highest daily increase topping the previous record set in april. germany's buyer settling the monsanto weed killer thursday, june 25 already. 2020 days are getting shorter "squawk box" begins right now >> even though the days are getting shorter, welcome you are such a nudge for reminding me >> summer. summer is over

>> it is not over. it is just beginning the days are long right now. we are going to take that. i'm becky quick along with joe kernen and andrew ross sorkin. we are sitting at the flat line. dow down about 7 or 8 and nasdaq up by about 13 yesterday, the dow was down 710 points a decline of 2.7% s&p off 2.6. came with huge steep declines going as smoothly as people had hoped. all of those concerns added up

to steep losses. looking at the treasury yield at 0.669% now you see additional pressure as we continue to watch that case count >> talking about that, the united states seeing a record number of new coronavirus cases in a single day. tallyi tallying 45,000300 that tops the numbers from april reporting that visitors that travel from hot spots to new york, new jersey to connecticut will be asked to quarantine two weeks. those who defy that order. hot spots include arizona, utah, texas, arkansas, alabama, north

and south carolina president trump says he will not follow the quarantine order when he travels to his golf club. anyone in his proximity is tested the president of the united states is not a civilian noting a number of those secret service that were at the tulsa event are quarantining clearly they are not immuf >> here are some of those hot spots. arizona reported nearly 1,800 new cases yesterday. seven-day average up more than 76% compared to a week ago hospitalizations on wednesday

hit a record high of 6,700 88% of icu beds occupied florida reported 5,500 new cases shattering the previous single-day increase. nearly 60% of tests came back positive up from 11 percent e on tuesday. the average age of patients in florida was 33 years old down from over 65 years old in march. texas reported a record spike of 5,500 new cases. the average is up 91% compared to the same average a week ago hospitalizations are up nearly 75% in the last week becky. disney is delaying the opening of the california-based theme park originally scheduled for july 17 giving us time to bring cast members back to work and back to business, we have no choice but to delay the

reopening of theme parks and hotels until we receive approval they appear to be on track the wall street journal reports that disney is considering pushing back the july release of mulan. after tenant was pushed back to july 31. this raises the issue that it could be companies and in turn consumers that push back on this regardless of what they have to say. if you watched the sectors that were down. hotels airlines, cruises, they saw so much pressure and dragged the averages down. >> we all have been. i don't think any of us have missed the day, have we?

since february we are not missed a single day maybe one day, we'll need to take some time off not like anything taxing to worry about with your family or your money or anything else. the day will come when i want to take a vacation. i know viewers are there going yes, yes some we are considering it now. i'm looking at plane reservations we may drive somewhere but you can't drive if you try to go to the caribbean or something i'm going through the motions, here is a fare that seems to fit, what will happen the day before when i'm headed to get on a plane tomorrow i don't know what it is going to be like in july and august >> would you travel to a state where you are seeing these

spikes you buy a ticket and plan for it >> would you go to disneyland? >> what happens when you come back, do you quarantine for two weeks when you come back >> there are real world problems when we read about it. you realize these are other people considering these things. you bring it home and you are looking at the united app. you are saying, wait a second. you got to go through a temperature check and wear a mask the entire flight you are wearing a mask >> i'd drive >> have you seen they say the air really does circulate a lot. do you buy into that it turns over like 18 times. >> i have a three-year-old who would no way wear a mask >> the tray table, so clean you

could eat off of it. you could start eating a banana, put it in the pocket of the seat in front of you and then pick it back up. would you do that? >> you go first. >> i don't know. looking for a cheap and widely used steroid, dexamethasone. treatment would help vaccine, anything would help us now. good morning >> good morning, joe we hope not to get a severe result remember those prior results that showed that this was the reduced drug to show mortality by a third for patients on ventilators and by a fifth for those receiving oxygen

nonetheless, so much excitement about a drug that can finally reduce that mortality risk demand has soared. with data out this morning in the week after those results were released, demachbd went went up 610% the fill rate went up 54%. that means the tire precipitation wasn't filled out immediately. a drug distributor says they have enough supply but the drug is subject to historical ordering patterns. this is given as a pill and through an iv.

the iv formulation has been in shortage since 2011. according to these and because of these ongoing issues for these products according to the fda database, at least four of these companies are reporting the iv form has been in shortage we reached out milan does say that its drug is available but does cite that increased demand pfizer and sanofi are smaller maker. they are looking to increase for the eight countries they do supply back to you. >> meg, that makes it sound like there will be more supply of this hand there was of hydroxychloroquine when we thought that was going to help

>> hydroxychloroquine is an interesting one. that is only used for cases of malaria and other things the use spiked and now there is all this left over-hydroxychloroquine after we found it doesn't work. but dexamethasone was more widely used before this. that is a bit of the difference. joining us to talk about this and more is dr. scott gottlieb a former fda commissioner and serves on the board of both illumina and pfizer. you are not the type that says i told you so but you did warn us that some of these states looked like they were hitting potentially pandemic or outbreak levels within those hot spots.

those numbers you worry about have come to fruition. >> it is difficult to get under control. you remember new york city announced the stay-at-home order on that friday that went into effect that sunday they didn't peak the number of cases until april 7. so almost three weeks went by until the time they put in place that stay-at-home order and the peak number of infections. we know there is a delay from the implementation of policy and actually affecting the em-democratic. whatever the states do them right now will help them in about two weeks or longer. whatever policy decisions they made a week ago will flow through right now. the next week or two is largely baked in terms of the impact of policy they need to start thinking a

little longer term i think the first two weeks they'll look at is closing the settings. they are not going to close the settings they'll need to look at some selected shutdowns like bars and look at health care if they are going to capacity. if you are worried about that, start to dial back procedures to free up capacity texas and florida have a lot of capacity there are parts of those states that look pressed right now, for example, houston every time i retweet some of the things you put out looking at concerning numbers of hospitalizations or hot spots, somebody tweets back and thinks this is some sort of a political statement you are making

i want to make it clear, you served as an official in the trump administration as the head of the fda what you are talking about as a doctor and the things that concern you. i want to ask you about testing. from the beginning, you and dr. fauci have said testing, testing, testing yesterday, we heard from the trump administration that federal government will not pick up the tab on that it will be pushed back to the states and municipalities. is that something we need to be concerned about? >> we need more testing. i was writing about this back in january about the need to free up some of the educational labs for testing. the more we test and turnover cases, the more we can get people identified and isolated people when they find out have a

positive infection will do the right thing and self-isolate getting people tested is important. we are testing a lot and doing a good job in most states. some states are going down florida, unusually showed a 10% rebu reduction of testing most are going up and that needs to continue. that's how we are going to get a handle on this pandemic. people don't want to shut down the economy. i understand why if you don't want to shut down the economy, you got to decide what to be for if you are against universal masking and tracing and testing, you are going to have to tolerate a very large epidemic once this spreads, you are going to see excess death and disease. you are not seeing that now because it is a younger

generation in florida. south carolina looks troubling, alabama, north carolina, arkansas this isn't just confined to a handful of states. >> on an economic front, if consumers don't hear about testing maybe they feel better if they realize there is more and they don't know about it, they could feel confident if they get out there and know the facts. >> the reality is that this will drive what is going to the hospitals. doctors come together saying we have a challenge here. i don't think medical providers want to work in a covid-19 only system they will press policymakers to mitigate doctors don't want to

expose themselves to a risk. texas medical center now, they are going to be in surge capacity in a couple of days within two weeks, they'll be in unsustainable surge capacity as of yesterday, 27% of all icu beds were covid patients you are starting to see strain on the capacity. >> talking about the rush to get remdesivir to some of these hospitals and the use of remdesivir with younger patients often combined with plasma i talked to a doctor who said we

may have to ration remdesivir. >> i think we'll use what we have on patients who need it i think it might have to be allocated carefully. some who might benefit from it won't get it because they won't meet the clinical criteria because we don't have enough at the current moment there is more supply coming in to the market. we felt we would have enough of these drugs by the fall. we didn't anticipate we'd be dealing with this scope in june. in july and august, if this didn't happen, this will get pressed. >> by the way, i know you are not calling it rationing but the doctor said certain young people may not get it today because it is being saved

for those who need it later. given the numbers that have come down so well we are so happy about it in the tri-state area how do you think about the reopening and people's behaviors here we are trying to go out and seeing these numbers elsewhere around the country how should we think about all of that right now >> i think people in the tri-state region are still cautious that is a good thing people here are wearing masks. for the most part. there are exceptions because of what we went through that will have an impact of preventing a large epidemic taking hold. what is happening in the south did not happen in the last few weeks. this has been month after month.

to see it in the form of an epidemic where you are having 5,000, 6,000, 7,000 cases a day. new york, it will take weeks and weeks to build that kind of cases within the community we do have a benefit now of a july and august that might not be virus free but we won't have wide-spread transmission that doesn't get us out of the woods for the fall we really crushed the infection. as long as we stay vigilant, we'll we able to reopen against that back drop >> so many people are dealing with this right now in this area now that they think things are getting close to all clear would you go to a friend's house for dinner and eat in doors? >> if i trusted that friend. i've interacted with friends

i have young children. they've interacted with other children we've narrowed down the people we interacted with we have a smaller circle you can have interpretations it is not risk free but it is low risk the prevalence here is pretty low right now. >> dr. gottlieb, thank you we'll see you back here this time tomorrow. >> thanks a lot. thank you. when we come back, a surprise move by softbank's massa son overnight. and the ceo of bayer over the massive settlement over allegations that its roundup weed killer causes cancer. relatively flat. dow down 710 points yesterday. the futures down 50 points

s&p down by 2. nasdaq down by 7.5 we'll be right back. can i find an investment firm with a truly long-term view that's been through multiple market cycles for over 85 years? with capital group, i can. talk to your financial professional or consultant

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call or go online today. welcome back softbank masa son announced he's stepping down from alibaba's board today. he had been on the board since

2005 jack ma joined softbank's board in 2007. in a statement, he said the parting of ways was muj. masa son famously decided to invest $20 million after a five minute chat. that has been the most successful to date bayer paying up to $10.9 million in a settlement for its roundup weed killer. dow down about 15 points dug overnight over 300 points. i saw even more. wasn't up all note worrying. we'll be right back.

can i find an investment firm with a truly long-term view that's been through multiple market cycles for over 85 years? with capital group, i can. talk to your financial professional or consultant for investment risks and information.

