i cannot -- oh, i was going to say i can't guarantee a triple digit gain handing it over to "squawk on the street. it is up in the air right now. it has been another good show. thank you becky, thank you andrew make sure to join us tomorrow. >> you are welcome. >> ske"squawk on the street. up 97. "squawk on the street" is next >> and here we are i'm david faber along with jim cramer carl quintanilla has the morning off. this is "squawk on the street. welcome to all of our viewers as we get you ready for a open half an hour from now loongs like stocks are going to continue resurgence after last week's weakness for all of the

major amples we saw a surge in cases for example, in other parts of the country that had not been as hard hit jim, i can go through a list of things this morning that perhaps would give investors pause in a different environment, whether it be beijing, and the recent closure of schools there as they deal with a surge in cases it is only 137 but nonetheless. flights also there we will get the update from beijing. layoffs at the likes of at&t or hilton quest giving us gooit guidance that still speaks to the weakness of that business. yet here we are with potentially another rally in store a half hour from now. >> david, all of those things you just mentioned were things that maybe we expected to happen i'm looking at 25 pieces of research that i have sent to you in synopsis, the vast majority

of them are raising price targets. why? because the targets were slashed before we knew that the federal reserve was going to back stop all of these companies so the federal reserve is saying if you are public and you want to issue debt you are fine now that does not mean that the smaller or medium sized enterprises are going to get anything they have been backed up by the treasury as much as check. that news is not good and it is still down from where we were a week ago but there were so many companies that were given up on by analysts. and now you find that those who thought american airlines was worth $1 or $2 or $4s are wondering why it is worth $20. all the analysts were too negative when you raise a target you get

a momentum that's what is happening underneath this market. >> right but we have also discussed that length and are sure to come back to it time and again, the divergence between the stock market and what we call i guess the real economy for lack of a better term, jim. >> right. >> that continues. i referenced layoffs, 3,400 from at&t 3,400 technician and clerical jobs across the country over the next few weeks and i believe another 1,300 retail jobs at the 250 at&t mobility and cricket wireless jobs. hilton, 2,100 jobs hbcc cutting 35,000 jobs over the median term according to reuter's, worldwide. united sweetening the exit deal for flight attendants. i don't know the real economy doesn't will be so good. >> i don't know, david everything is going to sound --

everything you described is going to raise numbers i think a lot of the companies are using the cover of the pandemic to actually take some actions they would have liked to have take before the actions are very harsh for workers. very good for shareholders you can justify pretty much anything yet here we are, wide suntrust say they denny's, sequential improvement, denny's being the restaurant chain where you and i can get the grand slam one of my favorites. sales are minus 40, they were minus 60 before. tell me how many people you really need to put to work if your same store sales are minus 60 i had mcdonald's the other day they are going to get through this but the competitors, the hamburger joints, the diners, i don't know how they are going to stay in business a lot of them serve alcohol, too, but you are not allowed to go into their places

when you see, david n texas, when you go in, what did they think is this did they think they were immune this thing is so easy to get that if you keep talking to me like this, david, i am going to give it to you >> that is not true. >> it is so easy to get. >> when i come to the studio we will make sure to still be 30 feet apart unfortunately i guess if that's the way you want it. >> it is so easy to get. >> it is easy to get inside. >> so easy to get. unless you gargel the clorox -- a joke a joke. >> to your point i guess we are talking about new highs in new cases in arizona, florida, oregon, oklahoma, and texas. all reported record increases in new cases on tuesday new all-time highs again, off of very low levels. nothing approaching the likes of what we saw in the new york area thankfully these are way, way down, new york, new jersey, connecticut. you spoke with the ceo of

mcdonald's yesterday on "mad money. let's listen to what he had to say on the expectations of when business can really get back to what it was. >> until we have a vaccine what we have seen in other markets, the consumer is still going to be concerned about safety. they are going to be making kind of this unconscious cost benefit trade-off. we do need a vaccine certainly our expectation though is that a vaccine is probably -- you know, call it 12 to 18 months away. >> finally someone who makes sense. >> can you imagine getting facebook business as usual >> we have to emphasize that we have to explain there's a man. he's telling you the truth without a vaccine, we are not going to go back to normal so we've got treasury secretary mnuchin doing what he can. and we have got jay powell doing what he can. but we have covid-19 doing what it can do.

unless we defeat this thing with a vaccine there is going to be -- what a brilliant comment that chris made. he said that there's basically a cost benefit analysis to going out. that's why i still favor the covid -- cramer covid index. when we had campbell's mark clause on the other day he said we just saw the numbers for the end of may they are dramatically up why? because the cost benefit analysis of going out is just crummy it's not good. and now, people don't want to go out and they think they can get sick the same reason why costco's numbers are up because you have to wear a mask if you go to costco. people feel safer. you may not want a mask -- i don't like wearing a mask. i think i am going to make another mask i am not kidding i have got a contest to make masks that are

better yet i feel like i have got the wear this when i go out to eat but the funny thing is there is nothing you caeat. and air-conditioning is a problem. you may want to deny it -- you talk to wynn, bring johns hopkins in and try to figure out how the droplets aren't bloep from me to you in your secret, hidden location. >> no. right. it is true eating indoors is still going to be an issue even at 50% capacity even though, et cetera happening across the country outdoor dining is of course a different matter. >> how about when you talk about airlines and they always say the air circulation is better than a building absolutely true. but then they always say but if the person is sec next to yick , sorry. that's why you can't have people next to you. you can't. >> that -- you raise an interesting issue, and speaking

for example, to the bankers that i talk to during the course of the day. when are they going to be getting back on planes it is one thing to go back into the office, frankly, where a lot of the protocols are starting to be put in place. most of wall street is not talking about coming back and forth. some are starting to come back into the buildings fairly soon but really until september in some ways seems to be at least where a lot of people's thoughts are. we talked about elevator traffic and things of that nature in some of the bigger buildings certainly in new york and other metropolitan areas when you are getting on an air plane is one the big quest we have an ak out from quest they are talking about improved passenger management in 2020 operating revenue is estimated to decrease year over year from 60 to 75%. >> unbelievable. >> they have published their

flight schedule through january 4th of 2021. they currently estimate second quarter 2020 capacity to decrease in the range of 50 to 60% year over year as gary kelly told us -- i forget what did he say, 2022 or '23? it is going to be a while. >> my daughter teaches english in madrid. season is over and i want her to come home. david, all i can think of is what is that flight going to be like how is she going to get from madrid to here i know she is going to self quarantine for two weeks but as a father, i worry about my daughter flying from madrid to here. why? >> right. >> because what happens if someone is sick who is next to her? and you can't stop it. yes, i have a wrist band on. it doesn't entitle me to margaritas this is my temperature

but it isn't temperature the three days before the temperature is when they nail you. >> i know. and even then, even then a lot of people aren't having a temperature. >> no. >> that said your daughter in a demographic where she is probably at very, very little risk >> that's a safing grace. >> but the real risk is she would get and it bring it home to you. >> she's in quarantine for two weeks. a real quarantine. >> it is going to be fun. >> what a world. new zealand had two people come in, and it violated the quarantine again, i go to texas and i say to them, guys, listen to me. gals, listen to me the protests in front of the alamo you did last week, not a great idea i mean, i want protest, but could you do some distancing when you protest because you are going get it you are going to get it. >> yep >> i don't want -- >> that said -- that said, we are -- we are looking for a

higher open as we watch cases around the world i want to get to eunice yu now in beijing who can update us on the situation in beijing we will get that after the break. let's take a quick break as i mentioned we are about 20 minutes away from another up open on the morning. jim gave you a lot of the reasons why. a lot of it is because of the three letters, f-e-d back after this. it's pretty inspiring the way families

