good morning it is 5:00 at cnbc "top five @5." futures and dow down for the second week. >> the fed puts new restrictions on banks nike posting a surprise quarterly loss the latest retail company hit hard major u.s. airline ceos will hold a white house meeting while their labor unions seek billions

more in payroll pay. and ford unveils the new f-150 with new options including hands-free driving it is friday, june 26, 2020. you are watching "worldwide exchange" on cnbc. good friday morning. i'm dominic chu in for brian sullivan we are seeing a bit of negative activity right now, the s&p is implied lower by about 12 points the dow would open down by 170 and down another 14 points for the nasdaq this represents moves off the low so far on the treasury yield side of things, we are seeing movements across the yield curve slightly lower at 67 basis

points or .67% ticking higher at 18 basis points or .18% there the fed announcing it will force big banks to suspend share buy backs and cap dividend payments for the third quarter. the firms must resubmit their pay back plans the fed found several banks could get too close to capital levels amid the pandemic induced slow down. shares of nike, dow component as well the company posting an unexpected loss. was hurt by retail store closures the wholesale business saw a 50% drop in business on line sales rose by 75%. we'll talk to an analyst in the

next half hour about that nike trade. in asia, those markets in mainland china were closed for the dragon boat festival hong kong stocks lower the senate passed a bill to sanction people and companies if viewed as helping china to restrict the territory autonomy. hang seng and sax both up. christine lagarde says the world may be past the worst of the crisis but she cautioned the recovery will be in her words, quote, incomplete and might be transitional in europe, you can see generally positive there catching up to us in positivity. dax up 1%. coronavirus headlines drive

much of the conversation yesterday, the cdc said it estimates for every case reported, there are likely 10 other infections that means the real number of americans may top 20 million frank is here with the latest this morning on those headlines. good morning that is right. we have the outbreaks in multiple states, the governor announces that he's pausing the efforts to in his word, corral the spread hospital rates spike in 16 states this week 35 states are using the contact tracing technology from his company. here is what he said on mad money last night >> just wearing a cloth mask reduces a spread by 90%. second thing is test and trace you got to test. once you do test, you've got to trace. that is true for states like

we've heard from these incredible governors and corporations as well the ceos of major airlines to hold a white house meeting with vice president pence and others to talk about european union travel restrictions on americans, temperature checks at airports and contact tracing of passengers unions representing airline workers are seeking billions in more aid in order to keep jobs to the end of 2021 as travel demand remains weak. stocks lower in the pre-market ba being to you. back to the markets now. u.s. stocks closing higher yesterday recovering some of wednesday's losses nasdaq rising the ninth time in the past 10 sessions up more than 11% so far this year joining me now, patrick

armstrong. patrick, the market moves we've seen as of late have been stunning for some. how is it we can see so much positivity and bullishness in markets given everything we've seen corona wise and everything else the real driver of the markets to the measure of money supply wh which is coins and bills growing at 27% the past year that is a huge number. before covid, the biggest ever got to was 14% money is being pumped into the system it has to find a home. things are going higher whether safe haven, gold, equities the market is unprecedented. that's the real driver of

markets right now. >> patrick, we are showing viewers and listeners we are showing a chart of the m2 money supply in the united states. i'm curious that you see this spike higher it has not led to inflation on certain fronts oil and fuel prices certainly no maybe food prices but that is because of some covid-19 supply chain issues are we on the verge of inflation, it doesn't seem like it now >> we are not. money supply historically fed through into real goods prices when money was distributed it got moved through the economy. the way money supply and generation is going right now, it is going to the rich. the institutions quantitative easing doesn't give money to everybody it buys off of institutions,

endowments and after fluent people and they put that to use in the markets it is not creating real goods inflation, it is creating asset inflation. that seems to be the emphasis of the process right now. we do have inflation years down the road eventually, this will be transmitted. right now, the mechanism is creating asset price inflation it can't be that easy, right? you can't just say i'm going to be pumping money into the system and asset prices will go higher with no real repercussion whatsoever what are traders missing about the possible down side in this kind of scenario >> it is unprecedented we are doing an experiment right now where we don't know the outcome. japan is further ahead if you look at all the etf

