now, you had to certify that you would spend 75% on payroll, i guess now that's down to 60%, but overall it's been a phenomenal success and probably saved 50, 51 million according to many estimates. you know, i thought in three weeks they phenomenal job, the reason those job numbers are picking up is the ppp temporary layoffs going back to work terrific. >> i want to see you again soon. maybe tomorrow. >> all right. >> we are out of time. >> anytime thank you. >> i hate cutting you off, it's always at the end of the show. thank you. larry kudlow make sure you join us tomorrow "squawk on the street" is next ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, mike santoli coming how live from separate locations. futures have been in a tight range all morning long as the market weighs the tension as kudlow just said of reopening the economy. u.s. covid cases top 3 million,

60,000 new cases in a single day for the first time oil is holding 40, gold topping 1800 for the first time since 2011 david, it was a quiet calendar already going into this week, but it does seem like today in terms of looking for inputs traders are really on their own this morning >> they are. i mean, you know, the only calendar, carl, that really seems to be getting busy and staying busy is the ipo calendar which we should mention as well just because it is some sort of reflection of demand in certain parts of this market the latest of course rocket mortgage, that's going to be an enormous ipo, we can talk a bit about that later if you want other than that not that much to key off of clearly, mike, this is not a market that seems to be particularly concerned in terms of keying off of the rising cases of covid that we're seeing around the country and the reversal of reopenings, the slowdown in business, certainly in travel, leisure, restaurants,

that is resulting from the rising caseload. >> there is no particular number that comes out that is reacted to in a dramatic way, there is no sense of urgency around it, except it is incrementally, i think, there's wear and tear and you can see it if you look below the surface of the market. that's why, you know, the financials and the cyclical stocks and the real kind of traditional consumer plays are struggling industrials are struggling versus things like semi-conductors and anything digital. so maybe you could see in the way the market is differentiating among perceived winners and losers the fact that it's a long slog, it seems to be the implied message of the markets for most of the economy. as to whether it would be the kind of thing that's going to reach a threshold level that's going to take the entire market by surprise and drop it, it's not evident just now, it does seem more like a selective market with a lot of push/pull

inside of it, it's kind of trapped in a little bit of a trading range right now. yesterday market just kind of got weighed down in the afternoon as treasury yields refused to get out of their own way, they went down a little more and that means growth stocks can work but the rest of it just kind of gave way, carl. >> yeah, to c ashin says we might be at an important junction this morning. there's some concern he says that the bulls failed to seize the initiative after those few sessions where it did seem like cyclicals were going to get back on board we had freeport with a solid pre announce the other morning, this morning it's alcoa with an upside q2 announcement there is ammunition there, just a question of whether or not they are going to put it in the barrel. >> the bears lost their opportunity, too, a little while back, the market refused to go

below 3,000 on the s&p 500 you mentioned alcoa and freeport, look at the price of copper, it's been outperforming gold so the rest of the world to the extent that things like china are getting back to work, maybe that's got certain influences on parts of our market and some companies, but it is true, though, that in general there hasn't been this broad impetus to say now that we've come to this level all of a sudden we're going to start buying the stuff that's going to do well in a better economy i don't think there's a real edge in terms of deciding which way the next few percent is except that, you know, to art's point, the market did shuttle back to the upper end of this range and waiting for the next thing that's going to capture its attention. >> david, on the bankruptcy front stories last night about amc trying to work out a deal to avoid that fate. this morning it's brooks brothers and reports about

acina, the ann taylor parent, but clearly the circles of concern around retail and travel are going to remain. >> without a doubt listen, these are the areas that have been a concern from the beginning, unfortunately the economy has not been able to fully reopen, those companies that were on the cusp or did have a good amount of leverage, many of them retailers, many of them the previous subject of a leverage buyout which added debt to their balance sheets have already to some extent filed, whether it's a niemann marcus or a j. crew. brook brothers we have had the ceo on a number of times, again, not perhaps a surprise there as well unfortunate though it is. this has accelerated a trend we've said it so many times that we may have seen the outcome of in three, four, five years in the space of months. but retail was already under pressure the continued focus -- you don't out, mike, i can look at the broader market and say it's not reacting, but of course within

that as you say there certainly is a reaction in some areas and reads is another one we will continue to watch as a result of how the malls will do. we were talking for years about the slow decline of the mall, so to speak the question is whether that has been truly and fully accelerated. one would expect that to be the case when you lose anchor tenants or when they go bankrupt, restructure and close stores because of that. >> there's a lot of sense in here that we're waiting for some critical break, maybe in some of these sectors. i think people complain about the extreme concentration of the u.s. market and five stocks are well over 20% of the s&p 500 turn that upside down and all the stuff that really looks like trouble points are actually very much underrepresented in terms of the market value. traditional retail, outside the super stores, it's pretty trivial. you can't find anything bigger than a mid cap in mall stores or anything like that

even real estate, not something that moves the overall market and also kind of is going to move with bonds to some degree, too. it's in a weird way one of the things that people believe is the big risk is this hyper concentration of the market, it's also insulating it from a lot of these macro influencers, carl >> you know, mike, speaking of debt, b of a has an interesting note out this morning in which they basically argue what they're calling bond tourists are going to leave by the end of the year, they say they may be unloading as much as $200 billion of high grade investment grade securities over the rest of the year. that's been met with skepticism from others where are they going to go. >> right. >> clearly if ig were to lose interest on the margin that wouldn't be necessarily constructive. >> it would not be constructive. if really high grade corporate debt gets repriced and those yields go higher i think that's probably -- that's like your desert island indicator for me in terms of where the equity markets are valued

the fact that you have investment grade yields under 2.5%, you have all these balance sheets that got refreshed or to some degree on some -- in some instances weighed down by new debt that baled them out of a pickle, i do think that that would be a significant thing, but it remains to be seen whether there will be any kind of a flight out there because the overall story is the scarcity of reliable yield and reliable cash flows in the world, that's what is holding things together in the capital markets right now. it's hard for me to know, as you he say, where things would go, where they would go, carl. >> david, i can't imagine you disagree with that. >> no. i can't. and i don't at this point. you know, again, the one thing that we continue to come back to in terms of activity has been of course debt and equity capital markets, we are talking about it right now, the ability of companies to raise billions of dollars in debt and through the equity markets i mentioned this rocket mortgages, guys, dan gilbert of

course we know well, frequent guest on "squawk box" through the years, committed himself to trying to rebuild the city of detro detroit. this will be a boost for them as well i've been surprised i think some are by the willingness of market participants to flock so some of these ipos and these companies to come back to market over the last few months. warner music, royalty pharma, i mean, you could go on through a number of names, albertsons didn't go that well, but these are large deals. looking through this s1 this morning and i can tell you as well they only put $100 million in there but this rocket mortgage which owns quicken loans, going to be 4 to 6 billion dollars of offering. it will be the largest ipo of the year it could come as soon as the end of the month of july and it would have an over 50 roughly let's call it $50 billion market value. so these are not insignificant companies we're talking about here dan gilbert is going to be even wealthier given he owns a

majority of that, 79% vote when the company does come public, he would still control the vote and a lot of the economics there but, mike, the -- the resurgence and the agility or, you know, of the ipo market has been somewhat surprising, i think, in this current environment. >> yeah, and even existing ipos over the last couple years they have done very well as a group i think, you know, money managers, individual investors, definitely still have an appetite for the differentiated idea, the idea of, you know, a better mousetrap for something like quicken loans, obviously that's a thriving piece of the economy, as mortgages if they seem to, you know, have a more efficient way of delivering those things, right, it's kind of -- it is not a brick and mortar play, so to speak into no. >> you can see where it would play right now the way the market is set up, too, it's interesting, is kind of new buzzy ideas get overcapitalized instantly and