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as i mentioned as we wrapped up ourp last block, a program in beijing taking steps to stem a potential resurgence of covid-19 cases in that city let's go to eunice yoon. >> 137 people have been infected but beijing officials have warned that that cluster was detected in its infancy and that they expect the number of confirmed cases to rise. it has sparked fears of a broader lockdown tens of thousands of people here in beijing are coming to covid testing centers like this one. the chinese capital raised its alert level after more cases linked to an outbreak at a wholesale food market were detected in nearby provinces authorities mandated that anyone looking to travel out of the city must now get screened for the coronavirus first. all workers associated with the market and residents in the area

are banned from leaving. bus and ride sharing services out of beijing are suspended flights cut by about half. all schools are closed after reopening briefly. today city officials said students you this prepare for the possibility that classes won't resume until next february the biggest economic impact outside of the wholesale market has been on the salmon industry. the origin of the beijing cluser is still unknown but rumored to be because of imported salmon. salmon has been pulled from store shelves all over the country. ports are now testing all shipments of meat. the government appears to be wary of shutting everything down again. most other food stalls and shops are open though sul seellers are cautiou. it does appear that the authorities here want to keep businesses going for example, roads and highways are still open companies as well as factories have not been told to halt work. and then that said, there have

been more announcements today by the city of bans of certain events that could be important for business for example, ceremonies, press briefings as well as sale exhibitions. guys >> eunice, thank you, eunice yoon in beijing. jim, of course it is the world's second largest economy as eunice just said, it is still open we are reopening and not going to close again as the treasury secretary made very clear last week as well impact >> are the wet markets still open i think that that's what i am concerned about. >> yeah. >> have they really changed over in the prc they blame foreign salmon? how about the bat market how is the bat market doing? is that still open mixing bats with foods that they shouldn't mix. i mean, our decision not to close i think is a more sensible one because if you are afraid to go out or if you are in an

at-risk group, you can stay at home you can choose to try to find -- if everybody wore a mask then they could go out, too the aversion to wearing a mask is as i call it the live free or die contingent that doesn't understand that going for the latter and not the former. >> true. and yeah, you have spared little criticism for china to large -- >> it is going to be tough for me a guy named jim cramer became the president of otis. i wish him luck. >> not the same one. let's take a quick break, jim. on the other side we will get your mad dash. of course we will count everybody down to the opening bell 12 minutes before we get started here we are backing off of some of the numbers we saw earlier but still set up for what will be a

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welcome back to "squawk on the street" time for a mad dash. oracle reporting earnings this

morning, jim how were they? >> david, i will tell you there is an alternative universe that happens at oracle. you listen to the call the most successful business people on earth. one of my absolute favorite ceos it sopds like everything is coming up roses, winning business, crushing workday, and they have got tremendous potential to be number three in cloud after amazon web and azure. they never mentioned google cloud. thomas kerr who used to be at oracle is now at google. it is win, win, win. they got the zoom contract but they missed the numbers. substantially. and they didn't give you any real hope that things were going to get better. they say it is covid-19 head winds. but if you listened to the call you would say i have got to take this stock eventually i think people will they bought back 40% of the stock.

they stan there and buy it back. they bought back 361 million shares a total of $19.2 billion in the last 12 months. so this thing is just a buyback machine. they have issued a lot of debt to buy babb thiks. they bought back 107 million shares for $5.2 billion this quarter. you are basically selling to oracle if you are buying this stock. i don't like to sell to oracle. >> remember the enormous debt deal they did early on in the pandemic. >> 20. >> $20 billion >> >> $20 billion. >> i misspoke. they reported ar the bell. the conference call already having taken place but they got out there quick in the capital markets even as the fed came in to the aid of most borrowers. >> somer and ellis are brilliant. but up against great companies they are moving to the cloud a. lot of companies are moving with them but the shot they have taken on

the workday i asked for neil to respond because it says they lost this huge deal with goldman because it didn't work and owe oracle got the deal. i think it has to be investigated a little. you have got to be sure that the claims are for real. >> all right i look forward to hearing from neil through you at least. >> thank you. >> let's take a quick break, jim. we will have a lot of time on other side as we head to an opening bell as you can see, we are expecting a higher open for all the broader averages

>> announcer: the opening bell is brought to you by nuvnne. a leader in income, alternatives, and responsible investing. we have a developing story out of washington this morning the justice department set to put forward a plan as soon as today to roll back legal protections that on line platforms enjoyed more than two decades, the likes of facebook and others, twitter. the proposals are designed to make technology companies be more aggressive in policing harmful conduct and be fairer, more consistent in how and what they take down or what they deem to be objectionable content.

of course this follows president trump's executive order that sought to weaken broad immunity for facebook, twitter, and the other platforms. but these proposals are just that, jim. and what we are really waiting for here is legislative action because that's actually what they need as well. they would have to be adopted by congress to actually have force. and so it remains somewhat unclear exactly what the point of it all is >> it really is a question of how many friends does mark zuckerberg have in congress? how many small businesses have they helped? are they an ambassador for the small to medium-sized enterprises? that's what they need to do. is facebook shop going to win over so many congress people that they are going to look the other way on free speech or are they going to punish him? you could argue everybody should be regulated for free speech but facebook at one point was not

viewed as a place where we got all of our information but there is a lot on the line here in terms of expense and a lot on the line in terms of the soul of the country. can you just put whatever you want facebook reach as lot of people. you sure couldn't do it in the "new york times. >> no. >> it is it is an interesting moment for the soul of facebook. >> it gets back to the idea of what is objectionable to one person may not be to another are you in fact infringing on free speech. at the same time, jim, something we have discussed what about those who openly put up things that are completely and totally untrue is there a responsibility on the part of the platform to police those people or are those who are spreading those lies going to be say, hey, those are my free speech rides my first amendment rights? >> i talked to mark and i said why don't you put caveat every for, you are just on your own for these things

caveat every for is what you got. i didn't get -- it is not clear where he stands on this issue other than basically look we don't want to sensor people but i think there should be a caveat every for. although maybe we should get a cigarette package warning. but there really should be some people who say you know what, this is -- you are on your own here if you believe this because i find a lot of people believe anything that's written. and it is a shame. if you told them it is caveat emt or maybe they say it could be wrong yet it still runs when you mention the nazis, there was a moment of truth where he said basically yo not why couldn't geshels -- >> again, to that point, you can litter the world with lies or

say caveat emtor but the people is not necessarily getting people to believe the lies it is getting them to believe the truth.e truth could become g that nobody knows exactly what it is. >>n abstraction. but we may be in the minority these days. >> it is one reason why i love reporting on business news and on companies because you can typically get to the truth of the matter, whether it be earnings and or other performance that is actually able to be measured. >> you are right. >> and measurements, there we go we will start with measuring how the market is going to do today, as you see we are opening higher. >> yesterday you bought something, you got on the deal and you made a lot of money. it happened. it happened. it was tangible and it was terrific we have to continue to try to say, look, here's opportunity. we can't just say you know what, royalty pharma, phony.

