the biden campaign out with a new jobs plan. we'll take you live to washington for the details thursday, july 9th already 2020 "squawk box" begins now. good morning everybody welcome to "squawk box" on cnbc. i'm becky quick along with andr andrew ross sorkin you saw the dow pushing back above 26,000 after falling below that the day before. nasdaq up by almost 1.5% apple and microsoft leading things as they have been doing so often lately. this morning we take a look at the u.s. equity futures. you'll see the dow futures are indicated down by about 340i7b9s the nasdaq is indicated up by 50

points and the s&p is relatively flat we've been watching what is happening in the treasury market and we take a look now, we'll see the 10-year yield, at this point, seems to be sitting at 0.655% andrew, over to you. just out in the last half hour, the biden campaign releasing a new jobs plan. kayla joins us with more it's $700 billion, kayla >> yes it is stemming from a 110-page policy document that is essentially emerging of the left and moderate ring priorities inside the democratic party. it was produced. i the campaign said it will create millions of good-paying jobs and reinforces some policy commitments as well as jot lining new programs that a democratic administration would push for including a $15 federal minimum wage, mandate for 12 weeks paid

family leave, universal pre-k for 3 and 4-year-olds and payment platforms for low-income americans run by the federal reserve. democrats say a public credit reporting agency is needed to provide transparent alternatives to the private sector. there was also a considerable portion of the plan that is devoted to undoing the work of the trump administration expanding the affordable care act and doubling down on more public options for health care, raises taxes on corporations and estates, essentially undoing the 2017 tax cut and j.o.b.s. act and revisiting anti-trust considerations of certain mergers in specific sectors that took place under president trump. there are also some items that seem to borrow from trump's own agenda, like a native american manufacturing policy that incentivizes companies for on shoring production of goods here that's something the white house is working on. the plan endorses several policies underway like aid to states and local governments as well as immediate grants to

small businesses to provide payroll. we're still waiting for the specific jobs commitment from the plan, but there are some commitments to certain parts of the plan like the campaign says this will create $5 million good-paying manufacturing jobs we're still going through it, andrew we'll have more when we finish the long document and go through the details. >> all right i've been trying to go through it myself. when you look at the investments in r & d and the push around 5 g and the real thing i was going to ask you around taxes. we did say they want to do undo the tax cuts they want to do it on the corporate level -- not to the former level, though, and then what they want to do on the individual were you able to get through that part? >> well, it's not totally specific on exactly what they would do the campaign has said before,

andrew, that undoing these tax reforms that the trump administration put in place would be the lion's share for the other programs that the campaign wants to do now the it's on the website haven't changed. my assumption whatever the campaign outlined on the front before still stands. so we'll see exactly what finer print the former vice president can put on this. he's expected to give an economics speech today to flesh out some of the proposals and what may have changed. >> okay. we'll keep our eyes out for that we'll see where the markets and what the markets think of it we'll hear more about that plan, kayla, at 8:40 this morning. we have pete buttigieg joining us from the biden campaign he's a surrogate for biden we'll talk to him all about it joe? >> thank you, andrew more fallout from china's new security law in hong kong. australia's government has advised its citizens not to travel to hong kong. those who are there should reconsider their need to remain

there. the warning said the new law could be interpreted broadly and australians could face deportations or transfer to mainland china for prosecution there. whoa changing my travel plans near term it warns that its citizens could break the vaguely defined national security laws without actually meaning to. australia also followed canada in suspending its extradition treaty with hong kong. just reading that gave me -- it made me nervous. i would heed that warning, i think. you know what i mean, becky? >> i think so, too. >> not even a citizens and be deported to the mainland where that law might be applied? it scares me. >> well, look, we've known for a long time china has been moving closer and closer to bringing hong kong back under its wings and back into the fold after hong kong had been run separately for all these years

there have been minor things leading up to it but, yes, i think you have to look at it we're going to be in china at some point when you're in hong kong that's something to give some serious thought to. >> wow. >> yeah. i would. we have no plans we had no plans. i have to plans to go anywhere especially, you know, we're driving places and i'm trying to figure out how that's -- how far does a tesla go? can you go have you thought about that? >> you can't go cross country. >> so you can't go -- >> you can do about 250 miles. but, you know, on the system, if you have a tesla, joe, they tell you on the map where the next tesla charging station is. >> that's cool. >> it's fast charge now. >> how long does it take to charge what is the fastest charging >> i don't know if you get the full tank, but i think if you do it for 20 minutes, 25 minutes, you can get it, you know, a good 200 miles out of it, yeah.

>> waffle house. >> that's a lot for taking on the cross country trip. >> put charging stations near waffle house you think i don't think about these things you think i don't think think about these things >> you do car rides with young kids we don't stop. we get up at 3:30 or 4:00 in the morning and you drive and you bring your stuff with you. the next, you know, hour or two hours on the road, no thank you. >> you can kill 20 minutes at a waffle house. >> you know what i bought recently >> i can do it morning and afternoon. biscuits and gravy twice. >> it's a luggable loo it's a bucket with a toilet seat if you're going on a long road trip. >> in the car? that's great, becky. why go to a restroom do it in the car that's awesome. >> i want to correct myself -- >> you don't have young children anymore, joe.

>> that's disgusting >> i was talking about young children. >> oh, okay. jeez anyway. >> guys, just so you know, just so you know, on a model s, i was wrong. on a model s, on a single charge. >> 400. >> if you have the long-range model s, it can apparently go 402 miles. >> that's better. >> that's impressive. >> 402 miles. >> it's an epa rating. >> right and if the model s can do it in about an hour and a half that's pretty good [ laughter ] >> if you put it on whatever it is. >> what is that speed? >> ludicrous mode. >> ludicrous mode. >> yeah. here is our favorite stock. >> we'll talk about a couple of stocks to watch this morning bed bath & beyond will close 200 stores over twoyears as it works to getting back to profitability. the company said that the move will generate annual cost savings of somewhere between $250 and $350 million. the ceo told cnbc there are

number of stores dragging them down, this his words he said as stores reopen from the pandemic, consumers have been buying big-ticket items like home decor, bedding, and accessories for the backyard the retailer's quarterly report shows a sales decline of nearly 50%. a surge in online sales of more than 100% in april and may and then costco. that stock is up after hours the company reported net sales of $16.2 billion for the month of june. that's an increase of 11.1% from last year. e commerce sales were up by 86%. and now some news about our very own network cnbc announcing yesterday the former fox news anchor shep smith will be joining us to host a one-hour evening news program monday through friday. at 7:00 p.m. eastern time. the newscast is going to be called "the news with shepard smith. it will launch in the fall shep will be on squawk on the street today at 10:00 a.m. eastern time to talk about it. a huge welcome to shep smith

huge welcome to 7:00 p.m. live news hour here, too. it's going to be great >> yeah. i echo what mark said. fact-based general news program that competes with what we see on, you know, other cable networks i'm not going to mention any names. >> all right. >> big positive for cnbc and the overall media landscape. fact-based and here's what's is going on make your decisions. we wish him well so big news yesterday. >> yeah. >> a big hiefr a big hire it's nice to have live news at 7:00 p.m.! you know, the last time we did that, was larry kudlow had the show at 7:00 p.m before that it was "kudlow and kramer." >> yeah. and then it became kudlow. >> right and the on reason i know that is both you guys and them were kind

enough to put me on tv when i was way too young and had no business not that i have any business being on tv now, but that's where i started. >> that phoney humility may play at the times and the other places but we're not buying. >> thanks, joe. >> you should think of yourself the way you think of yourself but say it loud and proud. >> trust me, i don't -- it's kind of you think of me that way. i don't think of myself. i wish i could think of myself that way. >> don't stop. that's what you should say anyway [ laughter ] >> anyway. big welcome to shepard smith we can't wait to have him here. >> looking forward to hearing what he has to say about it at 10:00 a.m. on "squawk on the street." when we come back after this break, we'll talk to dr. scott gottlieb who joins us with the late et. cetera latest on the pandemic from new

jersey's mask mandate and the governor reopening schools in new york take a look at gold prices trading near the highest level since september of 2011. "squawkbox" returns after this save hundreds on your wireless bill

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pandemic the california governor saying hospitalizations in his state are up 44% over the last two weeks. but hospitals are still only at 8% capacity. that's the good news he said supplies of ppe, including masks has grown tremendously since march california's seven-day average of daily new cases has reached nearly nearly 8,000 an increase of about 1700 cases per day since july 1st in new jersey, the governor is mandating face masks outdoors when social distancing is not possible there are exceptions for people eating and drinking at outdoor restaurants as well as children under age 2. in new york, governor andrew cuomo blasting president trump for pressuring states to open schools in the fall. he said it's the states' decision yesterday president trump threatening to withhold federal funding for schools if they don't reopen for in-person classes in the fall. governor cuomo saying school districts will have until the end of the month to submit reopening plans and new york would announce the school

decision sometime during the first week of august joining us to talk about it is dr. scott gottlieb serves on the board of lumina and pfizer let's try to break it down i think i would start with this, there was a brouhaha controversy debate over the fact that president trump went after the cdc and the cdc guidelines yesterday and it appears as if the cdc said they're going to be reissuing those guidelines for schools and making them, perhaps, a little bit more lax what do you make of that >> well, i'm not sure what the cdc is going to do to the guidelines i saw different reporting they'll actually make the guidelines a little bit more granular the guidelines themselves now are pretty top line. they're not very specific. and i think what actually is helpful to schools is more specificity. they talked about putting out separate documents we'll see if they come up with if you look at the guidelines,

though, they're pretty general they encompass things like schools are doing trying to create distancing in the classroom, implement cleaning, use of ppe all the things schools are doing and all the things, frankly, other countries do countries able to successfully reopen their schools like norway and germany. they all implemented pretty stringent measures in the schools to reduce the likelihood of outbreaks. >> and so when you think about bringing kids back to school, and i know that, you know, the american association of pediatrics, everyone said the goal is to bring kids back and i'm a parent myself. i want to bring kids back. but the question is, how do you do it safely i think it keeps going back to the questionof the data, which is do we know a., where they at lower risk and not just they but what does it do to the community spread issue >> well, look, the balance of the data suggests that kids are less likely to get infected and less likely to spread the

infection. there's a number of studies that are reliable at this point that demonstrate this there's other data you can point to that suggests that kids are just as likely to spread the infection as adults. but i think the balance of the data and most of the experts who agree that kids are less likely to get infected. less likely to get sick when they get infected, and less likely to prop all gait the infection. there's been one reliable study shows they're 50% less likely to get infected but can still get infect the you have to be mindful that outbreaks can happen in the school setting if you have a dense epidemic in the city, the school can be ak focus of additional spread that's what people are concerned about. i think the biggest concern is the health of the children and making sure you don't have an outbreak in the school while the data generally demonstrates that kids do well with this virus, the incidents of severe diseases is far less in children under 17 than it is in adults. children still get sick. the best study that looked at a

