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 is handling this surge in cases, a lot better than it did

in march and april. >> yeah, and, you know, the market if you want to talk about it being the index certainly is doing that it's been steady naturally the most heavily weighted stocks also happen to be the ones that are in th strongest trends they are covering up for a lot of, i think, softness under the surface. you're not seeing this latest push higher really have the participation of the airlines and all the kind of so-called epicenter sectors that now are under a little more question about a stutter step in the reopening process. i do think the market is trying to be rational about it. it's unclear what would stop these trends, why would apple and microsoft stop going up today when they haven't stopped until now except the fact that the nasdaq does look really stretched once again compared to the rest of the market there does seem to be a little bit of frothy speculation happening in some pockets of this market but that's been the case periodically for the last several weeks i guess you would say. >> yeah. bay crest yesterday looking at

outperformance ndx versus spx. you have to go back 20 years they say we feel like the boy that cried wolf because they keep saying this over and over again and the friend conditions. sara, i'm glad you're with us this morning, some disparate opinions from fed officials, bostic, rosingren, talking about air pockets in the economy which goes counter to what bullard told you guys yesterday afternoon about year-end jobless expectations here is what he said. >> i think we're tracking very well right now, unemployment peaked at 4.7%, some would say because of misrecording it was much higher than that, now it's down to 11.1%. i think i would say to my fellow economists in the forecasting community, you know, you should take that on board how volatile this number is 360 bases points now in just two months seems to me like by the

end of the year you can get down to certainly single digits and probably into -- maybe even below 8%, maybe even 7% by the end of the year. >> 7% -- >> 7% unemployment. >> especially -- >> no, it looks a whole lot better than 11%, carl, to your point. it's a pretty optimistic viewpoint. and that gets to the market and the take on jobless claims today. it's a half -- glass half full kind of view not just on the covid cases but on the economics 1.3 million does show that those jobless claims are edging lower and it's a good realtime read on layoffs because it's a weekly number it's way off the peak. we were seeing numbers like 6.9 million in the middle of march so moving in the right direction, no question about it. a lot of people focusing in on the continuing claims number which shows the number of americans week to week ongoing on jobless benefits. that number at 18.1.

it was better than expected, but it's still a harsh reminder that 18 million people are collecting unemployment benefits and raises the question of what's going to happen when that bonus benefit expires at the end of july for now, though, the market likes to see it going in the right direction which is similar to how they are he a reading the covid cases. even though they're going in the wrong direction everyone is focused on the mortality rate. we did see a tick back up to 800, 900 which higher than where we've been but if you look over the fourth of july weekend those numbers were the 300s so they were unusually low if you balance out the last few days the mortality numbers in this country are still averaging around 600 it's worth watches those higher numbers to see if they go up, but for now the narrative is it's skuewing younger, the treatment options are better and that's good enough, mike, for the market to keep seeing highs or technology to keep seeing these highs. >> it's good enough to

essentially gravitate toward the areas where it's not as crucial exactly whether we have all these states reversing, reopening moves and, you know, 1.3, 1.4 million weekly claims is an enormous number, i mean, in the general long-termsense of things. so it takes a tremendous amount of hiring this month to try to offset that to get anything like back under 10% in unemployment by the end of the year i don't think by any means people are confident in the trajectory, but they're definitely taking comfort in the fact that, okay, claims peaked, they're still going down, we can look at that path and say, well, this seems like other cycles just in this ridiculously exaggerated and compressed time frame. maybe we can hope for the best the bond market not paying a lot of attention, not moving much on all of these things. it's still i think kind of a wait and see mode in terms of really the macro story, carl >> yeah, it's not stopping, though, colonovic at jpmorgan

talking about retail investor participation, hedge fund participation, if that participation were to get back to historical mean you are talking about in their view another $400 billion worth of buying which colonovic says would get you back to record highs. >> i would place a little more weight in the possibility of systematic hedge fund strategies that look at the volatility level of market going back down forward normal that's an input no those processes in terms of how much risk, exposure and leverage they use. that makes sense to me than waiting for normalization of retail flows into the market we talked about the great rotation back into equities seven years ago and the s&p went up 40% in 2013, there really with as no great rotation back into equities, people stayed involved, the market did the riyal case into equities for

retail i think that's one of those things maybe it happens, maybe not. "the new york times" talking about robin hood and the kind of crazy wild fringe of retail speculation with play money that is going on in parallel to most traditional retail investors sitting this one out. >> i like this stat, carl, from david rosenberg of rosenberg research, has his own shop now, he has been bearish, no secret about it but he reminds us 70% of the s&p that is not tech is actually lower than it was back in september 2018. so that's money that you haven't made just how frustrating it is right now for all those value investors who saw a bit of strength a few weeks ago and that's really just faded the small cap investors that also saw some outperformance which has also faded makes you wonder whether if you continue to see strength if we do get this rotation out of the narrow leadership we have seen from the big cap tech stocks, what changes that or if those stocks

are due for a violent reversal and correction to the mean that's one of the dee debates. what happens to the other stocks that are not just your tech, your semis, your stay at home cloud plays which are making new highs every single day. >> yeah, that's a good point it sort of brings to mind a couple of calls out this morning, microsoft web bush goes to 260 as a street high and they are talking about cloud tail winds. on the other hand there is square cowan puts to market purview, 200% since mid march has more than priced in the good news they go to 119 you're beginning to hear maybe on the ex trtreme margin analys saying you've made a lot of money in this way. >> for microsoft and for apple i think they are in a different category which is these are the free cash flow machines that you

can rely on, the earnings estimates haven't come down. the market is giving them credit for having some of the very few sources of long-term free cash flows that we can rely on in the market and so paying up more for each dollar of that free cash flow is what's going on every single day it ends at some point, it gets too expensive at some point, you steal from future returns at some point, but while this process goes on until people get confidence in the earnings coming back somewhere else or yields back up, that's another potential catalyst, you know, it's hard to say that that momentum is going to be interrupted anytime soon >> and cisco another upgrade in morning, morgan stanley goes to overweight on that name, sara, they say cisco hasn't been this cheap against the s&p in a decade and we use webex every morning on our morning call a lot of those structural changes in corporate and consumer behavioral continue to provide a lift to some of these

names. >> right and actually we asked jim bullard the fed president in st. louis yesterday why technology -- i mean, we were asking about this disconnect between the markets and economy and why technology is so hot, why a stock like tesla is up more than 40% in five days this is where he pointed, to the stay at home economy that the portion of where we're spending our money has just shifted and the longer it lasts the more people speculate that it's going to be permanent shifts into online payments, look at paypal and square, even though square is coming off today on that call, these are stocks that continue to make new highs, zoom, cisco, webex cisco hasn't been as strong but that's been a lot of the play in stocks stocks like trade desk, crowd strike have you seen some action stocks that have tripled since march. i guess it's on the stay at home play and the fact that, you know, this is going to be structural on how we do our work and that's going to benefit the enterprise cloud companies or anybody that's attached to

whether it's ad tech or enterprise cloud. >> yeah, i mean, it's obviously everyone can agree on the trends i do think the question is, you know, how long the gold rush is going to last. carl, that same -- you know, from morgan stanley on that cisco call they mentioned the fact that they have this cio study, basically i.t. officers at companies about their spending plans and they're talking about a pretty good decline in expectations what they're going to spend this year after many years of growth that includes in software there's also been reports that venture capitalists are closely scrutinizing their company's investment in cloud. seems like a big ebbs pens not to say the trend is changing but the market is assuming this is up and away for ever and this will be winner take most verticals within software. with he might have a reckoning ahead of us but right now what changes the story is the question. >> yeah. you know, it's not friday yet,