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welcome back to "squawk box" this morning bayer is nounsing it will be paying more than $10 billion in a settlement over claims that its weed killer roundup causes cancer joining us now, good morning to you. appreciate you joining us. this has been a long time in the making there are a lot of questions about it you have made the argument that this puts this episode, if you will, behind the company but there are still questions about potential outstanding lawsuits you probably saw comments by some of the claimants yesterday that this is not over. what do you think? >> thanks for having me. good afternoon we have been very clear from the

outset that there are two important conditions that need to be made for us to come to the table for a settlement number one, it has to be financially reasonable and has to be something that puts closure to this litigation both have been achieved for the totality of the litigation and totality of the monsanto litigation the amount of the $10.1 billion to $10.9 billion does not include the 75% of cases where we have already written agreements and includes an allowance for the remaining 25% we are very confident to negotiate settlements with over the next month to come also based on your prior experience

in other cases >> you have been working with ken fineburg who is trying to mediate these cases. you did see some of the claimants who said they plan not to settle and plan to take you to court whachlt what do you say to them? >> i think ken is the expert that renders his opinion on his vast and long experience mitigating very difficult cases. we believe we have a structure in place that not only addresses the exiting cases we have but also the future with the science panel that will be put in place that also brings the discussion back to where it belongs that is the scientific

assessment that roundup is a safe product that does not cause cancer we think this is the right body also for future claimants. >> that's the question i was going to ask you obviously believe in roundup. still on the market. on one end, it is still on the market and you believe in it on the other hand, there is this $10 billion that is going to go out the door how do you square that circle? >> we need to put this litigation behind us and set course for the future. there are so important things we need to do as a company that is grounded in science and works in the areas. if you look at the lockdown and the pandemic that is still very, very presence. especially in the u.s. the businesses that are open in the crisis

doctor pharmacies, and food stores that is the business we are in we have to put this litigation behind us. there is no other way to do it than with a settlement we have to go back and do the things that are important for customers, consumers and patients that is to work for the future and to actually feed a growing population every night, there is about 800 million people that go to bed hungry there is about 10 billion people that need to be fed for the next decade that's what we are there for we are an important company to address these needs of mankind >> i want to ask you more questions that do relate to mankind. but with regard to the settlement, when you look back

on the transaction to buy monsanto, good deal? bad deal wish you did wish you didn't? >> we look at the combination of both companies also with utmost diligence secondly, the combination has always been built with the two companies going forward. would into the s we need to curb global warning

and do this with things coming to the market. >> i'm going to take that as you are happy with the monsanto acquisition. tell me how you feel about the situation going on in the world. >> the situation continues to be highly volatile. we had a good start to the year with a strong first quarter but we caution that that might have seen some advanced purchasing. we didn't know at the end of april how the whole crisis would unfold there is still a high level of uncertainty in the market. we are working through these issues we are preparing for our quarter two. we are going to release in early august we'll be in a better position to shed some light on

the remainder of the year and to what the next years hold for us and what may impact for the time to come. >> how do you think the world changes your business in the long term. >> the food, newtition and health are resilient because they cater to the most basic needs of people. we are not concerned about the quality of the business going forward. we are concerned about the help where globally distributed supply changes have to work so we can continue to serve consumers and patients that is important to us and, yes, in that area we are concerned. everything else, we have the

tools, the people and the brains to address the challenges going forward. now more than ever >> we want to thank you for joining us we appreciate it on what is a newsy day for your company coming up, volatile session overnight in the futures down more than 300 at one point overnight. now down about 42, 43 points talking about the biggest movers in retail and big tech names we head to break and look at yesterday's biggest losers in the dow and the s&p 500.

good morning, u.s. equity futures now down 32 points or so we have been up and had 2.5% selloff yesterday. nasdaq snapped its same-day win streak big tech stock hz been leading the market higher. facebook, microsoft, amazon have pulled back. joining us now, chief market strategist at td ameritrade and dan ives director at wedbush securities i want to get to you on apple but since we just talked about overall markets or nasdaq, i want to talk to you about this are they pull backs we are

seeing is it we had one a couple of weeks ago, a pretty sharp one. about 1,800 points on the dow. we had a 700-point move. the financial media. they love down days. we had a couple of weeks we were up 3 or 4,000. those are met with beyond. you see a down day and it sort of baton's up the hatches. does that ring outco come placen si or is that a concern? >> the entire trading population has become arm chair

epidemiologists. it is very hard to put your fingers on this. i think it is good to not have this a couple of weeks ago, it felt like whatever you bought, it was going higher it was good for people to be a bit selective of what they are buying and to give more thought on that. it is a good thing for people that weren't involved in the market through up our hands for the average person involved. and now the financial media wants them out of the market the selloffs are happening, the old expression, the market that goes up the stairs goes out the window it is going out the window with fury >> if apple is any type of market leader at all, it is hard

to see a real bearish case for the nasdaq you are now looking at a price target of 425 for apple. that is your price target. that's not your bull case. it is 500 for apple. it was 360 indicated to open this morning you are talking 500. it has to do with what china has to reopen? the 5g tail wind. it is going to be big in your view >> for apple, i think we are half way through the top rating. you look through the services and the value of that is around this you look at the pure numbers,

350 million of 950 million iphones right now are in the window of upgrade opportunity. all of our checks show this will start what we believe will be a $2 trillion market cap over the next year in terms of apple. >> amazing could you describe what 5g will do in terms of the whole eco system >> it will be transitional for apple and the whole echo system. first on the smartphone side, you'll see apple and samsung and others this will be the pipes and the opening to what will be. you look at smart cities and transformational applications and what will be the start of a big change for consumers if you go back to the 2021 and 2022

it doesn't happen without smartphones going 5g apple, where they stand, next t cloud, this will be the most transformational even with covid, we are talking a trillion dollars that will be spent. and apple is a big piece of that >> always treat the market with respect in terms of risk and reward no different here with the daily news flow. we are used to talking about the markets in terms of our health and the health of our family, it is such a strange dynamic. we are almost getting used to it it is not easy ives, are you at home? >> yes, man. i'm at home. what are things behind you

do you put cash in those things? is that money you made from apple? >> yeah, i wish. those are things back there that my kids use. >> okay. just wondering >> thank you >> thank you >> becky i think that's money wads of it, becky. joe, thank you when we come back, market movers, we'll take a look at gold yesterday, the commotyoueddi tch the highest level since 2012 up 16% for this year we'll be right back. ♪ ♪

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the payments platform that delivers convenience for all. adyen. business. not boundaries. an update, nevada's governor has ordered face masks to be worn by the public starting on friday hospitality workers had been asking for government to intervene requiring customers to wear face coverings. take a look at casino stocks right now, unchanged travel stocks were facing pressure on concern of hot spots we are seeing now. when we come back, carla harris will join us. squauc squawk will be right back.

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welcome back to "squawk box" this morning

we are staying on top of the action we want to bring you an important story, which is morgan stanley is kicking off its fifth annual multi-cultural leadership conference joining us is carla harris, vice chairman of global wealth management and head of multi-cultural client strategies group. carla, great to see you. >> good to see you. >> today we're going to do this virtually. i know you have a virtual conference on the table today. more more relevant than ever especially given the conversation that's happening across the country right now about diversity and race and inequality and everything else in terms of not the new found problem, but given the conversation, how does that change today's event >> i'll tell you, thank you again for having me on, it has been a pleasure to talk about this every year. this is the fifth year holding

the conference this year you are absolutely right. it will have special significance we decided to go virtual like most conferences this year, and we wanted to focus on the topic that will be most germane given what's going on with covid-19 and given the social unrest and what's going on across the country, i think it will have more significance as we talk about health care, politics, the economy and frankly the changing face of philanthropy we'll have a real discussion about the stakeholders and the innovative transaction that the ford foundation did last week which we were privileged to be a part of that is i think a real unique showing of a public/private partnership excited about this year. >> tell the audience for those uninitiated about the transactional relationship with ford and what you guys are doing. >> yes

last week along with wells fargo we had the honor of being able to bring a billion dollar transaction to the marketplace as you know, the ford foundation, premiere organization with respect to distributing funds to other nonprofits, especially around social justice and i think that the enormous demand for the transaction is reflective of people wanting to be a part of the solution. both public and private investors wanting to be part of the solution i don't think there's ever been a transaction that has come to the market that has been for this use of proceeds so we were very proud to be a part of the transaction. >> i've got a question for you i think it's a question happening among management and boards across the country. people are talking about wanting to diversify management and boards i think there's now much more movement on that issue even in the last two or three weeks than

you've ever imagined, at least that we could hope for i think they're grappling with this issue of using the word quota. i know it's a word you don't like i wanted to try to understand how you think that these boards and management should be thinking about this and especially when it comes to hiring, both at a college level but also among the senior ranks. you often hear about the pipeline issue, especially in the senior ranks, what they should be doing. >> yes i'll tell you, you're right. you and i have had this conversation before about quotas, and i think the word to think about for every company is target, not quotas quota makes you think about a limit and something that is required target is something that is aspirational and that you are working towards and it's something that you can exceed in that moment. so i think if they change the language, if you will, and start thinking about targets, number one, that will make it easier. number two, as you and i have talked about before, there's not

a supply issue, not at all there are lots of qualified multi-cultural folks in the environment not only at the college level but also at the graduate school level and also broadly in the marketplace so it really is around the intentionality which i think the word target will help you with with respect to filling your board rooms, senior ranks and pipe lines with multi-cultural candidates. >> carla, we always look forward to seeing you. we wish you lots of luck today with the conference. we should also note that our own melissa lee will be hosting a panel at today's event >> yes. >> it's going to be an exciting one. >> we're happy to have her again. thank you. >> we'll look forward to that. >> thank you very much >> thanks again for joining us this morning "squawk" returns in just a moment.