stuff that's tried and true and you have, you know, the high dividend yield stuff, whatever it is just gets left aside because there is no perceived long-term durability to that story. so very bifurcated situation, guys. >> yeah, we have had a mix between dun & bradstreet and albertsons and lemonade and maybe rocket in the days to come guys, covid is the other big story, obviously we mentioned u.s. cases now topping 3 million for the first time let's get to our meg tirrell for an update on everything we know so far today. >> carl, we are seeing higher case numbers after some depressed numbers coming o out of the holiday weekend, they are on the rise, ever core isi reporting 52,000 new daily cases reported by states in the u.s. yesterday. if you look at johns hopkins numbers they put new daily cases in the u.s. over 60,000. of course, that is a new record. the test positive rate has also been increasing now at 8.4%

according to ever core isi the differences in some of these numbers can be attributed to the fact that johns hopkins pulls from county level data, especially los angeles county reported 4,000 new cases yesterday, whereas the state only recorded 1,000 of those we are going to see a bigger number tomorrow. in terms of single new daily case highs, five states reaching new records including texas, idaho, montana, missouri and oklahoma texas recording more than 10,000 new daily cases, florida there also more than 7,000 and california more than 6,000 although if you factor in those l.a. county cases more than 9,500 yesterday from california, guys the hot spots are starting to be spread out a little bit. south carolina representing two of the fastest growing areas in the country right now, charleston at number one and myrtle beach at number four. mcallen, texas, also now making that top five list jacksonville, florida, still on there and orlando as well.

most of the big slow downs still in the northeast, guys some concerning news to point to in arizona they recorded a record number of daily new deaths yesterday at 117. guys, arizona of course was one of the earlier areas where we started to see these concerning case counts rising and now the death trend there rising as well you see this in texas and florida where hospitalizations have also been spiking so we are starting to see these numbers catch up to the case growth guys >> maybe with more of a lag than some expected, meg, but deaths and hospitalizations we will pay more attention to in the coming days talk to you soon meg tirrell joining us on covid this morning. we will take a quick break futures have been in a pretty tight range all morning long upgrades of caterpillar and kohl's today along with a downgrade of american express. we are back aine.in mut

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civil rights and activist groups meeting with facebook on tuesday called the meeting, quote, disappointing guys, we got statements from the naacp, color of change, david, the anti-defamation league which was just on with joe kernen a moment ago on squawk, mike, calling it basically a pr exercise i'm not sure how high expectations were going into the meeting, though. >> no, i don't know about expectations going in in terms of, you know, in terms of business changing, anything that was going to be durable, what

facebook might say that was different from what it already has been saying. you know, and the market is -- i think it's, you know, watching but not panicking over this. estimates are down 20% it's not as if people think there is no impact from the macro situation on advertising on facebook and it's underperformed on a one-year bases most of the faang and mega cap tech stocks. it's not necessarily that people believe anything going on has been a game changer for the company's business model from here, david. >> no. that's the -- yeah, it doesn't appear to be a game changer. we've made the point of course, listen, these large brands are well-known advertisers, not insignificant, butter there are 8 million of them on the facebook platform. a lot of it is direct response and for a lot of advertisers the return on invested capital is extraordinarily high, far higher

than they find on other places so it continues to be a question to whether they are not going to go away and that seems to be the expectation at least for the investors who are unafraid at least as to what is going on right now. but, carl, it was interesting to listen to john from the adl talk to joe and said right now i can find any number of hate groups, any number of militia groups that want to overthrow the u.s. government on the platform despite the fact that facebook tells us they're banning such groups >> yeah, and i was just taking stock of the moves that the company has made over the last few weeks, guys. they have agreed to this audit obviously which we've talked about a lot in terms of how they monitor and handle hate speech they have banned boogaloo, they're going to try to register 4 million people to vote this week, mike, the news was about no longer giving user data to hong kong law enforcement it's not as if they are absolutely standing still. i guess the question is how

they're going to meet some of these groups in the middle with the caveat that as a revenue impact it's going to be diminim diminimus. >> it does seem that the company continues to be reactive, ad hoc, it's discretionary how it's going about it as opposed to systematic, as opposed to trying to in a very broadway filter certain types of content the company says, look, it doesn't really prefer to have a lot of the objectionable content on the site because, you know, advertisers tend not to want to interact very much with that anyway it's not necessarily kind of fueling a desire, it seems, by the company to really change the fundamental business practices to try to maybe keep it away in a more rigorous way. >> we will watch the action today. of course, coming off that all time high yesterday. take a quick break here on this wednesday morning. more "squawk on the street" continues in just a colef mite nus.up o hey! lily from at&t here. with some helpful tips. tip #1: you can currently get the amazing iphone 11 for half-off on at&t,

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lease the 2020 es 350 for $359 a month for 36 months. experience amazing at your lexus dealer. experience amazing i am totally blind. and non-24 can throw my days and nights out of sync, keeping me from the things i love to do. talk to your doctor, and call 844-214-2424. here is a tweet from the president a day after pressuring schools to reopen in the fall he says in germany, denmark, norway, sweden an many other countries schools are open with no problems. the dems think it will be bad for them politically if u.s. schools open before the november

election, but it is important for the children and families, may cut off funding if not open. talk more about that after a break. back in a minute

>> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. welcome back taking stock of what the president just said, david, about reopening schools in the fall and threatening to cut off funding if they don't. we did get that meeting yesterday at the white house about just that, national education association later put out a statement saying that there was no clear message nationally on schools and that the administration had no credibility. who knows how serious he is, but i did notice today that harvard has filed a lawsuit in district court in boston on those new i.c.e. rules so education as a campaign and political issue come september will be huge >> it's going to be very important and obviously for the three of us, for example, all with various aged children in school, it's just an important life issue as we try to plan your life for september and as the schools try

to plan exactly what they can do colleges taking different approaches and then you come back to something like the new york city public school system, 1.1 million children theres no way an economy like new york's and or any of these other big cities can get back to anything close to normalcy until those children return to school and their parents can go back to work but, you know, i'd love to see a case count for germany and denmark and some of those other countries that the president mentioned in his tweet because their new cases i think look very different than our own. it's one thing to say that and i think the schools were certainly planning on full reopenings to the extent that we continue to decline in new cases not have 60,000 new cases a day, all time highs that we've seen in this country. that makes planning a lot more difficult. so the president may say you have to open the schools, i think it's the desire of every local official, every parent that the schools be open, but it's very different when you've

got 60,000 new cases a day as opposed to what we've seen in germany, denmark, norway, to a lesser extent sweden which never closed its economy, by the way just very different, guys. and a key for our overall economy, no doubt about it >> yeah, i mean, you can't find anybody who in an abstract way says we shouldn't try to open the schools. i do wonder what standards, what's going to be tolerable in terms of outbreaks, in terms of new cases coming out of the school environment it's going to vary everywhere and also i don't know if the withholding of federal aid which is not really generally a very big part of local school budgets is going to be the thing that changes that equation, carl. >> we'll see hhs did have an announcement yesterday with a big push on testing in areas of louisiana, texas and florida. so that increasingly will be a story along with ppe equipment for teachers as they try to get kids back into the classroom