guys, but next week is going to bring a slue of bank earnings and da davidson has a bunch of calls out on the banks today they lift jpmorgan, cut b of a i wonder where you think sentiment is on financials we've seen late afternoon declines and then recoveries the following day, but we're going to learn a lot more tomorrow about expectations for loan loss provisions, a story we were hoping could be contained into one or two quarters, but, i don't know, is that in doubt >> yeah, i think sentiment toward the financials is pretty bee left right now people have mostly given up on the idea they absolutely at times get cheap enough just for a quick reversion trade it makes sense i think yields are going to determine what happens here. right now yields plus the credit loss picture because it doesn't necessarily seem as if it's just going to be this fleeting hiccup in terms of credit losses. if you look at the pure play credit card companies they're not looking great. capital one and discover and

synchrony and to a lesser degree american express clearly the market is acknowledging that there's going to be cumulative losses building up on the books here and it's not a great thing. but, you know, how cheap do they have to get before that's accounted for is a big question. a lot of people are gravitating toward the capital markets type names, jpmorgan over b of a fits into something like that but right now it's getting extreme in terms of the relative performance of financials versus the s&p, it's pretty much back toward the march lows. so, you know, maybe yields if they can hold in here can give some support at some point on the treasury side. >> down 25% as a group for the year the question of earnings overall, i wonder how much of this earnings season, this quarter that just passed is just going to be a throw away and considered old news because we know that the country was shut down and what it's going to look like right now, you know, the expectations are for 44% decline

in earnings, but if you look at some at least consumer exposed names and bed bath and beyond and levi are exceptions because both have been doing worse than your average retailer but even nike was such a dig business appointment. it makes you wonder how far apart the analysts are from what's actually happening. they are kind of guessing at this point not knowing who is bringing in revenue and how much of the business is coming from online i think that's going to be a key question then it raises the question of how much you're overpaying if you are overpaying for future earnings given it's so hard to determine valuations right now off zero guidance and off dismal quarters that we're about to see. i would note that bank of america sees some upside this quarter saying that the economic reports are coming in better than expected which should help the earnings picture out a lot but we aring for ugly numbers overall. >> definitely ugly numbers in some ekt issers i think the numbers will be stale because analysts have decided not to be

too fine about it but it seems like a very low bar at this point for this quarter anyway. so you probably are going to see if companies care to try to beat these are low hurdles to try to clear. i don't know how much that's going to matter, the market is essentially saying we're going to give everybody a kitchen sink, two or maybe two or three quarters at the most and then we're going to assume we can lean back on longer-term earnings estimates 2022 estimates are kind of meaningless right now but they've basically not come down. hardly at all. they've certainly come down less than the market wept down in march. so if you believe the market can kind of use that as a beacon, that's your bull case, but certainly remains to be seen if those numbers can hold up. >> yeah. the hall pass earnings quarter, there's no doubt about that, mike we will take a break here. as with he said futures continue to be in a tight range. we will talk to the treasury secretary next hour.

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welcome back data on housing rentals out of new york city coming in a lot worse than expected with the city emptying out fast robert frank has the numbers robert, good morning >> good morning, sara. good morning these numbers just out showing the worst june in over a decade for manhattan rentals as more

renters moved out and a lot fewer moved in the number of new rentals falling 36% compared to a year ago, average price per square foot down 6% the big worry here and the big numbers was this rapid rise in empty apartments the inventory of rental listings soaring 85%. we now have a vacancy rate that is the highest in manhattan on record now, landlords are racing to fill apartments with discounts and incentives a one bedroom will cost you $3,400 that is still twice the national average but a lot more discounts being offered now. half of all rentals in june came with concessions and the big declines were in larger more expensive apartments, rentals for three bedrooms falling 42% brokers say families that would have typically rented those bigger apartments have a lot of them left for the suburbs either for the summer or we may find out for good more than two-thirds of new yorkers rent, it is the largest

rental market in the country so we could see a cascading effect throughout the summer on the big landlords like blackstone and related, property taxes are the biggest source of revenue for new york city and of course an impact on the broader economy. so these will be numbers to watch in june and more importantly in july when we finally see the market reopen and brokers are able to show apartments whether that demand is still there carl >> we will be looking forward to that day obviously just to get the market running again robert, amazing numbers for those of us who live in and around new york city robert frank. when we come back this morning cnbc's latest hire and a new edition to our fall prime time lineup. shepherd smith is with us in n'gonyerer an hour dot awhe.

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>> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. china stocks are going to remain in focus this morning the journal, sara, is up with a piece right now saying that senior executives at tiktok are discussing options like

establishing a new hq for the app outside of china and trying to distance themselves from china. they're citing sources here, but one ramification of the chinese/u.s. tensions that are accelerated in the past few weeks. >> and the fact that the market is totally brushing it off look at chinese stocks, it's been a huge story this week, whether it's a retail investing frenzy or a state-sponsored buying with a number of editorials running in china saying buy stocks, you have seen remarkable relens. you think the market here has been hot, check out china. the china blue chip index, csi 300 is at a five-year high mike santoli, it's certainly helping the mood and sentiment and one -- a number of reasons, i just laid out a few, but one that i heard was that maybe there is pricing in of president trump's reelection odds which have been going down and the idea that biden could be softer

when it comes to the tensions with china, but i will note that biden did put out the economic plan or briefed reporters on it ahead of a speech in pennsylvania and there was this idea of buy american. >> yeah. >> bringing more supply chains into america the idea being tough on china, though it's hard to imagine you would get someone as tough as president trump with the constant tweets, with the worries now about hong kong and the threats about breaking complete ties with china perhaps that's entered into some of the bullishness we've seen in chinese stocks lately. >> i did see that bespoke parallel being drawn with biden's poll numbers there was an alternative story that says perhaps chinese authorities might prefer president trump's reelection because he is less likely to join with allies and trying to isolate china and have more of a united front on many issues. it's unclear that that's what's going on when you mention they have the state telling people to buy stocks and have these

massive upspurj in retail activity, retail trading activity, it seems like it's all the explanation you need, it's one of the strongest winning streaks we have had since 2007 when china really was in a bubbly environment to me it does seem as if -- >> by the way -- >> -- a burst of risk taking over there. >> don't we have that here we have the fed, we have larry kudlow coming on cnbc telling people to buy stocks because they are a bargain, we have a burst of retail trading activity as well and we had china leading after its coronavirus surge over there in terms of the stock market predicting a v-shaped recovery. >> it seems like a little bit of not quite a direct a line to the government in china telling people to do this and having this massive rush of new account openings the next day which is what seems to have happened over there. i think it's a little bit of a looser tether over here. yeah, there is a side game going on in terms of very, very active small trader speculation, i just

don't think it's necessarily tied into the bigger issues. >> sara mentions biden's speech today on the economy, one of his first major economic addresses, buy american program worth about $700 billion, more u.s. purchases of u.s. goods, more government r&d that is u.s. based, but as it's been noted very little in terms of a progressive agenda no green deal, no medicare for all and i wonder whether or not that means the market needs to reprice at least some of the expectations that it may have for a biden win. >> it's interesting because i don't think the market has necessarily kept those trades on in aggregate where, for example, when elizabeth warren was seen as being a big risk and you did see whole sectors maybe compromised by some of the policies it seems really like a let's try not to make a lot of waves electability type economic program more than anything else. it's very tough to see what the market is doing yet in terms of trying to price in election

outcomes or policy after that, but this particular plan from biden does not seem like it would, you know, kind of come close to any third rails >> yeah. well, that was goldman's point earlier in the week, saying that whether it's options equities or the prediction markets they all are telling you very different things about their view of what happens in november. there is the opening bell, guys. and a look at the s&p 500 as that fills in today. with he will take a look at what leads today in terms of analyst calls one that did catch my eye, sara, was peloton, b of a says that delays now for a new bike three to ten weeks at the very peak of the year was seven to 11 week so their view is that capacity is coming a bit online, they think q4 will be a full capacity quarter they go to 72. we've seen the price target on pton go from the 40s to the 50s to the 60s and now the 70s.