wild swenings on the future this morning we will break down the latest and what it means. disney's dilemma the entertainment giant saying it is delaying the opening of theme parks and may postpone the release of "mulan. an outlook is straight ahead. plus, a new fund is helping new jersey businesses get back on their feet. details straight ahead the second hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin and becky quick and joe kernen u.s. equity futures at this hour, overnight it looked like we were meaningfully in the red. right now not so much. i want to say down 17 points nasdaq looking higher and s&p 500 looking marginally higher. joe. >> thanks, andrew. we've got covid concerns, but apparently some are citing election risk hanging over 9 the market as well a new economic survey takes a look at the race for the white house. steve liesman joins us now with more, and let's just skip it,

steve, the athlete thing just give us the facts no, no, no, it's been done enough, the all america type stuff since they're not playing anyway, and may not be this year take it away, steve. >> reporter: joe, it just wouldn't be an all america economic survey if you didn't joke about that. so thanks very much about not joking about it. joe biden jumping out to a 9-point lead over president trump in our all america economic survey. president trump still leads on the critical issue of the economy. let's go through it here what you see is that compared to our april survey, president trump fell by 1 point and vice president -- former vice president joe biden increased his support by 3 points in the head to head there five point lead has now become a nine point lead. this surge comes amid concern over the economy, concern over wages and obviously concern over

the coronavirus. we'll talk more about that in a second let's take a look at the issues we asked about which candidate has the best policies for the following issues you can see the one that the president leads on is the economy, and that's a 6 point lead over biden, but immigration and dealing with china and foreign policy that seem to have been marquee issues for the president, the first two are within the margin of ear rorror biden dominates on police reform, dealing with coronavirus and healthcare and a 25 point lead on dealing with policies for racial equality. what happened to the president with his approval rating is he got a bump from april that our pollsters, both democrat and republican, pollsters we have, attributed really to a rally around the flag phenomenon that happened around when the coronavirus crisis hit and was

hardest. now he'sback to pretty much where he was except he's real close to some of his worse levels with a 52% disapproval rating and a 39% approval rating and that's -- it's not terribly different from where it was but really he lost the bump that he had around the coronavirus part of what's happening internally in the head to head is biden consolidating his base. he had gains among young people, 18 to 34 maybe the bernie supporters came over democrats. he had gains in democrats. he's consolidating his base. one issue for the president here is what happened with independents this is worth a closer look. watch what happened here the president's approval rating among independents declined from 37% to 26% follow the orange bar there. what happened? they did not go over to biden who maintained a 31% support from independents.

those independents who left trump went over into the undecided column that's something worth watching. still makes this very much a horse race five months out just a couple quick facts on the economy. 29% say it's good or excellent, down from over 50% back in december 60% say there will be no full recovery for a year or longer from the coronavirus, up from 52% in april and then maybe one of the more worrisome numbers, 31%, only 31% see their wages increasing in the next year. back in december it was 50%. so people are going to be nervous about their wages and we'll see, guys, does the president able to make this about the economy, which is where his strength is? or is it about the coronavirus, health care and some of the other issues the public was talking about? that's ultimately what might determine this race. joe? >> steve, that was what i was going to ask you about oh that's what i was going to ask you about, steve, just the idea that it's the economy, stupid,

has always been the mantra that we've believed since james carville with bill clinton running on this. this time around coronavirus and healthcare are so wrapped up in how the economy may go that i guess it could be a little different this time. >> it's very -- it's very difficult to say now when we polled in 2018 actually the economy was not the number one issue health care was the number one issue and you saw democrats pound that and they pounded that all the way to victory in the house. by the way, this issue of the coronavirus and health care are obviously two issues that are intertwined. the president has strength when it comes to this issue of the economy. i don't know if he's able to bring it back to that issue or, as you say, if americans remain focused on these issues of health care and the coronavirus and see them really wrapped up in the economic outlook. people do not believe this virus issue is getting shorter

they're listening to dr. scott gottleib, as am i, and he is concerned about the fall we had some 3/4 of our respondents, becky, believe that there's going to be a second wave and that's up from the last time we asked them. >> all right steve, thank you good to see you. in the meantime, the market's deep plunge yesterday has plenty of investors on edge. joining us to talk about what's behind it and what's next is our very own mike santoli. barry knapp, managing director at ironside's macro economics. gentlemen, good to see both of you. mike, i want to start with you just for a recap of what happened yesterday and what that might tell us about investor sentiment. it was really a lot of the stocks that are so tied to the reopening of the economy, things like airlines, things like the cruise lines, things like hotel stocks those were the ones that i think suffered the most yesterday. >> yeah. >> what's that tell us >> they absolutely were at the heart of the weakness yesterday. it's part of a process that was

underway for 2 1/2 weeks those stocks peaked with the s&p 500. one difference yesterday was there was a little bit of a pull back after a huge up side sprint in a lot of nasdaq names that managed to support the indexes while those other stocks did correct. absolutely i think the rising case counts got to a certain threshold where it did prompt a little bit more nervousness about the pace of reopening, but i don't think it was a change in character of the market really yesterday if you remember a couple of weeks ago we had the big almost 6% down day it did serve as a little bit of a short-term shakeout. the average stock in the market down 12% in 2 1/2 weeks. so it's -- you would often -- you would basically say if we needed a pull back, it's been underway for a while yesterday was a little more pointed in terms of the concerns that it was not rescued by the big growth names >> well, oil itself was down 6% yesterday. it's down again this morning >> right i mean, that's another -- that's another aspect of the reopening,

but also of rallies that really did seem to price in a lot of improvement in a hurry, whether it be gasoline demand or something else so i think it's part of this hashing out of a digestion process of that rally at this point. >> hey, barry, you have been pretty optimistic through this you called the rise that we saw in equities as the economy started to reopen. does this give you pause at all? >> not really. i actually think in a lot of ways what mike is describing is a pretty healthy process you know, if you think about what recessions do, it really accelerates the process of creative destruction we wrote a couple of reports wrote shepherds gale which is another term for that, and if you think about what's likely to occur in the economy going forward, you've got a series of sectors, consumer discretionary, consumer staples and health care that have made greater than --

greater contributions to s&p 500 revenues than they've made to earnings for quite some time, largely because their margins have been weak, they've been less productive. that was starting to evolve late in the last business cycle if you recall, productivity averaged 1% for the first eight years of their recovery and accelerated to 1.8 because of technology innovation adoption in those sectors. so when you think about the earnings outlook for the s&p 500 on a go forward basis, what really will drive earnings forward is going to be technology, but not just the technology stocks themselves and software stocks, but using technology to deliver health care, using technology to deliver consumer products, right? just migration from bricks and mortar to online retail sales. that has the potential to drive overall margins for the s&p 500 up so this was always likely to be an accelerant to that process

and, you know, buying into the recovery stocks never to me made a heck of a lot of sense they were always going to struggle, but trying to play those themes that were accelerated by this could he vied crisis are the ones that make sense on that morning i got lucky and bought health care and software on the 23rd, those are really the potential big performers in the next cycle this rotation that mike's describing without calling it rotation to me is a manifestation of that of what the next business cycle is going to look like >> barry, you were watching earlier when we were having a discussion about vacations and whether, you know, any of us really feel like flying. i think you tweeted out -- i think of you and i think like we're both big lovers of vale and vale mountain.

it was a full flight and you were comfortable on a flight from colorado. >> it was unbelievable, yes. we drove out there a month ago, and drove out there with my son and my dog and flew back yesterday and i had a window seat, had my mask on, but everyone had masks on. i was okay with it when i got to d.i.a. denver airport, there was no one there. you know, i think that part of the process is going to be fleeting in some ways it reminded me of when i flew back from vale on march 10th and no one was worried about the virus and then the end of the week it was shut down again but, i don't know, that's why i'm saying, that plane, that part of the recovery is very tricky for me and buying airlines, particularly when government lends you money is not my favorite idea, but playing into these other themes going forward. one other i would mention for sure is there's going to be a big recovery in global trade and global exports

if that activity was depressed during the trump trade war last year, it was starting to reaccelerate, so i would really look to industrials and even some of the mercantilist countries, even into mexico. >> i'm sorry, i wasn't going to try to take this over, but quickly, santoli, she's saying 2800 is the first on the s&p if we don't see improvement in places, it doesn't seem like that's impossible for where this could get to i don't know where from there. >> what's that >> i don't know if it's first support. we kind of held up in the mid 2900s a couple of weeks ago and that's one area that's sort of like the high end of the former trading range, but i think the key about something like what

katie is saying about 2800, if it were to get there, it's still in the context of a correction it's not kind of game over for the rally. doesn't mean you go back to the low. it feels like we do if you get there in a hurry you would characterize as a somewhat routine pull back after a huge up side run >> mike, we will see you a little bit later barry, thank you for joining us today. good to see you. >> thanks. >> andrew? coming up when we return, thanks, becky, small business in new jersey getting a chance to access new fund set up by the state's former governor and his wife we've got details on that straight ahead. plus, trouble for the magic kingdom. disney delaying the opening of disneyland and in florida more than 7,000 workers at walt disney world have signed a petition urging the media giant to reconsider the opening of disney world next month.

we'll break down what it cldou mean for the company with rich greenfield "squawk box" returns right after this businesses are starting to bounce back.

