good morning, everybody. happy friday and welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we're going to start things out with the markets this morning. the dow is down 350 points in a volatile session yesterday erasing its gains for the week but the nasdaq did push to a new high as it continues to do we've watched this happen again and again. it was helped out, of course, by the same names every time. amazon, microsoft, apple, and netflix. you look at what's been happening with u.s. equity futures, dow is under pressure once again nasdaq is also down by about 32 points but the nasdaq is up by 8 points in asia chinese stocks fell after an eight day winning

streak that sauz the shanghai rise 16% yeah shanghai was down by 2% today. let's see what's happening in the treasury market right now. yields back down below 0.6%. we haven't seen that for awhile. and joe, still chuckling a little bit about football and why we care this time around not the ivies? >> no. but anything i see -- this morning it was eric chemi. i realize out on the cliffs they have that full size cardboard cutout of me so then i was thinking, you know, next week if i don't have like being here some day, i might just put it right here just have something on a loop. less taxes, less government, more -- you know >> a welcome respite >> plus they got sound they're going to pipe in sounds like the tesla, you know, the motors

>> i saw that. >> they're going to pipe in fans cheering and i read this stuff and we go, okay >> i want a cutout >> this makes sense. put an entire stadium full of cardboard cutouts. >> yes >> and we all go, yeah, that makes sense. >> but people would do it. because i was thinking the camera would go in on the crowd and you'd go, there i am there's mom! i was watching that thinking people are definitely going to want to do this. >> but this has been a slow -- sort of a slow bleed to what to expect the stadiums are going to be full of cardboard cutouts with piped in -- we would have never believed any of this stuff, would we now it's just -- >> tells you how far we've come. >> yeah. how far we've come or, you know, how much we've i guess lost. but we just accept anything now. anyway, we digress, andrew >> we digress. let's talk about some of these

comments that democratic presidential joe biden made. provocative had comments that the market is now going to be listening to when he was talking about his new economic plan, he said president trump is too focused on the stock market during the coronavirus pandemic. >> throughout this crisis, donald trump has been almost singularly focused on the stock market the dow and nasdaq not you. not your families. if i'm fortunate enough to be elected president, i'll be laser focused on working families. the middle class families i came from here in scranton. not the wealthy investor class they don't need me >> we're going to talk more about those comments and biden's tax proposal and what it may mean for your money. we'll do all of that at 7:30 a.m. this morning. joe? >> thanks, andrew.

people do have, you know, mutual funds and it's not just all wealthy people that even -- that's not even talking about that sometimes a vibrant stock market indicates a company's usually -- maybe not now -- but it usually indicates that companies are doing okay which means they might be hiring and be able to raise wages and stuff like that. i mean, you only need to go back to economic downturns that are led by a weak stock market it may not be totally correlated and nobody is saying it is, but certainly during the depression or during the financial crisis a weak, horrific, plunging stock market feeds back onto the or is caused by a terrible economy where no one's doing well. i understand his populist rhetoric, but it doesn't really -- it doesn't really hold water. and andrew, i just -- i read this today and i actually didn't

think about you. i don't think about you in this. i was thinking of seth hanlon coming up. don't waste time arguing with people whose opinions are opposite of your own i don't know what doyle for a living so accept the way you look at the world is different and find ways to make it work and i read that -- >> i love it >> but i did not think about you. >> you do think of me? >> no. i thought of seth who's coming on then i read yours. you're pisces, right >> i am. >> you're on that middle thing >> i'm on the depending on what newspaper you're reading >> on the cusp >> well, what do you think this says shut out the noise and listen to what your inner voice has to tell you. becky, i'll get to yours later i'll probably get yelled at for reading horoscopes on the air. anyway >> one thing, i was surprised by this, joe. i don't know if this is accurate, i think it is though

did you know actually only 44% of americans have any contact at all with the stock market? >> even in 401(k)s and mutual funds? >> even 401(k)s and the like i don't know if that statistic is totally accurate. but i think it's directionally correct. and it was a lot lower frankly than i had anticipated >> i think it's probably come down because there's not as many pensions >> people have had to use money and savings to live. i mean, i have heard what percentage of people live paycheck to paycheck, run out of money or would run out of money if they didn't get a paycheck. or what percentage of people don't have $500 for an emergency. it's an unbelievable number. >> yeah. the number of jobs that are not connected, you know, that are not considered full-time employees. if you look at the digital economy and how that has changed so many things too >> right all right. >> can't get a 401(k) if you're not an employee.