>> right you can see the gauge is the delays it just shows how much demand there is and how fast they need to get these bikes off and into people's hoechls as we continue to see the semi lockdown continue yes, we've reopened, but clearly there's still a lot of people working from home and there is still a lot of gyms in this country that are closed and a lot of states that are still closing, carl. goldman sachs has a good state by state tracker where they show that states representing 40% of the population have started to roll back reopening in some fashion. so we will watch the high frequency data like the open table restaurant reservations which had started to tick down and whether the market starts to pay attention and recalibrate the economic expectations or whether they just see this as a blip toward the broader reopening in this country. clearly peloton is a major den fish yaer. lulu closed that acquisition for mirror yesterday that is official peloton competitor, work out in front of a police officer record in your own home

i noted the regeneron call, it got an upgrade to buy from hold, price target up to 750 from 400. regeneron is one of those star stock stories not just because they're working on the antibodies but this particular upgrade said it was being underval exclude for its oncology pipeline and seeing expansion in oncology. regeneron is one of those companies, mike, where if you talk to people and ask why is the market going up, why is it so resilient, this one, this and lily and some of the others working on antibody cocktails is considered a hopeful bridge to vaccine. they are in late stage trials, let's see how they do. the government has poured this week half a billion dollars in to get the manufacturing up to speed and the whole idea is to give people antibodies like a vaccine, not like a vaccine where you produce it yourself, but as a temporary holdover whether to prevent covid or to treat covid that would help people feel more comfortable

going out of the house so fingers crossed that this one works and you've seen it in the stock, but clearly getting a little love from analysts and that stock continues to be higher. >> it's extended over the biotech sector there is the most acute issue in a lot of the investment going toward covid related if you look at the xbi equal weighted s&p biotech it's up 50% off the lows and has been a lesser mentioned leadership group along with traditional tech it's risk appetite play, it's a long time horizon play because we are not worried about the economy -- we are not looking for the economy to deliver much in the moment. all that seems to fit together in terms of biotech at these levels >> mike, watching the s&p leaders, pent air, doesn't happen a lot, but up 6%, the number one gainer. i don't think we would have mentioned this call otherwise, but b of a double upgrade to buy on a strong season for swimming

pools. pent air is the largest u.s. pool distributor and the stay-at-home orders -- it's the ultimate stay at home story, isn't it, for those who have the luxury of having a pool in their backyard. >> anecdotally definitely heard about how companies, local companies that dig pools are basically flat out, they can't get to you in season potentially because people are deciding to redirect investment there. pent air is a name where it benefits from this catalyst, the analyst call and also still down pretty handily year to date. seems like it was ripe to have people rediscover it at these levels i was just going to print out the s&p itself, 3176 just for reference the highs on monday and friday around 3,180, that's kind of as high as we've gotten since early june when we did make that bush seems like the market is trying to return to the upper rail of this trading range at least in

the early going here, carl. >> you know what's been interesting, guys, that a lot of people are talking about is that stocks are rising along with gold which we do sometimes see happen when there is this big reflation or central bank stimulus but it could be a warning sign that gold has been so well bid, it's trading 80 bucks off of its all time high in dollar terms. it's been a steady climb up and the minors mind find themselves up there with the internet and cloud names as far as the secretariers that are performing best in this kind of environment, whether it's some kind of bet on inflation later on, which is picking up speed and you've seen a little bit of some of the industrial metals gain as well, copper, iron ore, they have been doing well, but gold is definitely catching people's eye up almost 20% so far in year. >> you can arguably explain it as negative real interest rates, that's a tailwind for gold and for any nonyielding asset, there is a lot of other story lines as you mentioned that get people

comfortable. i mean, the inflows into gold have been very, very strong, you could take that as a positive or negative, sentiment is very hot in gold right now for something that's let's be honest just made a round trip in nine years, it's not as if it's crashing up toward new highs, but i do think there's a lot of story lines in its favor. copper has been outperforming it in the last few weeks. i think whether it's saying anything about inflation, whether it's saying anything about the dollar long term, whether it's saying anything about central banks, you have to go back to 2011 and said what was gold at 18 bucks an ounce telling you worth listening to over the subsequent few years. it's not clear that the macro message was something that helped you out very much could be different this time but that's just a reality of what we see in the last decade >> rbc today says 2,000 before the end of the year. so that's something to note. sara, walgreens is an interesting story. 2% div hike but they suspend the

buy back, they're cutting 4,000 jobs, this he see full year adjusted eps below the street. covid impact $700 million, $750 million, one of the s&p losers today, i mean, whether it's -- if it's the front of the store that will have interesting implications for names that you watch like a pepsi which reports next week. >> pepsi reports on monday and they actually have been more of a beneficiary of the stay at home trade relative to cok which has a bigger percentage of its business away from home in the restaurants and in the stadiums, that's sort of been the stay at home versus the reopening trade. so pepsi, you know, does well from the grocers, but the walgreens note is interesting and also interesting relative to bed bath and beyond which also showed weakness. this was a retailer which was very weak going into the crisis. if at any time that people needed to go to bed bath and beyond and buy kitchen supplies because they were cook at home or bathroom supplies because they were spending more time looking at their homes and

renovating and all of these trends that should have helped bed, bath and beyond it didn't get it the stock is down 18%. yes, e-commerce grew i think almost 100% but overall sales down 50% this that has been a tough turn around story and sort of a tough one for investors. it's interesting that it's closing 200 stores and usually wall street might look favorably on an announcement to cut stores and get cost cuts and productivity gains like lee vice that ended yesterday down 9% a nicing 15% of its workforce would be cut it's a sign that these retailers are in a desperate position. cutting costs, closing stores and laying off people and that's not being interpreted as a shrink to grow in this environment because there is no proof that they will be able to grow >> no, exactly right i mean, this is the time of year when we would normally be talking about how does back to

school look, what are the companies maneuvering for for holiday and it's almost irrelevant you have gotten a lot of these old retailers accelerated their declines in all of this, but they've been cushioned by being able to raise debt and essentially kind of keep it going for a while, but it is really about, you know, trying to shrink -- especially if you have more than 1,000 or so stores it seems like the market puts those chains in a real penalty box because it's almost by definition too many so it's a tough one to see the xrt that equal rated retail etf which screens out to some degree the amazon effect and it is not really, you know, had any sustainable come back in the last few months since the lows >> carl, it also makes you wonder we have to tale these names and put them on some kind of list. united airlines, levi, wall green all announcing layoffs if you look at today's unemployment claims number on layoffs, 1.3, it shows it's moving in the right direction. it's still very elevated and you

