intec in a race to vaccine. >> i thought pfizer said they wouldn't release anything physical they published it in a journal. >> they've submitted to a journal and they have submitted it online so folks can see the data. >> 24 out of 24 and pretty good potency if it's 1.8 to 2.8 thank you, meg that probably is responsible for what we've seen here we have to go. make sure you join us tomorrow "squawk on the street" is next ♪ >> good wednesday morning, welcome to suite, i'm carl quintanilla with jim cramer, david faber live from separate locations. welcome to q3. features have come offer early morning lows, adp shows private sector job growth of 2.4 million, covid cases remain a worry as eight states posted new highs, ten year 69 basis points but, jim, looking a over this release from pfizer and

biontech, seeing a bounce. >> we know that pfizer is not a hype company it's a big conservative company. when it sees things that are not working it is quick to say it. when it sees things that are working it is long to say it in other words, this is not a company that is a brag guard company so i am very surprised to see them come out this early. they must feel a level of confidence that is extraordinary versus what they typically do. david, you've known pfizer for very long, you know that pfizer is one of those companies that i guess you would regard as stodgy and certainly not a company that likes to get ahead of itself >> no. you would have to put it in that category, i think, so it is interesting that this has been shared as meg said and as we know 24 patients, jim, is not a lot. very positive it would appear at this point i think always important to mention, though, that when we talk about a vaccine we are talking about the need for

large-scale trials as soon as possible because, of course, there is always that risk that when you give it to millions of people you want to understand if any of them are going to get sick even though they were not sick so it is a different sort of a level in terms of safety and efficacy that you're dealing with as opposed to perhaps an antiviral where you're taking it already because you are sick, jim. >> yeah, i'm shocked that they do 24 out of 24 frankly. i know that we had the unfortunate experience in france of a drug that the president championed where it was very good numbers but not peer reviewed i know that we had the almost fiasco of the eight for eight. pfizer, it is just very surprising they must have a better feel than just 24 for 24. i know we will hear from meg, but this is highly unlike pfizer actually i can't believe that they're doing this without many, many more people and many, many

more days. i guess they feel 24 for 24 is enough to be able to go for it i want more information. i frankly don't just want to accept it like this. but the market will and it's kind of a saved by pfizer market from where we were just a few minutes ago. >> let's bring meg back in here. meg, we did get the vaccine guidelines from cdc yesterday and in the release pfizer does say if everything goes right expecting to make 100 million doses by the end of this year, potentially more than 1.2 billion by the end of '21. >> yeah, carl. so just to give some context on releasing these early bant, i spoke with the ceo of pfizer on friday at the milken conference, he said their policy wasn't to release the results until they had published them in a journal but he did note that they had them in-house. there's some question over you have these data and they're not out there. the scientific community wants to see them, the investing

community front plea want fr wants to see them. they have submitted to a journal and while the journal is getting ready to publish the data in a peer reviewed format they are publishing this on a pre print website that's not peer reviewed this is essentially what the scientific community has been doing during this pandemic to get information out quickly. it is a lot more information than we have seen for other vaccine candidates recently with just press releases of top line data you can actually look through the manuscript of what they're reporting here they tested this, this was a phase one-two study so 45 patients total on the two lower doses there were 24 patients and they saw neutralizing antibody levels of 1.8 to 2.8 times what you would see in patients who have recovered from the disease in terms of safety, they say no serious adverse events, they did see some fever in the higher dose, the 100 microgram dose, they did see more sort of injection site reactions or other issues, so they decided the lower doses worked well enough

they do give people two shots of this, three weeks apart, and then they looked at the results about a week after that. so these are preliminary, guys, but because of the speeds we're moving, they do say if they get regulatory approval they plan to start a potentially 30,000 participant phase three in late july we should also note this is only one of four candidates that pfizer has been testing along with its partner biontech. this is just the most advanced they will probably have more data on the other candidates, they will select the best one and take that into the phase three in just a couple weeks, guys, the end of this month. >> wow wow. >> you know, they're using a principle, the nyu langone vaccine center, certainly not someone that you would say, hey, listen, we're going to release this, are you okay it would be more like please don't release this if there were any doubt. i think that that -- look, there are a lot of 501s that are

involved, cincinnati children's hospital, university of rochester, the center for vaccine development, global health in baltimore, but the one i'm familiar with is langone and they have been very reluctant to do anything that is at all hype, so, meg, this is a very good group and this is -- i'm looking at the paper that was released from med rx 5, but it's not idle i mean, this is something that is quite impressive. quite impressive >> yeah, it's exciting pfizer's stock now up 7% this morning, guys. so i believe biontech is halted right now so it's stock hasn't continued to move. but early but promising data. >> meg, it's david i mean, also worth reminding people of all the different efforts that are being made towards a vaccine, another company that's not particularly promotional and is enormous is j & j. my understanding is they've moving towards human trials

sooner than they had anticipated for their candidates as well having completed animal trials on them as well. >> yeah, we are going to see kind of a stacking up of major companies starting these phase three trials this summer modern na being the david and goliath picture starting in july, pfizer end of july, has stra zen can a potentially july/august and johnson & johnson seeing september they've been accelerating their timelines since the beginning. major companies getting into large trials this summer unfortunately given the trend in infection in the united states, they're going to have a lot of people to test this on and get efficacy results quickly if these band trends in the u.s. continue. >> meg, i'm looking, this is r & a, open premature, but same kind of -- same kind of way to go that mad earn na is doing, but

at the same time let me ask you why do they do this? >> why did they do messenger r & a? >> no, why did pfizer release this >> i think people need to know the information. there's probably a lot of pressure on them, especially after the ceo told me on friday in our public interview that he had the data in-house and they were waiting to publish it in a scientific journal the timelines of science and publishing don't match up with the demands for information during a pandemic. that's something the entire scientific, medical community has been struggling with people get criticized for putting information out before it's been peer reviewed but if they sit on it they're criticized for sitting on information. so, you know, the same thing happened in the uk recovery trial with dexamethasone, they were criticized by doing medicine by press release. it's a slightly different situation because that drug you could use right away whereas this is a vaccine, we will have to wait for it to be proven in larger trials but there is such appetite and demand for information and they are trying to publish this in a peer

reviewed way and they have posted the manuscript. >> meg, thanks for that. we will watch it obviously one of the big stories of the morning already which was full of news going into this announcement meg tirrell watching pfizer and biontech jim, is the advice to chase this we've been down this road before with the likes of modern na and j & j. >> we present available data from pfizer, present available data through 14 days through second dose in adults. 14 days. with everything we've seen with this thing so far it has beaten every single attempt by any scientist to do anything it has defeated us across the board, it is much more powerful than we think and, therefore, i think that this is a glimmer of hope, a glimmer of hope to chase pfizer up 2 bucks. remdesivir, how much did we chase gilead i was excited about remdesivir if you want to chase pfizer you

have to hope that someone else is even more enthusiastic than you are because to me 14 days r & a, i don't know about you guys, but how many times, how many times have we seen someone say, bingo, and how many times have we been defeated by obviously a pathogen that has far more reaching in anybody's mind than we have so far. >> yes but that said, we do know these efforts towards vaccines are very serious, being made by so many different companies and back to your original point, jim, this is no a promotional company typically. >> that's true. >> as meg made clear there is a desire for the information, people can do with it what we wish, of course, you can see the impact it's having on pfizer stock price right now, adding an overall positive tone to a market set to open down, although not sharply lower we are hopeful we are going to have a vaccine. >> right. >> let's call it, i don't know, jim, i mean, something that we can believe is going to be available in mass, let's call it