we mentioned some of the sell side calls this morning, i will let you decide what you think is most interesting, i think b of a and caterpillar is a good place to start, upping to neutral, tempering our negativity they put out tons of concerns about broad macro issues, but they can't really deny some of the incremental improvement in e con data so they will go back and try to hedge their bets on cat. >> it's kind of a just be careful not to fight what looks like in some areas a strong rebound in the macro environment, talking about the economic surprise index which is at record highs but that just means economic numbers coming in better than forecast, not that the activity level itself is all that strong. things like the rest of the world coming back, i mentioned earlier the price of copper, that is perhaps a tell that maybe some industrial activity might be reviving and in general high liquidity environment where you do have the ism numbers even improving a little bit it's sort of like a let's temper

our negativity a little bit, doesn't seem like they're really sold on the idea that we have a multi-year recovery in the end markets for cat particular, but for the stock maybe it is just about let's not play the down side anymore >> and then you've got things like a rare upgrade for kohl's out of b of a and their point largely that their reopening progress versus peers will lead to sales outperformance. at the same time you have the amex downgrade at citi going to neutral talking about shrinking card balances and obviously the weakness that we know in t and e even really when the second text mix you get difference in who is going to outperform and who won't. >> i'm looking at kohl's down 57%, 58% over the last 12 months of course, $3.2 billion market value now. so that stock has just been crushed already. whether or not this is fair value at this point based at least on the hopes of reopening

and increased same store sales growth as a result of that we'll see. but it has been a challenging path again for kohl's as you guys well know prior to the pandemic we were talking about this and jim was talking about it frequently in terms of the many challenges that face that retailer >> he's been tough on them of late guys, there is the opening bell as we say futures really didn't lead us directionally one way or the other this morning, although they did improve as we've gotten closer to the opening bell speaking of radio he opening, david, disney with the statement yesterday they're going to go ahead with this reopening of disney world on saturday on a limited basis even as florida tops 10,000 cases, three times in the last week and then espn tonight returns to live sports with major league soccer it was interesting to see disney's resolve as they've even allowed some previews i think for members of theme park media for lack of a better word into

the magic kingdom this week. >> yeah, they went through in great detail all the different steps they're taking of course listen, disney world was clean to begin with, one can only imagine how much it's going to sparkle now, the key question continues to be how many people will show up, their ability to have what level of capacity and whether they're going to be able to bring that up over time remember how they started as well when they opened shanghai disney in terms of how many people were allowed in the park at one time. parks are very important to this company, so is espn at this point, we've talked for many years about, of course, its declining relevance perhaps and or cord cutting and what that's going to subpoena for espn which has only quickened during this period there there has not been live sports, many people have been home saying why am i paying for this when i'm not getting anything for t plenty of challenges there not to also mention the production stchedul, pulling back on the cinematic openings on the likes of

"mulan." you know, disney has managed to hold up fairly well, mike, i think many people would say. yes, it's down 21 or so percent, but given the challenges the company has faced i think many are simply saying, okay, we will look at 2020 as a year where it just was a write-off for you guys, but it's disney. >> that's right. >> and you're going to come back and everybody is going to come back to disney. >> yeah, fair to say i mean, it definitely gets the kind of quality halo in terms of even though the balance sheet has got more debt than it used to, it's obviously a survivor. also people getting excited or have been excited about disney plus, even though it's not a financial needle mover for the company very much right now, it seems as if they are in the right places and i don't think there's any doubt that whatever capacity they decide they can start with at the theme parks they are probably going to be able to fulfill and it's just a matter of waiting. you also have a lot of these stocks out there that seem a little bit binary, i mean, who knows if there is a lightning in

the bottle vaccine trial where do you think disney stock is going to go the next day, right? it's got a high up near 150, so i don't think it gets there in a blipg but it's that kind of idea that you have two-way risk in a lot of these stocks tied to reopening possibilities. >> yeah, you've got to have -- if you are a trader you have to have a whole box -- you know, that you want to go to immediately, a group of vaccine stocks, right, that you know will move dramatically on the day hopefully that we get a really -- some positive news even what we got from pfizer a week or so ago about the 24 patients on their vaccine at this point but you're right, mike but, you know, for disney, listen, direct to consumer has been a great success, we know that with dis me plus, but they are still spending an enormous amount of money. the leverage ratio at the company will hit levels perhaps that it's never seen

4, perhaps five times. they had added a lot of debt i want to check that, but i think that was the number. yeah, there are plenty of challenges there by the way, on media companies, not a public but by i come back to it often i know and it is connected to disney in part because kevin mayer went to run it, the man who ran direct to consumer at disney but did not get the top job at the company when iger stepped down as ceo. mike, you've got teenage girls, too, carl, soon, i mean, you know, i don't know about you, but tiktok what has gone on in this country during the pandemic particularly for that cohort has been incredible and if mike pompeo is thinking seriously about banning tiktok in the u.s. he will have a lot of teenage girls to deal with and it can get ugly quickly i kid about it in a way but i also mention it with

seriousness, this is an important company in the midst of this political crisis going on in hong kong because of the chinese crackdown. pompeo saying they might move ahead with doing something like that he will be speaking at 10:00 this morning we will monitor that as well there are companies connected to this, even the likes of fastly, this content delivery company that is up 350%. i think tiktok is 10% of their business if that were to actually happen not would only the teen aged girls get very, very upset but there would be implications on public companies. >> one of the biggest down loads in the u.s., i think like 70% of my interactions with my daughter are them showing me a tiktok video and me not understanding why it's supposed to be funny. yeah, that is exactly what would happen and it's also of course a brand that's gotten politicized. keep in mind, you know, tiktokers supposedly were out there misleading the trump campaign about the oklahoma rally and what attendance was going to be. it's a dicey one for sure, not

just because of u.s./china relations. >> yeah. >> people talk, carl, about this being $150 billion market value if and when it were to come public, something like that. we are talking about an enormous media company, carl. >> i know, it's hard to imagine that mayer would have left for anything less. being dealt a hand that maybe he didn't expect even knowing some of the risks of going to a company like tiktok. the president follows up on his tweet saying i disagree with cdc on their tough and expensive guidelines for opening schools while they want them open they're asking schools to be impractical things, i will be meeting with them. we will look for program on that even as he does meet with the president of mexico today and we expect a press conference later on. david, sort of in the media circles as well spotify we've been talking about them and this podcast strategy, we have this

$20 million deal with omnicom, giving them first mover access to explosive podcast content interesting debate about what the term will be on what some argue a somewhat risky strategy on podcasts. >> it felt like a diversion to some extent. i remember the day that daniel eck came on with jim and i and talked about their investment. it has increased substantially since then joe rogan deal of course perhaps being the biggest headline, carl, but it has worked at least in terms of capturing the attention of investors and potentially advertisers, as well the technology has changed to the extent that you can target ads a lot more effectively on these podcasts which i think appeals as well to advertisers as one reason why omni com is looking for that spend at this point on those podcasts.