do have this narrative out there that it will continue to improve into fall as states reopen and businesses come back on line, but with 18 million people still on continuing claims and companies announcing now during this quarter that they're laying off people you wonder how much of that is already baked into the forecast and whether we could see a second wave of layoffs in this country as some of the stimulus programs wind down and some of these companies especially in retail take a close look at their businesses and try to stale back. >> yeah, no, it's true walgreens is a cautionary tale this morning we've been talking about the warn notice that united is sending out to employees with the plan to cut as many as half of the front line staff. the journal has an additional bit of color saying they don't expect further government assistance beyond that october 1st cliff. we will talk with the treasury secretary about that in a moment mike, at the top of the next hour yeah, it sort of leads to what

rosengren told the ft which is my expectation and fear is that we have community spread and that will be a problem for the economy. then he went on to say that he thinks companies will begin to worry once again about the level of financing that they currently have. >> yeah, that is the -- that's the question of in a sense the second wave of retrenchment not necessarily purely of the virus and that's been an open question if you've been able to view the majority of unemployment as being somewhat temporary, that's coming into question now as all companies try to cut costs and rationalize, i think we will hear a lot about that in earnings season coming up in the next couple of weeks on the financing side we've been bridged through this period, it does seem as if companies have kind of created a little bit of a cushion, but it's not indefinite and that is something. rosengren, you know, we should probably make clear, he tends to think in these terms quite a bit and sometimes raise alarms about things in the kind of capital

raising side and sort of financial conditions as being a potential yellow light, but worth listening to, you know, nonetheless. and really also, by the way, echos what chair powell has been emphasizing all along which is there are more risks than potential upside opportunities that he wants to be prepared for in the months ahead. >> all that said, though, nasdaq and the ndx once again an all time high. let's get to bob pisani this morning. hey, bob. >> rng goo, carl happy thursday, everybody. it's a flattish open but you're right it's a somewhat depressingly familiar scenario here, sort of like groundhog day, once again we're being dominated by technology as well as china on a tear since chinese authorities have been trying to jawbone the markets up in the last week and suck seeked. tech outperforming, but retail is not doing anything, energy is

not doing anything, the banks aren't doing anything and the main banking etf went from 30 to 40 back to 30 essentially in the last five or six weeks since the end of may these inverted vs that we see, energy stocks, the same thing, the xle up, down, back down to where it was five or six weeks ago. so where are we right now? we are in the waiting part of the rally to figure out how the reopening is actually going and, again, we've been debating is it a v, is it a w this is the s&p 500 in the last two weeks, excuse me, the last two months that looks like a w to me not a v. this is the waiting, we're trying to figure out exactly how the reopening is going and the answer is it's not entirely clear and the market isn't entirely clear about what's going on one thing that's obvious, just open up the hood of the market it's glaringly clear where the market believes the winners are right now. take a look since june 1st when we started that chart there and technology is up 10% what's happened to everything else industrials are up 1%, consumer staples are flattish, health care is down, banks are down,

energy is down 7% here, it's not on there, but should be on there, energy is down 7% so this is a very wide dispersion in the returns. we've been talking about this. if you look at the tech sector, this remarkable uniformity they have decided that mega cap stocks, semi-conductor stocks and software stocks are where the market wants to be everything is up 11%, 12%. these are subsectors of the technology groups here so the market has made a very clear decision who is winning and losing, that's what we do at r n cnbc, the market has decided the winner is tech, mega caps, semi-conductors and software companies and the losers at least right now are small caps, value and what we call cyclicals, energy stocks, bank stocks and most industrials although not all of them, some are doing better than others that's a broadway of what the market is trying to figure out as of right now.

finally, sara was mentioning china earlier. there is a very interesting hearing going on today at the sec, they're having a round table on emerging markets. it's actually about china. the sec has been seeking a lot more transparency on the chinese firms listing in the u.s., they can't get access to the audit information. they have been stymied by the regulators in china when they go and say we want to look at the audits of the chinese companies listing in the u.s., the regulatory authorities in the china will not allow them. this has been a problem for years but it's getting a lot of traction now, congress is getting into the act, the senate passed a bill that a set of regulators can't see audits for three years the issue with securities could be banned from listing in the u.s., the bill is in the house now, marco rubio is getting involved, he wants to delist foreign companies that don't cooperate. why is this happening? it's been around for years, but it's getting traction because it's getting mixed in with all the trade and the covid and the geopolitical tensions. theres a potential financial war

on top of the trade war with china that's going on. we are seeing some chinese companies co-list over in hong kong, j.d..com did, there are reports that ann financial may be listing in hong kong as well. speculation is these are back stops in the event something goes wrong with the u.s. listings in the united states. carl, this is a timely topic, it sounds a little bit nerdy looking at financial statements of companies listing in the united states from china, but it's very much mixed up in the trade tensions and the geopolitical issues with china that hearing is going on right now, i will monitor that and let you know if there's any news in that guys, back to you. >> not nerdy at all, bob thanks. let's get to rick santelli this morning as well good morning, rick >> good morning, carl. even though we had our 14 drop in initial jobless claims and we were under expectations both initial and continuing claims as you look at a week to date of ten year note years here we hover, basically the lows of the

week, basically close to the lows of all time considering that 54 bases points the low all time yield closed we are hovering 10 basis points above it it seems not to pay much attention outside of jobs reports and that's because for the most part rates are considered managed, especially during the turmoil of the covid effects. let's go back to the 23rd of june for ten year note yields. why? that's the last time we settled outside of a range between 62 and 68 basis points. today might be the 12th. but if you go back you will see the 23rd we settle at 71 basis points and it's been just steady and consolidating ever since now, let's consider march 11th, almost four months ago, a couple markets comping back to that same date. italian ten year yields around 100, 120 basis points is at the lowest yield in nearly four months and that goes a long way to christine lagarde and the eurozone trying to throw

everything including the kitchen sink into their economy and having some success at least in the eyes of the marketplace as some of those southern economy rates have moderated another market that is at an extreme since the 11th of march, close to four months is the value of the dollar against the chinese currency and one of the reasons may be, well, look at a year to date chart of the shanghai composite. today is the eighth session in a row it's closed higher it's pulling a nasdaq on us and it's coming at a time wherein investors looking at some of the issues of the u.s. markets are starting to sprinkle their investment dollars in the eurozone and in china. carl, back to you. >> all right rick, we will see you a little later on rick santelli. take a look at where we stand right now, bob and rick spelled it out for you, underperformance in the dow and s&p as the banks, energy, industrials underperform, down about a percent, although otanher all time high on the nas back in a moment

dow is down 100. the recovery for restaurants is being hindered by a resurgence of co-vid cases ahead of earnings season. kate rogers explains why this trend may only get worse and what we're expecting kate >> good morning. restaurant transaction data had been improving but over the past two weeks we've seen that trend reverse course data from the npd group shows overall transactions at major restaurant chains declined 14% last week's report showed it

declined by 13%. nationwide full restaurant transactions fell by 25 % and quick service actions declined by 13% full service is most aligned with sitting down and eating in dining rooms and we're seeing states pause reopening or roll back some plans to reopen dining rooms and major chains like mcdonald's hitting pause states with the biggest declines in full service transactions are louisiana, south carolina, texas, north carolina, georgia and arizona where cases are rising earnings season kicks off for the restaurants next week. shake shack said samestore sales fell by 49%. there's more pain for many companies this quarter there are a few outliers the best performers in the space for the year have all been those with the most robust delivery and carryout systems the best performer is wingstop

it makes sense our polling among likely voters shows only 38 % feel comfortable going in and sitting down as a dine-in establishment at this point in the outbreak. you can understand why consumers are turning to more names where they have the delivery and carryout options >> and these are just the biggest chains in the country. imagine how much pain is being felt at the smaller independent restaurants. >> that's right. the smaller businesses exactly. >> thank you getting hit the hardest. meantime steven mnuchin is just moments away we're expecting highly anticipated decisions from the supreme court around the top of the hour including whether the president must disclose information about his taxes from hibaer 'lbe right back. you say that customers make their own rules.