series of children was in china. it was 2,000 children in china they looked at on the cdc's website and they point this as the most reliable data analyzing what the experience was in kids and 5% developed what they call severe disease those were kids who required oxygen, became hypoxic and. 56% became critically ill. that's better than you see in adults that's a far less significant impact in the total number of kids who became severely ill from covid we worry about our children so we want to be mindful about what happens in a school setting. most schools will open this fall most schools will have physical classes in person. most schools are going to take measures to try to prevent the likelihood of outbreaks in the school room setting. >> and our communities kids are egger to get back to sports. obviously, we want life to get back to normal, to some extent

but reading through the guidelines, at least in new jersey, that schools will be required to -- i don't see how you can meet the guidelines and having any sort of these fall sports we'd be going back to they're waiting to make the decision what would you say >> i think the sports are going to be a challenge. i don't think that you can create a bubble around the sports like you can in pro sports i think you'll see a lot of schools suspend extracurricular activities because they're going to be focussing resources on getting kids back into the classroom. you're already seeing colleges do that. and schools don't have the same level of resources that a college does, trex colleges will be testing students back on to campus and implementing routine testing for students on campus a lot of public schools looked at doing that. i had conversations with governors about that they're having a hard time coming up with the resources you'll have a little bit of a challenge with have and have notes in the school setting where districts that don't have as much money have older infrastructure going to have a harder time creating the safe opportunities

that suburban districts will have available to them because they have better resources, newer buildings. there's an important role, i think, for the federal government here to make sure there's ek widble access to the things that we believe are going to help protect children in this setting. we don't -- there's a lot we don't know we have to have a little bit more humility about the virus and not just say, you know, it's completely safe in kids. we should send them back for five days a week full days. if schools want to take measures to try to dedense fie schools, as they tow into this, because they're uncertain about what the environment will be like, that's prudent. i think we should have a little humility and see how it goes and that might mean, you know, distance learning one day a week and four days a week in classroom. depending on the district. it might mean staggering the school day having a morning and afternoon session. that should be the discretion of the schools to try to do those things different schools have different resources and different challenges >> doctor, you've been more cautious throughout this let me ask you, why are you more cautious than, for example, i

don't know if you saw the president tweeted yesterday talked about a number of countries, mostly scandinavian countries that had success bringing kids back to school without flair ups or at least without reported flair ups explain your view versus the evidence to the degree you believe that evidence in those countries. >> look, it's true that countries successfully did this. some countries did have challenges you look what happened in israel they had a big outbreak in their schools. they have an older infrastructure the schools are crowded. that was well known. if you look at the countries that did it successfully, than implemented vitam implemented stringent measures i think some level of thinking about this and allowing local districts to have discretion to take prudent action entering into the fall makes sense. we don't though what it'll look like we don't know whether there's going to be outbreaks in the school it's a kind of thing you can

take a little bit of precaution up front if it goes away, you stand away some of the measures you implemented. i think it's better to do that than rush everyone back into the classroom, not take any precautions and have outbreaks and have to close the schools. what i don't want to see happen is schools open up and have to close because there's big outbreaks in the schools even in flu season, when we have large outbreaks of flu in schools, oftentimes they'll close for a period of time you don't want to see it happen with covid then it will be difficult to restart things we should go into this and do it right. see how it goes. >> okay. dr. scott gottlieb, great to see you and get your perspective on the thorny issues. we look forward to speaking with you tomorrow thank you. as we were talking about, we're going to talk more about a setback for sports several major football teams suspending workouts after positive covid tests

and one conference cancelling all college sports for the fall we have the details next take a look at the biggest premarket gainers and decliners in the s&p 500 cisco systems leading the way up by 2%. "squawkbox" will be right back stock slices. for as little as $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership. schwab. own your tomorrow.

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welcome back sorkin, we're in the socially distanced version of chairs. >> what do you think of this >> look at you you're playing along. >> yeah. >> you're playing along. >> yeah. >> it's a chair segment. >> i got chairs. >> you have chairs 7. >> i'm going to make it better you want to see something? >> yes. >> you want to see something the ultimate chair hold on. what do you think? >> the iron throne >> you're king. >> i thought you would like this. >> thank you. >> this is like ultimate chair.

>> you know you're embracing it. i love it. i love that. no i love that. you're playing along that's good. let's get back to -- this is not really -- >> let's get back to the news. this is not important content but i have to tell you, i thought about the story. it's a serious story but the late night people could go crazy with this. imagine japan's theme parks issued a ban on screaming during rollercoaster rides. you can imagine why. a part is new covid-19 guidelines you have to wear masks and one promotional video from the rollercoaster, i mean, you can see you don't want to be screaming because, you know, it's arrest ration and it can be spread that way. they're riding these things silently there's a message at the end that says please scream inside your heart so the theme parks say they're following health guidance that coughing, singing, can increase

the spread of respiratory disease but, you know, they've been designing roller costers to scare the absolute crap out of you. now you're going 185 degrees straight down into a roll and then upside down it's meant to make you scream! it's like the doctors saying you got a dislocated finger. i'm going to pop it into place but don't make a sound i think that's bad for you when you sneeze, don't you sneeze >> it would be an involuntary scream for me. there's no way i would not be able to not scream it's not possible. >> there's no way. >> i would just wait. >> yeah. i go on a rollercoaster, i mean, you look like -- we're on a rollercoaster. it's crazy am i wrong to think -- i thought if you were moving that fast and there's a lot of wind in the air, you're outdoors, that this wouldn't be a problem.

>> i don't know. >> i don't know i would be want to be on the backseat or the front. >> yeah. i'm in the front ride in the front. >> right. >> i don't know i want to be in the backseat that's the wrong time to be in the backseat of one of these things. >> right. >> it's just so bizarre. becky, i forgot to ask i suggest you go on the "it's a small world" ride. i was going to ask evans to play the music for you. it gets in your head and drives you nuts. >> no, it doesn't bother me. it drives everybody else crazy i can sing it for hours. >> maybe it was me i think i would wait until the pandemic -- you can't go on a roller coaster and not cream. >> what if everybody puts their hands up like this and doesn't scream. >> some people throw up on these. what if somebody throws up >> that's a point. then you're toast. >> yeah. >> yeah. for sure. >> all right another story, too the ivy league has officially

cancelled its fall athletics programs including its football schedule and a statement the council of presidents called it extremely president but didn't believe they could create and maintain an environment that meets the. safety ohio state is the latest to suspend. the results were not made public the separately north carolina halted football workouts for at least a week after it reported 37 positive tests among student athletes and coaches guys, this is what we were talking about with dr. gottlieb. it's difficult to imagine how high schools or elementary schools are going to be able to continue with their sports programs or extracurricular programs when you start realizing just how many rules and regulations there are about trying to make sure the school population is safe i guess it goes back to the idea that we want to get the kids back to school we want them learning and in the classroom and as much as i'm

dying for my kids to play sports again, more than anything, i want them to be back at school. >> right i really want sports it was a sad thing for me to hear it was like oh no. even ivy league sports you know what i mean even ivy leagues and there's a famous harvard/yale game which is supposedly legendary. >> yeah. >> years ago. >> it is. >> yeah. no, it's good. ivy league is fine but if it spreads to everything and maybe, i mean, one falls and then you think it's, you know, it's going to the sec and -- that's going to be depressing. this is is a yearlong thing. i think we need to face it it's not like a -- hopefully only a year. it's a year out of our lives it's like, okay, no fun at

restaurants no fun at war -- bars. >> for kids it's two years because the school years. >> it's two school years. >> i said that yesterday, my wife said what more do you need than when you have the family together so i don't know. we'll get it it's depressing to hear every time another shoe drops. >> all right. >> right for the spring they'll consider springing football back in the spring and play a spring season instead. >> do you know how big red was looking this year? sorkin, do you have any idea cornell? >> football our sport is hockey. >> looking good. >> hockey. >> hockey is our sport and i doubt it'll happen any time soon. >> lacrosse maybe. that's a pole game. >> we have greg shiano back at rutgers. we have high hopes. >> yeah. >> not for football. >> what is that? winning a game high hopes. >> high hopes.

>> you want to go into that conference. >> i mean, then you tell your players. >> greg shiano is back you have to do it. >> you have to play ohio state this weekend and -- anyway coming up u.s. equity futures right now are down only 29 points we'll talk about the big rally in tech stocks next as we head to break here is is a look at yesterday's numbers. experience the adventure of a bigger world in a highly capable lexus suv at the golden opportunity sales event. lease the 2020 nx 300 for $339 a month for 36 months. experience amazing at your lexus dealer.

good morning a look at the equity futures i've seen this movie before. the green on the top green on the bottom. red in the middle. that's the dow indicated down. it rebounded yesterday but didn't get everything back from the day before but is selling again dried up a little aztec stocks lead the market higher again today. a good time to have the segment. it's the race to 2 trillion. some of the market's hottest stocks are rising in value we used to talk about first trillion dollar market cap well, that happened awhile back. apple has market cap of 1.7 trillion microsoft -- why do we have

those? that is totally wrong that board? that board is totally wrong. we have one job. those are t's not b's. joining us to discuss the tech sector's dominance is paul meeks, portfolio manager at the wireless fund and independent solutions wealth management and ed lee corporate media reporter at the "new york times" as well as the cnbc contributor i don't think about you all the time, ed. >> oh, come on you're killing me here. >> yeah. i didn't realize how much i missed you i didn't realize how much i missed you until i thought of you. we haven't seen you in studio. that's another thing, you know, we hope schools reopen we hope ed lee gets back. >> hopefully soon. >> you think amazon will be the first to exceed $2 trillion, paul just in general, i mean, you saw

those numbers but do you think this is normal for, i mean, i know covid actually helped some of these stay at home plays but is this normal to be in evaluations like this? are you comfortable? >> i'm not comfortable with evacuation but i'm increasingly comfortable with the themes that drive the evaluations. if you take a look at the market on a relative basis, if these companies aren't going to be the ones they first get to $1 trillion market cap and into two, i don't know what other companies deserve to have that role so, yeah i worry about the pop in these evaluations particularly as we've had an enormous move off the bottom of covid. on the relative basis, i think they'll continue that performance. >> they have better prospects than a lot of stocks that haven't performed like that. i like the way you answered that, ed

i'm not sure -- i don't know whether -- that paul is telling people to buy or to sell or to auditor lighten up or what. >> right no, i'm with paul. i think that said is the right way to think about it. i mean, if you're going to pick one, i think amazon, despite trailing apple and microsoft a little bit on an overall evaluation, i think they're probably -- it's still fastest growing. it's incredibly fast growing company. it's interesting given how big it is. and, you know, it still has a growth story relative to apple and microsoft. so i actually think if we're going to pick a horse in this race, i would go with amazon, first, in terms of hitting that $2 trillion. it's arbitrary that $2 trillion any of the numbers are arbitrary. we like big numbers. so if we're going to -- $2 trillion and i think it's still the most

aggressive, i think, bezos in terms of how he thinks about the business he thinks less tech business than opportunity business. what did i buy next? whether it's a walmart or back end business that's weird i don't know i think me personally i think i spent -- i agree amazon spending so even after that i'm sure it's going to continue to seep through. >> so we talked about the ones heading for two. there's some of them that are we talk about every day heading for one like facebook. who will be one of the ones close to a trillion? who will go over you think facebook is going over they got a lot of stuff on their plate now, obviously. >> yeah. another three companies in that $600 billion to $700 billion range. facebook, as you mentioned, and