we've talked a lot about spotify and its huge move up on the back of podcasting, not necessarily music. and of course what the implications are for the likes of a warner music and others, unclear, but certainly been very positive for the company. >> i mean, you know, so spotify with a $50 billion market cap it seems as if the market is somewhat giving it credit for following the netflix path if you look back when netflix first got to $50 billion market cap it was five years ago and that was at the time when wasn't there tremendous controversy over what netflix was doing in terms of originals and believing that originals were its future spotify podcast in a sense is originals for spotify for the platform and for them trying to get out of this kind of commoditization trap of being a distributor. who knows if it works, who knows if it has netflix type subscriber numbers down the road but it seems like it's that kind of template they're trying to

follow, maybe the market is giving them credit for figuring that out, carl. >> all right guys, let's get to rick santelli who we have missed the last couple days. rick, good morning. >> good morning, carl. indeed, you know, if we look at what's going on in treasuries obviously many are continuing to look outside of treasuries, especially in the safe hasher. yields aren't juicy enough potentially as we see gold at some of the best levels since 2011, but i will warn, you know, if you go back to 1980, gold had a high of about 835 soin$835 s d if you adjust that for inflation we haven't taken it out. look at a week to date of ten year note yields hovering at 66 basis points, we just moved into the green in terms of we settle at 65 yesterday, so yields are a bit higher, prices are a bit lower, but we are at the lowest levels since the end of last month and on the jobs thursday report we were as high intraday as 71 basis points so you could see that is the high water mark and it really has proven to be

we always seem to get the juiciest yields whether it was over 90 basis points in that original report when we saw the surprising growth in jobs. if we look at what's going on in credit in general, here is a year to date chart, barclays spread chart of investment grade and you can see that even though we are not below 100, here we hover around 145ish and these are really competitive as a matter of fact, if you add 141 basis points on to our favorite corporate security not only are the yields fairly juicy, but of course they start to really add up when you look at the long data 30 year bond which is hovering at a yield right around 140 bases points. even the high yield as you see on the spread chart from barclays hovering a bit under 600 basis points you stack 600 basis points on top of treasuries and that's going to give you the maturity yield value for any corporate security you are looking at, whether it's the hyj or gnk

atfs investment grade is king, huge demand and will continue most likely to see that when we think about foreign exchange yes the dollar intention did has been in a range, no at very strong range but still up just a bit for the year but a lot of the action of late has been in the competitive trade as we see some strikes on coronavirus in our country here is our currency versus the chinese yuan we are close to the worst levels in four months since mid march this is something truly to pay attention to it isn't only whether the remnants of the trade deal are still intact but there's a lot of handicapping going on between our economy, the european economy, the asian economies, of course, what's going on in china. so we can try to handicap whose companies will be those better growth companies as we try to get on the other side of the effects of the virus carl, back to you. >> all right rick, thanks talk to you in a little while. we are back to 26 k as microsoft and apple deliver the

mail once again. let's get to bob pisani. >> carl, the most important thing here is we're seeing the continuing dominance of the techniques and particularly semi-conductors and mega cap tech names and the struggle for the cyclical names, the real problems the banks are having, industrial stocks are continuing to have and energy stocks as well so here you see techs, again, dominating, consumer discretionary, health care is doing a little bit better today, biotech has been on a tear recently there you see energy is just barely on the upside, banks now essentially flat acting horribly in the last month or so. mega caps here of course we have the new highs essentially on apple and microsoft as well as amazon, but you see every single day when these stocks move up 1% and they are almost 20% of the s&p 500, that's going to move the overall index. i mentioned tech in july, it's very hard to keep moving the market up when essentially you have a bunch of semi-conductor and mega cap names moving but

that's really what's going on here sales force, nvidia, microsoft or apple, this is just in a few trading days on the upside and they tend to help move the market forward banks are acting horribly. regional banks are back towards where they were in late may before they had a modest rally, these are all inverted v shapes. these are the big super regionals. this is just in the last few trading days this is july that i'm talking about. you can see the declines there industrials similar, but there is a little bit of a bifurcation. yes, you have the problems with the airlines and some of the big global industrials like techs tron, lockheed and aerospace is tough, then we have the logistics and shipping companies, fedex has behaved well since its earnings report even though we have problems shipping to businesses, individuals are doing well ups also been doing well and logistics like robinson they have also all been up.

a little bifurcation in the industrials. overall where are we summer trading, folks. the minute we have the quadruple witching at the end of june we had a narrower trading range, lighter volume and brett fairly unimpressive this is characteristics of what happens after the quadruple witch in june. rocket mortgage, this could be the largest ipo of the year, we don't know yet but it's going to be mortgage of $2 billion. we have had some big ipos this year royalty pharma $2.2 billion, warner almost $2 pll dun & bradstreet 1.7 albertsons really big as well. why is it good morning ring so much attention it's not so much the mortgage, it's fintech, that magic word, fintech mortgage companies, some of these fintech consumer stocks have done well look at what happened with lemonade recently. they are renters insurance, folks. look how well it's done.

select quote does essentially insurance as well, medicare related it's been well since it's ipo why won't a mortgage company that has a respectable brand name behind it also garner a lot of interest. you have fintech, you have consumer, you have ipo market that's hot, you have a stock market that's moving up. it's little wonder why you're getting companies out there that are reporting and particularly when you get returns like this and yes these are all either tech oriented or biotech oriented in the case of moderna as you see right there the ipo, etf mean while hitting historic highs, this is a basket of about 60 stocks of ipos that have gone public just in the last usually two years, that's about the cutoff point so we've also got reports today, some reports allibabalibaba's at may be filing in europe. there are reports out there. the sec will be holding a round table tomorrow discussing some of the issues around emerging market companies, particularly chinese companies listing in the

united states, the sec is unhappy about the fact that their regulators don't have access to the auditors and to the auditing reports of chinese companies that list in the united states. there is a movement afoot to get very serious and push back on that and maybe some of these new listings in hong kong is a response to concerns about that. i will be covering that tomorrow, carl, but this whole thing is heating up. remember, marco rubio has a bill that would force the sec to delist companies from china that don't follow u.s. regulatory rules. that's a big issue back to you. >> huge. thanks, bob. you will see a little bit later bob pisani we can take a break here, back above 26 k thanks to apple this morning. do you havy s eiupthr target we are back in a moment.

harvard and m.i.t. have sued department of homeland security over those new i.c.e. rules. let's get to our robert frank this morning. >> good morning, carl. as you said, harvard and m.i. ti both fueling the lawsuit against the trump administration over the decision to revoke visas for international students taking online classes the plan it's cruelty surpassed only by its recklessness says it's to force colleges to open without concern for student or fact all the health the lawsuit seeks a temporary restraining order against this decision from i.c.e. which revokes student visas for those

taking all classes online. international students from harvard which is switching to online only in the fall would be deported or forced to transfer overseas students still outside the country are barred from entering if all their classes are online. all important becau there are more than 1 million foreign college students in the u.s. they account for 15% to 20% of enrollment in schools and a larger part of tuition since they spend $45 billion a year just on school costs under the rules if a student course load is not entirely online, students can stay. so students at the university of washington came up with a novel solution yesterday launching a petition to create a one-credit in person course with only one meeting a quarter and excused absences that would get around that visa so far they've had 14,000

signatures students in the u.s. and forced to go home sometimes can't go home because of the travel restrictions from co-vid >> robert, i heard you this morning talking about possible motivations on the part of i.c.e., whether it's to go back to where we can crackdown on online class fraud or simply pressuring the schools to open in the first place >> that's right. this is not a new rule it simply reverts back to the prepandemic rule which stated if you're just taking online classes you couldn't get a visa, but many think this is an effort to really force schools to open or perhaps get more seats at the colleges for u.s. students we don't know the answer >> yeah. it's a big story today robert. thanks we'll talk to you later. robert frank coming up later this morning, we'll talk to the head of slack, stewarbuerel back in a moment we gotta take off. you downloaded the td ameritrade mobile app