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cow is down about 100 points delta shares are falling phil has the details for us. >> sara. in an employee memo, it's made clear the recovery in the airline business is slow and right now in july they're flying just 30 % of their schedule in the memo he addresses the fact

that covid-19 continues to weigh on passenger demand. writing the continued growth of the virus through the sun belt coupled with the quarantine restrictions being implemented in large markets in the northern part of the country give us renewed caution about further scheduled editions at this time. this is from a number of executives don't expect to see big rebounds in scheduling in august and certainly not in september or october when the airline business traditionally settles down delta shares down about 3% right now. back to you. >> phil, just quick, on the spectrum of airline executives who have been adding capacity. fair to say delta has been on the cautious side. >> a little bit. but they said and they are adding 1,000 flights in the month of july. i think they were going to add 1,000 in august or more flights in august and that was going to be it. then they were going to cap it now this brings into question and we'll get their earnings next week and talk with ed at that time. are they going to pull back on

their august schedule? united is being less ambitious than originally planned. >> all right phil, we'll watch that obviously a lot of travel-related names you should pressure today sara, thanks we'll see you this afternoon in the meantime, everybody, good thursday morning welcome to "squawk on the street." kayla is here for the hour as we'll see the treasury secretary in a couple minutes. first up, rick santelli with wholesale trade. >> the minus 1.2 mid month is tossed and is replaced with an identical minus 1.2 %. that's the worst level since july of '09 when it was down 1 .5%. if you go to sales, a different story. up 5.4%. that actually is the highest month over month level ever going back to 199 2 when this

series was adopted in the rear-view mirror was minus 16.9 now 16.4 that's extreme the worst month over month level since 1992 kayla, back to you >> thank you so much, rick we have someone here who can help us sort through that and more we're joined by steven mnuchin >> it's great to be here with you. >> i want to start with what rick mentioned and also this basket of economic day that that's been eroding over the past week. the first things like retail sales and consumer confidence has fallen since the recovery began because the virus is surging across the south and west how is the administration adjusting the growth forecast for the second quarter based on that >> well, let me say as i've said before, the traditional economic models really don't work in this scenario since this was a scenario where we closed down the economy and we're reopening

and it has nothing to do with traditional economic problems. the number one issue i'm focussed on is jobs. we've recreated 8 million jobs in the last two months people thought we were going to have as high as 40 million unemployed the highest we got to was 22 and we're now down 8 million from there. that's what the president and i are focussed on. our job won't be done until we get everybody back to work >> the biden campaign is taking aim at the trump administration on some of those statistics noting no party has won the presidency with net jobs lost or with unemployment above 8 %. can you fix those numbers before election day what's the strategy? >> there's never been a point in the history of time that we've closed down the u.s. economy so i don't think those traditional numbers are important. what i do think is we are rebuilding the economy the blue chip indicators for the third quarter is expecting 17 % gdp. we're recreating jobs and

providing a lot of liquidity to american business and american workers. so the president's economic plans are really working and we still have more work to do >> the congressional budget office has suggested that that rapid rebound in growth in the second half would assume that social distancing measures go to zero but we're not seeing that happen so is there going to be a bite taken out of this dproet and if so, how much >> well, i think we have certain hot spots. we'll deal with them people are beginning to learn how to be able to work in this environment. certain businesses have recovered very effectively certain businesses will take longer just as i heard some comments on the airline industry i think we're pleased in the work that we've done at treasury to help the airline treasury it's important to keep it together that's clearly an industry, restaurants, hotels, airlines, are clearly going to be areas where they're going to need more help >> let's talk a little bit about the airlines, because the

treasury just announced this week you've reached terms with most major carriers for 25 billion in loans as a second trauchlk tranche of aid for that industry does that require the companies to maintain jobs >> there are certain requirements in the psp. there are different requirements in the loan agreements this was all negotiated with congress and again, we've signed loan agreements in many cases i think many of these airlines aren't going to need to use them and will finance them in the capital markets. we wanted to make sure the airlines had backstops so they had liquidity. that's something we've been focussed on and between the payroll sporlt and the loans, we've created a lot of stability for that industry. >> some of the commentary from the airline industry is still dire you heard the delta ceo has renewed caution for passenger travel in the near future.

united said it could lay off a third of its work force. would you consider the programs a success if these businesses stay afloat and they don't buy back stock and executive pay is limited but there's still massive layoffs? >> i think all the airlines want to maintain as many people as they can employed. i know that's very, very important. some of the airlines have never had furloughs. they're committed to that. other airlines are in more difficult economic scenarios i've spoken to all the ceos. i know they want to keep as many employees as they can. that's their objective we need to have air travel when the economy rebounds i've been briefed on the progress we're making on vaccines i'm highly optimistic we're going to have great progress by the end of the year. i think as we get through this, we're going to make sure our airlines are there for the rebound. that's what we've been doing >> and i know between now and

the end of the year you're going to be working with congress. hand and glove to institute some new programs reauthorize some existing programs to get more money into the hands of americans and these companies. on the stimulus check specifically, the president has said he supports another round of stimulus. leader mcconnell has said there should be a $40,000 income threshold. is that a level the administration supports? >> i'm not going to go into the specific details today on that, but what i would say is we do support another round of economic impact payments you know, in most cases they're not checks it's direct deposits we can get that into hard working american's bank accounts quickly. the level and the criteria we'll discuss with the senate. i had a productive call with mitch mcconnell yesterday. as soon as the senate gets back, we're going to sit down on a bipartisan basis with the republicans and the democrats and it will be our priority to

make sure between the 20th and the end of the month that we pass the next legislation. >> because the end of the month is when the expanded unemployment benefits expire as you know, and then the paycheck protection program which is supported an estimated 51 million jobs here in the country many companies have already exhausted the funds that they've gotten for that. i'm wondering can you reach an agreement before what many strategists are calling an income cliff happens at the end of the month >> let me comment on both of those. first, on the ppp, i've had productive conversations with marco rubio. both of us are going to have a conversation with ben cardin next week. there is already bipartisan work i think any extension around the ppp is going to be much much more targeted to the businesses that really need this money. and the smaller businesses so we're already working on a plan for that. as it relates to the enhanced

unemployment, we knew there was a problem with enhanced unemployment and certain cases people were paid more than they made in their jobs that was a technical fix we were in an emergency. we went along with that. we're going to fix that technical fix and make sure people are insented to go back to jobs. i've heard stories of where companies are trying to get people back to work and they won't come because of the enhanced unemployment. we'll fix it and figure out an extension that works for companies and works for those people who will still be unemployed >> there's a study that shows that two-thirds of workers laid off are now receiving more than their prior earnings because of the expanded benefits. will the technical fix be a cap on the benefits at 100% of whatever that worker was making before >> you can assume it will be no more than 100% we went to incentivize people to go back to work.