>> that was my first point my second point, andrew, i think holds true that -- >> you don't want to have a low stock market nobody wants a low stock market. this market obviously feels a little bit out of sync with the unemployment picture, but yes. >> it is a barometer of the health of, you know, not everything in the economy and not wages and not, you know, not income inequality. it may not necessarily be a harbinger of that. but if you had to pick, you want a plunging stock market or one that is rising, you take the rising one >> cheers to that. united and its pilots union have reached tentative agreements for early retirement and voluntary furloughs. the other three biggest u.s. carriers have already reached deals with the pilots. earlier this week, united warned about 40% of its workforce could be furloughed when federal aid restrictions expire on october 1st. >> you know, the timing of this does make me question.

because it was surprising to hear united talking about that earlier this week. warning that they were going to lay off up to 40% of their workforce all the way in october 1st. we knew things were bad, but we also heard some airlines were negotiating with the government to try to come up with additional aid that might be brought in that's why i thought it was kind of odd at the time that united would be talking about layoffs coming they must not have needed more money from the government. but they may have been something to give them additional leverage in talks with the pilots union too. go ahead, joe. >> i made some reservations for a flight >> did you really? >> yeah. >> it's in december. what are the odds? >> yeah. yeah >> i did say can i pick a seat and she said, you can pick one wherever you want.

literally. >> the whole plane's open. >> kind of so i don't know. i don't know what any -- i mean -- and the stock price of united indicates things aren't so flush right now which is once again sort of a proxy for how busy >> okay. real quick though and it's off topic, was it a good price you know i like -- i get pleasure out of being cheap. was it a good ticket price >> it was a very good price. and we've had this argument for years. you know, i don't argue anymore because it just says not to. but airfare 30 years ago is the same as it is now, andrew. and you never give the carriers any credit for that. you don't. remember if you wanted to go to florida like in the '70s and '80s, it was like $500. so this was -- they've treated us very well, the airline industry okay so just nod your head yes. >> pandemic pricing. >> they're wonderful people, all those airline people anyway

how come all the fares are exactly the same >> you should read your horoscopes every day i like this. >> it's also friday. it's also friday >> it is friday. >> you know what that means? that i'm in love >> you're welcoming it i like it. embracing it all, joe. yeah we'll play that for you in a bit. meantime, hong kong is going to be suspending all schools starting on monday because of a spike in coronavirus cases there. most of the city schools have been closed since february with the move to online learning. hong kong reported 42 new cases yesterday and the second consecutive day of rising local infections and guys, that's just a little telling. you know, they have 42 new infections and they shut down the schools. it's going to be difficult as we head towards september here. >> yeah, it is 28 vaccine developments or something. 28 people working on -- 28 different entities working on it fingers crossed. this is the big ten.

so now we're getting serious here big ten athletic conference has canceled non-conference athletic competitions that doesn't save you, rutgers, from playing michigan or ohio state, becky >> yet i know >> so it's not a panacea for your players but i don't know what we're going to do. and this is temporary here and this could -- they could cancel everything. the decision will help the conference limit travel and ensure universal testing of teams under its control. the decision will strike 42 non-conference football games from the schedule including matchups including michigan and ohio state the conference allows for the possibility of not playing at all this fall. notre dame, that's what i thought. notre dame/michigan. much more on this topic later

this hour. a quick check on the cheering section at -- oh they got it out. there it is. >> you look like you should be standing on the sidelines in that getup that is not a sitting in the crowds >> what if we bring it here? it won't fit in the chair, will it if we just stick it there and can you do the audio >> won't argue with anybody. >> i say the same crap all over -- oh, there it is. all right. great. that's beautiful >> where's the audio from the you driving the car. >> no, no, no. no, no, no hey. didn't we have those big heads we all had those big heads what are those called? >> we do called fat heads >> what are you doing? >> fat heads >> we had those. we could use those where are those? >> we still do >> i think we do have them