by the spring of next year given the manufacturing capabilities that are out there you still need as meg said these large trials, right. >> right. >> 30,000 people that's going to take a while although, again, to her point, unfortunately there are plenty of people to enroll in those trials at this point you have to obviously not necessarily be sick, either. >> right. >> you want to be fine as well but you need to understand how it's going to play out in these covid patients so we'll see >> right and, look, carl, look, i don't want to be a kill joy i'm just saying that we had -- we had one yesterday come out, it was 96% effective and the stock immediately lost 10% after spiking up we don't know that the biontech data as well as we know pfizer dave and i are both in the same camp which is pfizer is one of the big ones okay you hear from pfizer, you hear from merck, you hear from bristol, you hear from j & j,

they are not companies that have never produced big drugs, they can do it and pfizer can do it in scale i want to be hopeful but i also want to be realistic how many times have we felt we have the magic bullet. maybe this is the magic bullet 24 for 24, i'm just surprised, i think meg is right, there is a lot of pressure to be able to reveal you have something good do you want to be number 25? i don't want to be number 25 i think that you need to be number 25,000 and so let's hope that it works, you have to hope for the best but prepare for the worst when it comes to a vaccine. >> certainly the stance that fauci took yesterday in some testimony, jim, which of course rang loudly at the close yesterday in which he talks about the possibility, the worry, that we might be posting not 40,000 new cases a day but closer to 100,000. here is what he said >> i can't make an accurate prediction, but it is going to be very disturbing, i will guarantee you that, because when you have an outbreak in one part

of the country even though in other parts of the country they're doing well, they are vulnerable i made that point very clearly last week at a press conference. we can't just focus on those areas that are having the surge, it puts the entire country at risk we are now having 40 plus thousand new cases a day i would not be surprised if we go up to 100,000 a day if this does not turn around so i am very concerned >> that's a big reason why goldman this morning or yesterday, jim, says that 40% of the reopenings that were in place have either now been paused or reversed. >> right look, this is about testing. we are out once again, good piece in the atlantic, the atlantic has been right all along, negative and right, saying that the big ones -- remember we allowed all these companies to merge, there's labcorp and there's quest, what a company that we only have two companies -- it's not just the government that has

completely screwed it up, it's the private sector we have bio reference, too, you can see that goes up pretty much, but they're maxed out. we are back to the three to five day thing, we are back to trying -- except for in some areas like new york, new jersey, once again, the backlog is too great so you have a nonmasked, nonsocial distanced population that exploded and everybody needs testing and the test companies they're done there's no more -- they have no more capacity. so once again we have revealed ourself as one of the more stupid countries on earth and it's really something not to be proud of how the heck did we get to the point where there's two and a half companies that actually do testing? now, someone else could say, yeah, we havers this, this, this i'm right. it's what i do. >> making it plain right there, jim. we will take a break a lot of corporate news to get to this morning. obviously fedex from last night, general mills, macy's, facebook, united, tesla, beyond meat, we will get to all of that when we

get to the b block when "squawk on the street" continues

the ad boycott at facebook takes effect starting today. the company has agreed to meet with organizers of the boycott according to what a company spokesperson told reuters. jim, in the last 24 hours we

have agreed to a third-party audit on how they handle hate speech, they have reorganized some algos to prioritize transparent authorship of news articles, they have banned boogaloo are they starting to get the message. >> i think so. the message has been loud and clear, it has been in the form of an avalanche because i think some of these companies are afraid, justifiably of a boycott. i think that what mark zuckerberg needed to do was come in with a third party that you have to listen to and that have to talk to the groups that are upset and figure out what is a good policy that would include both patagonia which i regard as being a hardliner, ben and jerseys that is a hardliner but also regular companies, companies like levi with chip berg, bring them in and say, listen, might have screwed up, maybe i left a particular post up that was too long i want to do it right, i want to follow third party audit

can you get out of this, mark? you can get out of everything if you change your mind the country is a forgiving country but you have to a i renounce what i did. if you can't then all is not forgiven i think these are the right steps and i'm willing to say that given the fact that yesterday i threw him under the -- about 17 different greyhound buses. >> yes, you did. it was an interesting conversation we had, jim of course, we did make the point that zuckerberg is a businessman, he will respond as he needs to to make sure his business isn't impaired. i've been trying to talk to investors who are positive on facebook and there are quite a few of them to understand why the stock hasn't reacted that dramatically that said it was down a lot on friday, i know, down, what, almost 8% on friday but here is what you hear, $80 billion of ad revenues at this company the stock is at about a 20 multiple on gap earnings, still growing very quickly the top 100 advertisers were

about 20% of its overall and now they are as little as 10%. it's not about brand building on this platform, it's about direct response and for those advertisers, small and medium sized businesses that are looking for direct response, it's the most effective platform the return on invested capital they get is far higher than they do in any other platform so they aren't going to go away and conceivably for those big advertisers who are looking more towards brand building it's unclear how long they can be away from the platform as well it's important, i think, to hear the other side of this which is, yeah, this is not going to be that important zuckerberg will do what he needs to do around the edges, but ultimately it's really about a direct response platform in which the advertisers are quite happy given the returns that they get, not to mention the coming wave of social commerce that people talk about you follow somebody on instagram, they wear clothes that you like and then you buy through their instagram account in some fashion and facebook

being able to take advantage of what will be, again, those who are bullish on it believe a growing area. >> right look, i think the shape -- the shops, it's brilliant, stock had a big move after shops i think what they intend to do to be able to support some of the shops, i suspect they are doing some things with minority shops that i think will be very positive i think they had to get -- they have to get this behind them if only just because it's like cambridge analytica, it just kept hanging out there and it makes it so that there's investigations and maybe distractions and also a sign that perhaps you just don't -- you can't trust them i think 8 million advertisers think you can trust them and they've been the way to be able to create business it is the way to be able to create small and medium-sized businesses and i think they understand that. that's their ambassadors at the same time, look, they are people and people do not want to be on the other side of history and i think that whether they are making a lot of money or

not, zuckerberg has said why bring in a third party, why bring in someone -- why bring in the people who have been most critical i believe that this is the dialogue is incredibly important, but, yes, david, there hasn't been much of a dent to earnings because unfortunately for facebook if you are a facebook shareholder, facebook and work there they have not been able to crack that much in consumer products, there are open very big contracts, but he is making the moves he's making the moves that you need to do to get back on even keel in the meantime, you're right, the 8 million advertisers that are direct response they need facebook as much as facebook needs them >> all right we will watch that, guys when we come back we will talk about two of the big stories in the so-called recovery regarding the american economy, that's fedex from last night and of course united adding some 25,000 flights in august. back in a moment