even at 100%, if people have jobs we want them back to work it's intended for people who don't have jobs in industries that are harder to rebound we will not be doing it in the same way, and we're in a dramatically different situation. many businesses are open and want to hire more people today >> on the paycheck protection program specifically, we learned about the recipients earlier this week. but we didn't get any information on the vast majority of the number of loans those below $150,000 why did treasury not disclose those. do you expect all those loans to be forgive snn. >> first, let me say treasury very much supports transparency. and we had discussions on a bipartisan basis on all the loans above 150,000. we disclosed them in buckets let me say, loans above $2 million are going to go through a review before they're

forgiven you shouldn't assume everybody who has a loan is necessarily going to be completely forgiven. we'll go through the reviews as it relates to small companies of $150,000 or less, we want to protect that information because there's payroll information, and we didn't publish everybody who got enhanced unemployment insurance. so it's a very similar situation. but we did provide all the details. over 4 million loans people can go in and data mine, and they can see zip codes and lots of information about those small companies that i think is helpful for transparency >> i'd love to hear where that audit of the loans above $2 million stands and whether you think it's a likely scenario that loans to billionaires like kanye west or the l.a. country club where you're a member, will the loans get paid back? >> it would be inappropriate for me to comment on any specific loan at this point and they're going to go through

a review i would describe the review. some of it will be electronic. some of it will be an audit. some will require information. the vast majority of the loans were hard working businesses where the money went to pay employees and they'll be forgiven as we said early on, if they were companies that shouldn't have received the money, we'll deal with that as well >> mr. secretary, a quick question on tax day. it's coming up next week, of course i heard you tell david rubenstein you had considered whether or not to delay it to september but obviously in the end you decided not to do that what was the calculus behind keeping it in july >> i reached out to a lot of different constituents on this issue. it was something i wanted to carefully weigh. first, all of the accountants in the accountant industry whereas last time they were concerned about getting taxes in, not only did they assure me they could get it done but they encouraged me there's about 30 billion of

refunds we want to get to people they also wanted to make sure they didn't get backed up into next tax season. that was something that was very important. and also, i heard from many of the states it created tremendous revenue problems for them when we postponed it beforehand. but i just want to assure anybody who has a specific hardship, they can go to irs.com and go online. the irs will enter into payment plans for people with hardships. i think we got to right combination. . >> you mentioned revenue hardship for states. as you try to put together another fiscal support package in the 11 or 12 days, what's the administration's position on federal aid to states as discussed? >> well, one thing we are not going to do is we are not going to bail out states that were mismanaged before the coronavirus. so that is not the intent. i think you know we gave substantial amounts of money to

the states in the last round that could be used for coronavirus. we also provided flexibility that could be used for first responders, firemen and policemen so there were no layoffs in the areas and there's different people with different opinions in the senate and the house as to what we should do and we'll have the discussions moving forward >> i'd like to pause for a moment and bring in my colleague who has the results of a supreme court decision just coming in. what do we know? >> the supreme court has decided in one of the two pending cases against the president of the united states and in favor of the manhattan district attorney who has seeking financial documents regarding the president's business and personal financial empire. the supreme court just deciding within the past couple seconds ruling for the new york grand jury over its bid to obtain the president's financial records including the tax records. now, this means that at some

point the outside auditors and banks will be required to turn over the documents to the grand jury, but because of grand jury secrecy rules the scope of the investigation may not be become public any time soon the grand jury will be expected to keep all that secret. the tax returns, financial documents, and everything else that they are able to obtain now as a result of the supreme court ruling will go into the investigative process. the public will only see those at some point in the future if there's an indictment or a criminal proceeding. the president argued this was presidential harassment and local district attorneys should not be able to subpoena these kinds of records from a president while he was in office they suggested the president was entielted to a temporary immunity the supreme court disagreed. we're waiting on one other verdict here this will be on the issue of house committees who also subpoenaed financial documents the supreme court expected to

issue the ruling in a couple minutes. that will have potentially more implications for the public debate as we know, documents that go to capitol hill tend to leak to the press. documents that go to grand juries tend to not leak. >> all right there's more news. i'd like to get the reaction of the treasury secretary you've deferred to legal koinl on this before with the ruling now, the president must provide this to a new york grand jury, at what point would you expect to satisfy the request? >> i can't comment on just because i heard this as i understand this, this case doesn't involve the treasury i believe it's between the president and third parties. when things go to congress, they tend to go get leaked and when they go to grand jury, they don't, that's what i agree with in that story. >> the tariffs, the president threatened new tariffs on china,

new tariffs on europe and on canada what is the administration's stance about whether new tariffs before the election are a good idea >> well, i think you know the president has used tariffs as a way of getting free and fair and reciprocal trade the tariffs on china were all about it was not a level playing field. so the idea here was we wanted china to open up that was the intent of phase one. they are following phase one we expect them to adhere to this the president's use of tariffs in all these things, whether it was with mexico and canada, that was to get free and fair trade we couldn't have been happier. the president of mexico was at the white house. we had terrific meetings all afternoon. a working dinner of both u.s. and mexican business people with him and president trump. and we couldn't be more pleased with the u.s. mca agreement. it's the largest trade deal in history. and that's going to have a very positive impact at the u.s.

economy and mexico and canada. particularly in a time when we all need it as a result of co-vid >> and where does the decision stand on potentially reinstating the aluminum tariffs on canada >> i think as a matter of policy, i don't comment on future presidential actions ahead of time. >> i'll ask you one more on tariffs. my understanding is you have to make a determination this week how to proceed one year after the investigation into france's digital services tax can you preview what we should expect there >> i can preview the ambassador and i had discussed it and will be reviewing it with the president. no decisions have been made yet. >> all right our thanks to steven mnuchin thank you for standing by as we got the news we hope you'll join us again soon, and thank you for your time >> thank you stocks took a spill here on that news. dow is down 188. the supreme court ruling 7 -2

that the new york grand jury can access the president's tax returns. the chief justice writes that decision for liberal justices are joined by kavanaugh and gorsuch. when we come back we'll check in with shepard smith with his own show this fall he's going to join us to talk about that and a lot more when coins.onhetrt" ntue when the world gets complicated, a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management.