somewhere. maybe we'll drag those out they're probably back at englewood cliffs somewhere it's friday. anyway friday with terrible serious news to talk about, unfortunately coming up. >> yeah. when we come back, covid cases surging in hot spot states several governors mandating masks to help slow the spread. we'll check in with dr. scott gottlieb next. and check out shares of bed bath & beyond they said they will close over 200 stores in the next two years. that stock fell nearly 25% in yesterday's session. we'll be right back. usaa is made for what's next no matter what challenges life throws at you, we're always here to help with fast response and great service and it doesn't stop there we're also here to help look ahead that's why we're helping members catch up by spreading any missed usaa insurance payments over the next twelve months

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welcome back, everybody. coronavirus cases continue to rise in california, texas, and florida. according to the latest figures, the seven-day averages of total cases is up about 26% in california 19% in texas, and about 30% in florida. yesterday florida reported a record number of covid-19 deaths and hospitalizations joining us right now to talk more about all of this is dr. scott gottlieb he's a cnbc contributor and serves on the boards of illumina and pfizer dr. gottlieb, good morning good to see you. >> good morning. >> let's talk a little bit about the cases and what we're seeing and some of the extreme measures we were just talking about in

hong kong they are closing schools now because they had a new surge in cases that surge was 42 cases. and it kind of puts things in perspective when you think about the number of cases that we're seeing in some areas here and how we're going to really be up against things as we try to get back to school in the fall i know this is a topic we talk about almost every day, but it's something i think parents everywhere are thinking about constantly trying to figure out how they're going to handle this if the schools aren't open in the fall we've been watching some cases of some outbreaks at least at a summer camp in missouri. i just wonder if there are lessons you can take out of that that may be helpful as we get back to school >> well, we don't have a national strategy when it comes to coronavirus we have state strategies and there's really two dichotomies in this country. michigan massachusetts, maryland that really sought to crush the virus like the asian nations like western europe.

and in their states mostly in the south that have adopted something akin to the swedish model. they're allowing spread. they want to manage it to a point where their health care system doesn't become overrun. i don't think that florida or texas or arizona for that matter are seeking to crush the virus at this point. i think they're just trying to keep the numbers down so their health care systems don't become overwhelmed. and like sweden, i think for the most part they'll be willing to open the schools against that backdrop they seem to be willing to do that i think on a local level, it might be hard for certain districts to open just because the health care systems might be overrun in certain parts of those states in three or four weeks when they have to make those decisions. but for the most part if they're willing to open against the backdrop of a reasonable amount of spread but their health care systems have not gone into this super surge capacity, i think they're going to do it you know, and we'll have to see what happens in countries where they opened against the backdrop

of a reasonable degree of spread you did see outbreaks in schools. remember we talk about germany and norway being successes in terms of being able to reopen schools. but they reopened against the backdrop of having crushed their virus. sweden kept the schools open through most of their virus. but they implemented stringent measures in the schools. israel tried to reopen the schools and had big outbreaks and had to reclose some of them. so i think that in the south in these states like texas and florida, they're going to be willing to open against the backdrop of spread they're not going to be fully eliminate these epidemics by august >> you know, we are the united states of america and even though these are different tactics these states are taking, there's no closure of the borders. there is free travel between them you may have some soft governors here in the northeast saying if you come in from one of these other states, you have to self-quarantine for 14 days. there's no way to enforce that

i know people just around here who are not following that enforcement. what's to say that this is not going to surge again in the northeast? >> well, i mean, that's the problem. we have a lot of infection in this country so it's going to be hard to keep it out of the northeast. i think our borders are fairly pore ous to your point. paying a pretty big sacrifice to crush the virus to not have it reimported back into the states and see epidemics heading into the fall if we had a more uniformed strategy, that would be better to have one mind around it that we wanted to fully eliminate spread and want to crush the virus. at this point, it's going to be hard with so much infection around the country. it's going to be hard to get to a point where you could, you know, you're not going to eliminate the infection but get it down to levels that are much lower. the prevalence of infection in the country right now must be