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a leader in income, alternatives and responsible investing. welcome back let's squeeze in a mad dash as we get you ready for an opening bell two minutes from now. fedex certainly a focus this morning, jim. >> okay. when we look at what is positive this morning, united is positive, yes, we want to hope 24 for 24 pfizer is positive i thought fedex was great and one of the reasons why fedex was great is because it's been so bad. this was a very good conference call, i happen to be a big fan of fred smith, i think he is a remarkable guy, but it has been bogged down by so many things, u peer acquisition has not been that good, trading talks with china really hurt them david, this country has gone in a few minutes it's gone e-commerce i have williamson mow on tonight. e mers, e-commerce you go from 18% to 28% e commerce in a quarter you are going to make a lot of money particularly if you have good ground service which is what

fedex had. also because there weren't a lot of -- to europe where they would load up packages that went to fedex, david, this was a quarter that shows you there is a great amount of grit at fedex and if things get better they are now prepared and when they get europe together, which is not going to be unfortunately 2022, i hope they're underpromising there, you can see even at a time where we're supposed to be a terrible recession they can have good numbers because this is now one of the best stay at home stocks. this is a really nice turn and it's a for real turn and i think that of the three things united, pfizer, and this, this is what i would say is worth betting on. >> all right well, that is quite a move that we're going to see we will keep a close eye on ups, see if it benefits at all. will this quiet the talk about how long mr. smith has been to go his job >> i think so. or if you want to go out at a high, i don't know what i liked about it is the

last few conference calls you detected a wariness. not this one this was a congratulatory tone and it deserved t the analysts did not turn on fedex, the last few calls have been unruly, this time they liked them >> cowan goes 167 on fedex, there is the opening bell. dun & bradstreet on the left they will highlight the company's ipo, first day of trading they will trade under dnb. there is a look at the nasdaq as well as far as fedex goes, no guidance from them or from macy's, again, or from constellation brands or capris is that a problem? >> it's become with the exception of a crown castle last night a standard procedure initially it hurts stocks and now we just say of course, what the hell are you supposed to do. constellation was saved by the mexican bell, they were not

going to be able to get the beer that they wanted now that they are i think it's okay. capris doesn't have a clue about what it'sdoing any way macy's, what are you going to do, you have a $3 billion charge, 3 billion here, 3 billion there, this has been a difficult market in retail to be able to forecast anything. if you can forecast you are in some sort of business that's basically a utility. so i don't blame them for not being able to take a forecast -- put out a forecast i do feel, carl, that we are at that juncture now where maybe you're done with forecasting you don't have to do it anymore. look at constellation and they put up a really good number. previously they told you, listen, we may have a beer shortage for cinco de mayo they cleared it and people like it >> we mentioned united, jim, during the cluster there leading the s&p this morning as we said adding 25,000 flights in august, brings the schedule to

about 40% of 2019 levels, you are talking a lot of international, shanghai, leem muhammad ali perú, frankfurt although it's not clear if you are an american if you can go there, jim, and phil lebeau adding color about travel trends as well. >> carl, two notes there is a conference call going on right now with united executives talking about the additional flights they are planning in august the near term note is this, they are saying that they are seeing a flattening in demand within the last week in terms of travel as the number of covid-19 cases has risen, as the number of states and cities have said we're either going to hit pause or we're going to pull back on reopening. so that's something to watch closely. not a surprise that people who were planning to take a trip, whether it's to florida, texas, wherever, have decided i'm not going to make that trip. that has happened, a flattening out in demand. with regards to transatlantic travel, not surprisingly because

all the borders are closed down, what they're seeing on the few flights they have going across nonamericans going over to europe, americans who are in europe coming back over here we will be curious to see whether or not that changes, if things open up a bit later on this summer as united decides it's going to be adding about 25,000 flights in august most of those domestic, but also some international. >> phil, could this be because the airlines even without the faa are saying, listen, you have to wear a mask so it makes it so you feel more confident that you are not going to get covid from the person next to you >> i think that united and all of the airlines, when i talked with executives they are pretty confidence now they are done with the political discussion about wear a mask, not wear a mask their whole attitude is you are going to be safe when you are on board with us and part of that safety message is you wear a mask, it is the best way of preventing the spread of covid-19 that's an industry-wide approach

that they're taking. you saw the video from scott kirby earlier this week. i wouldn't be surprised if you see similar marketing approaches from other airlines as well. basically it's what you've said, jim, if you're going to fly, you want to be safe and the safest thing to do is wear a mask. >> i think this ad campaign is great. i know scott really well that was a very gutsy ad campaign in an era where the president is featuring social distancing and there's a lot of people in this country think that masks represent weakness. so it was, i think, a bold move that made me feel like, well, wait a second, maybe i'm not going to die because i fly >> right and they're done with the debate i think that's a smart move. i think the gate is -- it's going to go on, you and i both know that. i think the airlines are like we're beyond that. >> right. >> it's a matter of this is the rule, this is how it goes. >> terrific. just terrific. carl, back to you. >> watch for the impact on the transports, jim. as they are doing quite well

today along with tesla 1,100 now, jim, as we crossed the 200 billion mark at cap level yesterday. >> what the hell now we're waiting for china, we have numbers coming up, actual numbers, but i think that what you could always say even if the numbers in the united states are disastrous as some people are telling me you have china and china, well, i mean, they love it >> yeah, we will get some delivery numbers later in the week china is a story, jim, we -- i mean, the hong kong security law goes into effect, they make 200 arrests on the first day, the uk says this is a clear and serious violation of their joint resolution, they're going to offer a path to citizenship for british nationals overseas, but we are not talking about china the way we used to. >> no. china is baffling, isn't it? i'm just -- do we have a cold war -- david, what do you think? when you get up and you read whatever that comes out of the white house is terrible and then

there then seems to be we need them again because business is really good. what do you think is going on? >> i think we're having a very difficult relationship and i think it bears very close watching as we have for the last couple of years as the two sides try to hammer out a trade agreement. of course, now we've got that phase one, we will see whether they follow through with the farm as much as, but i think it's more along the lines of the fights over intellectual property, huawei, zte and just the general nature of two powers, one in ascend ans to a certain extent in terms of its economy and one having a somewhat difficult time at least right now and the fights that are going to come, jim and, unknow, it's across -- it's across the aisle, one of the only things that unites both parties, i think, is sort of opposition to things currently as they stand with china so you've got trump on one hand

but i think you could expect under a biden administration no significant changes in terms of at least that oppositional mode that we're currently in. >> people don't realize, i mean, nancy pelosi has been -- speaker pelosi has been incredibly tough on china, biden very tough on china. i had felt at a certain point china would say it's the devil you know versus the devil you don't know, but one devil is a lot more mercurial than the other. i do think when you have a spokesman peter navarro come out and say, listen, it's done and then the president tweet otherwise it does get us a little bit confused. when you have people in the high level of administration saying, listen, he is joe stalin, he is joe stalin, again, we don't know really where we stand. we have williamson mow on tonight, they are talking about trying to move as much business out of china as they can, the same thing rh has been saying, a lot of companies that really don't want to make things in china, but, look, every day i

try to figure out where we are trying to make peace or war and i think that makes it difficult to do business in china. i don't know, if i was a businessperson i would still be pulling out of china very rapidly. >> but, again, it comes back to that point that you were making even with tesla, you are talking about an enormous population that continues to growth grow in wealth and that has growing spending power if you are a corporation that makes and sells things like cars or anything -- anything else, you certainly don't want to not have that market be a part of your addressable market. >> gm trades on their numbers, marriott was brought down by china in terms of the numbers, they will certainly have a resurgence fedex is very important. we had micron yesterday, micron is not sure what it can and can't sell the one that comes most to mind is apple and apple has got a lot to win or lose still. >> of course. >> this is some day. this was supposed to be the best