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get a powerful and reliable internet and voice solution for only $29.95 a month for three months. call or go online today. - communities of color have always been underrepresented in the u.s. census. that means less federal funding for schools, hospitals, libraries, and other public services for diverse communities and less representation in congress. this year, it's critical that you participate in the 2020 census. it's safe and confidential. let's make sure everyone is counted in our community. for more information, visit getcounted.com, and to participate, go to census.gov. welcome back, everybody. the futures this morning are a little bit weaker after a big decline yesterday for the markets. dow was down by 710 points yesterday. this morning it's indicated down by about 95 points also check out some of the early movers in the dow. the ones leading the way today,

nike, apple, microsoft those are the three that have been higher. nike's up by about 87 cents. apple is up by $2. if you want to take a look at some of the laggards though, this tells you the story of what we've been watching yesterday in the markets, concern about potential for shutdowns in some of these areas or at least a slowdown of the reopening of the economy. that put pressure on airlines and travel stocks, and you see that reflected here, too boeing is the biggest decliner down by 3.4% this morning. walt disney down by 1.8% american express is the third decliner down by .8 of a percent. when we come back former new jersey governor chris christie and his wife mary pat are launching a fund to help small businesses that have been hurt so sharply by the coronavirus. we'll hear from mary pat christie right after this break. take a look at the faang stocks. many have led the nasdaq to an

all-time high. yesterday it fell 2.1% in the selloff and snapped an eight-day winning streak "squawk box" will be right back. time now for today's aflac trivia question. what cat food claims it tastes so good cats ask for it by name? the answer when cnbc "squawk x"onnues started with a few smaller bills. fifty dollars here. eighty dollars. a hundred dollars. i had good health insurance. why isn't this covered? well, then they started getting bigger. eight-hundred dollars. eighteen hundred dollars. i saved for this. but not that much. i'm glad i had aflac. they gave me money when i needed it most. that's why aflac is here, to help with the expenses health insurance doesn't cover. i love that aflac duck. aflac! get to know us at aflac.com

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so good cats ask for it by name? the answer, meow mix the revival of small business is essential to the economic recovery. former new jersey governor chris christie and his wife mary pat are stepping in to help. they have launched the new jersey 30-day fund to support businesses in the state affected by the covid-19 crisis joining us now with the details, mary pat christie. mary pat, thanks for joining us this morning i think you got the idea because something similar was in virginia i'll tell you what struck me initially was that we all think small businesses, philanthropy, small businesses, it doesn't immediately enter into your thinking that i could help -- that's the federal government needs to do the pp -- you know, we figure they need to step in or the state needs to step in. what a great way to do this.

you and chris ponied up 100,000 to start with and it's to really help small businesses in new jersey, which are the life blood really of any economy. >> yeah. good morning, joe. thanks for having me these are folks that have really fallen through the cracks, they have 3 to 30 employees, they haven't gotten federal assistance and they are, they are main street mom and pop places we've opened this two weeks ago and we've had close to 2700 applications the need is really great >> how -- i mean, we're doing this for a reason. i don't know if you notice, but we're all about solutions here on cnbc and "squawk box. how would someone get involved with this to help fund it? >> well, i raised almost $500,000 so far so i'm making lots of phone calls, but they could go to the nj30dayfund.com which is our website or donate online or send a check in or wire and i can provide details

for that as well but we really are helping a lot of people. and the stories as i go through these applications are both heartbreaking and inspiring because these people have worked decades to develop their businesses and they've seen it devastated in just three months. >> six states, is that it, including new jerseythat have similar programs >> yes >> i don't know if anyone is really good that we're shiepg a light on this, i don't know if people have seen it. >> no. these are people from nail salons to restaurants to a tire business to a woman that has a quilt shop that she's had for 13 years, but she employs four people so we not only want to get people back to work and help employ the people, but we also want to help people that are in their communities like mare's dance studio that has 130

students in long branch. it's really the life blood of the community. we're just trying to do our part. >> if somebody is able to pay it back, you don't take the money back, it goes out to someone else that needs it, right? >> it's one of the hallmarks of the fund, if you get back on your feet, if you get federal funding and you can pay the $3,000 back, we'll pay it forward to another worthy business >> can you get one of these if you've already gotten a loan or help from our -- from the government >> i mean, more times than not our applicants have not gotten it, but it does not disqualify you. you do have to be a for profit business though. we're not -- there's lots of people out there doing worthy work for the nonprofits, but you have to be a for profit business. >> how long are you going to do this, do you think how long will the fund run >> it got its name, 30 day fund, because the founder's concept was that it would only exist for 30 days.

we have found that the need is much greater than a 30 day fund. my guess is we'll stay open for three to six months and close it down get out the money efficiently. all the administrative costs are being born by me and chris so we think it's a worthy cause. >> where is the governor is he like standing right across from you like coaching you or giving you tips? >> he's not. >> he's a tv star now. >> i've been able to figure this out on my own. he's down at the beach and i'm up in mendham. we're covering all of our bases. thanks, mary pat. >> thank you >> thanks for contacting me so we could shine a light on this good luck. >> appreciated your text >> see you later >> becky thanks, joe. still to come on "squawk box" this morning, disney in distress the stock down again this morning after it announced that it will delay the opening of the california theme parks

we'll talk about the impact on the company next and then mohamed el erian of allianz will be our guest. we'll get his take on yesterday's selloff. the futures this morning are a little bit weaker after the big selloff yesterday at least for the dow and the s&p 500. dow is down by 100 points. s&p down by 6. the nasdaq is indicated up it's up by 11 points rhtig now "squawk box" will be right back.

welcome back to squawk banks box. disney announced an indefinite delay last night

juliaboorstin joins us now wit the latest julia. >> yes, andrew it looks like shares are trading down pre-market. disney is delaying the reopening of the anaheim theme parks and resorts and hotels canceling the proposeds phased reopening that was set to start on july 17th. the company is saying the state of california has indicated it will not reissue theme park guidelines until after july 4th given us the time to bring thousands of cast members back to work. we have no choice but to delay the reopening of our theme parks and resort hotels until we receive approval from government officials. disney says it will update reopening plans when guidelines are released and will move forward with plans for opening the mall outside of the park gavin newsome appreciates the

consideration. while disney is pointing to the state approval process, this does come after a dozen unions representing 17,000 disneyland employees wrote to governor newsome last week saying they believe it is unsafe to open the park disney world in orlando is still on track to start its phased reopening on july 11th though over 9,000 people have signed a petition on moveon.org calling to delay the opening of that theme park until there is a decline in the number of covid cases. there's another issue to watch here for disney. the company has to evaluate whether or not to delay the release of "mulan," the big film scheduled for july 24th release. it had already been delayed. the question is whether theaters or major markets will be open by then andrew >> hey, julia, before you go, a couple of things we're all trying to understand what's going to drive the

reopening or the reshuttering of business in this case it appears that what's happening in california is driven by government not by a corporation or consumer, consumer demand. how do you think this will ultimately play out in florida where it's unlikely, i think, that the government will shut down disney world but, again, you talked about the unions, you talked about employees and then there's going to be the consumer demand picture on the other end. what are you hearing inside of disney >> i'm hearing that the state of florida and state of california are handling this entirely differently. the state of florida has been enthusiastic about the reopening plan the meeting that orlando county government had to try to figure out the reopening plan and the safety conditions there. so i think that it's really going to come down to the state decisions and i think that to a certain extent behavior of people and consumer interest is

following those state guidelines so i think we will probably see orlando open as planned though disney does have to deal with the question of whether employees really feel safe returning to work and where they are negotiating with unions with that so i think right now the first step is making sure that the governmental perspectives are aligned. after that you have to get the employees and after that is whether or not there's consumer demand >> but what is your sense on the consumer demand side of this given what's happening in florida? by the way, the nba obviously is hoping to get down there as well so there's a lot riding on this, but as we see flare-ups around the country, you're seeing in places like texas where the government has not cracked down, for example, on certain things but the consumers unto themselves, the public is starting to just given some of the real health concerns >> you know, it's really hard for me to tell i think there's a really wide

ranging perspective about whether or not people are just so eager to get out of the house. this is something i hear also about the movie industry people are eager to get out of the house. their kids are cooped up they've promised their kids something to look forward to i do think there will be a certain portion of the population that will be eager t get out there. the question is how many people is it? i think there was an assumption that by now, by summertime there would be a lull in cases people would be able to get out there. and i wonder if that's the sort of changing people's perception about things because i think going into the summer the assumption was it would be totally fine by july to start this phased reopening and i don't know if people are going to change their minds. there is a sense from the film industry and parks industry that people are raring to go. the question is whether this new spike or increase is going to influence that. >> julia, thanks joining us now, rich greenfield, light shed partners.

co-founder that's nice. you're a positive guy. instead of looking how this affects disney negatively, you think it creates opportunities for the streamers like disney, netflix, hbo max, like peacock >> yeah. look, everyone's got to be figuring out new strategies. i think the question that andrew was asking to julia is sort of unanswerable, right? we don't really know what consumer behavior is going to be i've heard movie studios have been doing studies saying up 50 to 60% of frequent movie goers are not comfortable going back to theaters now and that's probably prevaccine. you're looking at an extended period of time where even if it's open will be severely depressed. look at what universal did with "trolls. i'm not saying direct to consumer $20 could work. "kings of staten island" a few weeks ago did far better it got a lot more buzz going

direct to digital than it would have if it came out in movie theaters being flexible how you think about the business is a real asset. in that case or certainly in universal's case, being connected to comcast, having a large broadband base, having the video business both in the u.s. and overseas with sky is a unique advantage disney is unwilling to make those types of decisions disney is committed to these terse. they recommitted to reare only going to release our films in movie theaters p puts them in a lot more difficult position. >> disney pure playing things and suddenly the pure play is not looking necessarily -- it's just being looked at -- >> it's the perfect storm, right? it's every part of their business is impacted you were talking about the nba i think, andrew. is the nba actually coming back? do players and their families

actually want to go to florida right now? part of the challenge is that the disney workers are not part of the bubble. they come in and out you can't force the disney workers, i understand, into the bubble because they're union workers. you run into all of these challenges in reopening. i think that's why investors are going to continue to lean and move away from these legacy media names like disney, look towards names like comcast, look towards charter, look towards netflix and snap chat and twitter. i think the traditional media space, the pure plays on programming are going to be very difficult over the course of the next 6 to 1 months. >> rich, we talked about disneyland and the parks in california having a tougher time opening for disney what about florida they're seeing cases increase there, too is this disney wants to reopen the parks but california officials haven't put out the guidelines yet so they can't but they're going ahead in florida or you think the florida parks are at risk too? >> becky, what i'm sort of

staggered by is the disney brand is so important and it's taken, you know, decades of building up that brand perception. i get that people want to get out of the house i'm included in that group my kids certainly want to get out of the house you would think disney would be taking a far more cautious approach and it wouldn't be the government pushing back on disney, it would be disney saying, you know what, we're nervous about what's happening, we're going to proactively slow down i'm surprised we haven't heard that from disney in california and certainly the same goes in orlando. the fact that workers are writing petitions in the thousands in both states sort of just shows you that like disney's under a lot of pressure financially. they're feeling the pressure to open and, you know, i think that's the unfortunate side. from the consumer standpoint, but i really think to andrew's comment before, i don't think the consumer demand is going to be there the headlines are so bad look at what happened with people being nervous about going

to a rally for trump the other day. i think here's growing fear among the consumer about attending large gatherings i would put theme parks in that catego category i wouldn't be surprised to see disney delay the reopening risk factor is growing meaningfully. >> a month, two months, one quarter is one thing china or europe, it's going to happen eventually, right, rich how much do you penalize the stock for what is not going to be permanent hopefully who knows. >> i think the real question there, joe, is what's the new normal investors are looking past 20. no one cares what is 20 enks? i don't care whether it's disney, comcast. they don't care. they're looking at '21, '22. the question is how long when do we get a vaccine when does travel normalize it could be a lot longer than the next 12 months to get anywhere near where you were in