holdings in japan. the bank of japan owns 75% of them the may may not just be the qe, they are already buying equities there is going to be consequences inflation is the ultimate end point. you have to print new money to payoff old debt. we've got deflationary measures. supply is coming back following demand people are going back to work because they have to but staying in a little more than they would have otherwise the end game may turn into helicopter money, which is more equity that is when you'll get real goods and real higher inflation. it is an experiment right now. no one knows in fact where the end game will be >> patrick armstrong, thank you. we appreciate it

coming up on the show, a new survey about optimism on a covid vaccine. what investors are saying right now about the likelihood there as we head out to break, take a look at this morning's s&p 500 leaders and lagardes coty, net app carrier global among the gainers there. stay tuned to "worldwide exchange" here on cnbc - [narrator] the shark vacmop combines powerful suction

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welcome back if you are just waking up or driving to work, if you can go to work, we are seeing a slight bit of negativity if these futures hold the dow down by about 140 points, nasdaq off by about six. oil a key point of focus west texas intermediate at 1.34%. we continue to track the surge in coronavirus cases and hospitalizations in parts of the country. namely arizona, texas and florida, which according to the cdc are now above 80% above icu

utilization. some within 10 days of capacity in those intensive care units. top bio tech analyst says while the surge may not lead to a second total national lockdown, it is likely we see something as serious. >> if there is going to be relockdowns, i'm of the view it will be more regionally based. if you have a county or locality where you are seeing a strain on the hospital systems, you may have to take that area to take more precautions a state wide or national wide lockdown is unlikely what we are saying, i got to

say, mark, this is an interesting time for biotech a massive spotlight has been shined right down on it. how is that changing investor sentiment and responding to such a degree of focus on the entire industry >> it has been a lot of investor interest in the space. not just from traditional health care investors we see this in flows into the sector also in index performance, we follow the index and it is up 15% for the year. since midmarch, it is up 46% biotech companies have raised

$15 billion in a strong capital environment. >> the environment for capital raising is there a lot around what is happening from covid-19. what are the expectations. are we going to get a vaccine sometime soon is there a threat of a second wave or extension of the first one? these are people who understand the science. 98% of those surveyed thought we would have a vaccine over 67% thought that would happen over the third quarter this year or next. a lot asked when another they

are ptherapeutic would be approved i think those are both positive signs from a group that understands the difficulties in understanding these types of treatments we've focused on the companies and right fully so that are in the coronavirus eco system directly working on the vaccines or treatments. what is the outlook for the rest of the biotech industry. the vast majority are not working on covid-19 or coronavirus issues is there still a bright future for those types of companies >> i do believe so since the down turn has not been necessarily for covid-19 related companies. i think the crisis and the

pandemic has shined a spotlight on the importance of the sector and of having the latest cutting edge developed and that is exactly what these companies do. >> thank you for joining us this morning. we appreciate it still on deck, amazon reportedly buying a self-driving startup for mo trehan a billion dollars. those details coming up next 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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good morning welcome back to "worldwide exchange" on cnbc. making headlines this morning, amazon has reportedly agreed to buy self-driving startup zoox and will help with its autonomous vehicle technology. virgin successfully completed the second glide flight test in new mexico and plans to begin commercial operations this summer aims to be profitable by next year those shares up 5% pre-market. pg&e has raised $5.5 million and plans to emerge from chapter 11

bankruptcy next week shares up roughly 3% in top trade. now to the headlines phillip mena is with us with the latest >> good morning to you the trump administration is asking the supreme court to strike down obama care amid a pandemic and recession if justices agree with their argument, an estimated 20 million americans would lose insurance coverage and nullify protection from preexisting conditions coming one day after the nation hit a new record for the highest daily total of cases >> the george floyd justice and policing act passed last night banning choke holds as well as no-knock warrants like used in the shooting of breonna taylor in kentucky. one has already shot down the plan saying it goes too far.