we can't do that you taught me long time ago david that the real outlets have to apologize when they get it wrong. the bogus outlets don't have to do anything. >> that is true. but, again, yeah, it is a real benefit thankfully to being a business reporter all these years. royalty pharma, the stock was up 60%. >> such a good business. >> this is not a company that just began, as you know, it has been around for 20-some-odd years and it has a prove track record of success. very strong financials we talked to the company's found sker ceo yesterday was that a bit much there? or is it going to continue as it appears to be this morning so far? >> it is a general atlantic deal general lieutenant, bill ford historically have tried to make everybody win. that's their philosophy. it is one of the reasons why i tried to talk this up as much as possible because general atlantic has a long history of saying okay, investors win, principiples wina

win. they have baio haven you may not have heard of it biohaven has as the ceo mentioned a pill, it dissolves in your mouth. it tastes pretty good. i am a spokesan person for the american migraine foundation it is a miracle drug i think it is going to be sold for four times the price of the stock. it is such a miracle it is incredible who has stock in it, who has a stake in it? they do. i looked -- other than their pfizer drugs -- by the way we never mentioned the lily drug yesterday that sent them up 20 points it has a drug that helps with met static breast cancer pfizer's didn't work and this royalty had a stake in pfizer. they are of course transparent about everything they have they are investing in winners. they let you participate

they needed something -- a liquidity event. it was not going to be one that bill ford was going to make it so you lost money on that's not his style. >> bill ford of course from general atlantic, as you say he also did say that as pablo now they are going to be in a position to use their currency from consolidation and the like. let's come back to ipos for a second. >> sure. >> a couple of months ago it seemed unlikely we would see these kinds of reaction in the marketplace let alone get initial public openings. atlanta record company, nikola we may be setting up for seeing big names in the fall. the likes of pallan tier could come, airbnb, business is under too much pressure right now to consider that.

>> door dash. >> it could be the beginning >> it gets you into the casino i use that word because it angers the older people. of course i am one of them it gets you in this is one where you are winning. it is almost as if they tell the blackjack players, listen, you get 16, you get 16, you get 16, they get whatever they want and you have got hit it is amazing the deals you get at the beginning and then at the end it is like oh, my god here comes airbnb but at the beginning it is really good because the deals are priced to move and priced to make it so everybody wins. so it makes everybody happy like royalty pharma look at that deal. isn't that great >> yeah, it was a great deal serious market caps, warner music before $16 million royaltia pharma before that as well then nkla which we spent some time talking about on a positive note this morning. >> draftkings though, a little selling.

ringing the register seems right to me. certainly okay >> uh-huh. not a bad idea to do that. >> right you ring the register a little. >> let's talk a little -- yeah let's come back to some of the names we love talking about. amazon this morning jim is up. i don't know if you had a chance to see the laura martin piece from needham a long piece on the company of course very positive talking about a $4,000 or $5,000 stock price over time. >> that's a nice price. >> that's what a caught my taepg was this $500 billion valuation on the media business. >> yeah. wasn't that something? >> never seen anything like that before. >> you go on and you want to have ultraviolet killer of covid and you are looking for one that you want and there is seven others at the top. it is pretty amazing it is. >> they are talking -- she's talking about twitch, hidden

values of the likes of twitch of course, which is -- i mean very well may be given the demographic that likes to watch video games. >> twitch is nvidia. there were some things that were positive pepsico getting rid of quaker. ant jemimah, they say it is based on a racial stereotype how did they figure that out. >> i was talking about that this morning. what took them so long >> good move for them. based on the racial -- >> i want to get back to amazon. >> yeah, i'm sorry. >> i want to get your thoughts needham saying prime subs revenue at $29.8 billion then putting nine times multiple on it even though it doesn't make money saying it is worth $187 billion twitch, music, ad revenues which

are and have become incredible revenue, high margin. >> the pandemic. it is like the netflix piece that we saw. the pandemic changed -- again, we had these behaviors that changed. amazon is an incredibly safe place to shop. as the pandemic runs away, finally ends some day, right, maybe when we get a vaccine, the residue is that people say you know what, how do i do without this amazon? this thing is such a bargain it is just kind of -- it keeps winning. i know it is upsetting to people that amazon keeps winning. but it is the same people who then shop amazon i shopped -- i bought, i don't know, another 200 gloves yesterday. i bought them friday and they arrived yesterday they are at my doorstep. i leave them out for a day and i have got my 200 gloves

i don't know where else i would get 200 gloves where else do you get them you look up glove, there is the glove and you buy it look up kn 95, and there it is, and you buy it where else are you going to bet it ward's. >> walmart, target, e-bay, try any other number of things because amazon is not necessarily the price leader most of the stuff they sell on e-bay, that stock is going to rocket this year, 5%. >> i know, you can go to home -- i don't want to go to those stores why? because there will be people without masks. i will go to costco. >> you don't want to walk -- >> i don't want to be next to a person who has no mask i don't. why should i why should i have to risk my life to go get a kn 95 because the reason i am trying get one is because i don't want to risk my life. >> understood. >> my life

>> understood. >> you read that really good form of steroid. what does it do? does it get you out? no it save as certain percentage of people. >> yeah. yeah that was yesterday's news. and you have to have -- you have to be very sick. but it is a poesk development. listen, we discussed this. the rate of infection is staying fairly high. however, thankfully, the rate of death is declining, it would appear, at least in part because of different therapies that are being used different approaches as we have learned more, doctors learned a lot more how to treat the virus. >> and regeneron >> what. >> i like regeneron, i think they are ahead. >> you mentioned your unwillingness to go into a store or potentially into a restaurant fertitta is a frequent guest on cnbc on the exchange in particular i always like listening to him

he discusses something you and i -- and you as a restaurant owner know as well, which is the challenges right now is in some of his businesses but also the challenges in dealing with landlords. i wanted you to take a listen and just react. >> if these landlords don't get some religion and realize where they are going because they want to play "hardball" today, you are going to lose in the next 12 months they are going to lose 20 to 30% of the tenants. a third of the people are being reasonable out there a lot of them are your small business own who are have tenants. another third are even bigger companies, but the worst are the public reits and the public reits need to pull their heads out of toilet and decide we are going to work with you and let's sit down and work together. if not, we all need to keep battling >> he is so good. >> emotional. >> he is so good he comes on, he yells. everybody comes on and says hey, don't worry, it is going to be