day of the year and it's the best day of the year kind of a reversal it's certainly the making of a positive day when it was looking pretty negative at 3:00. >> your point about the chips, jim, is a good one in light of the fact that it's leading the s&p lower. xilinx, micron, a lot of their better than expected guidance was thanks to loosening restrictions on china. the only thing worse than chips at the moment is general mills which had some interesting numbers. north american retail up 36, but food service and convenience stores down 24 we have talked at length about that share shift. >> yeah, i mean, i have them on tonight. they didn't blow it away, $1.10 versus $1.06 2.05 billion rev i had conagra on last night, they had far superior numbers. they said some things about how pet food had been stockpiled and they saw that decline, slowing

and i was quite surprised about that they've got high end pet food. they had so much to talk up. they had cereal and baking and we've become a baking country. tiktok features bakers all the time tikt tiktok, i'm trying to learn anything here, guys. but i expected more from mills maybe they can tell a better story, but they caused -- they said an unprecedented boost in demand but didn't say it continued the whole quarter. by comparison it's not that good conagra was on fire yesterday. wow. chef boyer dee, david, it was up more than 60%. >> it was. >> the faber household -- how much are you stockpiling >> you know, i did stockpile some of it early on, but not as much not as much. in fact, we have sort of been pantry deloading now from those earlier days when we -- when we were loading up given that you can get ahold of what you need in the supermarkets at present

thankfully >> no more tang? >> people out there who are working so hard. >> never went tang i was a hawaiian punch guy and then you always want to give me a punch. yeah yeah there it is. there it is. i'm sorry we can't do it in person. >> remember me >> guys, i wanted to hit -- i do remember you i'm going to come see you one of these days, too, and maybe even get scary close to you. >> our parent company up this morning on this somewhat unusual upgrade from bernstein, they write an open letter to brian roberts the company ceo, of course, i'm talking about comcast saying, hey, you should spin out nbc and sky together to create a stand-alone entertainment leader that's optimized to boldly accelerate investment in programming, technology and strategic m&a while freeing cable to invest in capacity, product, subscriber, share repurchases and dividends. what does this get to? something that has been at least you would imagine a frustration. take a look at charter, a

company that has been extraordinarily well comcast has an even bigger footprint, an even bigger business but is not getting the multiple recognition perhaps it would deserve some saying because it's being held back by nbcu and those businesses. bernstein says a spinout would result in a higher equity level. slink to grow. is this something comcast is thinking about you can imagine brian roberts thinks about everything. he is way ahead of you when it comes about increasing ways to shareholder value or what the next deal will be or anything like that. when i have heard from bankers who were always pitching these ideas is the idea of could you ever swin nbcu if at&t was willing to spin time warner and put it all together and create a massive entertainment company. obviously you need divest urs, clearly antitrust questions but that's when this idea comes

occupy, not necessarily just a pure spin but it has the stock up this morning. it was briefly at 40 bucks a share, guys. i did want to mention that. >> david, didn't you think it was funny the way it was like an open letter to brian roberts. >> yeah. >> it was signed. >> i did >> personal. >> i did i know it's a little bit of a gimmick there. but, listen, it got our attention, right, so it i guess it worked. >> i did the same thing. when i saw this i thought i better read the whole letter, this could be important. >> a little bit. this is not necessarily new. you know he's thought of everything again, this is why, you know, those reports sometimes companies thinking about companies think about everything they are way ahead of everybody usually. especially companies like ours when it comes to m&a or things like that. who knows. speaking of m&a quick update on ebay, there was some press about that as well the sale of the classifieds business continues and seems to be going fairly well i'm hearing mid-july is when they would hope to really know

who is going to be the winner for that business. don't expect a price tag to be in the double digits i have seen some of that in print. what i am hearing from people familiar with the situation, while you do have at least three actor bidders including private equity in partnership with other companies as well it's closer to $8 billion maybe a little bit over is where they are right now. the market may be getting a bit ahead of itself in hopes it would be a bigger number the key will be what it leaves behind they've already sold stub hub. the timing on that was about as good as it possibly could have been they got that deal closed before the pandemic and then they will sell cls fieds and then the question will be what about the marketplace business, can it kbroe organically again or do they need to sell that as well which would mean selling -- >> the numbers are good there in that business. of course, volume has involved up there rather substantially. good quarter >> yeah. >> guys, it's been a remarkable week for yields and curves let's get to rick santelli

>> yes, carl, in about 15 seconds of course we will get our final read on market pmi this series only goes back to 2017 we do have a reading of 49.6 that is the mid month. we will be altering that but before we get to that really quickly what the markets are responding to, adp had a revision of 5,850,000 jobs from a minus number of 2 point -- what was it, 2.369 million to positive 3.065 million when you add in the current month, 8,194,000 jobs were added in two months, the number is out, 49.8. so we take 49.6, we toss it, we replace it with 49.8, which is a nice rise from the all time low which was april at 36.1. now, if you look at a two day of tens you can clearly see the way rates have jumped and they started to jump when we started

to contemplate the huge revision when steve liesman brought us the number at 8:15 eastern it is the lead into the employment report from the bureau of labor statistics tomorrow we did the same thing last month. mathematically many think you are going to see improvement on jobs for a while, we are going to have to see how many come back considering the amount of reopenings and some of the inertia on current reopenings, but no matter how you slice it it's going to be a big number. now, if you look at a two day of bund, i go across the pond to make a point how much our markets are tied together, and finally the dollar index, you know, last tuesday the 23rd we touched unchanged on the year, you see it on the left-hand side of your chart there. basically we firmed up and now we've been hovering about a penny above that so we are up one penny on the year the point is that is equities correct? most likely the dollar index will continue to slip.

carl, jim, david, back to you. >> rick, we will see you in 15 minutes for ism. we will take a break as we kick off the month of july and the third quarter. don't go anywhere. instead of trying to decide

"should i invest in stocks or not?" meaning, "are stocks going to rise or not?", let's instead stop looking at the investments, which we can't control, and let's now look at our goals, which we can control. in other words, we only want to take as much risk as is necessary to achieve our goals. we need to protect the money that's there. and that says you should be investing in... correct?

check out the s&p gainers, a lot of transports here, in fact, transports are having their best day since the end of may fedex up 16 is on pace for its best day ever.