>> the disney splash mountain ride is getting a makeover changing the original song of the south theme to princess and the frog after an outcry of the 1946 film betrayal of african-americans, so much so, song of the south will not be featured on disney plus but will instead feature the song of the black disney princess. you can see banks lower in the pre-market trade more when we come back after this

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good morning financial stocks under pressure after the fed puts new restrictions on big banks. nike is posting a surprise quarterly loss the company hit hard by the pandemic and ford with a new pickup truck with high-tech options including hand-free driving. it is friday, june 26, 2020. you are watching "worldwide exchange" on cnbc. welcome back to the show i'm dominic chu in for brian

sullivan the futures are indicating what could be a lower open for the major indices in the u.s the s&p is implied open lower by about 10 points. this morning, down roughly 100 points lower on that nasdaq down by more than 100 points right now check out this particular chart. checking out a chart of growth stocks versus value stocks these two etfs, the iwf which tracks growth and iwd which tracks value you can see always a slight tilt towards better performance in growth that gap is slidely wider here since the pandemic, that has widened out considerably a trend to see if those growth oriented companies continue. meanwhile, check out what is

happening again divergence wise when it comes to investment grade corporate debt generally speaking, those bonds have been performing from a price basis better but since that pandemic here, we've seen the gap again widen out. not exactly bad bad credit problems right now but still some of the noncredit worthy companies are fairing worse. also watching what is happening with financial stocks closely following yesterday's stress test results joining us on the news line. we know about dividend issues and buy back issues. >> i would say the dividend issues by the way. the headlines said, quote, the

banking system remains well under even the harshest of down side scenarios despite that with some headline grabbing aspects that had put pressure on bank shares overnight. given the uncertainty, banks would have to resubmit their plans and be retested this year and late september markets with the uncertainty and the plans now for the next couple of months as for the current level, banks will announce their individual fed results next week but based on the back out, it looks like goldman sack is just below their required scb but will not have to wrraise capital. on the flip side, the biggest positive surprise is morgan

stanley because their required scb fell as opposed to levels rising that is likely due to the e trade acquisition. second, a limit on dividends which now cannot be higher than trailing four quarters of earning, ie cannot be above 100% payout ratio there is plenty of head room, each quarter of low earnings replaces the last that will change wells fargo was 51% last year, they are trading today 52 cents it is expected they'll have to reduce their dividend. overall, down 2% overnight in the scheme of 2020, not necessarily an enormous move

>> so wilfred, what is interesting is how specific it was to a specific kind of stress we've seen with the covid-19 pandemic they are looking at a v-shaped recovery also looked at a u-shaped recession, they looked at a double-dip, a w-shape. what does that tell you about what the fed is thinking given the current environment we are in right now >> caller: those extra pandemic methods of recovery were led in on top not part of the original outline. i think the shape around that result what a lot of analysts are

pointing to are the finance closure. the second chunk of tests is thought by analysts that the higher cards would be out for the slightly more exposed area having to go through a second test in the same year is a big surprise and big blow. >> the positive spin on all of this is that the fed needed to thread a needle to make sure no banks would increase their dividend or reinstated buy backs that led to an uproar. they wanted to disrupt abilities to lend or spook investors more broadly. one could argue seemingly that fed has achieved that. we don't ghetto official releases to the banks until next

week and that sort of sums up reaction overnight >> thank you for that. we want to talk about what investors are doing. joining you now michael, you heard what wilfred brought up there. that capacity of whether or not the capacity to lend, what is the key take away from you is it as big a deal as it would be in the markets. >> those can't be overlooked at the end of the day, we continue to believe this is an earnings as opposed to capital or liquidity issue

the fed has taken measure. going through an additional stress test to prepare and navigate the choppy waters. >> over the past several months and years, we've known banks in america are better placed. investor what is getting in the way of investors saying i want to buy banks. >> that is a good question

this is the longest recovery we've had going back a hundred or so years. there is a fear that credit losses would materialize i don't think anybody thought it would happen as sharply and quickly as we did with covid-19. in the cause of the great financial crisis >> you have a fairly wide coverage universe there. what exactly will be the strength, the relative strength in this kind of environment and what type of banks would fair the worst if we did see a w or a double-dip scenario? >> it is going be about