pretty high. it must be on the order of 150, 1 in 175 people have the infection right now. before when we were burning around 20,000 infections a day, the prevalence was 1 in 200 people now it must be higher than that. >> scott, that's a strong argument for a national policy were you in favor of that? are you in favor of that now >> well, we haven't had it i don't think we're going to get it you know, this has really been helpful to have a uniform approach on how we're dealing with this on a state by state basis. we didn't to that. this has been largely up to the states that's why we've seen a patch work of solutions and outcomes you're not going to be able to unring that bell now it's up to the states to try to implement measures to try to

hold onto their gains. i wouldn't be surprised to see some get more aggressive on enforcing those. starting to trace people off of planes an things like that monitor people off of planes i wouldn't be surprised to see that start to happen as, you know, these states in the northeast continue to have relatively quiet periods right now and you watch things get worse in the south remember, with texas and florida right now, their health care systems have a lot of residual capacity in arizona it's higher it's almost 25%. that's going to continue to go up it's going to get worse before it gets better i think as you see those states get pressed, i think there's going to be more concern in states like new york, new jersey, connecticut, massachusetts that, you know, they don't want to head into a fall carrying more infection that's getting reimported. >> not sure if you heard us talking earlier about the big ten saying they're only going to be playing games in the

conference for the football season coming up in the fall they did leave open the possibility of canceling that too. do you expect to see -- i mean, it -- i feel like we're all kind of sliding towards this resignation that, okay, things are not going to look like normal we're not going to get to go back to school on a normal basis. i'm sliding towards resignation that my kids probably aren't going to play sports is that a defeatist attitude or realistic as many. >> i think the schools are going to prioritize keeping the classrooms open. so the extracurricular activities, if they're going to sacrifice something they're probably going to look to do that and focus resources on keeping classes open and to the extent they can keep outbreaks from happening in the school try to sand away the things that are sort of extracurricular that could have outbreaks

regimes for testing students and athletes as well many are talking about testing the entire student population every two or three days. it's going to be harder for public schools to do that not because the technology doesn't exist and the capacity it's there it's resources it's expensive so local districts are going to have a hard time doing that. you might see the specter of have and have nots when it comes to the public schools. because some districts that have more money that are wealthier might implement some more stringent measures including testing while other districts that are harder pressed don't have the local resources to do it won't be able to adopt those tools. >> dr. gottlieb, thank you it's good seeing you have a good weekend. we'll see you next week. >> thanks a lot. coming up, andrew's got this story. hopefully you've looked into the details of this, andrew. i'm talking -- >> which one's that? >> barbados. a new solution. >> yes

>> for those likely to be stuck working remotely for the foreseeable future what about working from barbados there's an offer from that country. we'll explain that next. you know, i know florida there's no state tax maybe you can just have no taxes? barbados not that we would want to do that as we head to break, take a look at the biggest premarket decliners in the s&p 500 we're coming right back. when we started carvana, they told us that selling cars 100% online wouldn't work. but we went to work.

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okay, folks. welcome back to "squawk box. this is executive edge we've got a story for you. joe mentioned it before the commercial break if you are sick of working from home and you want a change of scenery, consider this, folks. the prime minister of barbados considering letting visitors stay and work remotely from the island for a year. lawmakers there considering what they're calling a 12-month barbados welcome stamp it would seek to help replace lost tourism revenue there have been 98 confirmed cases of covid-19 in barbados. the island has been relaxing restrictions and has lifted curfews. i have been trying, joe. i know you'll say it's

cynical -- to find the tax rate in barbados. tax rate for 2020 is about 28% i don't believe the welcome stamp comes with a tax rebate of any sort just so we're on the same page. >> well, he's saying come on down >> but they will let you work from there >> right but is it rent free? has he got a bunch of places where you can just move in you know, he's saying come down. what does it actually include? i could go to barbados any time i want, i think, as long as i can pay for the hotel. >> well, i think sort of like the united states, you actually -- you can't just come work in barbados >> okay. can't work >> i think you can't willy-nilly show up and do whatever you want >> still going to be costly. >> i think you go on vacation there. you get a tourist visa, but they're giving a longer one. >> yeah. there are a lot of states that wouldn't take you from the -- there are states within the united states that don't want people