fine i went over the numbers for miguel yesterday i have ppp money i am going to lose money every single week. there is no hope whatsoever. we do sell some stuff you can take out we are losing a lot of money i don't care i want to keep the people employed you can say cramer is a fat cat. i did the numbers. i did the budget when the mayor says we can have people come in that's not going to happen we have a backyard but i think the vast majority of people who have a company like mine will close it you lose six people but there is no way i can't make money i have to pull out 60% of the seats. i have to put dividers at the bar. i lose probably half the bar. i am just going to lose money. normally i would close but i am committed to our workers why? because i am the greatest guy in

the world? i am a decent guy. i don't want it to close but you can't make money it is a license to lose. i am keeping it open because we are going to get a vaccine we are getting a vaccine when it docile be the only guy open on my block because i have staying power. but it is incredible how much money i am going to lose in the interim. >> there are going to be lines around the block you talked about us taking a cruise together on for we cannan apparently we have to wait longer they canceled most voyages through the end of september. >> was port now playing the cruises yesterday? he was not where was he on the cruises. >> he's your guy, not my guy you tell me. i don't follow him closely. >> i didn't look, i don't know if he was playing red or black today, or double zero. >> along the cruiselines he is having a tough morning although that can change very quickly as

we know. we are flatlining in the broader markets at least in the s&p. >> look, other than specific situations lice price target increases like beyond meat we have a lot of companies that are like what we heard from mcdonald's, which is, well, it is better than what we expected. but what does that get us? what does it get us? i don't know, david. i don't know what it gets us >> well, apparently, it still gets us an s&p that's only down a little more than 3% so far this year. >> nvidia recovered, recovered if that nasty gratuitous downgrade. >> nvidia always seems to recover, jim i want to get to bob pisani so we can get more on the broader market as well this morning. bob? >> kind of a flattish open for very good reason we are at the stage of the whole thing where we are reevaluating

what the opening looks like. defensive today is what i would call it. look at the markets. banks have had a really good we can. we were up 5%. not doing anything today oil is topping out at 38, $39. been that way for a while. semis still strong great day yesterday. health care all right. and defensive consumer staples okay mega cap stocks, a high in apple. and amazon keeps chugging away apple and amazon all at new highs. apple new historic high. microsoft, alphabet also on the upside david mentioned the cruiselines, all down norwegian extending their suspension of their voyages through the end of september there. southwest now leaving the middle seats unsold through september that group is weak if you look at the s&p, we are in a mini v, and the other

markets. there is the v on the right side here i guess the question is where are we we are betting on the pace of the recovery february and march we were in the shutdown fear stage. april and may in the reopening hope stage now we are in the reopening evaluation why is it? how confident are companies in a sustained recovery when are regoing to see hiring i heard jim talking about that eloquently what i am concerned about is we are hot getting an earnings expansion, we are getting a multiple expansion we are not seeing earnings expand the earnings cuts need to stop almost down 45% for the second quarter. that's been dropping for a while. we need to stop that less bad is what we need and we need to see the earnings estimates start moving up. you can see the market is expecting a v recovery in earnings look at these numbers here for the first quarter of 2021 and

second quarter of 2021 because you have easy comps. so this is sort of a v expectation in earnings, but a these numbers are still coming down they have to stop that we need some companies coming forth in the next month or so saying guys we have better visibility maybe that will happen but we are not seeing it right now. the nysc is continuing partial reopening here some of the designated market makers are coming back they are requiring an indemnification statement to be signed that's controversial they are doing temperature checks a the door. we will check with stacey huntingham after 11:00 to get an update from here finally, jay clayton is coming on we will be talking with him at 10:30 eastern time we will talk about the s.e.c.'s role in brimming the ethnicity inequality gap and a that frenzy of retail trading we have seen recently, what does jay clayton think of

that and what if anything is the s.e.c. doing to protect those types of investors 10:30 eastern. let's check in with rick santelli as well good morning, rick. >> good morning david. that is thursday wasn't a terrific day the equities were blown out, many investors got nervous all over again let's start a ten-year chart on thursday you can see we went from the mid 60s to mid 70s yields are up of course stocks up what happened. the feds declared about the corporate buying they are going to be doing. that sparked a rally look at the next chart both up crease perfect example today. ten investment grade and about a dozen high yield deals coming today. upjohn, gm financial, new york life just to name a few and the market is somewhat excited about it if you look at the general

activity in treasuries, look for potentially more selling as hedges are established indeed to get involved in some of these deals. finally, the barclays high yield index. you can clearly see the way it dips, came back up and back down when it moves up the spreads widen, not a good thing. when they go back down to the lows you see on that chart that is a good thing because when they narrow of course that represents better demand much more competitive rates alongside treasuries and when they become more competitive but higher than treasuries many times treasuries become the sell aspect of that hedge relationship jim and david back to you. >> we will keep an eye closely on that spread of course as rick pointed out the issuance just keeps coming. certain to be a record for investment grade this year as you look at the markets we are off what was almost a flat line a moment or so ago with the

s&p up a little less than .3%. more "squawk on the street" for you straight ahead >> announcer: the bond report is brought to you by pimco. for over 85 years? with capital group, i can. talk to your financial professional or consultant for investment risks and information. you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today. that's why usaa is giving payment relief options to eligible members so they can pay for things like groceries

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welcome back a lot of corporations focussed on the themes of diversity and inclusion. last night you discussed this with the mcdonald's ceo.

>> 70% of our crew is diverse from a race standpoint we've been on this for 50 years to try to make sure that we have the right diversity and inclusion programs i'm proud to say we've probably at mcdonald's created more millionaires within the black community than probably any other corporation on the planet, but there's still work to do >> more millionaires than almost any other or probably any other corporation on the planet. interesting. >> yeah. i listened to that and said to myself, hey, come on, other companies. it doesn't have to be just mcdonald's sure, they have a franchise model. you say only franchises can do it i think that's wrong it's a culture that wants everybody to win including people of -- who do not necessarily look like the ceo. i was just in awe of that number i didn't know it i know that pop eyes has a number that's similar when it comes to immigrants and dominos

has a number when it comes to delivery people. but let's just clone what mcdonald's is doing. i think -- i know i listen to giving a lot of money to the black universities people are doing things. people are doing things. but the heat has to stay on from the media. that's our job >> yeah. >> yep to see if this ends up being a different time in the past than when we've seen announcements, some money and seemingly not really the follow through, jim let's take a quick break and then get right back to covering these markets on "squawk on the street. where will you go first? wherever you make go, lexus will welcome you back with exceptional offers. get zero percent financing

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not a lot of outsize gainers this morning as we look. though, led by lows up a little more than 3% we're ckig aerhiba rhtft ts.