loan-loss provisions given the amount of stimulus the government has thrown at the issues at hand we won't know what ultimate credit losses is like until later this year into next year until others have run their course and we get a more normalized stimulus coming off i think at the end of the day, what we want to drive home is that banks remain pretty solid pretax and we'll likely see a peak of those loan loss provisions we are looking for banks that have strong capital provisions we are recommending a barbell approach where we have a basket of safety names. also, if the recovery continues in a more v-shaped recovery, a basket of beta names

those that are a little bit lower on the quality spectrum and those taking advantage of a crisis point >> what types of names go on the barbell in the quality side and more betting of the recovery side >> on the defensive names, we are looking for the midcap banks like prosperity and home bank shares on the beta side, regions and wind trust are names we would recommend in the midcap space, which is the majority of our coverage universe. coming up on the show, nike shares under pressure after the company posts a bigger than expected loss. as we head out to break, check out some of this morning's other top headlines on the market. delta has become the first u.s. passenger airline to resume

service to china after a nearly five-month break because of the pandemic the first flight left seattle last night headed to shanghai after a stop in seoul, south korea. a pause in the release of "tenant. if you are headed to a casino in las vegas, as of this morning, people there will be required to wear a mask in public. stay tuned, you are watching "worldwide exchange. we'll be back after this and because we don't know exactly when

this crisis is going to be over and we don't know exactly when the stock market will reach its bottom, we've got to be prepared for this to last a long time. if you assume that you're out of work for nine months but you end up only being out of work for three, well that's great. but if you think you're going to be furloughed for three months and it lasts for nine,

well that'll be emotionally devastating. so, we've got to prepare ourselves. tangibly and practically, as well as psychologically and emotionally. welcome back a quick on the global markets. karen is with us in the london news room. what are we seeing in terms of the trade action >> we are seeing a stronger trade at the moment. we gave back a little territory. stronger again today led by the ftse and the french market the cac outpacing the dax. german stocks have been real leaders on the boards. we are still weaker over the course of the trading week we did give back a lot of territory on what looks to be a lot of window dressing there is a little patch of

redness around those from the u.s. fed test. we have been stronger on industrials. travel and leisure has been hard hit. wire card with the filing and the uk regulate and impose requirements on wirecard and criminal charges against two incumbent and one former auditor have been released today >> thank you let's check some big news in the corporate world including the return of a grocery store giant to wall street frank has the details. >> albertson's will become a publicly traded company. at $16 a share valuing albertsons at about $9.3 billion the private equity firm has been

trying to take the company public since 2016. >> black rock has cut fees to match van guard on the etf will now be $3 for every $10,000 vested it was previously $4 black rock holds a third of all global etf assets and van guard around a fifth verizon will pause ads on facebook in july calling out the social media giant for not doing enough to stop hate speech, harassment and misinformation. verizon says it is halting ads until facebook can create an acceptable solution. >> a couple of big names in communication services we are also watching shares of nike down this morning amid pressure from covid-19-related shut downs reporting a loss of 51 cents per

share. down 38% from this time a year ago. inventory is piling up the shift on line is squeezing its margins. the stock has been flat since january, the most recent quarter now is at the bottom joining me now, analyst, matthew. good morning the nike news here, the loss may be unexpected but we knew it was going to be bad. does this fit within the realm of reason of how bad it could have been? >> at the end of the day, we did know it was going to be bad. going from negative 50% to positive 40% wide range of outcomes there nobody really had a clue

mi nike product remains hot there is no problem with the product. the problem now is covid we expect sales to reaccelerate this is one company vesting in the business so that on the back end of this. >> continuing with the market share. trying to open up a lot of establishments in hot spots. how is the geograph call break down now if there is another potential wave of the coronavirus not just here in the u.s. but in other key markets as well. >> we've seen that china will return to growth when they reported last quarter, they gave guidance to be flattish to positive

people said, no way we expected them to accelerate here going through the shutdown making it positioned extremely well with the consumer during said shutdowns during this quarter there, e commerce sales are up 75% in june those sales were up triple digits even now with stores reopen and going back to the mall if there is another shutdown, i would say they are one of the best positioned companies to whether the shutdown >> with a few moments left year,

is nike your favorite? you mentioned the product mix. air force one, i'm sure the "last dance" the michael jordan story has helped >> i would say one thing about nike yes, one of my favorites is nike my favorite is target for other reasons. nike specifically, their product remains hot. their digital capabilities are elite. they check the box the only stocks you want to own today are market industry console i h consolidators or digital leaders. it is a stock i say you should buy but i have a wide coverage and target would be my favorite. >> thank you for joining us this morning. we appreciate it >> thank you coming on deck, ford

deaniling the new f-150 with a wi rge of options including hands free the pictures you'll want to see next - [narrator] the shark vacmop.