the idea they're saying come on down, we welcome you you know, that's different in itself too >> right but i think it's -- you know come down. it's only $2,000 a night >> oh. i'm getting more information so here's the deal yeah yes. the tax rate for -- the tax rate is only 12.5% on taxable income, but that's -- well if it's under 50,000 barbad$50, if it's over it's $28. residential income is taxed at 15%. >> new york city is not going to let go of that income even if you're not there it sounds like they are fighting people already who are working in the hamptons and the rest you're going to pay the new york city taxes you normally do and 12.5% in barbados. that's a big fight there are so many of us who haven't been working in new york for months and we're still paying new york city and state

taxes. >> right right. and you get -- it's expensive to live in barbados until you live in the center of the island or something. i don't know i think we just are stuck. >> you're not sold >> no. i'll stay here >> i'd love to hear more about this though. this is going to be a fight between all these municipalities, these cities that no longer have all the workers in them. there's cities everywhere where people are working out in the suburbs, not in the city or state limits anymore and it's going to be an interesting case study to see what happens >> the whole movement of millennials to the city and then i guess they eventually move out when they have kids, but that's all been -- it's up in the air now. the allure and the attraction of the urban environment. you know, with covid, it changed everything you wonder about bedroom communities. wouldn't the real estate be going up >> they are.

>> huh >> it's wild the prices that are going on i mean, i'm up in connecticut and you're just watching the real estate prices just go up and up and up and up >> really? is that true many. >> yeah. >> same thing in new jersey. meantime, i'll be returning on the show from barbados because you could be anywhere at this point >> you might be there now. >> could be. when we return tech stocks on a roll pushing the nasdaq to new highs. we're going to talk strategy we'll do that after the break. take a look at futures at this hour let's show you what's going on three hours before the opening bell and looks like we'd open down about 150 points on the dow. off marginally on the nasdaq and up on the s&p 500. as we head to break, look at yesterday's s&p 500 winners and losers

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good morning welcome back to "squawk box. take a look at u.s. equity futures. bit of a mixed picture this morning. the s&p is looking up, up marginally dow off, though, about 150 points nasdaq looking to open down 1 the nasdaq continues to climb, to power through closing at another all-time high. now more than 3% just this week,

folks. joining us right now is sam stovall from cfra. and sam, i feel like we're asking the same questions over and over again because the question is, can these tech stocks keep going up? >> morning, andrew i think they can because when you look at earnings growth which is expected to be much stronger this year than the s&p 500 also positive gains next year the long-term growth rate for the tech sector at 13% is better than that for the overall marketplace. and on a relative valuation b e basis, it's trading at a discount to the s&p 500 over the last 20 years. so there's still good upside potential and if we end up having to go back into a yellow mode, if you will, for the covid situation, again there's going to be increased demand for technology to -- in order to work and live from home.

>> what do you make about the broader prognosis for the economy in the market? you look at the airlines this week they're down i think about 8% across the board that clearly has to be weighing on confidence in terms of where we are as a country and how quickly we can proceed >> true. also taking a look at some of the retailers. brooks brothers. the company filing for bankruptcy best buy yesterday as you reported earlier down 25% yesterday. walgreens, et cetera so we're going to be seeing very important data come out in this second quarter reporting period. quite frankly, those that miss are going to get hit hard. those such as fedex earlier are likely to be seeing some very strong price appreciation. so i think in general the market continues to look for a "v" shape recovery we're calling for a 26% annualized gain in gdp in the third quarter followed by a

nearly 9%. and nearly 6% for all of next year and the earnings expectations are pretty much in line with those forecasts. >> so sam, i think i understand why you're saying to some extent that things may worsen but these are some of the stocks that wouldn't necessarily be as affected because they can actually do well if things do worsen covid-wise but my question is, initially it was a rising tide. and the averages went up from those lows and now people have said it's probably going to get tougher. what you're seeing in these tech stocks now is the narrowing. does that show that there's a reason they're going up because they can still do well or is it just showing that the speculation has now moved into the high fliers, the money from the fed and everything else? i mean, is it a good thing or a bad thing? >> well, i think it's a good thing certainly for tech

and i don't necessarily think it's such a bad thing for the market overall granted right now we have 50% of the near 150 sub-industries in the s&p that are trading above their 50-day moving average. that's down from more than 90% just a couple of weeks ago on june 8th and also looking at the 200-day moving average you have only about a third of the sub-industry so we've been coming down in a sense digesting the gains and slowing the overall momentum when you look on a relative basis which areas have the better strength. and we all know that growth stocks tend to do much better than value stocks in a low interest rate environment. which is where we are today. >> okay. >> sam, in terms of the numbers we're going to see, earnings reports, how do you look through them and how do you not?