two companies, i think, that might have the better shot at that they're chinese companies so we don't think about them probably enough that would be ten cent and alibaba. all three have the same market cap. frankly, i like the growth prospects better for the chinese companies than for facebook. particularly with the cloud over the head of facebook now with the boycott on the digital ad spending. >> you know the nasdaq and the stocks just have a way of garnering a lot of excitement and attention. we've seen it before and it wasn't similar to 1999 we have a beautiful headquarters at cnbc. we built it when the nasdaq hit 5,000. for a long time when the nasdaq was not at 5,000 we called it the 5,000 building. we've doubled it and heading higher every day is this where speculation and

froth resides, paul? should we look at it that way or not? or ed? either one of you? this is where it's going to be, if it's somewhere. >> of course it's a self-fulfilling prophesy because we give undue attention to these stocks and, of course, all the indexes we followed carefully are market cap weighted if you take something like the xlk, which is the technologies, probably the best known tech etf. between microsoft and apple today, you're talking well over 20% in those two stocks. even though the index has about 70 names in it unfortunately it builds upon itself. >> you know what i mean, ed. there's days when you see the nasdaqs up 150 points for no reason >> i've been there i've been to the cnbc headquarters in san fransisco. it's very nice look, i think, you know, part of

the question will be -- it's been with tech where elsewhere you going to park your money it's been, you know, one of those things is it inflated? we talk about the tech bubble for -- we go through it all the time you know, it's these are massive businesses and we're living more and more in this virtual world and i think some of these things after a lockdown they'll continue to go on in terms of the new habits we've developed so, you know, it's -- yes. the ratios are high. i think the multiples are high in some of these cases but, again, where else will you park it? and that's where -- that's going to be the conundrum. but i think if they continue to improve quarter after quarter. we're growing and profitable in these ways and, you know, that's the gamble but people like it i think we also like it. >> excellent thank you both thank you to paul and ed i think i figured out maybe dr. evil

why talk about a trillion when you can talk about a billion >> yeah. >> that may have been it. >> looks good. see you in studio next time, hopefully. >> yeah. usually you're right here. >> yeah. >> we can socially distanced studio, if you want. >> don't think anyone else is here we're waiting for you. anyway, thank you. coming up, when we return airlines continuing to rattle from the impact of the coronavirus. united warning near lay third of the work force about potential furloughs. we'll have more on that in a moment and later you don't want to miss the interview with pete buttigieg. surrogate for the biden campaign he'll be talking about the new jobs plan that biden's campaign put out. reminder, you can watch or listen to us live any time on the cnbc app back in a moment i know that every single

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welcome back to squawk it's time for the executive edge twitter is working on -- you ready for this a subscription service a job post for a senior software engineer the company is building the subscription platform under the code name -- i thought you weren't -- saying this is a first for twitter. we'll have more on the story a little bit later in the show there's ban little bit of a debate over whether this is really in the figure or not. at one point, i think they had taken down the job post and put it up. i don't know. >> thank you when we come back, united airlines warning nearly 36,000 employees -- more than a third of its staff, of potential job cuts come this fall.

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welcome back, everybody. united airlines warning 36,000 front line employees about potential furloughs as the coronavirus rattles the

industry that's nearly 1/3 of united's work force joining us on what could lie ahead for the rest of the airline industry is dennis tasier he's an american airlines pilot and spokesman for the allied pilots association good to see you this morning >> great to be with you. >> dennis, this news is concerning it's probably not hugely surprising when you look at the trends of how many people are flying or aren't, but how do you respond to this? i know the pilots and all of the employees at the airlines have really been hanging in there trying to get through this, but what do you think when you hear about this potential for mass layoffs coming in october? >> it's very dark news but it's not unexpected we knew after the c.a.r.e.s. act by october 1st there was going to be a crush on this. i work for american airlines they have not formally announced.

suggested there is over staffing airline management teams have to be very careful here because when the recovery does happen, we saw glimmers of that, if you don't have the staffing and you've trimmed enough branches off of that fruit tree, when it comes around you'll have a pretty baron harvest it's pretty serious. just in the picture you're going to get a jobs report today if you take delta, united, american suggested furloughs, you're looking at close to 1 million jobs across the industry that shows just how deep running the airline industry is. >> dennis, what are pilots and flight attendants and front line workers, baggage handlers, what are they to do in this situation? it's not like they can leave the company and go look for work at a similar company. this entire industry has gotten hit at this point. what will people do? >> absolutely.

and that's why it's incumbent upon us to do all that we can to include calling on our elected officials. the investment, the c.a.r.e.s. act represented and sustained us through this time. i want to point out that as low as the tsa throughputs were from the low point to july 2nd, we saw an over 800% increase in pras sen gers traveling. that's significant still way too low, but that shows how critical it is that passengers are confident in air travel and that includes the mandates of masks, that the department of transportation continues to refuse to put forth. and we're starting to see people take creative ways on the aircraft of temporary relief from wearing the mask. and the d.o.t. just put out a report last week, strong report. as i read it i felt like you had metaphorically talked about roller coaster rides, not being able to screen that's exactly what i felt like when i read this because it ended with nothing but

recommendations and that's just not what we need at this time to support these jobs and our economic recovery. >> what do you mean when you say people are finding creative ways not to wear their masks? pulling them up over their eyes? pulling them down under their chin >> yeah. overall our passengers have been just great on this without the federal mandate, but because it doesn't have the federal mandate behind it, it makes it very difficult for us to force compliance we do all that we can. airlines are giving a rider red card, you won't be able to fly with us again. very strong mandate. people are taking a break to get a drink of water, eat. people are as i'm on the aircraft, i've been flying a lot, you see it drop down over the nose you might see it used as more of a chin guard and, you know, these are just natural human reactions. just like our professional flight attendants go through when the seat belt sign is on,

it's a choppy ride, they go through and look for compliance. without this federal mandate, you have a hodgepodge enforcement and it's just infuriating. i challenge the secretary and the administrator of the faa, come out and fly with me see what it's like out there grab a middle seat grab a seat on the side when the airplane is full and you'll start to see behavior that you're not going to be pleased with we strive for perfection it's safe out there. the air flow through the aircraft, the masks, the cleaning we've come a long way, but we need that one more push, and i challenge them to just join us it's just -- it's plain wrong like plain wrong to not do this. >> dennis, i hope they hear you. definitely a message from the front lines. thank you for your time today. it's good to see you >>. great. thanks, beck coming up, we're going to dig into the market action going on this morning take a look at the sector winners so far this week

discretionary communications services and technology the top performers

stocks look to get back on track as markets rebound with the nasdaq climbing to yet another new high the push to reopen schools harvard professor and former aei president arthur brooks joins us to talk about getting kids back in the classroom and much more. plus, the elon effect. why investors are piling into electric vehicle stocks and

hitting the brakes on traditional automakers the second hour of "squawk box" begins right now. good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures. moving around a little bit moving more into the negative territory as we've moved along this morning dow about 50 points off. not too much at this moment. s&p's been flitting around virtually unchanged. nasdaq up about 40 points. keeps on its roll, joe, on its roll. >> yes becky just noticed that music. we play that music a lot >> no. i was dancing like elon.

did you not see elon dancing in the cold open? put it on again and again and again. >> i like to see that. i think it's attributable to thursday you know thursday? thursday is -- >> oh, yes thursday is the closest to the weekend without being too close to monday. >> exactly exactly. exactly. exactly. anyway, yeah i cannot do that no one wants to see me do that big tech in the stock light. i don't know if anyone wants to see elon doing that either big tech in the spotlight leading the way for the broader market the nasdaq outpacing the s&p and the dow. yet again, we've already had a segment on this, mike santoli. he joins us now with more. there's something for everyone you can either say that's where the sizzle is. that's where the growth is that's where the covid plays are. or that's always where the froth seems to go in these sexy story stocks with -- that's just where it resides, right? >> reporter: that's the trick. try to illustrate or describe

what's going on in a new way what's interesting, take a look at apple and microsoft yes, there is an etf for everything in the s&p except for the technology, that's what the green line is. the s&p x tech index big tech isn't part of this elite group of huge growth stocks everything else is sitting around this also does have its biggest holdings, amazon, facebook, alphabet those are not technically tech as part of s&p's breakdown even with those three stocks, it's pretty much sitting here. look at the similar angle of microsoft and apple without necessarily having really similar business dynamics, fundamentals here. what is going on here, they have durable long-term earnings as far as the eye can see that is very scarce right now. s&p earnings for this year are down in terms of the forecast. more than 25% at this point. these guys, apple down 10% since

january 31st microsoft's earnings this year not budged since january 31st. that obviously places them in an elite category there's momentum, buying the obvious names that are working something else people are buying because it's working is gold and it would seem not to have anything to do with it this is a ten-year chart of gold this looks like the 20 year and going to a huge peak, down, going back up to that peak what is this telling us? real interest rates are negative, which means below the rate of inflation. it reduces the penalty for owning a non-yielding asset like gold it contributes to the scarcity of free cash flow and earnings yield that is benefitting tech stocks i do think one quick note on gold if people want to create a story line about what gold is telling us about the dollar, the sustainability of the government debt or anything like that, you have to ask yourself what was gold telling us in 2011 that was worth list jechk to for the rest of the decade?

it's not what's going on systemically necessarily, it's just working massive influence into the gold etfs >> it could be either, mike. it could be, you know, with so much liquidity, it could be money going everywhere. >> only way to frame it. >> risk on, or it could be they're not making that much more of it and we're sure making enough currencies all over the world. could be either. long time goalposts say this makes sense and it should be three times higher than it is. >> sure. >> is it non-correlated with financial assets >> it depends. the correlation kind of flips back and forth. >> it does >> the 2009 market bottom it rallied right along with equities. >> can be a risk on. could be money going in looking for a home. >> yes. >> whether it's microsoft or gold thank you. how is it out there in the nasdaq 5,000 building?