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market has been starved for good vaccine news. now biontech reopening up 12 >> it's fabulous it's 24 for 24. we want peer review. a lot of people were critical of people in the news who went positive on something before they said peer review may be the most important thing but this is being done at one of the hospitals involved they're rigorous and pfizer is a conservative company. i think hope is good this is not hype

at the same time we have to recognize it is very premature and we did the same thing with moderna when it was 8 for 8. this is three times better but those of us who got excited were punished soon after >> jim, you're not putting it on the moderna release camp >> no. unless pfizer and their executives sell a lot of stock pfizer doesn't do that i thought moderna was -- i thought that was one of the situations -- it was premature information, i call that but i do think pfizer is a real company and they must have something. i don't want people to get carried away every time we get carried away, what's happened? but it's better than nothing and i'm hoping that it's -- it goes 2400 for 2400 wouldn't that be something

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i think american business has made a lot of progress i think the events of the last three weeks have caused all of us to pause and say is it time to step up our game? is there more that can be done we at hent will be diligent at ensuring we have good representations of african americans on our board i think it starts there. if you don't get that part right, then it doesn't flow down into the organization. but is there more that at&t can

do absolutely >> i don't know if you caught that interview today he becomes executive chairman i thought he was particularly forthcoming on the issuingssuin. he made the point the last few weeks have been unlike anything he's seen, internally as well from his own employees as to what's going on and the changes they want to see he sent a very much -- he sounded committed to it. it was an interesting interview. i thought he was particularly strong this morning. perhaps freed up by the fact he doesn't have to worry as much about the day today at at&t. it's somebody else's problem now. >> but he and chuck robinson, money, meetings, you're right. this is something that's happening at a breakneck speed

that corporate america is changing you got to keep the fire underneath them. right? >> yes and that's the question. will this will sustained i keep asking is it different this time? the answer seems to be yes, it is but let's see a month from now, a year from now what, in fact, has really changed >> right >> indeed. we'll stay on that story without a doubt, david jim, let's get to stop trading you're watching this initiation on caterpillar >> yeah. this is one of those, it's like what happens with fedex. this is deutsche bank saying don't overcomplicate things. machinery tends to overperform at this part of the cycle. they're doing it ahead of anything happening facebook going up. the 1030 statement about facebook business blog that shows where they are and where they're going. i think they're trying like everybody else they're behind and trying to

catch up i think that's important and the third party news is incredibly important they've got to get someone who is not beholden who can say you've got to do this, and that way there can be discussions of more meaning and tonight we've got william sonoma they had an unbelievable online quarter. and then we have to talk to jeff, because general mills has been the hottest food stock and it's cooled. wow. what -- this was some show jeez >> it's been some week some -- >> yeah. >> some first half and pfizer is a big story today. we'll see you tonight. mad money at 6 p.m. eastern time as always. good morning, everyone welcome to "squawk on the street." i'm carl quintanilla with david faber and morgan brennan an interesting morning as we kick off the quarter adp adds jobs. 70% of the recovery there say

said came from leisure, hospitality, stride and construction co-vid cases, the u.s. has now posted record new daily cases for the fourth time in a week. we got the pmi now it's time for ism. good morning, rick >> good morning, carl. of course, we're waiting for a june read on ism, the national manufacturing. chicago disappointed a bit this does not hop over that magic 50 line. 52 .6. we're expecting a number of whisper under 50 this follows 43 .1, maybe or maybe not to be revised. we'll give it a few minutes to stew but 52 .6 is the best number going all the way back to april. april of last year april of last year now, 5 6.4 is new orders what a jump from 31.8. and 51.3 on prices paid from 40.8 the prices paid, there's a lot

of debate what the pricing issues will be six, nine months a year down the road from now, especially should we get our arms wrapped around coronavirus. our may read on construction spending, a disappointment here. minus 2.1% we were expecting a number closer to 1% in april it was minus 2.9% i don't see any revision, but i have an elevated heart break looking at the fact that we had 5,800,045 jobs on a revision >> thank you for breaking that down the ism number is something to watch. as all the reopening plans continue to vf mixed results stocks recovering from earlier losses after a study of a covid-19 candidate being developed showed positive results. it turned the market around this morning before we had the open meg joins us with more

>> hi, morgan. we need to note these are very early data from a small study, but the first we're seeing of this pfizer/biontech program when they looked at two of the lower doses, 24 out of 24 patients, healthy participants who received the doses generated neutralizing antibodies. those block the virus's ability to infect cells. they generated them at rates about two to three times higher than patients who have recovered from covid-19. now, safety is also very important. in the study what they found were the most common side effects were things like pain at the injection site, headache, fatigue, and they did observe fever, and importantly, on the 30 microgram dose,the higher o the two lower doses, after the second shot because the patients got to shots, 75% showed fever so what they're going to be doing going forward is figuring

out the right dose and they're testing three other constructs to find out what they're going to take into the phase three i've reached out to experts to get their take on the data heard back from one doctor at chop, a vaccine expert who developed the roto virus vaccine. he said preliminary data looks good we have to wait and see if it looks good in a phase three trial. the companies say they plan to start a phase three in late july here's the timeline of the major trials we're going to see start in the u.s. this summer. moderna planning on this month pfizer late july s a tra zen ka, this month or august johnson & johnson in september we're barrelling ahead toward getting these results. today extremely early. we're going to hear more on them from pfizer's head of research at 10:45 of course, stay tuned for that back over to you guys. >> meg, thank you. we can't wait. meantime, as you may know

congress allocated $100 billion to help hospitals and doctors manage through the pandemic, but health systems could lose more than three times that this year according to estimates from the american hospital association. our bertha joins us with a special guest. >> thanks very much. u.s. hospitals combined lost about $50 billion per month between march and june and aha estimates the nation's 5,000 hospitals will lose another 20 billion per month in the second half. meantime, congress allocated $175 billion in relief funds and ppp and cares act grants of that, 100 billion paid out so far. just over half has gone to hospitals. aha ceo is urging washington to do more to help the nation's health systems and he joins me now. mr. pollack, what do you think hospitals need now as we look at

the second half and look at a new resurgence in areas that had done pretty well up to now >> as you said, we have seen according to our reports, hospitals are now facing the greatest financial crisis that we have ever faced in our history. and we're confronting a triple threat here. first it's the rising number of uninsured people because of people losing jobs we take care of everyone that walks through our doors. the second is the increased expenses we've had to absorb in terms of preparing for and caring for co-vid patients and the communities we serve and third is reduced revenues by having to shut down regular operations as you indicated in our report, we've been losing $15 billion a month as a field, and we'll continue through the end of the year to lose $20 billion a month, and what's been

allocated thus far we really appreciate, but i think we're going to need more >> do you think that congress could really make hospitals whole here two-thirds of the hospitals you surveyed don't expect to get back to normal preco-vid levels this year. maybe even next year moodies is saying they're thinking it's more likely to be in 2022. >> depending upon how the funds are dispersed, there's a range of the degree to which people could be made whole. we're not expecting that people are going to be completely made whole as a result of that. we would love to see that happen, but it doesn't appear as if there will be enough money moving in that direction you know, again, by shutting down regular operations, that has -- that has really undermined the financial viability of the field in particular >> you know, and we're seeing that, again, in areas that are

seeing increased surges right now. particularly in rural areas. of the 30 hospitals that closed last year, 19 were in rural areas. and according to a center for rural hospitals they estimate some 450 this year are at very high risk at the moment. and many of them are in the areas that we are seeing the surge right now. what has to be done for rural areas in particular? you already have people who drive often more than an hour to get to a health system >> yeah. you know, you make a very important point. in fact, even before co-vid hit, roughly one-third of america's hospitals were operating in a negative position. and certainly the areas in rural america as well as vulnerable communities in urban communities are under severe strain. we have seen how occasions made of the of the funds to rural

hospitals and we have to continue with a focus on helping rural hospitals. we've seen a lot of innovations take place in extending care to those areas as it relates to telehealth, and we need to continue to move in that direction. so we have to pay attention to vulnerable communities both rural and urban as well. >> you're talking about rural hospitals and vulnerable communities and urban areas. when you look at the up tick and hospitalizatio hospitalizations, is the bottom line here that we are just going to inevitably unfortunately see some hospitals close, and if so, where are you worried about that >> i think, again, we have always been concerned even before co-vid that there were hospitals at risk for closure. without the appropriate assistance coming through from the federal government and from