2019 that's the challengewhy people are looking at a stock like disney and why it's trading down. >> sometimes i think about previous generations and stuff what is this -- let's say it was february even if you date it early, february to where we are now what's that, two, four months -- three, four months, rich remember world war ii, four years. four years we may not get everything we want, you know, in less than one quarter or if it's two quarters, it's like the world is ending it seems like to us. >> look, i would go -- the new normal for -- think about it you book travel six months in advance, sometimes a year in advance. so are you booking a trip to, you know, disney world right now for the holidays or even for next summer? probably not at least a good chunk of that. the movie business, you don't know what the movie business is going to look like over the next year that's why being creative in how you look at it, whether it's direct to consumer, what you all

did with "trolls" or "kings of staten island. you look at what they're doing paramount is taking that from viacom to cbs all access you could do that with peacock after you launch it more broadly in a couple of weeks being flexible about distribution is going to be a real key to being successful in quote, unquote, the new normal of media until we get past this. >> it's the bridge of how long companies can survive or employees can survive. it's not that we're soft, it's just the realities of what people are doing. >> think about it, you can buy any stock you want you could buy comcast now? do you have a media business, theme parks? you have a broadband business. you can buy netflix. since we can't forecast this stuff, it's very challenging to see when it goes away, i think you're going to have to make choices on where you really believe in the future and where you are comfortable making

predictions. i think it's very hard. >> thanks for coming on. toss it over with you, becky back down to 140 points indicated. >> yeah. got to watch this closely. thanks, joe. when we come back, allianz chief advisor mohamed el erian, yesterday's selloff, what we're seeing this morning and what investors can expect. as we head to a break, let's have a quick look at the airlines they were part of the big slide. down once again this morning declines of 4, 5, 6% across the board. that all came on growing fears that a surge in covid cases could force another round of shutdowns or make consumers feel like they don't want to fly. "sawbo wl rhtacquk x"ilbeig bk.

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welcome back to "squawk box" this morning futures have gone down as the show has been progressing. dow off about 160 points nasdaq looking to open down a little bit as well the s&p 500 has turned negative as well. wanted to check out oil prices right now and show you where things are if you want to buy them by the barrel, wti crude as we flip the board around, if we flip the board around that is -- maybe we're not flipping the board around there it is, 37.29 we'lbe bk thl acwi the one and only mohamed el erian after this businesses are starting to bounce back.

but what if you could do better than that? like adapt. discover. deliver, in new ways, to new customers. what if you could come back stronger? faster. better. at comcast business, we want to help you not just bounce back, but bounce forward. and now, with one of our best offers ever, we're committed to helping you do just that. get a powerful and reliable internet and voice solution for only $29.95 a month for three months. call or go online today.

welcome back, everybody. meg tirrell breaks down the numbers about what's happening and where. >> reporter: dr. fauci citing what he calls a disturbing surge in community spread in some states, and that's raising questions from some public health experts about whether some of these areas should consider even pausing or even reversing their reopening strategies take a look at this. this is -- there's a map we have from covid exit strategy which shows how states are doing on the government guidelines for reopening. this is compiled by doctors and public health experts who worked in the white house, the hhs and on the ebola epidemic.

a lot of these states are red. they are not meeting the federal government's guidelines for moving into the next stages. we were just showing you there a quote from the cdc's guidelines on these government gating protocols. they said given the potential for protocols, a low threshold for reinstating more stringent mitigation standards will be essential. our area seeing this increased spread actually considering putting these back in place. we have a map here of what we've seen from different states and counties around the country. this is not a comprehensive list, but what we found is that most places that are taking action are pausing their reopening plans either entire states from nevada to north carolina to louisiana and maine to some areas just specific counties like california, oregon, washington, florida. there's only one county that we identified, maybe more, one in

idaho, the area where boise is, reclosing bars taking a step back based on what they've seen guys, a lot of people really hesitant to really go backwards. back over to you >> meg, thank you for that appreciate your report and it's alarming it's alarming. nonetheless, markets down a bit. i don't know how long the markets are now. off about 3/4 of a percent now on the dow you're looking at the s&p 500 off marginally and the nasdaq off as well. yesterday we saw major averages post their worst day in nearly two weeks and the nasdaq snap an eight-day winning streak our next guest says none of the factors that contributed to the selloff should have been a big surprise to investors. joining us right now is allianz chief economic advisor mohamed el erian mohamed, you have been sober throughout all of this, perhaps more than most

having said that, the markets, of course, have continued to push higher on a relative basis to, i think, perhaps some of your earlier sober analysis. how are you thinking about things now the market is up -- while moving lower, it's still marginal relative to i think maybe the way you were thinking earlier. >> good morning, andrew. look, the market is looking for an anchor. it had the anchor initially of policies, fiscal and monetary. that anchor then got handed off to reopenings and then that anchor got handed off to retail flows, but retail flows no longer have the same influence you could see this from what's happened to the rotation trade, you can see this from what happened yesterday so the big question is what is the next anchor for markets and it's not clear to me where it's going to come from >> and so as you think about

this, to the extent that the market takes a pause or perhaps even tumbles, you know, i remember we used to ask you, do you buy on the dip and you said no do you feel differently now? >> so i think people should be ready for more volatility. what i don't like is when i hear people say go for the reopening trade as opposed to the stay at home trade as you just heard, living with covid is not going to be a linear process, it's going to be bumpy. i also don't think we should fade the u.s. in favor of other markets, especially not emerging markets. they're going to get hit even harder so the relative calls for me in previous trade forward the absolute call is really tricky because it depends on your feel for technicals, and i don't enjoy betting on moral hazard, which is the other way people are playing this market, which is betting on moral policy, they're betting on the

fed imposing yield curve control. i'm not comfortable doing that, but if you're comfortable doing that, i can understand why you would. >> well, let me ask you about that when it comes to policy as we see continued breakouts and spread of coronavirus throughout the country, there is at least among some investors an expectation that the government, putting aside even the fed, but in terms of government programs for small businesses and the like, if you thought those were ending, there's now -- i keep hearing a renewed view that maybe they will come back. >> and some of them should come back, but they should be much more focused they should be pro work and importantly they should be combined also with two other sets of policies, which is, one, making sure we can live with covid well, which is a health emphasis policy driven approach, and secondly preparing for the world after covid. andrew, if you put all of that

together, that's a lot for this congress to get through before november >> and so let me ask you separately if you had some money on the sidelines now, are you putting it to work if you have money in the markets, are you keeping it there? what would you be doing? >> so i have money on the sideline and i missed the last rally of the last three weeks. i'm not putting it to work here. when it comes time to put it to work, i will be putting it to work in thames that are, quote, under the umbrella there are two types of umbrella out there. if you are comfortable with moral hazard, the umbrella supported by the fed, which involves high quality bonds and certain high yield bonds if you're comfortable with a market-based umbrella, it is companies with very strong balance sheet and positive cash flow generation. and there's quite a few of them, by the way, out there. i suspect they will continue to do well albeit in a very volatile fashion

>> what do you think of the big tech stocks that have run up and have stayed up for the most part at this point? >> so i like them. i was a big buyer initially. i got out because i felt valuation had gotten too high. i would look to get back in if valuations were more reasonable. those stocks have at least two if not more of the following criteria that i really like. you've heard me talk about them. very strong carbsh on the balan sheet. on the sunny side of living with covid and post covid period. so there's a lot to like in those names. the question is just valuations. >> what do you think of the travel stocks? a lot of them got -- first they got pounded, then sherp somehow loved by at least a certain group. now people are worrying about them all over again. some people think they're going to be able to raise more and

more money from public investors. others believe ultimately they have to go back to the government >> they'll be able to raise money. virtually anybody can raise money in these markets it's stunning how for giving creditors are, and that's why we've had a boom record levels of high yield issuance ahead of a spike in bankruptcies. look, travel is tricky, and just ask yourself the question, if the eastern states are putting sand in the wheel measures to stop people coming from the hot spots, what do you think is going to happen internationally? we are not going back to the free travel that we have all been used to it's going to take a long time, and this is part of the very unsynchronized nature of the recovery, not just globally but even within the united states. >> okay. mohamed, it is always good to see you and to get your perspective on all of these things especially as things become or at least appear to be

at least within the context of the markets more volatile. thanks so much and talk to you soon. >> joe >> andrew, thanks. coming up, our exclusive interview with jeffrey knittel take a look at gold. as markets fell, the commodity hit the highest level since 2012 it'smo up re than 16% this year. "squawk box" coming right back

so i'm gonna hold on promoting you this quarter. cool? drop the taco. get in the car.