good >> pretty comfortable. >> pretty quiet. >> we can have two now build another one next door. see ya later andrew. >> mike, stay with us. don't go anywhere because we want mike to be part of this conversation as well we're going to continue to talk about the markets and in particular what earnings are our next guest saying earnings are going to be pushing equities a bit higher but urging caution after that joining us is barry knapp along with mike santoli. mike, come on back get him in the window. as part of this conversation barry, you're thinking a pause is coming? this is the first time i've sensed any kind of caution. >> yeah, no. i've been unabashedly bullish from the lows, but i think as we get into the august through october time period there's a couple of things to consider that will probably cause a

decent stallout. you've got the obvious seasonality. the way i tend to look at positioning and market sentiment is really based on the vol markets. not just the level of the vix but it's the vix futures curve, how the front month looks versus the six month and the premium for the out of the money puts. all of those things have come down so that sentiment is much more balanced. then we have the obvious election considerations. i know you're asking this question all the time. okay, well, it looks right now like a blue wave is probable, which undoubtedly means higher taxes on capital gains and income and the like. why hasn't the market reacted to it typically it doesn't until you get to roundabout august through that period. so i think that will come into play as well all of those factors would warrant a stalling out for a period of time

pushing all the way back through the highs to me seems unlikely with those considerations through that time period look, it's still early in the business cycle we've been saying that all along. march 23rd was the start of a new business cycle from an investor perspective i wouldn't make the switch from cyclical names to defensive names, but i would raise some cash levels here and look for a bit of weakness to redeploy that cash for a year-end rally is how i would tactically think about the next few months. >> mike, how much do you think the barry view of the world is now -- is starting to seep in as a conventional wisdom to the market how much of it is an outlier >> well, i think -- first of all, i think barry is very right. i defer to him on the idea that a lot of people for most of the last few months have been fighting this rally. they have not been comfortable with what seemed to be getting

it a couple of months ago if you said this is a new bull market, most people would have disagreed with you that seems to have changed i don't think it's necessarily that everybody is ragingly bullish, but i do think it's much of a mix between people who say this is the start of something that's big and people who are fighting it. that makes sense to me in this reporting season, it seems like the bar is very, very low. basically analysts have kind of just written down their forecast to whatever seems the lowest plausible number you are going to see companies beat the question is whether that's already somewhat priced in it does make sense with regard to the election influences, i completely agree it sort of starts to keep the market captive psychologically somewhat before the elections. it means it holds still. that's not the same thing as saying the market knows what it wants and needs out of the

election results but in the run up to an ee lerks it does make sense that it just sort of stops and waits. >> hey, barry, when you think about -- you think there's going to be a real push, you're saying towards the end of the year. for those who are not going to necessarily play this market, quote, unquote, day by day, is there an argument to just hold steady and try to ride out whatever you think the next couple of months' choppiness may or may not be? >> sure. and that's -- what i'm trying to say when i make the argument that this is early in the business cycle when the returns are strongest. so to reduce your risk wholesale because you're waiting for an election doesn't make a heck of a lot of sense you want to get the broader themes right you are talking about technology, the cloud companies.

what's interesting is the integration into health care sectors. health care, highest revenue contribution but a fairly low earnings contribution to overall s&p earnings things like telemedicine are just going to accelerate through the business cycle a secular trade like that or theme like that, you could buy -- >> barry, one question though about the sort of idea this is a new business cycle what does unemployment look like in this business cycle in your mind longer term? by the end of this year people are thinking we'll be maybe 10% high, 8 to 9s. are you thinking it comes back to where we were before or do you think that you're able to have an accelerating business cycle even with unemployment at high levels? >> no, first of all, my number for the year would be close to

tim bullards i've been on the more optimistic side for labor market turnover i'd be more like that. listen, what this covid did was really accelerate creative destruction. that process is going to lead a whole bunch of industries behind there is going to be this residual surely into 2021 that could linger into 2022 it will take time for that to come down. that's not to say the growth gap won't close but there will be an employment gap for sure. marking the stock market around the unemployment rate is a little bit -- not really the right way to go. you could get incredibly powerful numbers and everyone is scratching their heads because the unemployment rate is 6 that to me is a more probable outcome. >> barry, want to thank you. michael, thank you nice to see everybody. >> all right

>> beck? thanks, andrew let's take a look at shares of walgreens. the company just coming out reporting its adjusted quarterly earnings 83 cents a share that was well below the $1.17 a share analysts were expecting. performance was significantly impacted by the covid pandemic revenue did top estimates. walgreens is suspending activity under the share repurchase program. just a couple of headlines on this this is a dow component now, guys they say their sg&a increased because of higher employee costs, social distancing and cleaning expenses. they also say that the pharmacy volume was impacted by a drop in doctor visits and hospital patient admissions the market that was most impacted for the quarter was the u.k. market. remember, walgreens boots alliance is the name they're talking about the impact of covid-19 for the full year of 2020 they say the impact will be

$1.03 to $1.14 per share they look at adjusted earnings of 465 to 475 a share for the full year. that stock right now town by about 2.8% joe? >> yeah, you're right, beck. you buried the lead. the dow component. >> i had to look it up to make sure. >> we talk about that. they change it too much. they change it too much. >> i know. >> next thing you know general electric won't be a dow component. >> oh. >> as the economy reopens, the workers return, some are still collecting unemployment benefits a look at how work sharing is helping both states and workers deal with the pandemic head to break, here's a look at yesterday's s&p 500 winners and losers "squawk box" coming right back you say that customers make their own rules.

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welcome back, everybody. economies are reopening, workers are returning. some are still collecting unemployment benefits. it's called work sharing rahel solomon has the details on what some are calling a win-win. good morning. >> reporter: under this program

workers who may otherwise have been laid off instead see their hours reduced and can still receive partial unemployment states pay out less for unemployment insurance this is why they say it's a win-win. in some cases the number of employers using this program, take a look at this, has jumped 5,000% since the pandemic hit. it's currently available in 27 states plus washington, d.c. typically here in the states just for full-time workers compare that to other developed countries where temporary or part-time workers can access the short-term compensation benefit, becky. >> rahel, it sounds like the states are taking things into their own hands. congress has been talking for a while about allowing some of

them to receive some portion of the federal benefits if they went back to work. how do workers get enrolled in a program like this? >> reporter: so an employee can't actually apply or participate in this program until their company or employer has submitted a plan to the state and it's been approved but employees have a bit of flexibility. cut hours 20% in one division, 30% in a different division. there doesn't have to be uniformity a worker can't participate until their employer has already had a plan approved by the state >> rahel, thank you. good to see you. on the forefront of new hiring practices, we've got graystone. a social justice enterprise expanding access through the open hiring business model partners implementing this model include new leaders, ben & jerry's and many others. joining us to talk about this is

joe kenner joe, for those who aren't familiar with open hiring, explain the backdrop a lot of times people get closed out of the hiring process but this is a way to try and change all of that. >> yeah, good morning, becky thank you for having me. the graystone open hiring practice is very simple but it's actually a radical idea at the same time. what it means is basically when someone wants to be a baker at our bakery, put their name on our list, give us their name contact information and when the next job is available, you get it no questions asked, background checks, we don't do interviews we call you for a date to report to orientation and that's your first day on the job that's the first day to earning money, access to benefits and access to our union. >> hiring -- firms that use very specific hiring practices would blush thinking what they're

doing is a complete waste of time what have you had in terms of the outcome from some of these situations has it been a good situation have you had situations where somebody just didn't work out? what's the percentage between the two? >> well, our hiring practice is very unique, we're a manufacturer just like any other manufacturer that has to deal with attendance issues, people showing up on time that's what every employer deals with, but what folks should be asking is what's the impact of what we're doing and who we're hiring open hiring is a non-judgment practice it's inclusive hiring at its best we are bringing in folks formerly incarcerated, homeless, in recovery. the impact of that is what people should be thinking about in this day and age. >> that's a huge point, but i would say a lot of other employers before they pick it up what kinds of recidivism rates do you see what kind of tardiness do you see? people not showing up. how do your rates compare with

what every employer deals with on this front? >> again, we're just like any other manufacturer in that sense. our turnover rate is probably at or better than folks who are similarly situated than us but, again, what's unique about us is how we do it and how we open doors, opportunity and access to employment. >> i think that's a key point. if your turnover rate is half that of other places, why do you think that is? do you think you're buying loyalty? >> absolutely. we hear that from many of our partners, whether it's the body shop i don't know if you've seen the article, they've cut their turnover rate by 2/3 and their productivity is up 13% body shop has just done it, but we've been doing it for 38 years. >> what about your other partners how many people are you placing in this program at this point? i know it's a regional program do you think it is something that can be rolled out nationally, too? >> i would say it's been something that's been

international, actually. we've been working with the stark foundation in the netherlands. we have 10 or 12 companies practicing it. the body shop has 300 seasonal workers in raleigh, north carolina, doing this they expect to do it in retail operations this is taking shape nationally, internationally and we want to see it happen locally as well. >> it's a huge -- like you said, it's a radical idea, one where you can really show the numbers that you're doing well while doing good have you heard from any major fortune 500 companies that would like to get involved with this, too? or if one does want to get involved, what should they do? >> absolutely. my challenge to any business leader particularly in this day and age where we're seeing the negative disruption from covid, from the social unrest, let's find a way to positively disrupt our hiring practices and look at an opportunity and solution to

look at open hiring that allows access to employment. >> joe, thank you very much. we appreciate your time today and i'm sure we'll hear more from you. >> great to have me here thank you. >> thank you andrew okay coming up, thanks, becky, when we return, harvard kennedy school professor and former aei president arthur brooks is going to be joining us to discuss the reopening, the spike in covid cases and the handling of the economy by the government. check out the futures at this hour the dow off about 46 points. s&p 500 has been pretty untouch untouched. nasdaq in the green. 41 points. back in a minute. time now for today's aflac trivia question. on this day in 1995 which iconic rock and roll band played their last show? the answer when cnbc's "squawk box" continues this was an unexpected bill not covered by my health insurance.

and this is the aflac duck who helped me cover it. aflac. these are all the cab rides to my physical therapy. and aflac paid me directly to help. aflac. what he said. and this unexpected bill is from... the two-thousand-dollar specialist. thanks. aflac. when you're sick or injured, aflac is there. we can help with expenses health insurance doesn't cover. get to know us at aflac.com come on in, we're open. ♪ all we do is hand you the bag. simple. done. we adapt and we change. you know, you just figure it out. we've just been finding a way to keep on pushing. ♪

now the answer to today's aflac trivia question. on this day in 1995, which iconic rock and roll band played their last show? the answer, the grateful dead. lead guitarist and jerry garcia died one month later all right. still to come on "squawk box" this morning, harvard professor arthur brooks will talk about the reopening of america's economy and thenation's schools. and later, investors piling into tesla and other electric vehicle stocks what it means for traditional

automakers and the sector overall. "squawk box" will be back after a quick break.

welcome back to "squawk box. presumptive democratic presidential nominee joe biden rolling out his economic policy today. he's going to travel to pennsylvania near his hometown of scranton. the agenda slogan is, quote, build back better. his campaign team says biden will prioritize small business programs and focus on ee qualities that prevent minorities from getting there. pete buttigieg will join us at