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levi's ceo is joining us as the company sees a 62% drop in sales. an exclusive at the top of the hour ♪ ♪

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wells fargo investment strategist now about 25 minutes into today's trade, samir,

growth leading value the s&p in the same change you've been here for a few weeks. how would you play it and what's priced in heading into earnings season >> the range part is the key part we don't see a market between now and year-end that's breaking out higher or lower. what's keeping it from breaking out is co-vid and issues around the elections. and what will keep it from breaking down is the fed and policy makers. you try to figure out what areas might be in the secular outtrends. if you look at technology, that's the most favorable sector if you look at consumer discretionary, communications, social media, et cetera, health care and publfinancials that's our play book we don't see a breakout until probably past the elections. >> financials are the outliers in the sections you mentioned in terms of the persistent

weakness what changes the story there the good news on the banks is that they're well capitalized. the bad news is the capital is there to be burned up if credit losses don't go right. >> it's a great point. we like the valuation. the tricky part is they're cheap for a reason if as you mentioned the losses start to tick up and there is a much more severe recession than what we expect right now at least our base case is q3 was the trough a and then we go to a steady eddie growth rate. we learned with the coronavirus outbursts, it's a value place. it helps round out the exposure. >> chinese stocks taking off european numbers looking better. where's the global allocation wisdom sitting right now >> sure. we've been unfavorable on development and emerging market equities inspect one of the things that's starting to change

around the edges that we're starting to kind of think about is the dollar. if the dollar were to break down meaningfully to the up side, if it goes back to the weakness we saw in 2017, the play book would have to shift. it would be more about emerging markets, developing markets and large caps over small caps we don't think it's a meaningful break down you have other central bankers trying to protect their currencies if that happens, that's the key to start moving internationally. >> dollar index, it looks like it's stuck in a range. thank you for your time this morning. >> carl? all right. mike, thanks for the help this hour we'll see you later today. mike, good wednesday morning everybody. welcome to "squawk on the street." i'm carl quintanilla obviously interesting market action today as we're sort of

without any major inputs we're getting a nice bounce at the open dow above 26k. kayla, there's so much news regarding the economy, kudlow, phase one, and now the president as his tweets suggests he's ready to take on the cdc >> yeah. does not want to put jobs or any of the economic data larry kudlow saying the white house will not be espousing another partial shutdown that would further shutdown the economic resurgence. we're seeing airline bookings. some ceos talking about retail sales starting to soften there are glimmers the resurgence of the virus in florida, texas and california is going to take a hit on the economy. the question is how much earnings are next week with a fifth of the s&p 500 reporting and bank of america is saying it could be better than expected because expectations are so low. we'll see if that pans out

>> indeed. and speaking of retail sales, it was a very tough quarter for levi's sales down 62 %. we're going to talk to chip bergh in a few moments in levi's case, it seems like they took the brunt of their pain in fiscal q2 but we're on guard for any further deterioration given the expirin benefits coming. chip, welcome back >> nice to be back we talked to you a couple weeks ago. you made no secret the quarter was going to be tough. in terms of surprises, what stands out about fiscal q2 >> our fiscal second quarter was march, april, and may. so if you think about that timeframe, we really did take

the brunt of the pandemic, awaited average basis about 60% of our stores and wholesale partner doors were closed during that period of time. when doors are closed, you're not generating a lot of revenue. i think the positive surprise was the strength of our e-commerce business. we were actually down in march, but it really i think is consumers were focussed on necessities as they all wanted to shelter in place. but our e-commerce business came back really, really strong and in may, we were up 79% our u.s. e-commerce business was more than double the prior year. really strong e-commerce business i think we're going to see a huge shift in consumer behavior as a result of the pandemic. we're seeing itnow as we reope our stores consumers are coming back to the stores in fact, we have a lot of stores where consumers are lining up. because we're providing for

social distancing inside the stores when consumers line up to get inside a door, that's a good sign on the strength of the brand. but more importantly, they're coming in on a mission like, they are there to shop they know what they want they're in and out quickly our conversion is very high. unites per transaction very high so we knew the quarter was going to be really, really tough it obviously shaped out that way. we were down 62% but we're encouraged by the strength of our digital transformation the team also rallied and created a lot of new capabilities buy online, pick up curb side between our stores in the u.s. we do expect that those could be a longish recovery, and that's why we unfortunately had to make the announcement about reducing about 15% of our corporate head count as we go forward

>> it's a tough move when you talk about opening and even closing stores again, what's the metric you're watching market by market to decide whether a reopened store stays open or has to reclose >> we talked about this briefly a couple weeks ago we actually consulted with an epidemiologist to put together the specific criteria we used to determine when to reopen our stores at this point, all of our stores are not reopened we have about 90% of our stores globally reopened and here in the u.s. it's just slightly south of 90% so there are a number of stores here in the u.s. where we still have not opened the stores but they are specific health metrics down to the county level, actually. the transmission rate, whether it's growing or declining and above or below 1 we also look at the case rate on a two-week trailing basis.

and then the number of intensive care hospital beds that are available. and today we have not had to reclose stores temporarily, but we have about 40 stores here in the u.s. that are very, very close to it right now. in the hot spot areas that everybody is talking about >> chip, we hear from policy makers that consumers actually were able to save money in actually and may that remained employed they point to strong retail signs at a sign the consumer is ready to spend i'm wondering the decision you had to make to make a permanent adjustment to lay off 15% of your corporate work force, what were you thinking about in terms of how long this shutdown is going to last of your business or the softness that you expect from the retail consumer to last >> yeah. i actually -- i believe the may results may be somewhat inflated

if you think about it, consumers were sheltered in place for about two and a half months. they weren't out eating in restaurants or going to sporting events or going out for entertainment. they weren't commuting to the office or spending money on lunch out. on top of that, you have the federal program that gave a check to every household in america just about and people got their tax returns. so a lot of families looked at their bank account in may and said wow, our bank account is really solid right now and they took the opportunity as the economy started to reopen to go out and spend i'm not sure if it's sustainable. and we'll see as this plays out. but the decision to lay off 15% of people, it was gut wrenching. it's one of the hardest things i've had to do, but if you think

about our quarter, we would typically do about $1.5 billion in a quarter we did about a half a billion dollars. we lost a billion dollars off the top line we have an overhead cost structure, if you will, built for a $6 billion business. that's about what we were going into the pandemic. where we had a lot of momentum and a lot of good things going our way. and we're going to go through this pandemic and likely be less than $5 billion in sales so the choices that i was faced with was either cut everything cut supporting the brand and building out retail, investing in digital, or take this action to reduce head count so we continue to invest in the things that we know are going to drive our business ahead investing and doubling down on building the levi's brand. investing in retail.