the congress, we will see hospital closures. we're very concerned about that. and it is so important that hospitals remain resilient we are the foundation of the health care system, and we are the backbone of it and certainly in this situation where we're seeing co-vid and spikes in co-vid and a potential reoccurrence, we have to stay strong our communities and our patients are depending on it. >> sir, how many important procedures are being put off or how many conceivably electiv but things that people need to have done are not being done and, therefore, is going to actually hurt their ability to stay healthy is there any way to measure sort of the impact of that? >> we don't have any good metrics on hat, but we know between now and the end of the year our inpatient volume is

down about 19% our outpatient volume is down roughly 35%. and it's important, and your question implies this. it's important to recognize that elective procedures are simply scheduled. it doesn't mean they're discretionary. they're removing a tumor or replacing a heart valve may be elective, but that's life-saving. you don't know the cost of deafdea deferred care as a result of this situation whether it's from crisis periods or simply that people elected not to come to seek the care so we are very concerned that the cases that are -- that do come in now have been -- are in a more serious situation than they would have been had they gotten the care earlier. the other important thing to remember is that as we transition back to providing

regular services, we've put all of the important precautions in place to ensure safety to our patients and staff we have taken all the precautions necessary to allow that regular care to come back but it's not going to come back with the flip of a switch. there's a transition going on. and, again, according to our surveys, we're not going to get back to regular operations until probably not until next year >> rick, along those lines, i'm curious what the standards are or protocols in terms of maybe some of the people that are coming to the hospital right now. maybe for some of those deferred procedures when we see the co-vid hospitalization numbers in some parts of the country right now, is it mandatory across states, across the u.s. in general that everybody who comes into the hospital get a co-vid test and if so, how is that

classified once it happens if somebody is positive but asymptomatic >> well, you know, frankly, everyone that walks into our biddings these days are screened for co-vid in one form or another. whether it's through temperature checks, whether it's through different types of questions that people are asked. depending upon the availability of the testing, that determines how the actual screening will occur at that particular level we still are experiencing unevenness in testing availability, particularly as it relates to supplies. i was on the phone just yesterday with a couple of hospital ceos who were telling me they were having real problems, again, in getting the reagents and other supplies for their machines it's still very uneven the bottom line is everybody is going to go through protocols for screening when they either enter the building as a visitor or enter the building as a

patient. >> rick, this situation in some ways begs the question about the way hospitals are reimbursed for years it has been fee for service. as hospitals are now talking to insurers and looking ahead to the next few years, do we need to transition to much more of sort of a value-based system where you get paid to treat a population rather than having to go for each individual procedure that you're doing? >> the notion after value-based payment, if you will, is something that we embrace, and we've been working toward. and there's a continuum of different approaches that represent value-based payment. there's no question we're headed in that direction. and there's no question that people are at different points along that continuum based upon the market they're in and the community that they serve. we're going in that direction. there's no question.

it's just the pace when you talk about value-based payment, it also implies that hospitals, physicians, other providers are going to be taking on more risk and one of the issues that, of course, we have now, is we've got a lot of risk. so the notion of taking on additional risk at a time when we are managing an unprecedented situation, you know, that slows down that transition but we're definitely moving in that direction, and we want to get back to moving in that direction. >> thank you so much for joining us, the ceo of the american hospital association >> thank you for bringing that to us, bertha. the ceo of carrier is going to be our guest on the other side of the guest lots to talk to him about. stay tuned

new york, large malls, we will make it mandatory that they have air filtration systems that can filter out the co-vid virus. >> that was the new york governor earlier this week speaking on the safety measures that need to be in place as malls and other public places indoor public places in the state dwin begin to reopen the ceo of carrier joins us on

the ventilation efforts. thank you for being with us, david gitlin >> thank you for having me >> so about half of carrier's sales are hvacc on the heels of this announcement, you put out a release offering some of the products and services that carrier has to offer when it comes to something like hepa filtration systems tell us about that and what those conversations with, for example, mall operators in states like new york have looked like >> we're at an absolutely critical juncture in the fight against this pandemic. while we wait for therapeutics and vaccines, we needed an aggressive and common sense approach and that approach has to have two aspects. behavioral and structural. on the behavioral side it includes masks and social distancing and using good judgment on the structural side, there's a broad recognition that people spend 90% of their time indoors. and the focus on indoor air quality is more important than

it's ever been before. when you look at a company like carrier, we can address it in three aspects, the indoor air quality. it includes filtration, which is what governor cuomo talked about and finer levels of filtration it also includes ventilation and using more ambient air and also a focus on keeping humidity levels between 40% and 60 %. we have spoken to some of the mall operators i got off the phone with one of them ten minutes ago they're trying to assess the situation themselves our message is we can and will be part of any solution they desire >> bars are under intense scrutiny we've seen bars in a number of states and counties closed down. also restaurants and potential either capacity decreases or even halts to indoor dining at restaurants. i could go down the list in terms of some of the different businesses in which ventilation

is now a key part of the discussion and safety protocols. how much demand have you seen and how quickly as different businesses do reach out to you about the possibilities, how quickly can you roll out the products and help them get back to work? >> very quickly. we've come up with a solution which is essentially a movable filter, hepa filter you can put in place and plug into any store in a mall or a dorm room or classroom. the demand is at significant levels we've working with a number of verticals. we're working with hospitals we've been active with a couple of major universities as they welcome students back to school, they're thinking about solutions for the classroom, dorm rooms, many of the more general areas within the university. we're talking about commercial buildings. and homes. i mentioned 90% of your time is indoors. 65% of your time is in home.

as people spend more time in the home, we have a healthy home strategy we have a very, very broad set of solutions and we're working with a number of different verticals as they each try to welcome patrons and workers back to environments. >> david, it's david faber i want to follow up in terms of -- you're a global company. much of your sales outside the u.s. are you seeing similar interest in these systems in places like europe and other countries that have been hit as well? but perhaps a bit further along in their recovery? >> absolutely, david good morning to you. we're seeing it -- china as generally been focussed on indoor air quality over the last couple years with pollution issues it's shifting to a more focus on covid-19 we're seeing it throughout europe and it's a very common kind of focus area for a number of different customers. and what we can do is not only provide hvacc solutions but a

one top stop for a healthy and safe environment that includes being able to provide an app to use touchless. it includes thermal screening that's part of the overall solution or traceability if someone does test positive, we have the ability to trace where they've been in the workplace and we can report that so we can understand who else they may have infected it is a very global phenomenon and the desire across the world is pretty consistent >> david, we had a chance to talk to you almost two months ago, may 8th in the earlier days of the pandemic. and you were talking about changes you had to make on your assembly lines in terms of physical distancing and the use of robotics. you said at the same time we're going to come out of this with a more wholistic sustained approach a couple months later, what can you tell us in terms of how they're thinking about your work force and the way they do their work >> we've been aggressive on the

operations and supply chain side we're at 90% levels of output. we're pleased with that. we're looking at more systemic changes. the single points of failure in the supply chain whether it's dual sourcing, no more signal points of failure. another example is i think what we talked about last time. robots, co-bots. spacing people out six feet but separating them with a partner we're using it, we're looking at it in our georgia facility and we're looking at the type of work done by the human, for example, wire harnesses that are more customized to the specific application, versus installing rip nuts which are done by the co-bot a lot of changes that i think will be systemic coming out of operations and supply chain. >> david, as we're talking the