8:40 >> thank you, andrew i was trying to remember the broadcast news what is it bring back better. remember that quote from broadcast news i can't remember that. bring back -- a lot of bs there. let's get to -- this you've got to listen to arthur i would like to talk about his son but we have to talk about important other things the pandemic has colleges re-evaluating classes in the fall some say they will be online, others say campus will be open in the age of zoom our next guest is a contributing writer and talking about college and whether it brings happiness as how to build a life series which if i had known that, i would have ordered it. people constantly tell me i need a life is it a primmer on that, 12-step

program. arthur brooks joins us this morning. he's also a professor at harvard and american enterprise institute, president emeritus. great to see you we have to talk about getting back to work, the pandemic, other things philosophically i like talking to you you're so positive i could use you. i'd like to lay down on a couch and talk to you. you come from a family of academics. >> yes. >> you're a professor, grandfather professor. first son, valedictorian second son says i don't want to go to college, dad. >> yes. >> you're like, what do we do? you go backand forth you timely back him on his decision and he goes and gets a great job outdoors in idaho. as you said, is tired every day. gets up early, fully lives life. does that for a while and then joins the marine corps, which he

always wanted to do. what is wrong with that? >> nothing. >> what can we learn from that >> we can learn a lot from that. we have this culture -- by the way, you're welcome on my couch absolutely any time. you brighten my day any time i talk to you. it'snot just one way, man. i like talking to you. >> i appreciate that my boy, he really broke the mold here's the deal. my wife and i, we both dropped out of school. i was a classical musician she quit high school to sing in a rock band. for all the young people listening, this is not -- watching, this is not what i recommend, so we're pretty free thinkers on this our son went to this pretty nice preparatory school and he comes to us about this time two years ago. he says, dad, i don't want to go to college i can't face it. i just can't face it anymore and so he went out and got this job working 12, 14 hours a day on a wheat farm in idaho did that made a bunch of money.

then he joined the marines he built his own life. here's the key thing that he really taught me each of us has an enterprise under our control. we think of starbucks. people watching "squawk box," the best show on tv for sure a lot of entrepreneurs saying it's all about starting a business that's the entrepreneurial economy. wrong. the american experience is to start up life. each one of us has all of this stuff under our control. we can build our own lives and america won't come back. america won't be truly great until each one of us lives the startup life like my son carlos taught me to live. it was a huge learning experience for me. i tell you, i couldn't be prouder of him. >> you tried to figure out whether college brings happiness. you said there's a slight correlation. it wasn't a double blind study you know, you don't know what other things are going on in a person's life that correlates. there may be no correlation whatsoever, although we're not saying don't go to college people seem to have more

productive -- i don't know that's what i've been told >> yeah. >> made me think about it with my son how are we going to reopen, arthur let's get back to the task at hand in terms of schools harvard is trying to deal with that, so is penn, middle schools, elementary schools. everybody has this issue to do it safely because we all want to do it though >> that's right. the big problem with it, it really isn't to a very large extent liability around the students it has to do with the faculty. up here at harvard, i'm like the youth movement, i'm 56 a lot of the professors are at real risk if they contract covid and so they can't be -- you know, we can't put the faculty in a position of interacting with a lot of people who might be carriers of this disease. the college is splitting up the freshman and seniors and most of the graduate schools are entirely by zoom that's the way it looks like it's going to be in 2021 that seems to be the safest

option for the administrators. we can't do this forever goldman sachs has been clear that the most important thing based on their research, my colleagues at aei, you have scott gottleib on, masking is the most important thing to do, social distancing as prudent but the idea of constant shutdowns, start and stop, start and stop, that's not a great policy. >> arthur, i don't think i've talked to you about how to be a free market aei capitalist in an age where earlier this week we heard the government gave $1.6 billion to develop a vaccine we have ppp. the government is saving our collective butts does the government do free market types get a once in a 100-year pass on saying that everything should be stettled i the marketplace? i think i said there's no capitalists in fox holes, in pandemic fox holes. >> yeah. well, you know, one of the

things that adam smith always talked about is there's certain roles for government one of the roles is creation of public goods which will be under produced by public markets, or crime or pollution or monopoly those are legitimate functions for government the problem is not that. not that the government is trying to help us find a having seen, the problem is that the government is in every nook and cranny in our lives and growing by the second. that's the real problem. you can be a free market con ser va live like you, joe. do national security up one side and down the other should help us develop a vaccine, should do these policies and shouldn't control every development of our lives those are consistent philosophies. >> i'm thinking about it like laying down and let me tell you how to think about a lot of these things because i struggle with a lot of these things is there a private sector solution, a growth solution out of this morass that we find

ourselves in in terms of $25 trillion debt and the fed and everything else? >> yeah. there's only a private sector solution because capitalism and the free market economy are what's pulled us out of every crisis ever. that doesn't mean the government doesn't have a roll. the idea of the government saving the economy, that's not correct. government can do a lot. >> who would you raise taxes on right now, arthur? would you raise taxes on corporate -- i'm starting to think we need to raise taxes on somebody corporations are the ones -- i don't know if those are the things werescind it brings tax cuts back and creates jobs somebody, middle class, upper class we need a tax probably to pay for this no >> there's another way to do it. there's another thing we haven't thought about it before. how much -- how many assets does the federal government own that actually could divest itself and

inject those into the private sector economy to productive and efficient use? we need to be thinking more carefully, more seriously about all of the stuff the federal government owns that's worth trillions and trillions of dollars. joe, this is our privatization moment when we can actually pay back some of the money that we have spent at the same time get a better economy the economy that we really should have, we wanted from the very beginning look, we're going to have to pay more, but this could be a win-w win-win. >> i have an ivy league person that wants in here, a co-ivy leaguer. >> no, arthur, it's to the same issue that joe was just talking about in terms of taxes, which is i think there are people who look at this particular moment and say we've created effectively insurance policy for corporations shouldn't they have to pay effectively a premium on that insurance? and by the way, we've done that

for the businesses but we haven't necessarily done that at the same level for individuals and their health care and all of these other component parts. i'm with joe, actually, in that i don't know if raising taxes on corporations is necessarily the right answer insofar as it makes it harder to employ more people. i do wonder whether the wealthiest among us need to pay more in the same way that workers -- front line workers especially went to work in hospitals and went to work at the cash registers at walmart and that was their contribution during this pandemic and that those of us who have been blessed to make money during this period should -- our contribution should be in the form of higher taxes what do you think of that? >> i think that that's going to wind up what happens every day i think ultimately the government is going to have to find some way to float what we've done fiscally and they're going to go where the money actually is, which is with the

people who are making the most money. whether that's the moral solution or not, i think that's the practical solution and that's where we're going to wind up we're going to wind up with marginally higher tax rates. we're going to be more creative about how we tax consumption better with carve outs at the margins. whether somebody likes it or not, that's what we're going to get. >> french horn player, the barthelona he works on a wheat farm and takes after your wife. there's no way you could do any of those things, brooks. >> pretty tough guy. >> what about your french horn fingers if you're out there mending fences it's not happening for you. >> i tell you. it's not happening i'm a delicate soul. i'm an artistic type what can i tell new. >> we have to go want to turn it -- but when you

say "squawk box," best show on television, are you talking just cable or were you talking across the board? what about streaming and all these other things -- so you mean -- >> i'm talking universally the people who are not watching us, these are the people who are missing out not just on tips on how they can become more prosperous, how they can become happier. >> you wrote a book about how we all have to get along. how's that working >> you know, it's working for me in my life and i want it to work for you. i want it to work for you, joe. >> we're trying. >> love everybody. come on, man >> love everybody. disagree, but you can disagree without being disagreeable how's that >> not only that, you can disagree and love people more. it's a miracle, actually this is ultimately -- we're going in the right direction, but i see better times ahead >> good. that's optimistic. we're one day closer to whatever is coming. hopefully not that freight train headed right at us thank you, arthur. i'll send it over to you now, becky.

>> thanks, joe >> i love arthur feel the love, joe just feel it when we come back, electric vehicle plays are hot. investors are now taking note of ev stocks like tesla and nikola. we will discuss the rise of these names in a little bit. the futures this morning have been mixed. dow futures indicated down by 15 that comes after walgreen's boost came out with earnings that disappointed. stocks and off the lows that we had seen the lows. s&p down by 5 points, nasdaq by close to 60. reminder you can watch us live on the go on the cnbc app. we'll be right back. when we started carvana, they told us

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welcome back to "squawk box" this morning let's take a look right now at free market movers cisco, microsoft, walmart, apple, raytheon all on the move. nasdaq, few names on the move as well you're looking at netease.com up 8.5% jd.com, baidu all higher this morning. joe? >> thanks, andrew. you said you agreed with me on the corporate taxes? did i hear that, too is that just -- >> corporate tax piece is a very complicated piece. you don't want to raise taxes because if you raise taxes it makes it harder for employment. >> i agree. >> at the same time. i've been telling you that for years. >> there is an issue here though

about the insurance piece paid for. >> it's self-defeating. >> i don't know what the right answer is. >> if you pun nativelily say you screwed up again, you have to pay for this you're hurting the job creation in the future. this time it wasn't them screwing up. >> there's also what i call a usage issue. amazon uses, for example, a lot of the infrastructure in the united states, other businesses don't, how do you manage for the cost of that. >> don't say they didn't build that because be zoes did we'll have mayor pete on electric vehicle stocks are hot while shares of traditional automakers and suppliers continue to struggle a look at the elon effect. names in the sector next at the top of the hour chicago mayor lori lightfoot you say that customers make their own rules.

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welcome back, everybody. tesla shares keep on going the stock gaining more than 225% so far just this year. it's pretty striking comparison to the roughly 2% drop for the s&p as a whole tesla's record run has made it more valuable than toyota and general motors combined. investors are taking note of other electric vehicle stocks as well phil lebeau joins us with more on that front. good morning. >> reporter: good morning, becky. this is the elon effect. as elon musk has shown over the last four years, there's plenty

of appetite for a pure electric vehicle play and that's why people over the last through months, investors have said wait a second, if it works for tesla, can it work for other stocks that's why you've seen shares of nikola, workhorse which is building electric delivery vans. all of those have moved higher especially in the last month and a half the elon effect comes down to three things when you look at tesla and the roll that it's been on, you've got a number of factors here q2 figures tesla shares up 226% yes, ev demand is expected to grow plenty of reasons for elon musk to dance how is this impacting traditional automakers yeah, they're getting into the ev game. investors are not playing them gm will show the first all electric cadillac. this stock has done nothing. even though morgan stanley says the ev biz is break even

you have the mustang mach coming out. so when you look at shares of tesla, keep in mind that what people are focused on right now, it's coming up on july 22nd, what, a week and a half, two weeks away that's when the company will report q2 financial results. guys, there is growing optimism amongst investors that this company will turn a very slight profit why is that important? it will be the fourth straight profitable quarter the last hurdle to being included in the s&p 500 and that would be a big deal. >> okay. phil, stay where you are want to bring you into this conversation want to bring an analyst into this good morning to you. we keep watching this stock run, run, run, run, run.