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i could be earning interest back on my money. i just discovered sofi, and i'm an investor with a diversified portfolio. who am i?! i refinanced my student loans with sofi because of their low interest rates. thanks sofi for helping us get our money right. ♪ i mentioned lowe's is the top gainer on the s&p 500. why is it up >> a terrific piece talking ant spending continuing to be

strong, rising price target. why? home improvement they have supply checks. it's all good. people are taking some of that money they got from the government and making thundershower house look better. this is something that is one of the great spending trends i'll have to focus on tonight >> does that extend to home depot as well? >> absolutely. people love home depot and costco people love home depot i wish -- i'm not sure of their mask policy, but home depot is packed my home depot is so crowded nobody goes there. >> that was the old yogi berra line what's coming up tonight >> one of my favorites, lance fritz. the trains

i can't wait to look to lance. he shoots straight and is such a good operator. i can't wait for tonight i'd like to do the show now. i'd like to do another hour with you. >> i'd love that >> i get to see my wife this week that will be a pleasure. >> that will be nice from 30 feet away or a little closer >> i'll tell her you said hi >> please do >> jim, we'll see you later. >> let's get started on the 10:00 hour now now over to sara eisen >> i'll take it. david, thank you good morning, everyone welcome to "squawk on the street." i'm sara eisen here with david faber and mike santoli carl has the morning off we are holding onto gains that we've seen for the past few sessions the dow is down 28 points. s&p 500 flat nasdaq outperforms up .4 consumer discretionary and technology are higher in today's session offsetting the losses from energy, utilities and financials

mike, also wanted to point out the builder stocks which are flying again, this has been a good story for the overall economy. we got housing starts and building permits that came in. obviously it's a volatile data set. they missed expectations but a 14.45 jump in building permits. that's a good indicator of future activity. it continues to show that housing is in the v-shaped economic recovery story. for how much longer, that's the question with everything coming off better retail sales yesterday, there are enough bulls saying the momentum is good and the day is coming in strong. what are you watching? >> we're thin that part of the recovery what part are we rising to in terms? housing demand was great now record low mortgage rates. semi conductor stocks are rallying it'sbeen tough to bet against the market in a big way when they're working.

i think that last thursday's selloff did seem to sort of destabilize things a little bit. it felt a little bit like a bit of a gut check, and i think you see a lot of the erratic trading during the course of a trading day. the past couple of days. i think that probably is related to the fact that nobody really knows if the market is getting as much of a pass on the data. the higher prices go, the better the numbers have to get to justify it >> yeah. mike, i mean, i feel like every morning we come in and i can go through a series of things that conceivably would not be taken as positives by the market and jim and i have the conversation about how the market doesn't reflect the real economy i know you've been dealing with that question as well. but i'm curious as to what you -- does it have resonance? >> yeah. i mean, there are parts of the real economy that have to come through in terms of a rebound in order to justify a lot of what the market is trying to price in right now. i do think what the market does

not do, though, is reflect or capitalize the immediate mood or the tenor of today's headlines i think there's a lot of justifiable focus on the infection rates going up in parts of the country the overall numbers, though, and the fact the market is trying to say it is not yet altering consumer behavior in a way that we can observe i think for now markets are willing to give the benefit to the doubt to the play for that reason >> there's a feeling out there a bet against the market on rising case numbers, which are obviously worry some, and especially in a place like beijing where they had their economy almost back to dpfully restarted and now potentially shutting down. it's different the bet against the market is in a lot of ways the bet against the innovation that we continue to see on a daily basis when it comes to advancements in vaccines and treatments.

yesterday's news on the dexamethazone. the fact and yes, it's not a lifesaver. the fact that they can decrease the critical patients likelihood of death, that's certainly a breakthrough and we're going to need more on that, but the fact that more of this is coming, i think is a potentially bullish argument against the rising case loads and the fact that we're better equipped economically and from a science perspective to handle the rising case loads hopefully we can get more innovations to the market to get us to the fall >> right and i mean, right now, perhaps, just the aggregate numbers are not as a threshold where the market thinks it changes that story. in other words, we're moving toward being able to manage the situation better who knows the threshold. i have to say the market is willing, and in february this was the case the market was willing to ignore a lot of things until it quit

deciding it could ignore them, and we don't know where that is even if the thrust of the progress is something that i do think is worth keeping in mind, and again, i keep going back to the fact that the case loads can go up. the aggregate numbers of people per day is not huge relative to the economy and it's not causing people to rethink the immediate reopening move who knows what people will be comfortable with down the road >> this is the debate right now in the markets in fact let's continue the conversation now and bring in a panel of guests to weigh in. lisa, chief investment officer at morgan stanley health management joins us, and david lebowitz is with us as well. what is the market factoring in with regard to an economic recovery and potentially rising case loads here in the u.s.? >> look, i think the point is so

long as the hospitalization rate remains at a level that keeps us away from crisis, i think that -- from an economic policy perspective and quite frankly from a human psychology perspective, we've made the decision as a country that we're going to persevere and carry on. and so i think that the element of the numbers the market is focussed on is the hospitalization rates and whether we're bumping up against any constraints in any cities. and while the numbers are going up, we're not yet at any of those kind of crisis or overflow situations yet and so i think the expectation is that consumers are going to start reengaging aggressively in the economy, and carrying forward. >> the only question for investors sitting at home is is it too late? did we miss the market move. we are more than 40% off the march lows

is everything you just said already in the market or would you be telling people they can still buy now? >> i think it depends what your time horizon is. our perspective is we're going to trade and arrange for the next three to six months because we need corporate earnings to catch up with the price action right? i mean, don't forget, we've seen prices rebound by nearly 40% off the bottom and yet, s&p 500 earnings estimates have gone the complete other way and we've seen consensus move from something like $160 per share to something closer to $125 to $130 a share and so until we have better visibility on that, we think the market is going to range trade now, we think that visibility comes into focus over the next couple of quarters and then you can break out to new highs.

but in the intermediate term, it's range-bound what we say to our clients is what's your time horizon if you're a long-term investor, wink, wink, nod, nod, which everyone says they are, of course, you should be looking for opportunities to buy into this market on any down day because it's the beginning of a brand new economic cycle >> david, to that point, i mean, the market tends to look expensive when you do have a trough in earnings there is a sense that that's when you buy cyclical assets is when things don't look great and they seem expensive. how would you play it here and just that same question about whether the market has run ahead of reality or not. >> you know, i think i would agree with the idea that markets are probably going to remain range-bound until we see a significant breakthrough either on the medical side or on the economic front i also think it's important to recognize the market has essentially written off 2020 and is wholly focussed on 2021

part of what gives us a little more confidence that we're not necessarily going to retest the lows we saw in march is really the fact that we have a lot more information today around the virus itself, around what an economic lockdown looks like, and while i wouldn't be surprised to see some sort of pullback, and i think that would create an opportunity across the equity market broadly, i don't think we need to go back down to where we were in march to answer your question, mike, how do you play it here? it's really about balancing quality. some of our favorite sectors are technology, health care, and consumer staples we're still using those to build the core of our portfolios we want to participate when markets rally. if we see a breakthrough, we don't want to be all the way oent other side of the boat. we're taking advantage of things to fund modest overweights in sectors like financials where we

think the market has mispriced things investors are down deep and this is not a repeat of 2008 which seems to be the general consensus of most the investment community. >> i arguably. there's less talk about going back to the march lows, a 30% drop from here how do you assess the state of investor attitudes, and positioning? because the bull case seems to depend still on the idea that investors remain somewhat underexposed to stocks there's a lot of cash out there. people hiding in certain places because they're not believers in the cyclical move. >> yeah. no, i couldn't agree more. you look at the money market fund data. above the prior peaks on the institutional and retail side. you look at the positioning data in aggregate and this is interesting. most systematic strategies and institutional asset managers