mayor in new york city says that indoor dining is not going to resume on monday as they implement phase three. that's one of the things that some people in manhattan had been anticipating. and then citi group is also saying they might pull back on some return to office. i wonder on the -- say n in mat hanen you're talking about many small businesses is this the kind of filtration technology those types of small restaurants, drugstores can easily afford? >> absolutely. and we've talked to some restaurants. the interesting thing is they not only care about the safety of their patrons they actually care about the confidence that they're giving to their patrons this solution we developed in just three weeks which is this portable air scrubber device that you can plug into the wall. it's about three fetet tall. we said we can hide it, put a plant over it or something like that they said they want carrier on it and want it to be visible and

they want to give their patrons the confidence they're taking the right actions to filter out covid-19 covid-19 is microscopic. it's .125 micron big hepa filter is filtering out .01 microns. it's $1800 depending on the size and it's applicable for the restaurant, the hotel. anywhere they're trying to not only welcome patrons back but give them confidence that they have the right ventilation and right humidity levels in their air space. and carrier is in front as the leader in providingthe one-sto shop for this healthy business eco system >> given the fact that you're a multinational manufacturer you have a presence in north america, china, europe, right on down the list. i want to get your take on global economic growth right now. what you see in terms of recovery not just here in the u.s. but across the world.

>> yes you know, we've seen china recover in april and it's continued. china came out of it pretty well and staustained it. europe is a bit mixed. italy and france have recovered better germany flat lined uk is behind i'll go back to what i said on one of our investor calls a couple weeks ago the recovery in june in the u.s. surprised us it was very robust it was strong. we saw residential demand to be very significant in first part of june, and we mentioned that a couple weeks ago overall, commercial construction has started to pick back up again. so the recovery in the united states has been really over the last few weeks quite robust. >> does this feel like a v to you? >> i would say we think demand will continue. we think it will be jagged there will be some ups and downs. it will be lumpy

we're seeing what dr. anthony fauci said yesterday cases of 45,000 to potentially 100,000. it won't be straight line recovery will will be fits and starts, but we feel positive about the momentum in the u.s. and europe. europe was down for us in april and may, but as we started to get into june, we saw some signs of recovery, especially in southern europe. so it does feel like the momentum is in the right direction. >> dave gitlin, thank you for joining us today >> thank you, morgan it's time for the etf spotlight. we're looking atticer ioit it's up. boosted by the largest holding, kansas city southern that stock is on a similar one a weighting of more than 10% for the etf. st up 2 % today. we're going to talk to the ceo in just a moment stay with us

outens mire.

since the final week of may. the strength out of fedex, is it going to translate to the rails? l lk to the head of kansas city southern in just a few minutes.

good morning, everyone i'm sue herera here's your update at this hour. new york's mayor is slowing down

the city's reopening indoor dining will not be allowed then phase three easings begin next monday. this follows a similar move by new jersey last week swing state voters are giving president trump poor marks on his handling of the pandemic 35% of those polled blamed president trump to blame for the recent rise in cases in hong kong, demonstrators against a national security law. more than 300 were arrested after thousands took to the streets. and vladimir putin voting in his country's referendum that would allow him to stay in power until 2036 the changes are expected to be approved you are up to date i'll see you again in an hr.ou "squawk on the street" returns after a quick break.

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welcome back to "squawk on the street." freight heavily impacted by the covid-19 pandemic. what does it mean for one of the nation's largest railroads joining us is the president and

city of kansas city southern, patri patrick ottensmeyer. >> i want to get your take, especially on the ism manufacturing number better than expected it showed for the first time in a number of months expansion and is seen by the economic community as a forward looking gauge of what we're seeing manufacturing go over the next couple months. what you're seeing in terms of freight and specifically, a rail carload recovery the last time we spoke which i think was in april, post earnings you said you thought we were near the bottom >> we, and then it moved sideways we've seen a pretty strong recovery in the last few weeks our volumes overall are up about 30% from the trough which we

were in in late april or may about 10% below where we were preco-vid, but we've seen a pretty strong rebound in a number of areas. automotive, of course, as the auto plants are ramping up we've seen that in the auto business and some other areas. but with the exception of energy and maybe paper and some metals that we might be seeing some effects of plant shutdowns we've seen a pretty broad-based recovery since that trough in may. >> as we've seen the number of coronavirus cases in a number of states tick up in the last couple of weeks, we've seen some pauses and rollback efforts in terms of the reopening of economies, how far of a concern or risk is that for the recovery in freight >> we're concerned about it and trying to keep the sanitary

goodlines. we had good experience in march and april with the things we were doing to sanitize, to distance, keep our employees safe by the way, our employees did a fantastic job. 85% of our employees are not able to work at home they came to work and did their job and really kept things moving and moving well. the challenge this time, we're seeing certainty in our case of rebound. we're seeing more positive co-vid cases than we did in march and april, and now with the increase in co-vid cases under the stress of recovering volumes, it's a little bit more of a challenge to make sure that we keep our training staff properly and are able to continue our operations. so far we haven't had any difficulties doing that.

but i think with the recovery, it's going to be more challenging. >> the other big news of the day today is usmca, the updated trade deal on north american trade deal goes into force today. you're also the u.s. chairman of the u.s. chamber of commerce as the u.s./mexico economic given some of the changes that take effect, how do you expect it to impact volumes for the railroad and also just manufacturing activity overall whether it's autos or some of the other key industries that will be affected >> long-term, this is a wonderful opportunity for north america. all three countries. nafta was a great thing. it created a lot of jobs

the new umca is better in terms of making north america and all three countries more competitive, creating jobs deals with some labor issues that were -- that needed to be addressed in the old nafta, and when you couple the usmca entering into force today as well as all of the other things that are going on in the wake of the global health pandemic, companies, supply chain leaders, disfavoring extended global supply chains, disfavoring asia, china because of what we learned in the last 90 days, this should be a wonderful opportunity for north america, and we just need to make sure that we get off to a good start i think one of the key elements is to make sure from the very beginning we have very high level of coordination between the governments and the private sector to make sure that we can

align priorities, deal with pandemics, other issues like this so that there's alignment of policies across the continent, and make sure that our supply chains are protected and able to perform at the highest level, and make the most of this opportunity for north america. >> patrick, specific to your financial goals at kansas city southern, you've targeted $500 million plus in free cash flow for 2020 and you've made adjustments for our expense base and capital expenditures are you on track for that right now? do your concerns about where things stand in terms of the virus impact how you're looking at potentially further cuts to make sure you hit the 500 million plus free cash flow number >> we continue to stick with that guidance. as recently as a week or two ago wed a an investor confidence

we've been able to scale our costs very well as the volumes have declined. and now we're seeing some of that come back as we're recovering we've also trimmed our cap ex. we've been thoughtful, i think and responsive to cutting costs as appropriate as our volumes were declining we still feel confident in our free cash flow target. i hope we're done. it's never good, never pleasant to furlough and lay off people we just finished a voluntary management retirement program that targeted about 7% of our management head count. but hopefully we can grow from here, but we're still confident in our free cash flow target and as you know, we're getting ready for earnings, we'll announce the earnings on july 17th and have a more current update at that point. >> all right patrick, thank you so much for joining us today

we appreciate it on this day where usmca does go into effect. patrick ottensmeyer, the ceo of kansas city southern >> thank you for having me >> and it is the transports helping out markets today. fedex, of course, having the best day since it went public in '78. off the highs. s&p 3116 goes back to the highest levels since june 23rd wee ckn mite'rba ia nu you're first. first to respond. first to put others' lives before your own. and in an emergency, you need a network that puts you first. that connects you to technology to each other and to other agencies. built with and for first responders.