our next guest is no

stranger to the news business. shepard smith officially joins the cnbc starting this monday but this fall a new show, 7:00 p.m. eastern time titled "the news with shepard smith" will debut congratulations.catchy, right, ? >> this is a great day for cnbc. >> well, it's a great day for me i'm -- did i miss anything it's been since october. i checked out for a minute it sounds like things have been going on while the rest of us were hunkered down >> i want to get to the show and whether or not you've missed the news cycle how have you been spending your time since you hung up the mike in october >> watching cnbc and everyone else for that matter and reading a lot about -- we've never had a news cycle like this and it was already literally

crazy before i signed off. and watching it as a viewer has been a new experience. i've been a journalist for 30 plus years watching from the outside has been fascinating there really wasn't a time when i felt like oh, i got to go do this until cnbc came along with a plan for a newscast that's about news we're going to have reporters, the great journalists of cnbc and across the cnbc family news makers and experts and no opinion. no pundits nobody telling you what to think or how to feel just the facts i know my family in mississippi and my partner's family in pittsburgh want to know what the truth is what the facts are and we have a responsibility, those of us who are so privileged to have a platform, we have a responsibility to tell the truth, to seek the truth, find the truth and tell the truth in context and with

perspective. that's what we'll do every night at 7:00 on cnbc. i wish we could start tomorrow, but we have to hire some people first. so in a minute >> in a way i wish we should start tonight. all the news cycles that occurred since you went off the air, the co-vid response, black lives matter, defunding police and now the decision on tax returns. let's take that as an example. how would you cover that tonight if you were on the air tonight >> well, it just happened so i would need a minute. viewers should remember this goes back to a subject that the president has said is irrelevant and that is payments to stormy daniels, the adult film star and another. and the southern district cyrus vance in new york is investigating whether the president falsified his records in an effort to conceal whatever it was that happened the president has denied that he

had sex with either of these people, that there was an affair with either of them. they are investigating that. and vance subpoenaed his financial records including his taxes. and the president has said as he does on so many occasions, that he has immunity because he's the president. well, roberts wrote today in a 7-2 decision that, in fact, he doesn't have immunity. that the constitution does not allow for protections when under investigation in a criminal matter and that's what this is. a criminal matter regarding the president of the united states not about the sex or lack thereof as it were but about the finances and whether finances were manipulated to conceal the truth, whatever the truth is and the supreme court has said if vance wants the records, he gets the records we're waiting for another supreme court decision in a separate matter, but also regarding finances this will be -- the president

never wanted this to happen. this will not be a popular decision at the white house. i heard mnuchin say it's a separate matter. it is, but as you say on cnbc every time, follow the money, and that's what vance is doing >> shep, to your point, we're getting that second decision we were looking for, and for that, we'll interrupt quickly here and go back to eamon >> yeah. carl, that's right the second decision is in. the supreme court is throwing out rulings allowing the democratic-led congressional committees to obtain the president's financial records sending the dispute to the lower courts here. so that sort of keeps the supreme court for now anyway out of the position of really regulating a dispute between two independent branches of government which was one of the concerns here on the part of the supreme court. the issue in all of this had been three separate house committees had subpoenaed the president's financial information from his accounting firm and from his banks, capital

1 and deutsche bank. what they wanted was information about the president's financial activities the question constitutionally was whether or not they had a legislative purpose to do that whether or not this was a fishing expedition, so to speak, or whether they were subpoenaing this information for a legitimate investigation that would result in some kind of legislation that would affect the country. the president said this was simply presidential harassment the democratic led committees were after his personal information in order to embarrass him and resisted turning over the information from his third party accounting firm the supreme court saying they're going to turn this back down to the lower courts the supreme court avoiding here taking a skigs that means we're not likely to see those financial documents turned over to the house committees any time soon and it also means we're not likely to see the leaks that often happen on capitol hill when red hot documents enter congressman's hands, they often make it to the press relatively

quickly. now the supreme court is sending it back to the lower courts. >> as mnuchin said, as when things go to congress, they tend to get leaked and when they go to grand jury, they don't. >> that's right. >> shep, we can either go forward on this or talk more about the show i had a question about that. prime time cable is historically ground for confrontation and provocation. what's the strategy around news and facts? and how much ground do you expect it to get >> we expect to put on a newscast, and we expect cnn -- listen to me i'm the new guy. we expect viewers to come from everywhere i mean, if you look across the cable landscape and nothing against anyone, most of my friends in television are in independent television good for them. if you want to tune in at night and hear the opinion that's opposite from yours or have your

own feelings, amplified, go ahead. but if what you're looking for is a newscast, you're hard pressed to find that on cable. there was a time when there was a newscast every 30 minutes. it wasn't that long ago, at least if you're 56 that doesn't exist as much now anymore. and cnbc has made an enormous investment in the concept that people want to know what's really happening not how we think you should feel about it not to reinforce your thoughts and beliefs. here are the facts of the moment the president said you can't have my tax returns and financial information. the supreme court said you're not protected. therefore, the court will -- vance's office in new york will be allowed to have the information. but the supreme court also said we're not going to rule on whether the house committees can also have that information so those are the facts and you and your family can discuss whether that's a good

thing or a bad thing that's not my place. no one cares what i think. but what we're going to do is take in the vast resources of cnbc, combine that with the resources of nbc news, all of nbc's local stations across the country, and hundreds and hundreds and hundreds of journalists, and bring the best most relevant stories from people's lives to their households every night at 7:00 eastern time and i feel like that's a public service. we as journalists are so lucky to have the only job that's specified and laid out in the constitution we are to operate in the public interest, convenience and necessity. and our job is to tell people what's happening to get it right every time but because we're humans, we won't, and when we get it wrong, we'll correct it immediately and loudly across all the platforms where we got it wrong. and can i promise you that our joband our goal and our missio every day is to find the truth

and tell the truth in context and with perspective. without fear or favor. if we're making people upset by telling the truth, that's their problem. >> shep, you gave a speech in november at the international press freedom awards about journalist's ability to do their job. you gave a sizable donation to the committee to protect journalists. this is clearly an issue you've thought about deeply >> i have very good friends who have been kidnapped and held hostage. journalists are under attack around the world they're held for one reason, because they tell the truth. the truth isn't always pleasing. i'm fully aware of that. there's a lot happening in the world right now that's very displeasing. and we're at a moment of national and for that matter, world crisis it's not going well.

so when journalists are under attack, the people's right to know is under attack because we're not working for ourselves. we're working for the people who watch our work and read our work and rely on us for the truth every day. and if governments, especially start locking up journalists, the world is a much worse place. i know journalists are not the most favored person status, but if you remember what it is we're supposed to do, find out and tell you about, ours is a valuable thing our founding fathers said the democracy cannot hold without it so hopefully it will be a roaring success, and other companies will have more straight newscasts, because there's never been a time when we need it more, not in my lifetime >> the news with shepard smith debuts this fall at 7:00 p.m. eastern. shep, on behalf of all of us on and off the air at the network,

we're so glad you're on your way, and if you could start earlier, that would be great congratulations. >> we'll see what happens. thank you so much. taking a quick break here, i believe, as we watch the markets here >> yeah, carl. let's take a peek at the markets. the market softened up the s&p is down now a little more than a quarter of one percent. dow down 168 treasury yields a soggy at the moment the trillion dollar club, all four of those stocks in the lead back in two minutes. ♪ 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. ♪

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it's time for our etf spotlight. looking at the ticker fdis it's up over 30% in the last three months from right near the market lows. bed bath and beyond making up a portion of this index. i should mention amazon by far the largest holding, helps explain some of the performance. bed bath and beyond around 50% since the start of year. it's getting crushed this morning. it will close 200 more stores in seeing a sales decline we'll ask the korceo about it n. stay with us

welcome back, everybody. here's your cnbc news update at this hour. the supreme court has ruled that a large section of eastern

oklahoma remains an american indian reservation the decision means oklahoma prosecutors lack the authority to bring criminal cases against native americans in parts of the state which includes most of tulsa. the university of california is joining harvard and mit in suing the federal government over new rules which would revoke visas of foreign students if their schools conduct all lessons online and the ivy league cancelled all fall sports. they were the first to cancel the basketball tournaments due to covid-19. and in seattle, a final good-bye to the key arena sign that's atop the stadium for 25 years. amazon has secured the naming rights, so going forward it will now be known as climate pledge are > arup to date i'll see you in an hour.