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investors around the world. stressed out results of the fed's annual tests tossing the big banks into a pretend economic nightmare they're out later today. guess what we're living the nightmare for real and we're going to talk about what investors need to be watching closely. and an exclusive interview with the ceo of airbus americas just minutes away. the company could be in a good position to recover from the pandemic if only it can convince the public that it's safe to fly again. the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin u.s. equity futures are

indicated down triple digits and then down 163 points the nasdaq indicated down about 10 tough session yesterday in the nasdaq after having a string of pretty positive sessions and then s&p indicated down about 13, 14 points. dow futures have been pretty volatile since early this morning. we had been down 300 we were actually up 50 or 60 at one point since i've been here since 6 a.m. now you can see the futures are down 233 the implied open is down 158 let's take a quick look at treasury yields as well. as you might expect, those seem to moderate a little the yield does when we have this kind of action in the market and then oil a lot of times either responds to or helps lead the risk off trade to some extent. we've seen oil not trading as well as it had been when it was up it was up above 40

becky. >> joe, we begin this hour with an update on the coronavirus this is what caused some concern initially in the markets yesterday. that's when the u.s. registered its largest daily increase in cases since the pandemic began some 45,000 new infections that's more than 9,000 cases above the previous daily record that was set back on april 26th. states including arizona, texas, oklahoma, california have all set single day case records this week with some health experts pointing fingers at lockdown restrictions that were eased starting around memorial day texas governor greg abbott said his state is facing what's called a massive outbreak and might need to put in new local rules in place in order to preserve hospital space. in the meantime, starting today the governors of new york, new jersey, connecticut are asking travelers from more than a half a dozen hot spot takes including florida and texas to quarantine for 14 days when they arrive in their state.

in march they issued a similar order from people from new york area cuomo said the state could impose mandatory quarantines and fines for travelers who don't follow the rules andrew >> thanks, becky meantime, u.s. air lines coming off a rough trading day the major carriers all saw their stocks fall sharply on worries about the surge in covid cases and that 14-day northeast region quarantine phil lebeau joins us with a very special guest who is also watching those covid numbers so very carefully >> reporter: thank you, andrew let's bring in jeff knittel. we have talked about the state of the airline industry. when we talked in march you were concerned about covid-19 given what we saw yesterday with the quarantine restrictions from the three states in the tri-state area, how worried are you about passenger levels falling off? >> well, obviously, phil, this

is not helpful when there are restrictions by state, it creates obstacles, but the fact is we can only control so much. and our job is to create the safest environment possible for the passengers so when they're ready to fly, that we as the airplane manufacturer and our partners, the airlines, provide that service and give them the comfort that they expect from us and they will receive from us. >> and we'll talk about that a little bit more extensively in a bit, but not to beat a dead horse, but if the travel numbers don't come back, are you worried that the airlines have enough cash to make it over the next two years or are they going to have to go back in some fashion and come up with even more money, whether it's the private markets or looking to the federal government >> well, it's obviously airline by airline i think that this specific situation has been different than anything that i've

experienced over my 40-year career, whether it was 9/11, the financial crisis and the like. all of them had a dramatic impact on aviation, but this is the one that's most unpredictable. i think the airlines went into this situation in the position as best they could in terms of their financial wherewithal and their strategies now that being said, obviously they're all burning cash at different rates. i think raising cash is a smart move in an environment where rates are low. so they're all building cash and preparing themselves for the long haul. now there's a cost to that as has been pointed out in the past, but the reality is the rates are low and they have put themselves in a position to succeed over the next year or two. so do i have a comfort there yes, i do. i think they're doing the right thing, but this has been

unpredictable as you just mentioned, quarantines in certain states, certain countries and the like so i think the ceos and the boards of the airlines have taken a conservative and smart approach to what they've done. >> jeff, you talked about the creating an environment where it is safe to fly the hepa filters on all of the aircraft recirculating the air that's been borne out within the industry by study after study. at the end of the day if somebody sits down next to you and doesn't have a mask on or refuses to put the mask on or takes it off mid flight, it makes people uncomfortable how do you get the public to truly understand that this is all about interaction with each other in a confined environment. it doesn't matter how much you recirculate that air, how many times you disinfect that plane, if the guy next to you doesn't want to follow the rules, it kind of is a moot point. >> well, you know, in a lot of ways, phil, you're right, but

that's true if you're in a restaurant, that's true if you're in a hotel or in a lot of different settings you can't control everything what we're trying to do is control the things that we can control and put ourselves and put the passenger in the safest possible position. and you're right, we recirculate the air every two to three minutes completely through hepa filters. you're not going to receive that in essentially any other environment. masks are important. we can't emphasize that enough the airlines are requiring that, but if someone were to take an action, like taking their mask off, the flight attendants will address it and i think that will be under control i've had the opportunity to fly several times over the last few weeks and what i've seen is an environment where passengers are calm and every week they've been more comfortable and it's become natural. i have not seen one instance of

a passenger pushing back saying i'm not going to wear my mask. all of us when we sip our water or eat a snack have to lift our mask, but i think everyone realizes what we're involved in. certainly the people that i've seen have taken appropriate course in terms of covering their face >> hey, jeff recently dave calhoun, ceo of boeing got in a little bit of hot water when he was asked if he thought any of the major carriers would go into bankruptcy and i think he answered honestly, you know, it could happen not to put you at risk, but would you worry that any of the major carriers could go bankrupt just because we don't know how this is going to play out? >> well, look, i think that the -- this industry has restructured itself over the last ten years really to put itself in the best possible position so as i look over the next 12 months, no, i'm not concerned about that now i can't predict what will

happen with this virus, whether it's quarantine or not, but what i do see is every week, and quite honestly every day the passenger levels increasing across the u.s., and that's a good thing so that's our focus, to help the airlines put more passengers on airplanes and to help them gain comfort, them being the passenger, in being on the airplane and that's what we control but to the earlier point, i think the airlines have done a really good job of creating liquidity. and it's a smart thing to do to help them get through this crisis >> we had sarah nelson on the show yesterday she is the president of the international association of flight attendants, and she said there should be a federal rule for masking, something she has been pushing for also trying to get masks, make sure that everybody has access to masks, possibly n95 masks

the airlines have not been as public themselves about this have you pushed this -- pushed for this rule to be effective? >> we believe that masks are helpful, without a doubt one of the things we say is start with a mask. now whether it's a federal regulation or not, i'm not a big believer that we need federal regulations to implement the obvious. i think people realize that it is the smart and safe thing to do and i believe that people who don't follow that, there has to be a consequence but the reality is that -- i think that the vast, vast majority of people realize that when you fly or in other situations wearing a mask is smart. >> if there's no consequence -- if there's no consequence and there -- then why wouldn't

you -- you said you needed a consequence. why not therefore push for a federal rule >> if your consequence is you can't fly on the airplane later or things like that, that's a consequence also so i'm not suggesting that a federal rule may not be ultimately the way to go, but i think there are other ways to address this before we get to that i think that naturally the vast majority of people wear masks, and if the consequence is you have to get off the airplane, that sends a message, too. there's not a lot of people, at least in my experience, that want to board airplanes, not wear a mask, and then have to get off. now by the way there are medical reasons why certain people can't wear masks, and we have to address that separately and the airlines have done a good job managing that. there are specific instances where people can't wear them,

but the vast majority of people can and should. >> reporter: jeff, one last question here, you restarted production at your plant in alabama at the end of april. there's been a surge of cases in alabama within the last couple of weeks how are things going down there? how much have you had to slow down production, let's say within the last week or two because, look, as more people are coming down with covid-19 in that area, you've got to go a little bit slower in terms of bringing people into the plant production, et cetera? >> phil, to be honest with you, right now the plant is steady. we have about 2 1/2 months ago, we put a pause on the plant for about three weeks just to reorient and reset our supply chain, and then -- also in doing that we obviously put new protocols into the plan. we've reopened for the last six weeks to two months, things have gone very, very well

the reality is the employees have done a good job of following the protocols. i think the team has done an excellent job of putting the proper protocols in place, and it's working we've opened you probably have heard over the last month a new assembly line, the 220. in mobile we have both the 220 assembly line and the 320 assembly line. to your point about the supply chain and stopping quickly, you know, the supply chain is long lived. it takes a while to reorient it. now a major part of that supply chain resides right here in the u.s. as i've mentioned before, we spend $15 billion a year procuring parts for our airplanes around the world from the u.s., and we can't do start and stop one of the things that i think we've done relatively well is we've lourpd our total output.

we've stayed steady state. we are going to continue to focus on that and as we focus on that, we'll listen to our customers and make adjustments if we have to. right now we're steady state both in mobile and elsewhere. >> jeff knittel is joining us exclusively on "squawk box." thank you very much. i know we'll be checking in with you more in the future andrew, becky, joe watch the quarantines. if this spreads to other states, you're going to start to see the pressure on the airlines. >> even more all right. phil, we'll keep that in mind. coming up, are you stressed out? i don't have one of those rings, sorkin that's how you tell, right how's the morning -- have you been below 90 on any of these mornings are you having some good breathing. >> today i'm at an 89, joe

89 it says give your body some time to recover yesterday, boost your readiness. if you're up for it, today should be a good day for building your strength and overall fitness. >> what happened yesterday. >> it's like your who are row scope. >> what happened yesterday anything to tell us? >> i don't know. >> i know you're sheltering in place as they say. >> i don't know. >> huh >> no. i'm not sure >> all right >> my body temperature 3%. >> i know how to manipulate each of you at this point andrew, i'm just going to take charge of your ring and joe i'm going to take charge of your who are row scope. you guys bike into this stuff. >> i don't know which one to believe, "the new york post" or daily post it's the same for your husband does it mean anything? i'm not sure 89 still sounds pretty good, andrew >> a must. >> america's big banks are supposed to be able to handle another financial crisis

this is the stress that we were talking about. but they weren't expecting the coronavirus. we're going to hear later how they did on the government's latest stress test in a few minutes we're going to hear about what investors should be watching for. maybe talk about disney. stay tuned you're watching "squawk box" on cnbc ith versatility, whether on the track, or the everyday drive. today, that philosophy extends to how we connect with you. we call it, audi at your door. whether a remote test drive, shopping, trade-in, or even service pickup, audi at your door can do this and more at participating dealers. the premium audi dealership experience, on your terms. audi at your door. ever something's gone mogotten into the office.m, i hear you. feels like there's no barriers between departments now. servicenow. the smarter way to workflow.