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quarter. a decline of 35.3% while the plants were shut down, they were not selling to dealers. that's the primary sales that are taking place for all the auto makers. even more important, in the second quarter, huge dropoff in fleet sales. retail sales were only down 24%. again, general motors down 34% in the second quarter compared to an estimate of decline expectation of 35.3% guys, back to you. >> okay. phil, thank you. phil, still to come, pfizer's chief scientific officer on the co-vid vaccine we have preliminary results but it's enough to help pfizer stock and the overall market we'll talk to dr. mikaeld o d olsten after this.

welcome back transports are leading the way higher right now largely due to fedex they are up 15% is up 15% on pa best day in terms of percentage gains ever going all the way back to its ipo because it released its quarterly results after the bell last night. beat on both the top and bottom lines but keep in mind the estimates had come down pretty aggressively ahead of this no fiscal 2021 guidance. did cut capx for this next fiscal year, down by about a billion dollars year over year really the standout here was fedex ground which is basically the segment of fedex that handles more ecommerce home deliveries reported 20% revenue increase for the quarter and actually 17% drop in op right income as it had to spend more to handle the surge in all of

those package deliveries and the demand there for consumers in terms of ecommerce however, those margins, while under pressure, were still better than expected also, based on some of the commentary we got on the call, fedex express, the revenue which does skew more towards commercial deliveries, more of that business to business package delivery, if you will, fell 10% operating income dropped 56% but signs that a recovery there is also on the horizon. now, in terms of the global economic outlook for the company, because keep in mind fedex does have its hands in so many different markets and so many different aspects of trade close around the country, says it's still pretty foggy, varies region to region, similar commentary to a number of ceos we heard from in the last couple days transpacific is experiencing solid performance. company seeing improvement in transatlantic but that management is anticipating air cargo capacity recovery will

take 18 months to get to pre-covid levels so again more economic commentary in terms of what this recovery ultimately will look like carl >> morgan, meantime we're getting this positive vaccine data out of pfizer hey, meg >> hey, carl dr. michael dolston from pfizer joins us here. thank you for being with us this morning. tell us about this data. early from the first human trial that you and bio entech are doing on this vaccine. hearing from experts in the field they look promising. how do you assess how they look in terms of getting a successful vaccine for covid? >> yeah. hi, meg. great to speak to you again. well, this is the first data from a unique vaccine program in just some four months have moved to clinical experience that shows reason to be encouraged. the preliminary data from the

study shows that we can administrate our vaccine at the low effective dose it's well tolerated and it provides mutualizing, reported to be above what you see in plasma from patients that recover from the infection. as early we record as four weeks after starting the vaccinations. local injection where you inject the patients or systemic events 10 or 30 micro gram of low dose, moderate and transient no serious averse were reported. so we are obviously very encouraged by this good experience in humans and we feel great to be able to also post today a manuscript on a open public source that allow other

scientists in the world to review our data and at the same time submit it for publication >> well, i want to ask you about those levels of the neutralizing antibodies seen in this study. one of the things that your team note in that manuscript posted online is that we don't know yet what level of these neutralizing antibodies are needed to protect against the coronavirus. so, as you look ahead to the phase 3 trial, what are you expecting this vaccine potentially to see based upon the data that you've seen so far? how protective do you think it will be? >> you know, that's of course the key question, meg. as we stated, we are, you know, moving rapidly in an area where we constantly learn together and obviously we share constantly our experience with usfda. well, i am -- believe this is very encouraging

compared to con ve le sent serum, we were 1.8 times with the 10 micro gram and 2.8 times higher with the 30 micrograms. so we were higher than what was seen with the plasma and that's neutralizing activity if you look to antibody levels, we were eight times with 10 microgram and 46 times higher with the 30 microgram. so i am quite optimistic that this reflects the point you want to be to have a chance to deliver effective vaccine. we do know that from coronaviruses plasma transfusion has shown activity if delivered early in the disease of course, if you can raise the antibody levels that we discussed even before the disease, it makes me believe that this is really encouraging for us and finally, i wanted to say

that the platform that we are using also deliver activation in general of t cells we have seen with previous vaccines and we are just now recording that for this vaccine and share shortly so, i think there could be more mechanisms operating in favor of the vaccine than what you see with plasma. while this is early observations and before you can be absolute confident in the direction for what we're hoping to be phase 3 going into large data set that could be the foundation for emergency use authorization in the full and potential approval shortly thereafter there are, of course, we have to pass and more data we need to generate but i am optimistic and believe that we're on to something that is very promising new vaccine.

>> did i hear there's a question from the studio? >> meg, i have a quick one for you, doctor. >> okay. >> really quickly. not so much about the data but about disclosure the market obviously is keyed into any press release about data no matter how preliminary, doctor i just wonder what is the calculus right now, what is the process in terms of deciding when the market needs to get public information disclosed >> well, you know, as was said, we want to be transparent. we want to work and share our progress and he said in his plan. and we have done that now. and this is not a press release, right? this is write-up of a publication that is posted on an online server. and there is enough data for scientists, physicians to review and form their own opinion and at the same time, we

submitted to a peer review in a standard scientific journal. so i think this is a very good way of operating and it's about allowing science to be transparently reviewed and of course, we are optimistic about the data and that's why we have thought it represent a good time point to share it in the quality of a manuscript and hope to see good feedback in peer review. we continue to generate data, and we love data in other forms of similar type of manuscript as we move forward towards july, later part of july and hopefully start of a large period of study. and we work constantly in regulatory dialogue with the fda and get great feedback and review the guidance and incorporate that into our plans. i hope we review that state of the art scientific integrity in

a public health crisis to share data in the shape and form that we think others can review in a thorough way >> dr. dolsten, i want to ask you about your manufacturing plans. as you're doing this clinical development, you're also scaling up manufacturing and you now say you plan to have 100 million doses by the end of 2020 1.2 billion doses by the end of 2021 this will be a two-dose vaccine. so that will be 50 million people this year, 600 million in 2021, is that right? >> i think that is a good take at our plans and, of course, when you move with technology and encouraging data, you want to make sure that you can shortly after potential emergency use authorization that could come this fall and hopefully full approval pending good data and regulatory dialogue that you could supply the demand and the need for so

many patients at risk and, of course, to put society backint a more normal operating environment. so that's why we have invested in these plans we're very thrilled that we're able to record with such a low dose of the vaccine 10 to 30 micrograms this promising data and that allow so rapidly, of course, to see an opportunity to get into these types of doses. >> well, dr. dolsten, we look forward to seeing more of the data as it comes out thanks again for being with us >> thank you good day for science and patients >> meg, thanks for bringing that to us. obviously one of the key interviews of the morning as the pfizer news broke just before the market opened and has helped us we're off the session highs of plus 206 on the dow. starting off q3, jon, starting off july covid