doubling down on e-commerce business which we think we can double in the next couple years. and it was a really, really difficult choice either milk the business to be able to afford a bloated overhead structure for the size of the business we're going to be, or take this opportunity, make the tough call, you know, the most important responsibility i've got is to make sure this company is around for the next 167 years that's why we landed on this very difficult decision. so we can continue to power ahead. we think we're going to come out stronger from the crisis we believe we're going to build share. we cannot control how long will the virus continue will there be a second wave? how bad is the economy really going to be? what's going to happen to consumer behavior over time? these are all outside of our control. what we can control is our cost

structure and how we manage our brands and go to market. and we're putting all our energy there to make sure that we continue to double down on the things that have driven our success for the last number of years. >> chip, it's david. you just said you expect to potentially double e-commerce. i'm curious as to how you're going to measure that. it was 15% of revenues for this quarter. as you pointed out, revenues came down. are you saying you could double it to 30% of revenues or are you using a different metric >> a different metric. preco-vid our total -- when i talk about our e-commerce business, i'm talking about levi.com, dockers.com around the world. and prior to co-vid, that business was about 5% of our total business right now we're running about 9%

and last month we were at 13%. we think on a sustainable basis we can cross 10% very quickly. we're at 9% right now over the last couple months then we think we can double it again over the next two or three years. >> okay. and another followup you said to carl that you've seen a shift in consumer behavior i was not clear in terms of what you were talking act you talked about people coming to the stores and moving quickly through them is that the shift? they're able to go online, figure out what they want, or were you referring to something else >> there's a number of i think significant shifts the way i thought about this pandemic is it's compressed what might have happened in five or ten years and come can pressed it into a couple of months that's true on a couple levels a number of department stores declaring bankruptcy, that might have happened in five or ten

years. it's been compressed into a short period of time consumer behaviors, there's important things one is they're shopping with a purpose. i think the days of conspicuous consumption are gone people are very deliberate about what they're buy right now i think we're going to see more movement toward conscious consumption. consumers are looking for value. that does not necessarily mean cheap. they're looking for quality products, brands they can trust and products that are going to last a long time that plays to levi's strength. we never go out of style we're quality. it's built to last and that seems to be really resonating with consumers. the final thing that's really popping right now, david, is sustainability you know, many people have seen the photos on the internet circling the earth the blue skies over beijing, and

the famous picture of delhi before co-vid and during co-vid where you can actually see blue skies during co-vid. sustainability has gone mainstream it's no longer a gen-z thing and consumers seem to be attaching themselves they're looking for value, as i said, but they're also seeming to attach themselves to brands that have values and those values lining up with their personal values. all of these really do play to levi's strength, and in fact, as we go into the fall, our advertising campaign is going to focus on sustainability. where we have a number of really great initiatives going on >> that's the last thing -- that's the one thing i want to get to on advertising. i know you took a pause on facebook and social media. i'm not asking you to comment for the consortium or group of

companies that have done the same thing, but to what degree are advertisers demanding real change at facebook and how much of this is trying to either negotiate better terms down the road or save some money on ads >> i can tell you right up front this is not about saving money on ads we've actually had to shift our advertising in a slightly more expensive. facebook is so efficient this really is all about putting some pressure on facebook to change their advertising policies and specifically, the reason we joined is we've got very important things coming up in november called the elections. not just at the national level but all the way down to the local level with all the social injustice issues that have been happening over the last several months that really come to light over the last several months so we're really concerned about the spread of misinformation and hate speech on facebook. and there are things that they can do to shut this down they can change their algorithms

to make sure that misinformation doesn't spread on facebook they can change their algorithm to make sure that hate speech is taken off quickly. and it's really important as we go into the november elections that they really look hard at how they treat this misinformation, political ads, content that is designed to suppress voters in some parts of the country. these are things that could have an outcome, a meaningful outcome on the election. we're taking it seriously. we did join the consortium it was a much debated thing. but we really do feel very strongly that facebook has a responsibility here that they need to step up and address. and we won't return to facebook until we're confident and we want timelines

we want real concrete action from them before we're ready to recommit >> chip bergh, always appreciate your candor and your time. hope to talk to you again soon thank you. >> thank you thanks, carl thank you, everyone. still to come on "squawk on the street," he was the acting cea chair until two weeks ago and now the latest departure from the trump administration. tom phillipson will join us on the other side of this break stay with us before your own.t to put ot's 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. firstnet. the only officially authorized wireless network for first responders. because putting you first is our job.

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the latest economic official to depart the white house in th middle of recession. tom philipson joins us now it's good to see you >> good to be here >> what was your experience with co-vid >> yeah. i had a mild version of it it was just a day of fever and then three days of sick and then the only day that made it difficult is the fatigue after a week or too. it makes you less productive then but right now i'm back to normal >> and dialing into conference calls and trying to work on economic policy remotely defer easy tom, i'm wondering what the discussion was inside the white

house before your departure about a contingency plan for resurgence in virus cases and what measures need to be taken as a result. what did you discuss >> well, i think there's a couple aspects of this which i think is important to keep in mind one is that it's not all about policy in some sense i think it's been misguided how much people pay attention to policy here. this is largely driven i believe by the american deport private sector as opposed to public sector if you look at infectious diseases they have sort of a self-limiting feature that is when the disease grows, prevention grows and therefore the future of the disease is kept down. i think that's what we're seeing, what we saw in march and april. the private sector was much quicker than the public sector in terms of state and local governments in mitigating

behavior when restaurants were mandated to close, they were about 90% empty already because the private sector was more dynamic in the response. what you'll see now is there's obviously an up tick in texas, arizona and california and florida and other places not necessarily perfectly correlated with policy but you will see a response, i predict, to that behavior where the private or public sector in addition complimentary will now kind of respond in mitigation toward us. i think in general i think it's been overemphasized how much documents can control this as opposed to the american people which is a driver of this disease. >> governments will need to respon it's circular. the fewer people stay at hotels and take airlines, the more the businesses suffer. if they're important to the u.s. economy, the government would

potentially need to step in and provide more assistance. how do you craft a future relief package when some of this behavior is ad hoc it varies my states and counties >> well, it would have to be more targeted. i think in general the big issue here is that fiscal policy has to be much better linked to health policy or what we learn from the disease since march so what we learned from the disease is that young people are very low risk condition on infection. because we have zero prevalence studies that show we have more people infected. and we learned a lot of transmission is within the household. so, therefore, in my opinion, fiscal policy should be much better at segmenting the risk. if you look at the economy, that's low risk individuals that are productive producing the vast majority, 95% of the labor

market is below 65 they're productive and low risk. high risk is nonproductive, or retired. how do you use fiscal policy, essentially, to subsidize or pay for separation of these risks? that could be beefing up home care in medicare a lot more than we have. it could be using hotels which new york did during its crisis to house a lot of individuals. et cetera. but i think the key issue which is missed is that fiscal policy should be basically subsidizing risk seg menation from the productive part of the population away from the high risk unproductive part of the population i think that's completely missed in the current discussion. >> it's david faber. you mentioned earlier i think governments can only do so much.

i wonder when we look at germ y germany, the uk and italy which has a significant crisis but had dramatically reduced the number of new infections, what are they doing that we're not or what are we incapable of doing given our infection rate has never been higher >> well, per capita -- obviously we're a bigger country than they are, but the key issue i think is that for the u.s. we're so heterogeneous it's almost inconceivable to have a uniform federal policy it has to be a decentralized policy i think that's the correct one that was implemented where the federal policy -- either assists those state and local efforts or coordinates interstate activities which we did essentially with the ventilator exchange that tried to

facilitate trade in ventilators for us as states and municipalities but i also think if you look at this surge that we have now, it's a younger part of the population and again, that's sort of a private sector response. the young people realized this is not such a big deal for them. it's not surprising they're the part of the bigger part of the new cases. the u.s. in general is younger than our european counterparts we have less to protect in terms of the old part of the population than they do. we have more young people who are now looking at this and saying this is not much different than the flu you might get it more easily, but we don't have immunity or vaccines but i think it's sort of a telling part of this that the average age of infection has gone down dramatically in the second surge people learned more about the