appear net short equities ant surface. if you dig down deeper, what you find is they have significant exposure to the big growth names that outperformed on the downside and until a couple weeks ago were pretty firmly outperforming on the up side so the math i think that any investor needs to do here is take a step back, look at what's going on with the reopening, figure out how durable you believe that reopening is, and if you think that we can continue to move in the right direction, i do think that will be a tail wind for the cyclical parts of the market. again, people are not necessarily exposed to those parts of the market the way they are to the growthier names to my mind, that's where the opportunity is a lot hinges on the reopening process going smoothly enough that the market can continue to look forward where earnings hit a new all-time high at some point down the road. >> so on that question, lisa, on

the durability of the recovery and how long it lasts, i feel like one thing that people aren't talking about enough is that some of the stimulus programs which have clearly had an impact on consumer spending and confidence, the stimulus checks, the ppp loans, they have expiration dates what happens then? can we expect the continued pace of recovery if a lot of that was built on the fact that the government offered so much relief >> yeah. look, i definitely think that we're the -- where the clock is ticking a bit. but our thesis is we're going to get one more tranche of stimulus, probably somewhere in the neighborhood of 750 to another 750 billion to another trillion dollars by july 31st and extend some of the direct payments and support to small businesses in particular but look, i think the question

is what are the multipliers in the economy on this level of stimulus not enough people are talking about the extent to which the stimulus is huge right? just think about it. we're talking about an output gap in the year 2020 of somewhere between 5% and 7% down u.s. gdp you can guesstimate that number between 1.5 and $2 trillion. between the fed and the federal government, we may be talking over the next two years about something closer to 10 to $12 trillion of stimulus right? so you're kind of calling 10 times fire power as the problem. that has us destructive is the belief that that money is going to ultimately get spent. now, we're not saying it's all going to be spent efficiently and effectively and there aren't

going to be bad investments made, but it probably will make its way into the real economy just because of the size >> lisa, david, thank you both for joining us this morning. >> thanks, everybody >> all right, a quick break. we have morning strength in the index has faded. the dow and the s&p right around the flatline for the day bond yields are flat stayitus wh

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as businesses reopen, companies are exploring the safest way for employees to return to the office developed owned and managed more than 40 million square feet of office, residential and hotel properties including the new world trade center the company's ceo joins us now to talk about the path forward and the current environment. nice to have you your company is no stranger to challenging times. owned the world trade center before it was destroyed by terrorists on 9/11 but this would seem to be a particularly challenging time for the city of new york and as an owner of so much commercial space in that city, particularly for offices, give me your perspective on how you're going to deal with it and how you think things are going to be able to come back. >> thanks for having me.

we want to get everyone back to our office space in a safe manner we want to get them back hopefully on monday if our governor will allow us and we've taken all the steps necessary to make that happen. we've set up protocols, working with our peers, working with government, working with the real estate board in new york, and the cdc. and we've put the protocols in place. we've never closed our office buildings. they've been operating ever since they -- most of our assets are billion dollar buildings they've been open and operating. we can't close them. we've taken many different measures to make sure that anyone who accesses our buildings are going to be very safe first when people enter the buildings they'll see wherever there's a touch point anywhere, these touch points get cleaned

periodically, most of them on an hourly basis many of our newer buildings like the world trade center, you walk in with a card key you don't have to touch anything it tells you which elevator to go to. the elevator has circles to stand in the elevators and you go up to your floor and you get out. you don't have to touch anything and then you're in your space. once you're in your space, each tenant decides what they do. you can see the film this young lady is walking through. that entryway there tells you which elevator bank to go to and which elevator you're going to get onto and so you get right into your space and then you're there. we are requiring everyone to wear masks in all the common areas. so that everyone is safe and that you're safe from them there you can see people cleaning all the common areas. the air filtration systems are all state of the art and all are cleaned regularly. we have plexi glass in front of

all the concierge spaces and so all these precautions have been in place over the last couple months >> marty, let me actually just stop you there for a second. i'm curious. given all you're doing, what are your expectations in terms of how many people are going to show up in terms of occupancy? i mean, i've been talking to a lot of the companies, some of which are housed in some of your buildings. seven world trade or four world trade and the like how many people do you think are going to show up as a percentage of those who typically do? >> that's a great question i think it's going to be an akly kags over time we have to get people thinking about coming back and then once they start using it, they'll want to be there every tenant is going to do something different. we're going to an abc system on monday if we're allowed. we'll have a third for two days and off for a few days of that third, we're telling

them if they want to come to the office between now and labor day, come to the office. don't come in on the days you're not supposed to be there and so of that third, if they are not susceptible and don't have to deal with child care issues we're telling them we believe public transportation is safe and they're not worried about it, they should come in. we think 40% to 50% of the people will be in. anywhere from 15% of our work force we hope to see in on monday that's our expectation >> right i think i just saw a sign in some of the videos, no more than five in an elevator. how are you dealing with it with potentially creating task as people wait for elevators? >> it will be an acclimation we spent a lot of time with our friends in asia in beijing and

shanghai and seoul, korea and singapore and in hong kong and they did this as well. and because they're so used to wearing masks, they're all back to it and are cramming back into elevators again and no one is getting sick from it because everyone is wearing a mask and they're taking precautions we have to get people used to having very few people in an elevator, then people will get comfortable as long as they're wearing their masks and being careful, i think people will get comfortable and not be standing on blue circles again. >> marty, it's sara. you said every tenant has a different situation. just curious with the situations are like right now are they negotiating for less space? are they all paying their rent what sort of negotiations are you having right now given the

world has changed and people have been working from home efficiently? >> no negotiations we've been holding town halls with our tenants, communicate, helping them to communicate with their employees on how we're going to have a homecoming back to the office, and actually, our collections have been extremely high we've been collecting more than 9 7 president of our rent. we're happy about that and most tenants want to get back to the office so they're looking forward to welcoming back their employees some have said look, don't come back until the new year or don't come back until after labor day. many of people have people coming back because they have to we have people in the office every day. the populations are way down, obviously, because they're not essential. they don't have to be there, but once this opens up, again, for new york hopefully monday phase two opens, we'll see how many start to come back

it may only be 10%, 12 %, but after labor day it will pick up, and hopefully in the fall you're up to 60%. people will have to start to get comfortable with it. they'll get comfortable with public transportation and in an elevator and sitting in a concerns ro conference room again. it's gradual >> how do you view the future of your business to the extent that it's based on potentially job growth in places like new york it's hard to imagine that any time soon given the budget deficits new york faces. the service cuts that may come the people who may choose not to return and the companies that find them comfortable with a certain percentage of their workers working remotely >> i think it comes down to the people what's great about new york is the talent pools we have the highly educated work force