"squawk on the street" continues after a quick break. at the golden opportunity sales event. lease the 2020 nx 300 for $339 a month for 36 months. experience amazing at your lexus dealer.

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comments from the treasury secretary. treasures of bed bath and beyond announcing it will close 200 stores and seeing a 50% decline in sales for q 2 we'll ask the ceo about that and the impact of co-vid on his business next. stay with us i like liberty mutual. they get that no two people are alike and customize your car insurance so you only pay for what you need. what do you think? i don't see it. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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stocks going lower, down 350 on the dow let's get to kourtney reagan with the ceo of bed bath and beyond >> thank you for joining us here we have mark tritton, the ceo of bed bath and beyond. it's his first interview as ceo since taking over in november.

thank you for being with us this morning. when you stepped in it was a big job to reinvent bed bath and beyond, when then a pandemic hit, making the job harder are you still confident you can turn the company around to see profitable, growing sales again in. >> yes, sluabsolutely i think interesting times to take the reigns of a company in turn around. but we've seen an acceleration of our potential strength and opportunities as a result of the co-vid moment. we've seen great recognition of our brand. holmes are important for our customers and we're seeing growth in the category as well as growth to bed bath and beyond we have the strength of our balance sheet and a clear pivot to a digital program it's already accelerated with the covid-19 as we've grown in digital and developed curb side pickup we've seen a great response from our customers. we're seeing great numbers in

june and beyond. so we're highly encouraged by what we see ahead for us >> yeah. 82% overall digital sales during the most recent quarter when most of the stores were closed made up two-thirds of the total sales. you mentioned your balance sheet and part of what you've been doing is evaluating the assets you've got a lot bye bye baby is owned by you christmas tree shops cost plus world market just to name a few maybe not everyone is aware of that bank of america did a study and said almost the entire enterprise value of bed bath beyond is bye bye baby how do you recognize the value of that brand? >> i wouldn't recognize it as the sub title. bed bath and beyond is a powerful asset we see it collected together and connecting with our guests in their life moments from baby to college dorm to first apartment

to new home, marriage and beyond using the strength of our core assets moving forward, we've made a commitment to look at our noncore assets and maybe divest in those that's a work in progress. as we see the core body of our assets pulling together as an enterprise and using them for strength, bye bye baby is centrally inside of that plan. you announced 200 stores will be closed over the next two years. those are big boxes. is that going to be enough for you? and then those that are left over, what's your plan with rent we've been hearing a lot of retailers are not current on their rent with the landlords because of what's happened with covid-19 >> let me take the last part first. in terms of rent, we've worked closely with our landlord partners to establish how we stay liquid in this difficult moment as we come back to stores opening, we're in regular

operations but negotiating our position in terms of the 200 stores, bed bath and beyond, we're taking a comprehensive look at our return on the stores and where we've seen overlap in terms of demographics and shopping areas. we see the need to rationalize that fleet we haven't done anything major before we're taking one strong movement toward this. and we think it's going to have a really strong positive impact on our ebita going forward it marries to a number of stores intersect it and build a plan to move on the 200 over the two-year period. >> for the remaining rent, you're in negotiations with your landlords? are you not totally current with all those rent payments? >> we are in current negotiations and we are continuing those we are just coming into full opening this week. it's been an ongoing discussion

with our landlords >> mark, even before the pandemic, the bed bath and beyond coupon was a staple in american mailboxes i'm wondering how much you had to ramp up promotions during this period to try to get people who might fear their job security or might want to be saving more of their income to make purchases at bed bath and beyond >> we've seen it quite the reverse. a large part of our business was in the coupon space, it was store reliant. with the stores closed, no coupon activity. we normally see less resumption rate of due upocoupons on our o business we've seen that ratio change we actually scaled back on our promotion activity during the co-vid period as we found people were looking for their wants and

needs and we were enforcing and using the coupon when necessa , necessary, >> you were instrumental in your time the private label business developing them and growing customers affinity to shop labels that could only be found at target. are you planning is similar as 35r9 of the bigger better strategy >> yes, they were not super bell done we had good loyalty and we wanted to increase that. and actually create that differentiation, an all important preference for bed bath and beyond and addressing key opening price points to make sure we resonated proper value

every day for customers. so we have a roster of things that we're really excited to share in the coming months >> you compete in the home space, you had a strong digital performance in the quarter but as you look forward you have some big competition from target, amazon, and walmart for price and product. how can you remain competitive were your margins were really crushed in getting what the customers needed when they needed it. >> one of the things we were really encouraged by is coming back into stores while customers are returning and exceeding expectations in terms of same sales growth

fd we had over 100 million. they were completely new, and another 40% of our existing store based customers starting to use us as an omnichannel retailer we think we're coming back with a good brand, strength, ease, and convenience. we're really excited about being actively competing for market share on a level playing field so great indicators. back to college just launched for us in is really interesting. at the moment it is a little later but we're seeing tremendous engagement with digital, strong comps, and deep engagements. we think there is an opportunity for us there and moving forward.

if you go on our website there is a refreshed webb with a new experience we're seeing great signs of momentum there >> i was just going to ask about the back to college with so many schools in question about what it will look like, college in particular when you think about living in the dorm, how is that looking for you. can you go into thousand is looking, the same type of spending what will happen there if there is no real back to college in a regular sense? >> we made a meaningful pivot as a consolidated line up of what the new bed bath and beyond could engage with customers. we launched our website several weeks ago and we saw some early engagement, but it was slower than ly.

and we're using data on who is open and who is not but we're continuing with the efforts. we have seen a real interest, through pinterest data, it was up, and safety becomes a major issue inside of that so we provided solutions with a great value add. we're seeing increases in engagement, increases in conversion and sales and now we're seeing that increase at a store level, so we're actively looking at that. >> before we let you go, in advance to the pandemic you saw downgrades to your debt. you talked about liquidity as you look at your debt

profile, how is that impacting your business other made it more difficult to try to have a turn around >> debt is low and the next round of debt is not due until 2024 it is about $250 million we have $1.2 billion in our war chest and we have an abl to another $850 million so we're well stocked we're incredibly liquid. i think what we're able to do is create a cash scenario in may to break even ly qu liquidity is not our issue it is quite small and we have total coverage and we have funds that we can deploy and we're looking to the stability of the retail market

and the times to see how we want to deploy those funds. >> mark, ceo of bed bath and beyond, thank you for joining us here today telling us more about. your story and we hope you keep in touch as this unfolds >> thanks, great to chat with you. >> thanks, when we come back, we'll talk real estate, cyber security, and whether or not the u.s. should ban tiktok that is coming up. what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. mhm, yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything?

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the rent crisis is coming. we have the state's score card on where evictions could be

worse. >> kayla, as you said various evictions will expire. extended unemployment benefits will go away that means by the end of september up to 23 million, or one in five, could be evicted from their homes that is according to on going analysis states hardest hit include utah andwoman they have the highest share of renters at risk. it is close to 400 million californ californians, two million texans and 1.5 million new renters. it looks at state unemployment insurance. those numbers released yesterday

say that 76% of renters made their full payments. 43% were slightly or moderately confident and 4% had no confident at all renters in single family homes appear to be doing better, but american homes for rent and invitation homes are at risk renters in multifamily apartments are having a harder time others could also take a hit so far they have not dropped by much but that could be dcoming soon carl >> thank you we'll see you later on this afternoon. in the meantime, welcome to "squawk alley" we have a hiccup here