disease. >> tom, finally before we go, just i'd love to get your response on the current economic policy bench at the white house. you're one of a handful of top aides departing in the middle of a recession. is there enough economic brain power to get the country through this >> i departed basically to chicago. chicago gave me a three-year stay or leave as opposed to two-year which is traditional. i was thankful for that. i knew a year ago i would depart this summer. in terms of the white house economists, i also thought the economic process of advising th president was frustrating at the end the last few months. cea was extremely successful the beginning or eight or nine months when i was there. and because of that success, cea

had excluded in my opinion that's not what po us the wants. he wants multiple opinions in the room it's sort of like a court. you have the plaintiff and defendant and they hammer out with competitive arguments and the judge makes a decision i almost felt like it was one side of the court was excludeing the other. it's good for them but not good for the jury in some sense i was frustrated with that scenario i think there's a lot of expertise. larry kudlow is a great messenger and delivering the messages for the white house mnuchin is a great negotiator on the hill i don't think they have a deep expertise on sort of policy formulation or evaluation. it's sort of where the economists come in more. >> we wish you the best of luck returning to your university where you are an endowed chair

in your next chapter and as you decide whether to hold classes in person this fall. we appreciate your time. >> thanks. meanwhile the secretary of state pompeo a few moments ago talking act travel to the eu, funding for the world health organization and tiktok. take a listen. >> respect to tiktok, i want to put it in a broader context. we have been engaged in a constant evaluation about ensuring we protect the privacy of american citizens and their information. this doesn't relate to any one particular business or company but rather to american national security we are striving to get that light. the comments i made about a particular company earlier this week fall in the context of us evaluating the threat from the chinese communist party. we have talked about it in the context of zte and huawei, and we are now evaluating each instance where we believe u.s. citizens' data on their phones or in their system or health

care records, we want to make sure the chinese communist party doesn't have a way to easily access that. what you'll see the administration do is take actions that preserve and protect that information and deny the chinese communist party access to the private information that belongs to americans. it's a big project we have partners around the world where infrastructure crosses chinese tech nothing and then comes to the united states. one should think about this as a project of real scale and real importance we must get this right the infrastructure of this next 100 years must be a communications infrastructure that's based on a western ideal of private property and protecting that's the secretary of state talking about tiktok although, a bit more broadly, too, david, on a picture that is extraordinarily complex regarding multiple companies t tiktok and he referenced huawei. he talked about india, and the uk has been on the news on this front as well.

>> i was focussed earlier on tiktok because a number of people are talking about that. owned by a chinese parent. huge in the united states. hell hath no fury like a taken girl who doesn't have h her tiktok it's interesting listening to him. this is something i know you've covered closely. it's not just tiktok he referenced to zoom video with servers in china, for example. even though it's a u.s. company and tiktok also thinking about how it could run by u.s. ceo, how it could become a u.s. company, i think they have to consider things like that. given the potential threats to their business >> previously the administration tried to use foreign investment

rules. that's proving to be not a powerful enough tool and they need larger more blunter instruments to actually crack down on some of what pompeo's suggesting as information creep or perhaps outright information stealing we'll wait for more comments on what the administration is planning and how it plans to go about that, carl >> all right kayla, we'll watch that. in the meantime, time for our etf spotlight. looking at the ticker fdl. having a rough first half of 2020 not helped by one of the largest holdings, phillip morris with a 6 % weighting in the etf more squawk on the street ahead. p 0.is u12 stay with us (gentle music)

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good morning, everyone i'm sue herera here's your news update. new jersey will soon require people to wear face coverings outdoors if social distancing is not possible on msnbc the governor said he'll sign an executive order later today. there's no question that face coverings are a game changer. i think we were the first state in america to require them indoors. they've been strongly recommended out of doors we're going to turn that up a notch today and say we're going to ask you if you can't socially distance, it's going to be

required >> harvard and myit are suing te government the attorney general in massachusetts also says she will file suit against immigration rules calling them, quote, cruel and illegal. lleeou are up to date. i' s you in an hour. "squawk on the street" continues after a quick break. this selenite grey is so pretty isn't it? wow. jim could you pop the hood for us? there she is. -turbocharged, right? yes it is. jim, could you uh kick the tires? oh yes. can you change the color inside the car? oh sure. how about blue? that's more cyan but. jump in the back seat, jim. act like my kids. how much longer? -exactly how they sound. it's got massaging seats too, right? oh yeahhhhh. -oh yeahhhhh.

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facebook has a responsibility here that they need to step up and address, and we won't refer to facebook until we're confident and we want timelines. we want realtime action from them before we're ready to recommit >> that was levi's chip bergh earlier this hour. our next guest was in facebook's

meeting yesterday but referred to it as a pr exercise auditoring saying the company has made notable progress in some areas but has not devoted enough resources or moved with sufficient speed to tackle the multitude of civil rights challenges before it joining us now is jessica gonzalez, co-ceo of free press i think you heard chip bergh when we heard the tape of him saying they want concrete action from the company before they're ready to recommit. did you hear anything in your meeting yesterday in terms of that concrete action from facebook >> unfortunately, no we heard a lot more words. a lot more dialogue. but we failed to hear concrete actions and timelines from facebook to correct the problem and to address the concerns of now nearly 1,000 facebook

advertisers. >> i'm looking at your list of things you are asking for. i'm going to go well down the list, but to one that a lot of people are aware of because they think facebook has dealt with this that's to have him stop recommending or otherwise amplifying from groups associated with hate, misinformation or conspiracies isn't facebook already doing that >> they say they are, but in fact, they're not. here's the problem we hear from facebook some of their policies actually look pretty good on their face, but they're failing to actually implement them in comprehensive ways a lot of hate and misinformation are slipping through the cracks. >> so what happens from here this meeting yesterday you called it a pr exercise. many others attended

what happens next? >> well, i'll be reading the facebook audit that i got in my inbox this morning with great interest i have very low expectations that they are going to commit to anything in that audit because we saw what they did last year around this time they had another audit with a number of recommendations they failed to adopt. so we'll be very closely following and tracking what facebook is doing to root out hate and misinformation. right now we haven't seen enough, and this campaign is going global we're hearing from folks from all over the world that don't want their brand associated with hate and disinformation. >> all right tell me a little bit more about who you're hearing from. again, are these major advertisers? do you expect more are going to join this pause that's gone on at this point? >> you know, late last week we

saw canada's five biggest banks join the advertising boycott we're hearing from partners that have global constituencies that the users of facebook are concerned. so they are continuing to lift that up to brands across the globe. there's been a great deal of international media interest on this issue so as this becomes more prominent and businesses around the globe are having to deal with and make decisions about whether they want to be associated with hate and disinformation or not, i think we expect to see many more advertisers join the boycott >> all right well, we'll be following that part of the story closely. jessica, thanks for the update appreciate it. >> thanks for having me. we'll take a quick break here dow continues to turn really between in a narrow channel between the 200 -day moving

average and the 50-day moving average. we're up 146 we're back in a moment

the impact of th more "squawk on the street" coming up.