it's hard to know what to think anymore, colin. >> that's true go ahead i'm sorry. >> no, no, just what do you think is the right valuation fair value for this company? >> you know, we're really going back to our numbers. it's run progressively past our price target which was 96k we put that in place over a quarter ago. as we look at what the company has planned out to 2024, 2025, we see 15% up side the number we're looking for is the gross margin number. this company has an exceptional amount of leverage in the model at the manufacturing level so they're continuing to drive markets higher and getting the benefit from the efficiency in shanghai there's efficiency power as we look across the industry, we get the competitive properties, just continue to lag

in terms of the products that they're bringing to market, the functionality, updates, operating system it continues to look like tesla has two to three years from the technology perspective >> what do you make of the issues that phil was talking about and, frankly, we've been talking about for the last several weeks now about the possible competitors and rivals to tesla, their value and when you think -- if you think they'll ever prove to be a demonstrable competitor? >> you know, it's interesting to go back and look at the balance sheets, which had always been a concern for a lot of bullish investors for tesla in its growth period. at this point they have plenty of capital on the balance sheet with about $8 billion. you look at the leverage for the oems going through a downturn like this you have tesla's competitors, you have the restructuring, figuring out what their product

portfolio looks like as tesla focuses on a limited number of products that's driving underlying performance in each of those products. it's just a simpler model with a clean balance sheet and allows them to cycle through their product development faster. >> are you not -- are you of the view though that a couple of years from now we are going to see a huge number of competitors? phil, you can speak to this. you've talked about all of the big plans that the automakers in detroit have. >> reporter: colin, i'd love to get your thoughts. we've heard all the automakers we've heard this five or six years, we're coming, we're coming, we're coming so far it's been completely underwhelming. frankly, it has not been up to the level of tesla, which is why when you talk to people, i have never heard somebody say, i'm going to buy an electric vehicle. i want to see what fiat chrysler has to offer

no, i'm buying a tesla that is the term people use when talking about it what do you think? >> i think you're absolutely right. our argument around battery technology we saw a real major shift last summer, like august, september our industry started to admit that tesla had a lead. that's why there's so much focus on the battery we think there's a meaningful process technology that tesla has developed and is going to drive excess performance on the batteries. may want to show that in person so that september 15th day is intended to be a new person event in a detailed way to show why the process is different, the performance is different what tesla has is understanding batteries over 15 years of testing and leveraging that information through the design of the power train, that's more difficult than i think a lot of folks give it for credit and

we're receiving those issues with the competitors >> okay. colin, appreciate it really interesting perspective phil, thank you for joining us as part of all of this we'll talk to you all very, very soon meantime, we send it over to joe. >> andrew, thanks. chicago mayor lori lightfoot joins us to talk about her city's plan for economic activity as it levels out somewhat in coronavirus cases. that's next. don't miss our interview teth former south bends mayor pe buttigieg "squawk box" coming right back

good morning digging into job losses and the market's apparent disconnect we're 30 minutes away from weekly unemployment claims which are once again expected to top 1 million. tech stocks setting new records daily leading the markets higher what gives the windy city's economic comeback chicago out with a new plan detailing its path through and out of the coronavirus we will speak with the city's mayor live and another economic plan dropping this morning. joe biden's vision for a national jobs and economic rebound. coming up, we're going to talk with biden supporter and former presidential candidate himself, pete bbuttigieg. the final hour of "squawk box" begins right now

good morning and welcome to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin u.s. futures at this hour indicated down about 14 points see the nasdaq, talking about it all morning long just the outperformance of that whole group and the big names in technology that continue to power that average higher up 56 points this morning becky. >> joe, thank you. chicago saw its largest spike in coronavirus infections in may now the city is seeing the leveling out in cases and it's looking ahead to its economic recovery this morning the city is out with a comprehensive look at the plan on the path forward joining us is lori lightfoot mayor lightfoot, thank you for being with us today. >> it's my pleasure. >> before we talk about the economic plan to help revive everything, let's just talk about where you all are right

now. i realize you guys are at i think stage 4 of reopening things are starting to come back, but there are a number of important chicago employers that are looking at additional layoffs and furloughs to come, including united, boeing, hyatt. where do things stand on the ground right now how are you all doing? >> i think from managing the public health crisis, i think we're doing pretty well. we were very, very cautious and conservative in starting to slowly reopen. we called it turning a dimmer switch and not flicking a light 1wi67. i think that's served us well. we were certainly conscious of areas all around us where we're starting to see -- they're starting to see an uptick in cases. on all of the major indicators, hospitalizations, icu beds, number of people on ventilators, we are headed in the right direction. daily we continue to preach diligence but, look, our region's been hard hit just as other regions across the country have been hard hit

so that is why we needed to get ahead of this and really take control of our own destiny when it comes to economic recovery. we spent ten weeks really digging deep into looking at our region's strengths not just from an economic standpoint this recovery task force report and recommendations is about how we bring more people into the work force, then we focus on our key strengths in areas like manufacturing, transportation and logistics and life sciences. and really start to think about what weneed to do to create a vibrant economy that is much more inclusive and work force development, of course, is key amongst them >> this is a pretty ambitious plan it's trying to take a stab not only at fighting everything that happened to the economy during covid but also long-term problems that you've identified in the city in terms of inclusiveness, in terms of racial disparate

what are the main over reaching goals of this. what are the three things that maybe you think you can do as a result >> one is build a much more inclusive economy. the areas of our city, particularly in our south and west sides, that really haven't seen much in the way of development in decades we know that the only way that we grow the economy and grow our population is making sure that we create real pipe lines to good paying jobs for black and brown chicagoans who have not been dealt into the economic past that and growing our work force means we have a ready, willing, able work force to focus on our strengths like tem!stimon tech. we're a tier 1 tech city we need to make sure we have the workers for a lot of these startup businesses manufacturing has always been one of our strengths we need to make sure that we're creating new markets for our manufacturing industry and life sciences we've got a collection, whether

it's pharmacy, whether it's hospitals, science and research. we are really second to none in this area and we want to build on those strengths and match up the work force with the jobs so that's really what this report focuses a lot on and healing the trauma that people have suffered in our city. >> you were talking about some major investments, things like infrastructure investment, health care investment, training initiatives and trying to lure things like film and tv productions by i would assume offering them tax incentives to do that. those are great plans but most cities and states are facing a severe drop in the revenue they've taken in where do you find the money for all of these investments >> look. i think we have resources and be we have a lot of things that are attractive in the chicago region yes, you're right. everybody is facing resource challenges, revenue challenges but that's the whole point if you don't grow the economy,

if you don't warn new businesses, if you don't expand existing businesses then you're not going to have the revenue stream to support vital services that the government provides we're looking to grow and not just simply tax the existing infrastructure and economy we've got to give our businesses some relief and we do that by growing the economy and focusing on our strengths you mentioned television look, when television production restarts anew, we have a plan and a pitch that we're going to take to folks in new york and on the west coast because we've got the infrastructure here. we've got a great training in our work force and we need to make sure the chicago story is on the lips of every booking agent and that's what we're prepared to do. >> i agree with the plan whole heartedly. i come back to the idea, how do you do it this time around do you operate on a budget deficit? do you have funds you can pull in from other places understand completely the idea

you want to expand the footprint and have more business, more jobs and a bigger way to grow the revenue base it's always that constant question that gets asked, what do you cut in order to make those investments? >> well, i think when you make the investments and we've been fortunate enough in some of the resources that we have look, we're going to be challenged like every region across the country we see this as mission critical that we really have no choice but to make these key investments, particularly the investments in our work force, our people if we put people back to work by making strategic and smart investments, that is going to help us rebuild our economy and be primed to take advantage of opportunities. i think even with the challenges that there are with businesses really re-evaluating their priorities, they're going to still be making decisions about where and how they invest. we've already seen a lot of companies saying we're going to make strategic investments here and there. we want chicago to be at the top of the list when those companies

make the investment. so this is, as i said before, really about taking our own destiny into our hands not waiting for the market to do its work on us but really trying to control and shape the market and the narrative and build on chicago's strengths. >> you know, we've watched this play out as states have kind of tried to lure businesses away from each other over years and lately it seems like florida and texas have done a lot of the winning on that. they have not only talked about how they have the sunbelt, how they have a lifestyle there, but the big issue to try and lure businesses has been taxes. is that something you can talk to these companies about too illinois is having a difficult situation for a long time. can you change that sort of narrative? >> well, i think we can change that narrative, but the businesses that i've been talking to and the companies that we've been trying to lure, the first issue on their minds right now is where are you in the cycle of covid what have you done to protect the local workers and

businesses how have you been a partner with them in creating opportunities, even in these difficult times? and i think we've got a great story to tell here in chicago. if you look at us,you compare us to every other major city in the country, we're trending in the right direction, meaning cases going down, deaths going down, hospitalizations going down we've got a great public health infrastructure that is a key selling point in this economy right now >> mayor lightfoot, what has surprised you the most over the last several months as we've gone through this covid experience what changes do you think are here to stay, not temporary changes but permanent changes in the way people work and the way companies do business? >> look, i think what i've heard from a lot of ceos is we didn't think we could telework. we didn't think we could be flexible in the way we managed our work force and what they've discovered is in fact they can and actually productivity has gone up in a way that they've managed a lot

of these difficult decisions so we want to make sure that we're supportive of that work. if you look at our recovery task force eport, this is really driven by conversations, meetings, collaboration of businesses of every sector, not for profit organizations really thinking holistically about what drives our economy and how we get the work force back to work, what do we do to make sure they are being able to work safely and smartly in a time where covid is still very much part of our presence. but the innovativeness of our business and not for profit but also our government sector has really been incredible and, of course, the strength of our health care workers and our first responders has been phenomenal that's what's really carried us forward. >> yeah. kudos to all of them when you think about companies having workers work remotely more frequently, i wonder what that means for cities in

general. will it be less likely that people will be more likely to live in cities, pay the higher rent that they have to pay there if you could take that job and work from somewhere in the suburbs or even further afield >> you know, look, i think that right now we're still evolving people are teleworking but people are slowly starting to come back into cities and cities really are where it's at the vibrancy of the cultural life the assets that cities can provide. the synergies that you get from bringing people together in a place like chicago, new york, la, you can't replicate that anyplace else. particularly when you're thinking about a younger work force, they want to be in an area where they can enjoy their life outside of their businesses what's the best space for that when you have a younger population as most businesses do that's cities. so i think we're still evolving and we're yet to see the final chapter written on our post

covid life, we're still in the think of this. cities will continue to be incredibly important for businesses, for economies, and we're still going to be driving it we in illinois are the largest economic engine for our state but also for our region. that's where we take a regional approach to our recovery task force. we haven't limited it to the boundaries of the city of chicago which had great participation from our regional partners all across northern illinois and we're working on regional strategies to really tell the economic story here as well >> mayor lightfoot, want to thank you for your time this morning. we'll be watching, obviously we wish you the best in this continued effort thank you for your time. >> thank you very much thank you for having me. >> thanks. joe? thanks, beck coming up, earnings season on deck spoiler alert. q2 probably going to be worse than q1. talk about what to watch for when the big banks, consumer names and one of the faangs

report next week later this hour, don't miss our special interview with former democratic presidential candidate pete buttigieg, joe biden supporter. talk about the former vp's new jobs plan just out. check out the futures, down 36 points now. nasdaq strong. continuing to gain up about 52. bck x"n atching "squawbo o cn at leaf blowers. you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today.