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welcome back to "squawk box," everybody. check out shares of macy's this morning. the retailer announcing it's cutting 3% of its work force back in february macy's said it planned to cut 2,000 corporate jobs that stock down 2.6% joe? >> thanks, beck. the fed is going to release

results of the annual bank stress test. given the pandemic and the sharp rise in unemployment, they're experiencing a real life nightmare scenario leslie picker joins us with more good morning, leslie. >> reporter: good morning, joe ever since the financial crisis, going back ten years, the fed has come up with a hypothetical economic scenario and then tested the bank's viability in that environment this year the economic reality in some ways was stranger than the fiction. real gdp fell by 8.5% and the 10-year treasury declined to 75 basis points what they're grappling with is an economy in greater stress

than another economy enter the covid overlay. the fed is adding a high level test under a v-shaped recovery, u-shaped recovery and a w-shaped recovery after the close the fed will announce results based on a february scenario for each of the 34 banks and then it will share results in aggregate from the covid analysis as for the impact from dividends and buy backs, we probably won't see bank announcements from those until next week. >> we're in so much better shape. that's consensus, leslie shaking that dogma after 2008, no, the banks are all -- if that belief were shaken or the question, that could just add to possible problems. >> reporter: yeah. that's the key question with regard to those dividend plans if we aren't in better shape, they may not have to change their dividend plans

if not, the fed may mandate that they really pull back on those >> leslie picker, thanks make sure not to miss live coverage of the stress test results today at 4:30 on cnbc. becky? >> joe, thanks our next guest says that he is in a state of cognitive dissonance over the stress test. joining us right now to explain what that means and what he's expecting is mike mayo he is managing director at wells fargo securities mike, i think you are super worried about this but also super confident. how do you kind of come to those two conclusions? >> that's exactly right. as it relates to the fed stress test, i'm super confident and super worried at the same time super confident because the bank industry is resilient. capital is double from where it was a decade ago we've run over 200 earnings models with different scenarios. a recovery that looks like a v,

a u, a ddeep u the bank can absorb losses and grow book value and still afford to pay dividends so we're very confident. by the way, this is really under a presh preesh yated which industry group is one of the most safest according to the bond market? $6 trillion invest in grade bond market says that banks are about the safest investment around so all these reasons make us very confident about the fed's stress test and the banks. by the way, banks have already turned off 70% of their capital return by halting buybacks, so all of that is very good but i am worried about the fed stress test because they're talking about the modeling over the next

few years, businesses are failing, individuals are having problems in the middle of the crisis you have a lot of aspects to the fed stress test. you have new rules for capital, loan losses, pandemic overlay. you have some sensitivity analysis for the fed's own v, u, w-shaped recoveries. we don't really know how that information is going to be disseminated or received in the market the fed is applying that only to the industry they'll give some data at 4:30 p.m. tonight that could be a pure victory for the banks, meaning that banks might all or mostly will pass the fed stress test, but then there could still be this losing the war because you have this overhang from this new sensitivity pandemic overlay with the results uncertain until, say, the fourth quarter of this year so a lot of uncertainty. a lot more going on with this year's fed stress test

>> hey, mike let's just back this up a bit. the banks -- the heads of some of the banks where the very best risk managers on the planet are have come out and taken these bad loss reserves and numbers that people are saying, oh, that's very conservative are they being conservative or do they know something that the rest of us don't what are they seeing >> new accounting rules that have just been implemented this year that requires banks to estimate losses on their loans through the entire cycle and after thesecond quarter we estimate that banks will have reserved for problem loans equal to half the level from the global financial crisis. so i think it's just pragmatic, it's realistic what's not been realistic will be the last five recessions when banks were always playing catchup. so banks are ahead of the curve this recession more than any time in the last century in terms of reserving for problem

loans. now you had earnings held in the first quarter. you should have earnings held again in the second quarter as banks continue to reserve, but by the way if the fed's own assumptions for unemployment to go below 10% by the end of the year are correct, this could be, you know, close to the end of that massive reserve building, you know, way in excess of the actual loan losses that you're seeing >> hey, mike, let's talk about some of the problem areas because there are some areas of the economy that look like they're doing well other areas definitely are not obviously you think of travel-related issues, retail-related issues in a lot of places that are being shut down and maybe small businesses where they don't have the depth and the deep balance sheet to be able to see through something like this. if you think about those three areas of concern, is there a bank or several banks that you would be more worried about than others if you're looking at those that have, i don't know, a lot of exposure to reits or

something along those lines? >> the reality is, the smaller the bank, the smaller the customer, the more issues there are. what you saw in march were large loan draw downs by large corporations that is transferred to the capital markets, the fixed income markets now you might go to another stage of re-equification loans to bonds to the largest customers. unfortunately the smaller customers at the smaller banks don't have the same capital markets access so those are some risky areas in those industries that you mentioned like travel, hotel, some others and small businesses and so these are sobering times this is no easy call our point is that -- excuse me, our point is just that banks are resilient enough to absorb these problems, still support the economy and still have enough leftover to continue to pay their dividends, which we do think will be the result of the

fed stress test for most banks you know, if i were king of banks, i would simply say, you know, don't resume the buy backs largest banks, don't raise your dividends largest banks the next couple of corners, but don't force banks to cut through dividends either keep it the status quo unless specific banks, the bank boards decide you're paying out too much of their earnings in dividends. then you might have a couple of dividend cuts that way otherwise, keep the status quo meanwhile, come back to the banking industry in the fourth quarter. that's what the fed will be doing as it looks at the covid overlay and the speech last friday from the fed, they simply need more time and much uncertainty. i would consider this part one of the fed stress test, part two will be a lot more private later this year. >> right mike, thank you. good to see you. >> thanks for having me. andrew hey, thanks, becky

coming up at the bottom of the hour, jobless claim figures that still expected to come in over 1 million. then former restaurant executive body puzder is going to talk to us aut the risk of the economy. rd. rd. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪

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welcome back to "squawk box. breaking news. there is a lot of breaking news. let's look at advanced goods trade. this is of course the early read minus 74 that's a little worse than expected do keep in mind. much below 75 billion. these are numbers we haven't seen in a long time. whole sale inventories down 1.2% that's triple what we were expecting. that is a may preliminary number retail inventories down 6.1%,

also about triple what we were expecting. remember, when these inventories get depleted, the issue then becomes the rebuilding process and how that will contribute to future gdp while the drops take away from current gdp. now let's look at durable goods orders a positive number at 10.5. a much better number at 15.8 this follows an unrevised at minus 17.7 which is the second worst level ever in durable goods going back to 192. extransportation up double expectations at 4% if you strip out and look at capital goods orders, the proxy for capital spending, a solid 2.3. that's 2 1/2 times what we expected obviously these follow very negative numbers gdp, third time around the block on the first quarter gdp of course, that number, still don't see it out yet so we're going to have to wait for it yet. the money ball numbers, under

1.5 million on initial jobless claims, 1.480 million. a whisker under 1.5 million. after the all-time high jobless claims 6.78 million the third week in march. continuing claims also moved under 20 million which has been the recent area everybody's paying attention to. and also not by a huge amount. 19,522,000 19.522 million this follows a slightly revised 20.289 million on continuing claims now we do see some of the numbers coming out that i was looking for on gdp minus 5% the third time around the block did not change the second look was also minus 5% if we look at the consumption numbers, which were horrible at that time right as the coronavirus was starting to affect the economy on the back half of that particular quarter, it remained at minus 6.8

to summarize, no big surprises on gdp inventory drops bigger than expected improvements in durable goods preliminary may read much better under some big benchmarks on initial and continuing claims. in terms of what the market is doing on this, andrew, interest rates are stubbornly low as a matter of fact, ten year note yield trading below 67 basis points which over the last week or so has been the floor. back to you. >> rick, stay right where you are. we're going to bring in cnbc senior markets commentator mike santoli and steve liesman. steve, i want to get your reaction which of the numbers here stands out most >> the first reaction i have, did rick even take a breath while he read and gave us all those numbers. that's the first thing i want to know really nice job he did going through all of that data look, you know, where you stand i guess in terms of where you sit on this jobless claims

number definitely good that it's under 1.5 million, but also it remains -- it was higher than the expectation of 1.35 million. and the problem is it remains elevated and it's really not coming down perhaps with the pace we would have hoped we still have a large number of jobless claims is that because of economic slowdown and economic shutdowns that remain out there? is there refiling going on is there something with the issues i saw some declines in places like new york, oklahoma, oregon. some gains in places like california so it's a little bit all over the map. it's really become after dropping down from that 6 million level we had, it's come down i like the durable goods orders and i think rick was right to make a big deal of that gain in the business investment number the top line is affected i think by the transportation stuff and what's going on with boeing. even though they didn't have orders in may because there was

no change, it actually ended up helping out the number there a bit. x aircraft, that's up to rebound, some rekindling in business investment in the c suite, andrew. >> mike, what was your reaction? what do you think the market -- i mean, the market has now got a little bit worse dow is coming back a little bit in interprets of how it's going to react. >> the reflex was on the initial claims miss. it was a higher number than anticipated by economists. in terms of initial claims mitigated by the decline and continuing claims. continuing claims is going to be a little bit more in the foreground than it used to be. came in half a million below the forecast i'm not sure how fine tuned those numbers are for that number i think that's why you didn't see a bigger number in the market it's very tough to draw the trend, the curve when it comes to claims in a way that makes you confident of exactly how the trajectory is going to look right now.

yes, under 1.5 million still kind of a stubborn level of claims. we sort of don't know how to sort out whether it was also these processing issues and how all that's working through >> hey, andrew -- >> steve, come on back. >> i want to add to what mike was saying real quick claims before this coronavirus was the desert island indicator. you ask an economist what one indicator they wanted if they were on desert island, forget why they would want indicator if they were on a desert island anyway, that being the case, that was the one the jobs number that came in showed the gains and suggested, hey, we're not following t. i want to emphasize, mike is right we think in the idea of looking at that claims number being under 20 million that might be leading the way to showing improvement in the jobs market and it's going to be next thursday, by the way, folks, that we're going to find out which one is right here because we get that jobs number on thursday next week >> okay.

guys, appreciate it. rick santelli, mike santoli and steve liesman, thanks so much. becky? andrew, thank you. when we come back, we'll get more reaction to this morning's data with former economic advisor to president trump, andy puzder stay tuned, "squawk box" will be right back

well over 40 million americans have filed for unemployment benefits since the pandemic started the restaurant and ceo is joining us he's author of "getting america back to work." thank you for joining us so much to work through here i'm trying to figure out what type of reopening we're seeing here is it the type of reopening that everyone predicted there were fits and starts and three steps forward and two steps back