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notably missing from the large data dump on the ppp loan program is a full break down of demographic data kate rogers explains kate >> good morning. while we did get more information regarding borrowers of some of the largest borrow s borrowers, there's yet to be a full demographic breakdown to find out how minorities were in ppp. the dump was incomplete when it comes to demographics. they hope to learn more during the forgiveness process which is just beginning the advocates say more should have been done to collect the information. minority owned businesses were likely underserved by the ppp as many have no employees aside from the owner meaning they would generate

lower fees for lenders by taking out smaller loans. they've been disproportionately impacted with more black-owned businesses saying they were not active when the pandemic hit at a rate of 41%. that compares to 22% of business owners overall latino and asian business owners were also impacted smaller companies will need more help here and members of congress are talking about more targeted relief on this moving forward. back over to you >> thank you for that. we're getting news out of the mayor of new york city about the opening of schools in new york city this fall for that we'll turn to contessa brewer. >> the city district has more than 1 million students. the mayor says 75% of the families want their students back in the classroom. and to do that, they're going to institute classes where students would go to school two or three days a week.

and then remote learning for the rest of the time these families would also have the option to do full-time remote learning. this is, of course, an important step in getting the economy back up and running having some kind of plan for what to do with the kids you have to wonder, though, what this does for families if their kids are only back to school two or three days a week, how they arrange for child care or work from home and coordinate the with offices in terms of a full return to work the other rule he says is you're going to have to mandate face mask coverings for all the children when they're in class and for the teachers as well again, i've got small kids on my own. you can imagine this is going to be a mighty task coming up for parents. one more thing i want to mention. just because the mayor has put this plan out and says it's going to happen does not necessarily mean it will we saw the back and forth with closing the schools down the governor of new york says it is his job and his decision whether the new york city

schools reopen he has a news conference starting in about 45 minutes we'll hear what he has to say about the mayor's plan >>. >> as you mentioned, difficult to police this, especially with small children i saw the notice child care would require limited sharing of toys we'll wait to see exactly how that goes. contessa brewer in new york. up next, the former ceo of spirit airlines will join us on airline bookings and what's ayitr e duryst st wh us 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. firstnet. the only officially authorized wireless network for first responders. because putting you first is our job.

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it's been a volatile few months for airlines as that industry tries to get back on track during the pandemic. weighing in on the path forward is former spirit airline ceo ben baldanza good to see you, ben a senior executive told "the wall street journal" it feels like march all over again. how do you see it? >> it's good to be with you. thank you. yeah, the economy just keeps changing, doesn't it airline bookings are still on an upward slope in that more people are getting comfortable about flying and airlines are adding more capacity back, but it's

clearly slowed over the last week or so as more news of states, you know, seeing more virus events and things like that happening airline demand is so dependent on states opening. i mean, realistically who is going to fly to orlando if you can't go to disney world, right? so being able to do what you want to do when you get off the plane, not having to quarantine when you get off the plane are very important determinants in when airline demand really comes back >> and ben, just this week we saw another group of major carriers reach terms with treasury to access a second bucket of money from washington. these are loans with pretty strict conditions attached i'm wondering did the terms get so friendly that these airlines were happy to access this money? or did simply the booking start eroding to the point where they had no choice. what happened? >> well, i think it's a fact that because there's so much uncertainty about the future and so much uncertainty about when

demand will truly recover, meaning get back to levels before we ever knew what covid-19 was we don't know how long that's going to be. airlines are paying for planes right now the cares act is covering employment until the end of september but after that, it's uncertain what employment will be in the industry so, i think the real answer is all liquidity is good liquidity right now. so you have seen airlines do things in the private markets at rates they probably wouldn't have been comfortable doing six months ago and the government loan is just more access to liquidity at a time where you don't know how long you're going to have to live on that liquidity so i'm not going to say any terms wouldn't have mattered certainly they wanted to get the best terms they could get, but having the money with strict terms is better than not having the cash >> and on the act of flying itself, the practice of flying and what we used to know when we went to the airport and we boarded a plane, what will change permanently at what point will middle seats

come back? lawmakers are trying to push to codify that here in washington to not come back for some time for safety reasons >> well, i think that's a fascinating one because, you know -- it's really a u.s u.s.-unique kind of thing. no one else in the world is talking about stopping the middle seat as a way to stop the spread of the virus. also, a lot of the planes in the u.s. flying right now are regional jets that don't have middle seats so are these people who say they want to block middle seats as a law saying it's okay to sit next to someone if you're 2 x 2 but not next to someone if you're in a middle seat. that's weird you have half the industry blocking middle seats right now and half not blocking. it's a shorter long-term view. if your view is we have to get all the cash we can right now, then they're selling all the seats. those that i think are a little smarter to be fair and are

blocking some of the middle seats right now are realizing that the people who fly today, their experience -- their experiences on the plane are going to affect other people's views of whether they should fly or not and so, by blocking the middle seats right now when there isn't that much total demand, it's not that expensive for the airlines to do it right now and they're likely to help bring demand back more quickly because everyone's experience getting off the plane was, hey, that was pretty nice and i have plenty of room. versus they get off a crowded flight like the senator from oregon got off, he had a bad experience, and his experience drove his opinion about flying again. if you fly in one of the airlines that is blocking the seats, you're more likely to have a positive experience that's why i think the industry would be better off blocking the seats right now, although you have some airlines doing that and some airlines not doing that >> yeah. companies and passengers we're learning a lot, we're changing

behaviors and certainly the conversation will not be over for some time. ben baldanza, we appreciate your time this morning. >> thank you very much wearing masks is the most important thing on the airplane. >> thank you, ben. we appreciate it. we have some news for you from here in washington. the president of mexico andres manuel is here we learned the white house will hold a meeting for cross border chief executives this evening with many of these social and policy gatherings banned during the pandemic era, closest thing to a state dinner we could see while this event was previously reported by bloomberg, cnbc has obtained partial list of the american executives who are expected to attend this event at the white house this evening they include fedex ceo fred smith, ups's david abney and intel bob swan, the ceo of lockheed martin and executives from sempra, shell, ford, nuwcore and others a

conversation about cross border commerce, the usmca went in force last week and the country's relationship going forward with some well-healed attendees at that event tonight. guys >> okay. thank you. >> that will be -- yeah. >> yeah. >> interesting it's only his third trip abroad, david. and he's taken some pushback within mexico for having a relatively close relationship with the white house so we'll see what kind of issues get raised not only at the dinner but at the press conference if we're able to hear some of that. >> it will be interesting to listen in the brief time we have left in the show did want to note a move up in twitter that is quite significant. over 9%. snap up over 5%. i was hearing this morning we talked about it a number of times, of course, you heard secretary of state pompeo talking about at least the possibility of banning an apple likes of tiktok. is that the reason that twitter

is up so much because of this idea, well, if that were to actually occur, traffic conceivably would move to snap or twitter unclear, carl. maybe there's another reason for the move up in twitter, but we certainly did want to note both those stocks quite strong this morning. >> yeah. i'm seeing things cross social that are probably not worth getting into at this point but there's definitely some rumors flying around about potential growth initiatives that twitter might have. on the other hand, you're right. it might just be about tiktok and the aftereffect of taking out a big player of social and what that might mean for the likes of twitter or a snapchat so we'll keep our eye on that. aside from that, guys, the action in big tech remains incredibly strong. strip out facebook and you have new highs today for amazon at 30/50, apple 380 david, taking out intel's market cap for the first time >> amazing yeah

invidia. alibaba very strong, chinese economy. if that's true, explaining why that move up in alibaba is up 7% today, too, carl >> guys we'll see you later on david, have a good afternoon kayla, thanks for the help this hour always good to see you >> same to you we'll see you tomorrow good wednesday morning, everybody, welcome to 'squawk alley. jo jon, interesting action, it is leaning heavy into big tech. the nasdaq clearly outperforming even as the s&p is hanging on to a 16-point gain in the dow thanks to the likes of microsoft and apple getting back to 26k. >> yes, indeed you guys were just talking about twitter and snap and the boost that they've got this morning.