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>> welcome back, ford takes the wraps off the first redesign in six years of the company's top-selling vehicle. we have all the pictures and commentary around the f-150. >> this is a huge important moment for ford. the f series is really the most important vehicle for them it is the one that generates the profit this is what it looked like last night outside of detroit as den denis leary unveiled the pickup truck. this is the 14th version the interior will get a lot of attention. they've made a lot of changes here they want to stress that the

customer can do more this is like a rolling office. the engineer shift turns down to create a work space, it includes an on board generator. you may ask how much are they going for, be surprised the average for a full-sized pickup truck is around $50,000. 85% of the full-sized pick ups are sold by the big three. this is the main battleground for them looking at shares of ford, the f-150 is the profit generator. even as the company goes through an $11 billion restructuring, it needs the money made off the company. coming up on "squawk box," you do not want to miss this first on cnbc interview, we'll speak with ford coo jim farley we'll talk about all of this and

the hands-free driving highway feature. that option will be in these trucks starting next year. they'll do an overthe air software update that will allow that >> phil, i have never owned a pickup truck but i do own an suv right now. one of the things that caught my eye is that the cab inn or the chasis itself doesn't look much different. the focus was on the interior. why was that the focus >> jim hackett has been pushing much more of a customer focused approach toward the development of vehicles. you see that with the front two seats a lot of people use the

pickup truck i've seen these people, they are balancing their laptop on their chest and steering wheel it is just not functional to be utilized day in and day out. that's why they are focusing on making these more customer user focused. >> it certainly looks like it could be the perfect mobil office >> that generator will get a lot of attention >> a nice ac adaptor thank you, phil. we appreciate it back to the markets, joining me, portfolio manager. we are siege the markets right now. >> it is negative. is this still a market can you feel can be constructive to the

upside they will be two steps forward, one step back. overall investors should not be rattled by that. the global back drop going back to 2001 will graduallyimprove. those will be better than such megacap technology >> great question. we believe we have to be in the greatest and have very little debt on their balance sheet. like you reported, nike, the

company that is vesting back into their business will do very well look to companies like nike, visa you have to keep a view .3 to four years out you have to be an investor, not a trader here. >> in this kind of an environment. it wasn't that long ago you were saying this would be a focus it was going to be on balance sheet and quality. it now seems we are reverting to focus look does that mean investors are saying, hey, we think earnings are going back to normal >> look, you'll have to look out 18 to 24 months to get a

normalization of earnings cycle. that will bounce back to the next few quarters back to the 2019 levels. i think where the market is trading right now is on a gradual improvement of earnings to 2,000 you have to look at the 2021 levels it's looking at health care markers. they a they are pew ticks and the vaccine. then looking at the greater growth >> chad, we have about 20, 30 seconds. talk about the banks are they still vinvestable >> they are investable one has to believe the curve will start to stephen over the next 12 months you can kind very goodbyes you have to be a patient

investor that's the critical message. you have to be patient we believe banks are sturdy. dividends will grow but you have to look out two years. atth does it here on "worldwide exchange. have a good weekend. "squawk box" is coming up next 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.

good morning futures under a little pressure. the fed slapping new restrictions on the biggest banks. financials down on the news. nike posting a surprise loss the company hit hard by the pandemic june 26, 2020. closing in on july already "squawk box" is starting now

good morning welcome to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. closing in on july, you are right. you know what that means days are getting shorter >> so july is next it could come as early as next week we'll just have to see >> you know what else today is >> i don't we'll dot chair segment. >> it is friday. friday, i'm in love. >> you are still in love with matt >> i am. >> you are too >> so much in love with my family

in love with