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welcome back to "squawk box" this morning a little bit of news about our own network. skrooik announcing form injury fox news anchor shepard smith will be joining us to host a one hour evening news program monday through friday it will happen at 7 p.m. eastern

time the newscast will be called "the news with shepard smith" going to launch this fall. shep will be hanging out on "squawk on the street" at 10 a.m. eastern time. exciting new move for the network and for all of us here at cnbc. joe? >> thanks, andrew. dow component walgreens boots alliance posting mixed results early this morning the company beat analyst expectations on the top line but fell short on the bottom line. said its performance in the quarter was significantly impacted by the coronavirus pandemic and also says it's suspending activity under its share repurchase program next week the big banks start to report join us for a look on what to expect from the rest of the earnings season is mike thompson, managing director at goldman sachs asset management whoa well, excuse me. what happened? s&p got bought by gsam, right?

is that what happened? what happened? your unit got bought, right? >> that's right. we're part of global portfolio solutions now, joe it was -- everybody was happy with it, and we're very excited. >> congrats. >> to be part of goldman >> i haven't seen you walk, but you've got a bounce in your step you're swagging around there like a big investment banker so once again, rear-view mirror, is it outlooks that matter anyone expecting anything gangbusters? what do we need to watch for that gives us some idea about where to go from here, mike? >> you know, joe, i think if you remember anything from this quarter, you have to look at it, it's about less bad. that's the way i think the portfolio management team is looking at it. the s&p -- this is going to be the worst quarter, okay? in fact, earnings of $22 plus for this quarter itself on the s&p, that's equivalent to what we saw in the second quarter of

june of 2010 the number this quarter of being down 44.5% over the same quarter last year is basically a far cry from what we saw expectations were in january which was for this quarter to be up 5.7. so perspective is to be kept, you know, in kind of full frame here but what do you expect you expect weakness across the board. there is not one sector currently looking at any of the consensus estimates that are actually positive. i mean, i think yourtwo best performers in terms of growth are going to be likely the utilities, which will be -- expect to be down 2% and technology down 9% having said that, you know, moving forward, you remember we started the year thinking the s&p or at least the street thought the s&p was going to earn about $175 a share.

right now the way the consensus is, it's about 123 for next year, interestingly enough, if you take a look at those numbers, unpacking them, it gets kind of more interesting because it really gets us back to where we thought we'd be, slightly less this year, which is about $163. now i'll say that our goldman strategy team has a slightly more bullish outlook for next year, which is about 170 to be candid, goldman's views have been largely a little bit stronger than consensus particularly on the economic front. that's actually served us well as it relates to financials, look, here's what we're looking at probably the street is looking at down about 48% year over year quarter growth, okay so here's how you look at it if it comes in better, that's actually really pretty good news because that's the way this market seems to be behaving. i think one of the other things you have to look at is a lot of people looking at the component of value in the indices, and

that's really important because financials are one of the deeply discounted sectors in terms of valuations because the s&p right now trades at almost 25 times next year's earnings, but don't be alarmed by that because that's common when you come out of recession because what you're going to see happen over the next year as these earnings start impacting themselves, we get a little smarter about the path of the virus, the impact on the economy and potential changes as a result of potential administration change, we'll have better visibility but, you know, i think as we may move forward, you're going to see next year this time you're going to have some very, very easy comps >> interesting in terms of some of the big high flyers, whether they're tech, whether they're covid plays, do you expect the earnings that we see to justify the outperformance and -- in other

words, the bifurcation we've seen among the companies that not only are hurt by the pandemic but helped. do you expect the numbers to come in where people think they will would disappointment there cause some of the air to come out of the high flying sectors? >> yeah. it's unusual for technology names to really disappoint you know, the technology sector's always been very good at giving guidance in fact, i think a lot of participants would bet they're going to come in and beat that down 9% number going forward, i think a lot of the research points to the fact that technology names are going to be part of the solution in a post pandemic world. the other issue here is that -- and we kind of did it -- we kind of manifest this in our last position move for our portfolios, right? what we saw is the value a lot of the performance has

been, as you pointed out, in the reality from march to the present, kind of relegated to a relatively concentrated group of names. so that actually leads -- look at that like this. that actually leads to an opportunity where you can have catchup as the broader economy starts to re-engage. a couple of caveats. one, as you hear our economics team talk about, there are a couple of big risks to all of this, right, that are more things to consider impact on the virus? impact on the economy? and every increasing potential stroke of the pen risk because our strategy group, for example, if something were to happen to the tax reform, you know, there's an estimate -- i think our strategy group put out a great piece which estimates that could actually -- you know, their estimate right now for s&p earnings next year would be 170. you could shave $20 off of that if you actually saw that --

those reforms kind of go away at the tax front. >> what else, mike when you're pounding through all of these different names and different sectors, what do you think we need to watch for that could give us an idea on whether we're really in a recovering economy right now? is there anything that would show you whether these job numbers are going to continue or whether we're getting ready to slow back down >> well, you know, i think what we're talking about down in the portfolio of solutions group is we'd like to see a re-engagement of the -- you know, the leisure. you know, the airlines it's not great news. the hotels because then you really know that you're moving out of it now just, you know, taking a look around and just kind of putting portfolio management, there is other activity. people are spending money and there are some interesting bona fides that were pointed out yesterday. we had a call and it was interesting because, look,

there's a lot of, you know, savings pent up ready to go. there's a lot of inventory that needs to be built. so there are a lot of really fundamentally positive things that could actually support earnings growth on a broader base notion for the next couple of quarters. so those are the things we'll be looking for because those are really, really interesting then what you'll see is as multiple starts to contract but they'll merge with increasing earnings that's what you want to see coming out of, you know, this short but, you know, kind of painful recession. >> all right, mike thank you. goldman sachs. >> thank you. >> got to mean more -- a lot more money, right? goldman sachs versus s&p huh? no, you don't have to answer it but just wink or something >> goldman's a great firm. >> thank you thanks for playing along i'm just kidding i know you get better tables if restaurants ever reopen.

becky? >> joe, thanks. when we come back, new jobless claims data. economists still expecting over 1 million new filings. as we head to break, check out the shares of united airlines. the company is warning about potential furloughs as the coronavirus continues to cripple travel demand. those are cuts that could come as early as october. if all those jobs were cut, that would represent more than 1/3 of united's staff stay tuned, you are watching "squawk box" right here on cnbc.

coming up when we return, breaking jobs report we read the numbers when squawk returns right after this

rick santelli there. live at cme reads on initial and continuing claims, the notion that with the holiday and seasonal adjustments it's a little bit out of sync. 1.4 million with regard to

initial claims 1.314 million to do the work >> it stands at 1.427. 18 million.062 the claims number since the 17th of april we do 18,760,000

if you look at interest rates trying to define this mostly steady at 16 points. and we've violated 7 on the dollar versus the chinese. >> thank you, rick want to talk more about these numbers. >> i think the continuing claims number is still at the forefront. wanting to get a read on exactly how fast that huge pool of unemployed is being reabsorbed

that was better than anticipated. market firmed up a little bit on the print which does make some sense. we're in the mode where the market craves confirmation that there's progress being made on the labor front, reopening front. despite the fact we've seen surges in other parts of the country. not yet quite a stutter step not an enormous number keep in mind we were back around 200,000 at a full employment level a few months ago this is still a lot of churn and a lot of attrition in the economy, but it's still kind of moving in the right direction relative to where we were a couple of months ago >> okay. mike and rick, thank you we're going to continue this conversation right now joining us for a little bit more reaction to what this data means and where the markets are likely to go as a result, allianz chief economic advisor mohamed el erian joins us

does a number like this give you pause or does it say that we're moving as mike just mentioned in the right direction and given that the market seems to be looking for anything positive, do we go higher from here? >> mike is absolutely right. we are moving in the right direction relative to last week, relative to consensus expectations that's the good news but he's also absolutely right in saying the absolute numbers remain high. and that's of concern because we're getting now a migration up in layoffs from the smaller companies to the larger one. you've been talking all morning about united bed, bath & beyond the lest goes on and on of companies struggling we hope we get momentum to absorb the wave of layoffs to go from the bigger companies. >> and so when you think about what the numbers are going to look like over the next month or

two, both between earnings and where you think unemployment goes given clearly this out -- the continued outbreak of the coronavirus, what does that look like to you? >> so the very high frequency numbers, mobility, retail, traffic, they're unfortunately not just flattened out, they've started to come down "the wall street journal" has a chart on that this morning with the employment on that this morning, the numbers are starting to come down. it is a reflection of the fact that the reopenings have either been halted or reversed in over 30 states so we are going to see a moderation in the momentum but the hope is that the momentum continues forward but it's going to be at a slower pace than it's been in the last few weeks >> mohamed, i was talking to a big investor yesterday who made the comment to me that basically every investor right now,

professional investor is playing for basically two months out, two to three months out waiting for news on a vaccine. and that's the entire game and that it's entirely binary, meaning we're either going to show up in september or october or even earlier and you're going to get positive news on a possible vaccine or you're not and that's the game here and you're going to have to either bet one way or the other. what do you make of that >> so that will be the headline, but if you go beyond that, there are also people betting on further support from the government and central bank. this notion that we will socialize the down side. and also there are people betting that certain stocks, and mike made a great point with his chart today. certain stocks have become everything to everybody. by that it's the microsoft, the apple, they have it all. they have resilience, strong balance sheets, they have positive cash flows and they have agility

they benefit both from the journey to the vaccine and the destination with the vaccine so you have a lot of subthemes going on the big one is this notion that there is something good on the other side and it is the vaccine that will get us there but there's more behind this, andrew, than just this theme >> given that backdrop, how do you position yourself -- we're now in july. how do you position yourself -- given that backdrop and all of the concerns and the high frequency numbers you're talking about, how do you position yourself what is the gamble what is the bet to make? >> so i'll repeat what ed said earlier on your show, which i thought was great, because it spoke to me. i felt it. is i got the theme right but i got the valuations wrong what has been the real puzzle here is not the themes you've heard me say look for companies that have these four characteristics. strong balance sheet, positive cash flow, good management on the sunny side of the covid

error, but it's the valuation issues that have certainly tricked me i exhibit way too early from these names. so a lot comes down to how you value these names and what you have going on right now is this notion that there is no alternative and, therefore, these few stocks that are driving markets higher have become both growth stocks and defensive stocks and that's what people are betting on right now i personally think valuations matter over time, but the last few weeks have proven me wrong, andrew >> so -- and i accept that the question i asked is what do you think the inflection point would be to either reverse that, meaning that there's going to be a -- look, there is a herd mentality. people do change their minds about what the proper valuations of things are, what the right multiple should be what's going to change that either in the reverse or allow it to continue >> so i think the market has been telling you something that's really important.

technicals are really strong, which means to reverse it you need a very big shock. i look at three possible, i want to say these are possible, these are risk scenario sources of shocks one is cumulative bankruptcies because capital impairments hurt investors. two is a big policy mistake. we don't renew some of the relief measures, for example, and the third one is just a market accident of some sort that people find out that stretch themselves too far those are the three possible sources, but i stress, these market technicals are so strong that you would need a major hit from one of them or more to derail this mentality. some of us are on the sideline no longer really understanding what's driving these names higher the themes we think have played out, but you've got to respect these market technicals. >> okay. mohamed el erian, it's always

good to see you. always good to get your perspective on all of it thanks so very much. talk to you soon. >> thank you, andrew >> becky when we come back, joe biden's jobs message the former vice president set to lay out his message in detail later today. ahead of that, we'll be speaking with biden supporter and former presidential candidate pete buttigieg. as we head to a break, let's look at shares of twitter. that stock up more than 7% yesterday after the company posted a job listing saying that it was building a subscription platform code name griffin later in the day twitter edited that post to remove anymention of the subscription feature. that stock up is by 1.25%. stay tuned you are watching "squawk box" right here on cnbc don't forget to subscribe to our podcast. you'll get interviews, original content and behind-the-scenes access look for us onapple podcasts o