>> is this at a point where it makes you question the move in the stock market and the notion that we're going to be able to reopen >> no, not at all. as a matter of fact, if you look at the unemployment claims, unemployment benefit claims despite the fact that we have a $600 federal benefit that is increasing unemployment benefits to way in excess of what people were earning that had jobs, if you look at the beginning of may, in may there were 4.3 million fewer people getting unemployment benefits. so far in june that number has gone from 20.6 to this morning we're at 19.5. so an additional 1.1 over the past six weeks you're talking about 5.5 million fewer people claiming unemployment benefits now the initial claims numbers are still high, but that doesn't net out the number of people that are going back to work. so you're seeing a tremendous number of people going back to work may we had 2.5 million jobs

created. that's the most for months on record 2.1 million fewer people on record 17.7% retail sales where the experts were expecting 8%. we had 16.6% increase in new home sales the experts were projecting 1.9 and then this morning you see the experts are underestimating the amount of recovery where the numbers would end up on the different financial indicators so far we're recovering strong the coronavirus is obviously holding that back. we'd love to see the number of reported cases come down certainly deaths have come down from about 2200 middle of april to about 650 most recently per day in the united states but we'd like to see the number of cases come down and then i think the economy will do even better than it's doing now. >> quite a betback in the markets today. however, prior to that the

markets had rallied, 38, 39% depending what you're looking at, nasdaq even more, since the lows do you attribute that to positive predictions by the market about the success of reopening? or do you attribute it to all the money sloshing around from the extraordinary steps the fed has taken? >> what i think the market is doing -- i think the market believes the economy's going to recover. it's a question of when, it's not a question of if so you've seen the market remain relatively high given the financial shutdown and precipitous decline in economic activity you've seen the market hold up pretty well. when you hear positive coronavirus news, the market goes up. when you hear negative, the market goes down they're trying to adjust the timing the question is will we recover quickly or will it take a longer period of time when the indications are that it will be quickly, the market goes up significantly the last couple of days with the

increase in coronavirus cases, and we are doing more testing so there's a lot of reasons why the number of cases go up, but with the increase in cases you've seen the market come down because it looks like the recovery could take a little longer i don't think that's the case but the market reacts as the market reacts. >> well, how much of the world are we going to recognize even after we do come back to more normalcy are restaurants going to be 50% less fill than they had been is air travel down 50% are there a lot of people furloughed that just don't come back to work because there's not jobs waiting for them, people are going to be working at home and that has its own implications do all of those things mean that the market should be actually trading at new highs versus where we were back in -- at the beginning of the year? >> i think you have a lot of offsetting economic events

for example, in the restaurant industry, a lot of quick service restaurant ceos that i talked to are seeing positive sales, even versus last year when there was no coronavirus, because the drive through has picked up. so they're doing like 90% of their business through drive through. it used to be 40 to 50%. you're seeing some industries pick up. you've seen air travel go down but the demand for automobiles went way up because people are still traveling. you're seeing a lot of in and out in the economy things are changing. it's going to be a while before we get back to normal. in may with all of the positive economic data we had in may, it was a tremendous month, there was a survey by the u.s. chamber of commerce that said only 41% of businesses were fully open. you had 59% of businesses that weren't even fully open yet and we saw dramatic improvements in the economy. i think you're going to continue to see that on an up and down basis but a generally positive trend over the next few months then when we get a vaccine or we

come up with an effective therapeutic, i think you're going to see the economy go back to where it was assuming we elect a president with positive economic policies as president trump has had over the past three years. if we can continue those policies, continue the presidency i think we'll see the economy recover tremendously. >> the vaccine must be factored into some of your positivity i would imagine, andy? >> yes. >> fauci said yesterday or the day before that it was a question of when not if, which i thought was very encouraging so we will come out of this. we'll come out of it strongly. i think we'll have a very strong check mark recovery. i don't know about a v recovery. we could have one but a very strong check mark as businesses come back online and people adjust look, people should be wearing masks. you should be socially distancing we should be doing the things to keep this under control so we can get our lives under control as the medical professionals and scientists come up with

something more effective for us. >> andy, thanks. we appreciate it you're definitely half full on this whole thing. >> thanks, joe. >> we cover 3w0both sides of it >> good to see you. when we come back, we're going to talk about what to watch in the markets today with the futures at this.ing to a lower open we've actually seen the dow futures drop by about 200 points for the implied open s&p futures down 15. nasdaq indicated to open up down 5 points. as we head to a break now, let's take a look at shares of kb home. they said sales fell by 11%. deliveries by 10% and net orders, 57% as the coronavirus 14r578d the home building business stock right now is down by about 15%. stay tuned, you are watching "squawk x"ig he cc.bo rhteronnb guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse.

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welcome back to "squawk box" this morning take a look at futures right now.

we are in the red but, you know, it got -- you know, it's actually getting marginally better given some of the numbers we just heard about this morning. dow looks like it would open down about 155 points. it had crossed the 200 mark at one point after we got the numbers. see where things stand in just about 40 minutes from now, joe >> funny that there's that cute little green number down there on the lower right, that's the only one, andrew, everything else is red. we will see whether that spreads. coming up, cramer, he is in cramerica and he will have his first take on the training day ahead, in-depth analysis on the latest market swings also coming up you can always watch or listen to us live on the cnbc app squauks is coming right back can i find an investment firm with a truly long-term view that's been through multiple market cycles for over 85 years? with capital group, i can.

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welcome back, everybody. let's get to cnbc headquarters, that's where we find jim cramer who joins us right now to talk about what we're seeing. jim, i have to give credit where credit is due, you made a brilliant and bold call a couple nights ago when you told people that, hey, if you've made back a lot of your money, you should take some off of the table now yesterday we saw the dow down 700 points, we are continuing to hear about cases as they're developing and i just wonder what you would be telling people to do right now, by the way, kudos. >> thank you, becky. i take my cue from one person he is on very early ace his name is dr. gottlieb he said this morning to you it's going to be difficult now to get this situation under control he says they still can, but i thought that was chilling

because what it says is even though i think that long-term i'm bullish, i have to stick by if you haven't taken a little bit off, i think you have to i know that there's some very, very good people who are saying -- like josh brown -- look, you can't go in and out like that. remember a lot of people who follow me are individual stock people and when they have the docusigns and they have the zooms i don't think it's such a bad idea to trim them, they are so big, harry firestone said the same thing yesterday i have to stick by this. i'm feeling uncertain after a very big run, fourth quarter 1999-like and i have this guy gottlieb who has been, by the way, the only right guy the whole way saying to me it's going to be difficult. becky, if he doesn't say it's under control it ain't under control. >> it drives me nuts when people try to politicize him, jim, because he served in the trump administration as the head of

the fda. he is not doing this politically, he's doing it what he sees by the facts and by what he worries about as both a doctor and former official. >> i speak to so many people in the doctor business, so to speak, including some tv doctors and no one knows whether he is a democrat or republican i don't speak to dr. fauci but i would consult with dr. gottlieb before i spoke to anyone he's that good. >> if i were watching i would make sure i stay tuned, i didn't mean, to make sure we hear what you say in a couple minutes. we will see you at the top of the hour thank you. who is next? andrew i've got it. meantime, futures pointing to losses at the open this morning's data showing nearly 1.5 million more americans filed for unemployment in the latest week it is the 14th straight week that filings remained above 1 million. joins us is charlie mcelliott, the managing director and head of cross asset strategy at

nomora good morning to you. you just heard what jim had to say about where we are in the markets, you also saw that steep selloff yesterday. what do you think is happening here >> good morning. good morning andrew, good to speak with you again. so there without question is a very pronounced seasonality into june trading and the s&p and this has been for the last 25 years more or less as volatility became an asset class, as volatility became an input to determine institutional investor exposures and as that has correlated to this kind of reopening economic trajectory feel good trade over the past one month what the phenomenon pivots around is the june options expiration which is, you know, one of the four majors, one of the more serial options

expirations over the course of the year, it's quarterly and certainly in light of the past quart quarter's chaotic trading environment it was a very big one. what you end up seeing, then, over this kind of past 25-year period especially on a trade up into the june options expiration is a really well-documented phenomenon where the week and actually the two-week period thereafter, after the options expiration which for the vix it was last wednesday, for etf index and singles it was last friday, a trade down we are talking about over the last 27 years, 26 years, when the s&p has been up over one month into the options expiration, the following week thereafter, which is this week, the s&p is only up 12% of the time and there are a number of inputs into that. >> so, charlie, just to drill down into this

so you don't believe that what's happening in the markets right now are reflective of either new covid cases, the jobs numbers, unemployment claims we just talked about how much do you think that is part of this versus this technical issue that you're trying to describe >> yeah, there is no doubt that as the market participants kind of set up their sequencing after, you know, the maximum sentiment negatives of march and kind of transitioning into april, they made a checklist and that was they wanted to see -- they wanted to see the curve flatten. they wanted to see the reopening trajectory increase, they wanted to see data beats as that reopening creorresponded. the trick here, though, is that that also overshoots and that actually -- that phenomenon

certainly kind of the peak of last week's the trade up over the past month, you then actually started seeing this anticipated inevitable second wave and the second wave, you know, was that macro catalyst in the background that then took advantage of this kind of technical phenomenon in the market where frankly you had a situation where going in you had a significant bear sentiment, you squeezed out a large portion of the leverage community into a short trade, we saw cta trend momentum buying getting long and now as you've priced in the impulse change and the economic data to, you know, these significant multi-year highs and economic surprise indices, meaning on average we're beating the data on the reopening the second wave has incentivized some profit taking but the more

interesting dynamic is that all of that options flow that expired last week, almost 40% expired -- >> we are going to have to go. right. finish that thought just because we are up against a hard deadline. >> sure. you know, almost 40% of the options flow expired last week and that allowed us to move this week and that's really critical here. >> fair enough thank you so much. make sure you join us tomorrow, "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber live in separate locations this morning. some lingering weakness in futures today coming off the worst day in two weeks as the u.s. posts a record for new cases in a single day, worries the economic reopening is threatened, jobless claims down slightly.4