we have in the new york metro area that's what companies want and whether you're an advertising agency, it's hard to collaborate on a pitch when you're not together in a room. it's hard to do it on a zoom call or a web call when you're trying to decide which lipstick to use, you can't feel it in a zoom call to use an example one of my colleagues uses, if you're a lawyer, just graduating law school, you want to go to a great law firm, are you going to the law firm with the partners working from home or the law firm where the partners are working in the office you want to learn from? if you talked to the folks at goldman sachs and bomorgan stanley, ask the young analysts what's happening with their modelling skills they need people to learn. they can't just do it over the

line they have to be in the office. people want to be back in the office >> well, we certainly want them to be as well. and we'll be watching the reopening very closely appreciate you taking time for us this morning. thank you. appreciate you having me thanks so much david, time for our etf spotlight. today the semi conductors. ticker smh on pace for the fourth day of gains. now at more than 35% in the last three months led higher by asml holdings, lan research, amd. amd is up 20% this year. keeping our eye on the market. took a mini lag lower for stocks dow down 80 points new numbers on hospitalizations out of texas texas hospitalizations up 11% in 24 hours that's maybe having an impact here nasdaq stays positive just barely we'll be right back.

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experience amazing it's totally not the same without you. we miss your let's do this look and can't wait to get you back, so we've added temp checks, face coverings, social distancing and extra sanitizing to get the good times going again. we're finally back... and can't wait until you are too. something you might not know about when it comes to wall street and police brutality. leslie has that for us >> that's right. tapping the municipal bond market has become a common way for cities and taxpayers to fund the cost of paying for claims of police misconduct. take the village of hempstead in new york it owes 4.5% $4.5 million to a

man. the board voted to take on debt to pay for the settlement. according to minutes from that meeting. now, a recent study found that in the decade ending in 2017 investors generated more than a billion dollars in interest from these types of bonds in just five major cities. critics say this is shielding police from the financial consequences of their actions. others say access to borrowing is necessary to ensure that victims are fairly compensated for abuse. >> i think it would be a mistake to put financial liability for lawsuits exclusively on the shoulders of police officers, because those payments in many cases would be far greater than police officers on their salaries or other government officials on their salaries could afford, and so that arrangement would end up hurting

plaintiffs >> it may not always be clear to investors that their purchasing bonds for this purpose sometimes the securities are issued as judgment obligation bonds explicitly for funding settlements. other times they're in obligation bond state issuances. >> interesting i had no idea. thank you. jay clayton, sec chair is our guest very soon, coming up we want to talk to him about a lot of things. bob is going to start off the questioning when we come back on "squawk on the street. ♪

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now that's simple, easy, awesome. transfer your service in minutes, making moving with xfinity a breeze. visit xfinity.com/moving today. good morning, everyone i'm sue herera senate republicans led by tim scott have unveiled a police reform plan that is narrower in scope than legislation proposed

by house democrats and does not include bans on choke holds or no knock warrants. richmond virginia has a new police chief they asked for will smith's resignation following several nights of clashes between protesters and police where police used pepper spray and tier gas or theland protesters were injured after a car struck them. they have arrested the driver of the car. netflix founder is donating $120 million to the united negro college fund and two historically black universities. you are up to date i'll see you in an hour. sara, back to you. >> all right sue, thank you now to bob who is along said chairman of the sec, jay clayton. bob, over to you

the chairman of the sec joins us jay, good to see you, as always. >> thank you, bob. it's great to be with you. >> i just want to ask about a comment that jay powell made yesterday. in his congressional testimony he said the recession that followed in the wake of the coronavirus epidemic could widen income inequality for those on lower incomes i'm wondering what role can and should sec play in addressing the roles of economic inequality >> first, i share jay's view i think times of stress have shown that they do drive greater inequalities and we need to be mindful of that. here at se c, one of the things we focus on is investor education. financial lit eracy and to the extent that we have better financial literacy across our

society. those disparities are going to be less over time. it's one of the things that the women and men at se c are committed to, not just for our markets. but for consumer credit and how it all fits together in our overall financial picture. >> and you've done a great job of financial literacy. there's great things on the welcomes, investor.gov you've done videos to explain. i can't help but wonder, participation in the financial markets is a lot narrower than a lot of us would like it to be. i think it's put a lot of communities at a certain disadvantage is there anything the sec can do to expand the opportunities besides financial literacy >> well, look, i think it does start there, bob financial literacy, it goes to consumer credit, getting your credit under control understanding -- look, credit can be helpful buying a home, getting an

education, but it can also get you into a position where you're not really able to get to a stable financial position in your life. and we want to help people understand that investing becomes part of getting to a more stable financial position in your life and if you have a more stable financial position, you can weather the difficulties that we have, are witnessing in a much better way and we're just committed to helping people understand that >> okay. i want to move on and ask about a topic we've been preoccupied with at cnbc that's the recent surge in retail trading particularly in beaten up sectors like the airlines, the cruiselines and even bankrupt. i'm wondering the perspective on the retail trading can you tell us if there is a surge in retail trading outside of a few airlines and cruiselines, for example, and

what role, if any, does the sec play in protecting the investors? >> well, look, i think your first questions also go to this question to level set, you're right there has been an increase in the percentage of trading that is retail trading. we have open markets we have a disclotusure based system, but our retail investors should understand there are risks in our markets our favorite kind of retail investor is your long-term retail investor who builds their wealth over time through investing. there is risk in being a short-term market timing participant, and it does make me nervous. i'll say that people are perfectly able to do it. they let them do it. you know, just remember, there is risk in short-term market

movements. >> chair clayton, it's sara. to follow up on the question, how closely if at all are you looking into a platform like robin hood which has seen an explosion of amateur trading post crisis? are they safe, those investors >> well, let me be clear on something that we've done here with regulation best interest which goes into effect at the end of this month. this was a long journey for the commission we have substantially increased the responsibilities that brokers owe to their customers when making a securities recommendation and they have a care obligation -- >> i'm sorry, i didn't hear you. >> conflict -- >> can you hear me >> yes you're good.

>> we have a care obligation and conflict obligation. we have customers to understand what they're purchasing. >> their chaslayton, it's david faber. i can't say that i've ever seen a bankruptcy company in a position to potentially sell stock as hertz is, approved by a judge, approved by the creditors. still, you know, you wonder, aren't these investors being potentially taken advantage of by buying a security that could well end up being worthless? that's the view from the sec >> well, very good question. i'm glad you asked for a company, any company to sell stock in our public markets, there are a number of requirements including disclosure and there's liability for disclosure that is incomplete in a material way also our process requirements

including for us at the sec. what i can say is in this particular situation, we have let the company know that we have comments on their disclosure in most cases when you let a company know the sec has comments on their disclosure, they don't go forward until the comments are resolved. there are other processes here that companies have to follow, including if the shares are going to be listed, meaning continuing listing requirements for those new shares and there are professionals involved and look, we at the sec, we're trying to carry out our responsibility in situations like this as best we can, and i expect the other professionals around this situation to carry out their responsibilities as best they can. >> interesting so i mean, you seem to be saying you obviously presented these questions to hertz and to their lawyers, and to those thinking about underwriting and/or making