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welcome back to "squawk box. we're seeing the dow moving into positive territory now the nasdaq has added to some gains as well. up 75. at this point s&p indicated up just under 10. andrew okay coming up on the other side of the break, the interview of the morning. former south bend indiana mayor pete buttigieg, supporter of joe biden going to be joining us to talk about the candidate's new jobs plan just released this morning. we'll break it all down and ask a lot of questions about what it is and what it all means stay tuned squawk returns after this. look,e i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit

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the apparent democratic presidential nominee joe biden will lay out his plan today to revive the u.s. economy and get americans back to work kayla tausche joins us right now. she's got the details of biden's new jobs plan. kayla, came out earlier this morning. a lot of information you've been going through already. >> reporter: it did, becky a task force between the former vice president and senator bernie sanders has produced a more than 100 page policy outline, the crux of which is to bring critical manufacturing back to the united states. they're calling it a buy american plan with incentives for companies and $700 billion in earmarked funding 400 billion of that is for government contracts, specifically for american firms, and $300 billion for research and development. the campaign pledges those two efforts will create 8 million

new jobs new pay nfors are not available they're going to reverse the president's corporate tax cut. if it sounds like president trump's platform, well, it is pretty similar the white house itself is crafting policies to bring supply chains back to the u.s. last year president trump signed an executive order that would prioritize american manufacturers in certain federal contracts. the biden campaign says trump's efforts aren't working and that contracts to foreign companies are up 30% i'll be speaking to treasury secretary steven mnuchin exclusively about the economic policies and the effect they're having the vice president will be speaking at 2:30 p.m. eastern in scranton to lay out more of the plan joe? >> kayla, thank you. here to talk more about the vice president's plan, pete buttigi buttigieg. a former democratic presidential

candidate. former mayor and biden surrogate. i'm going to call you mayor pete i think we all feel comfortable -- >> that's what everybody does around here. feel free. thank for having me on. >> all right, mayor pete, i'm going to do that we understand the primary process and you understand it as well as anyone we've seen it on both sides. sometimes there is a tendency to move towards the respective bases, some of the programs and then when it comes to governing, maybe you become more centrist i'm just going to tell you, here's the headlines of this, mayor pete biden to map an economic path delaying progressive's biggest plans. i think kayla eluded to it, that he's going to call for a moderate approach towards reviving the u.s. economy. is that how you see it is that the right prescription to win >> well, i think there's a lot of boldness in the level that vice president biden wants to

invest in america. i think that's not only a progressive priority but something people across the aisle can get on board with, too. i think it's in keeping with joe biden's instincts to bring people together, but i think it's also in practical terms what makes sense for the economy. we need to invest in our own competitiveness, both in order to grow here at home and in order to compete with increasingly powerful economic competitors like china we need to make sure we're less dependent on supply chains for critical goods and infrastructure like we're seeing now with pharmaceutical issues on countries like china and we need to make sure american workers come first to me, that's bedrock for what the democratic party is about. i do agree with you that you don't have to be a rocking democrat to see why this is a good economic policy. >> this was prepandemic, pre-25 trillion, wherever we are now. this has cost a lot and inflicted a lot of economic

damage and hopefully we're going to come out of this, but it might take years so, i mean, is there something to that that we're not in the same position to be able to maybe be as free spending with some of the democratic programs, do you think do you agree with that and we're we'r going to need to try to pay down some of this debt with higher taxes? >> you know, as democrats go i've been one of the first to talk about deficits and the debt, but the reality is we can't afford not to make these investments or we will see the economy stagnate since we are in a moment of historically low interest rates and since these kinds of investments every time america has done them have paid off, investing in our competitiveness, in our infrastructure, in our manufacturing base, frankly they have a much higher rate of return than tax cuts so as economic stimulus goes i think this is the right way forward. of course we have to be smart about the investments that we make and of course you can't get something for nothing, but if

you look at the overall picture of where our economy is headed, we don't have a choice and we can handle these kinds of investments in we make them before it's too late. >> mayor pete, i think that lowering corporate taxes helped corporations become more competitive, bring money back, i think it was somewhat responsible for what were pretty good economic times before the pandemic in terms of historically low unemployment rates across the board and some of the deregulation. the vice president is going to reverse at least a portion of the corporate tax cuts do you not think that that plan helped with the economy? do you disagree that lower corporate rates were a boom for the u.s. economy and it won't matter to reverse them >> i'm very skeptical that those rate cuts should get most of the credit those rate cuts led directly to

exploding deficits it's part of the reason why oddly enough no the to be too partisan about this but across my lifetime 100% of democratic presidents have seen deficits go down and 100% of republican presidents have seen deficits go up you can't get something for nothing. what we have to decide is what's a responsible level of taxes that will deliver the kind of investments that make an economy competitive. >> right. >> and this isn't something we have to just use our imagination for, we look at the evidence and the evidence across american history is that when we're making robust investments with responsible but not excessive taxation the economy grows. >> we've talked about it earlier that right now with where american businesses and how important it is to get the unemployment rate back down, it seems like not the most ideal time to raise corporate taxes. now, we're going to need to pay down a lot of what we've spent and maybe, you know, you would raise it on wealthy individuals, but that may not raise enough,

either are you for a blanket raise in the marginal rate and to what level, or do you think -- what would you advise vice president biden to propose for a marginal rate across the board? >> well, i would advise him to look at the evidence and find levels of taxation that are consistent with growth as they have been historically of course, in american history the economy has grown much quicker under much higher marginal tax rates but i don't think we have to go back to what it was like in the '60s and the '70s even though that was a period of in many of those phases a lot of productivity growth look, the bottom line is you've got to pay for what you get and we should be able to strike a balance in the united states, but what we can't do is continue with these deficit exploding tax cuts that we were told into pay for themselves, you can check, they didn't, and now, you know, that was before we got to the situation we are now with the

deficit. it's why we need to make sure we are looking at the investment side as well as the cost side. what i appreciate about the plan that the vice president is laying out is it does both. >> andrew? >> mayor pete, i just wanted to -- we wrestle with this issue of taxes all the time, i wanted to press you on two questions related to it. one is just simply the timing of a tax increase and it's the request he we asked the vice president when he joined us now more than a couple weeks back and he said he would do it immediately even amidst this the question i'd say is to the extent there are small business owners out there right now that are clearly struggling and trying to get up on their feet, seeing a tax increase right in front of them, just make the case if that's the case you want to make in terms of the timing >> first of all, of course there's going to be a look at conditions on the ground the last four months have shown us in really blunt terms how quickly things can change and i know that a new administration will make sure that every step it takes is consistent with what

the right thing is to do based on what we see around us, but what we also know is that small business will benefit from the kinds of investments that the vice president is proposing and that this country will be a more competitive one and a more economically successful one. we are inn vetsing in the foundations. no country can get away with disinvesting in education, in infrastructure and research the way we have for very long and the longer you go disinvesting all of that the sooner it's going to catch up to you for small and business big alike we've already reached a point where even when there were low unemployment rates the american standard of living was not secure life expectancy going down it raises questions about how our economy has been lined up. this is a historic opportunity to make sure that it's working for more americans >> and, mayor pete, i want to follow up with the other big debate we have around this table a lot is about wealth -- the

wealthy and philanthropy yesterday warren buffett gave away $2.9 billion and which is a great thing and philanthropy, by the way, has helped even during this pandemic in a meaningful way, but oftentimes those shares are never taxed as we all know and so the government will never be a beneficiary and other taxpayers won't be a beneficiary of those successes do you think philanthropy should be taxed in any way? >> i think it would make more sense for that to happen on the front end. look, it's wonderful when there are these major commitments, generous commitments by individuals, but we've also got to ask how things got so unequal in the first place if a little bit more of that was making its way into a democratically-guided process, in other words, the kinds of research and development that invent trillion dollar ideas, like the internet itself and space travel, we know our country is better off.

we've got to ask where the balance s i would argue, look, think about it this way, in the united states right now there is not one county, not one, where a full-time minimum wage worker can afford a two-bedroom apartment. we are talking about somebody who works for a living in a job, full time, can't afford a two-bedroom apartment. i would argue that if that weren't the case, if we had higher wages and more public investment, we wouldn't need to lean on flap droppy quite as much as we did. >> mayor pete, the one thing that vice president biden's plan has with president trump's is it leans into made in america it looks like there are going to be real incentives and real penalties to companies if they are not making things in america. do you believe globalization is dead >> i don't think we have to choose between closing ourselves off and investing in our own country. on the contrary, i think in a

global market we are more competitive when we are starting right here at home made in america is good news and vice president's buy american initiative is good for us in the rust belt where we know we are capable of producing some of the finest goods in the world but there are so many loopholes and waivers in the system and i think you all had reported, you know, offshoring has gone up an awful lot under this administration so i don't view this as like the president kind of picking a fight with every country that we can, i view it as an opportunity for us to make sure that taxpayer dollars benefit american firms and workers first and then, of course, because we are so confident in the quality of our workers and our products, we can go out into a global marketplace and win there, too >> mayor pete, i was just trying to figure out, checking some of your math on the democrats in terms of the deficits. i mean, i know that president

obama tried to bring down the yearly deficit but he added quite a bit of debt over the eight years. i mean,more than -- >> can you name knee one democratic president who served in my lifetime who left office with a bigger deficit. >> i'm not talking about deficit i'm talking about adding total debt, we went from $10 trillion to almost $20 trillion under the obama administration that's a little bit of a debt, right? >> a lot of that's cyclical because he took office at the trough of the worst economic shop in my lifetime. look, again, i think we should -- frankly more than is sometimes fashionable in my party, i think with he should pay attention to things like deficits and the debt, but the way we pay attention to them is to balance spending and taxes and also in a moment like this not to be afraid to make the investments that are going to keep our economy growing. >> we have to run. where will we see you next if the vice president does win? is there a job can you tell us what looks good? what you got your eye on

>> you know, right now i've got my eye on making sure he does win and then i will do whatever i can to support the biden administration, whether it's an opportunity to serve inside the government or on the outside in some way, with he all have to make ourselves useful right now. >> i'm going to go with the mayor buttigieg for the formal good-bye we appreciate it, mayor pete. >> thanks. good to be with you. >> that does it for us today make sure you join us tomorrow "squawk on the street" coming up next ♪ >> good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with sara eisen, mike santoli, jim and david have the morning off. futures in a tight range again but that belies how much news there is, covid hospitalizations seven-week high, jobless claims tick down to 1.3 million, analysts calls on cisco, microsoft, square, jpmorgan and a lot more we will check in with the treasury secretary at the top of the next hour, mike, but a lot of discussion about how the market