this stock accessible to the public do you think that hertz, perhaps j is going to pullback from moving down the road, chair? >> look, that's a decision for them to make but we are following the process. it's a well understood process they are aware that we have comments on their disclosure and we will see. >> jay, on a separate topic, the c just lost a transaction they were going to float designed to help the maker taker system. some are charged fees and others get rebeats. any response are you going to examine ways to continue the maker taker system? >> this is another place where we have a responsibility

we have a responsibility to ensure that our trading markets and our trading venues operate in a way where people are getting the right deal that competition is driving prices to where our end users, our investors aren't paying too much to get in and out that's our job our market structure is highly complex. what the d.c. circuit said was we don't want you to analyze that through what the d.c. circuit viewed as an experiment. i respect that decision. but it just shows we're going to have to look at different ways to get data so we can make sure -- it's our job -- make sure the markets are functioning in a way that's appropriate for our long-term investors. i respect the decision, and we have ongoing dialogue on a daily basis with the exchanges they know our job, we know their

job, and we're trying to do the best we can to make sure our long-term investors get the best keel as they get in and out of the market >> let me ask about regulation best interest. it's implemented june 30th it requires the broker dealers to recommend financial products only in the best interest of their clients. it's been a long road getting to this position. a lot of people are taking early withdrawals from their retirement accounts and the sec made it easier to do that in the wake of the coronavirus epide c epidemic you've expressed concerns to the broker/dealer community about the procedure by which they can make those withdrawals and perhaps fees that may be charged. can you outline your concerns? this dove tails with the rig best interest thing that's coming into effect >> the cares act included a provision where let's say you have a fair amount of money in your 401k or ira, and you're in

a position where you're under financial stress, the cares act said we're not going to penalize you or impose the usual taxes for early withdrawals in those cases. the wisdom of congress in that, i very much support. what i don't support is people doing something like that, not to bridge a gap or a difficulty, but to maybe change to a different investment strategy that isn't in their long-term interest and what i'm saying to the financial community is look, people need to make the early withdrawals to get them over a difficult time, we should help them with that but we shouldn't use that window or that lack of a penalty or look of friction to put them into investments that aren't appropriate for them >> mr. chairman, during this crisis that we've been going through, of course, the exchanges went to a kind of more limited in person participation.

new york stock exchange floor, people just coming back to it. also broker/dealers, fewer traders. is there any observations about liquidity levels, anything in the cadence of the markets and how investors engage in it that you take away from this period >> we had what i would refer to as a giant risk off shift flight to liquidity we had intervention from the fed. supported by the treasury, and the legislation. that all facilitated that shift in investor sentiment. through that, the markets functioned about as well as i can reasonably expect. we were monitoring them closely. we had days with trading halts we had a number of up and down issues but overall the functioning of our equity markets, and we also look at the if i canned income markets. the functioning of the markets held up very well. i have to say as generally i was

pleased, and hope not to have to go through it again. but we'll take -- the things that didn't function as well as we wanted, we're going to look at and try to be even better prepared should the next time come >> chairman clayton, i want to come back to hertz it made a little bit of news they have a shell filing there's billions of dollars a week of the stock being baulgt and sold every day is the sec even in a position to stop a potential sale of stock by the company if you have issues with it >> look, there are a number of powers that we have, but we do have to follow due process here. and in a new issue situation like we have where there is new stock, one of the processes is to review the disclosure for the issuance, and we've let the company know we have comments on the disclosure

>> chairman clayton, thank you for joining us we really appreciate your time, and everybody, we are going to continue the discussion with chairman clayton around issues of economic justice and what the sec can do if anything about that on cnbc.com stay tuned for that. chairman, thank you for joining us >> thank you very much all right. bob, thanks. our thanks to the chair as well. coming up in the next hour, don't miss stacey cunningham to responds to the ruling as we just heard from sec chairman 'll ton on that. webe right back. stay with us at mercedes-benz, nothing less than world-class service will do. that's why we're expanding your range of choices.

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how we come up with new ways to serve our customers... and deliver r products. but no matter how things change, one thing never will - you can rely on the people and the network of at&t... to help keep your business connected. as the country slowly begins to reopen, cnbc and change research are looking at the growing concerns of covid-19 for voters in battleground states amen jaifrs explains what they found. >> yeah, mike. that's right we're seeing an interesting split here geographically in terms of some soft those states that experienced a real flairup of covid-19 and the other ones that are not seeing dramatic flare-up, you're seeing that in the respondents talking about whether or not we're reopening too quickly. take a look at the six

battleground states that we surveyed here. you see that florida and arizona, people saying we are reopening too quickly. 50% in florida 49% in arizona where you see the lower numbers pennsylvania 21%, michigan just 16%. so you're seeing a real geographic disparity you are seeing optimism, though, just a little bit on the question of whether or not it's safe to fly. slight tick up there, 28% now saying they do believe it's safe to fly that's well under the 50% figure who say they believe it's safe to go back to work so, in that case, you are seeing airlines being one of the riskiest seeming categories for voters across those six battleground states. then also on the political question of whether the president is pushing to reopen the country too quickly for political gain, 54% agree with that, 46% disagree with that so by a relatively small margin here you are seeing people suggesting that the president is pushing to reopen for political

gains. so some fascinating findings here politically overall what this poll found for the first time in all six of the battleground states joe biden is now leading president trump in every one of them that's the first time we have seen that. that seems to be responding to headlines around covid and the protests around police violence. back over to you. >> very interesting. it will be as we continue to check in on this into the election and potentially some of those states see cases rising. thank you. later today on the closing bell, don't miss a rare interview with billionaire investor jeremy grantham today at 3:00 p.m. eastern time. we'll be right back on she show. dow moves back to the flat line after taking a dip in the last half hour. we'll be right back. ♪ ♪ ♪ ♪

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faa chief steve dickinson testifying in front of congress this morning phil lebeau joins us now with why. >> this is a hearing looking at the faa roll in the 737 max nsks and oversight. right now the max have been grounded since march of 2019 approximately 450 have been built but they're not yet delivered. boeings plan a recertification flight potentially by the end of the month. here is faa administrator, steve dixon. >> as i said many times, i will not sign off on this aircraft until all faa technical reviews are complete i also intend to pilot the aircraft myself before the faa makes any ungrounding decision >> that ungrounding, by the way, is expected by late summer that's according to people at boeing though they understand that this could be pushed out a little bit, the senate bill, by the way, there's one introduced

calling for more faa oversight boeing is gradually increasing 737 max production as you take a look at shares of boeing that is a very gradual ramp. we'll not see completed aircraft coming out morgan, we'll hop back into this hearing. we'll let you know what else steve dickson has to say as they question him about the faa oversighted of the max morgan >> all right phil lebeau, thanks for bringing us the latest on that. good wednesday and "to "squawk alley. a quick look at the markets right now. it's a mixed morning for the major averages everything is fractionally -- >> we're having a little trouble with your audio, so i will grab it as morgan was mentioning, the major indexes are fractionally higher, trying to make their fourth straight positive session. that's where we'll start major averages now kind of treading water we'll see where they go from