and the other piece is across the board yesterday we talked to institutional investors. they say two, three months out from now we're either going to get a vaccine or not it's going to be binary. if you're in the market, you're going to win if there is a vaccine. if yo occur out of the market, you're going to lose do you agree with that assessment >> well, i think that wall street is definitely looking beyond the valley. expectations are for a 45% decline in earnings this quarter, 25% decline for all of 2020 but then a 30% gain next year for large caps 50% gain in earnings for mid-caps and a more than 100% surge for small caps and we're also expecting to see very strong results for developing and emerging markets. and maybe one of the reasons for that is expectations for a vaccine to come out in the first half of 2021

i don't think it's either just on or off meaning we continue with a bull market or we fall into a depression. i think that the market continues to fluctuate right now we're in the third quarter which historically is the weakest of all quarters. we are coming up to the november elections. if the market declines, history basically says worry about the potential for a replacement of the administration and that usually throws volatility into the market >> sam, always good to see you have a great weekend thanks for joining us this morning. >> my pleasure >> becky thanks, andrew still to come this morning, we've got some stocks to watch ahead of the opening bell. and then college football's fall season in jeopardy as the nba prepares to restart games. we'll dig into the reopening plans in just a few minutes. and a remund inder, everybody you can listen to us any time on

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welcome back one stock to watch, ford may have to shut some u.s. plants as early as next week due to a lack of engines from mexico the u.s. ambassador giving us the word on this a ford executive says the automaker has several pliers operating under restrictions imposed in parts of mexico it's not sustainable with u.s. plants that are running at 100%. coming up, college football in the fall is looking less certain after some news from the big ten. cutting its non-conference

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we've been reporting the big ten athletic conference has canceled non-conference football games. it will limit travel and ensure universal testing of teams under its control. the move comes as nba players from 22 teams arrive for the league's restart in orlando this week and two major league soccer teams had to pull out of their restarted season due to higher rates of covid-19 infection. joining us now for more, washington university founding director of sports business program and sports impact founder and president and our own sports business reporter patrick, we keep talking to dr. scott gottlieb who says that

colleges can't do what pro sports is able to do in terms of protecting players and maybe they have an easier path back. do you agree with >> joe, i think he is right. when you have a bubble like major league soccer, the nba, nhl, it's in edmonton and toronto, it does create more containment. one of my concerns, joe, when i look at the college game is trusting young people to do the right thing. here i am in los angeles daily i'm going over to the track at ucla and i'm seeing 30, 40, 50 people running, doing stairs, this, that and the other. most of them not wearing masks so you wonder, you know, how is this going to play out with young people being on a college

campus i'd love for it to work and i think the conference only strategy is a smart way to go if you're going to try to do it i just have my reservations it's going to ask. >> jabari, do you think there's a big disconnect between college and pro? should we just write off college? i do like college football and hoops a lot better than -- just for me in terms of my interest and draft kings and everything else college is -- looks like it may not happen, right? we've talked about this, jabari, i know i've got to put off my -- >> i'm not much of a supporter as you are with draft kings. college has to be different from pros their total proposition value to go down in these bubbles are much higher. these college kids are not

getting paid like the pros are remember, these are public institutions with government money so the government are behind a lot of these institutions and if we're having problems, you know, as a society dealing with covid, you have to think that the government institutions that fund a lot of these public institutions that you see through ncaa tournaments, they're not going to allow kids to go back when it's unsafe. at that point they'll be opening up to possible types of lawsuits from worker's comp type of issues to more you have to be very careful. i applaud the ivy league for doing something that is very, very extreme and hard to do but, again, the ivy league does not have as much tied up in football it's easier to say they can cancel than the power five that have millions and millions tied up it won't be an easy decision believe me, i understand by canceling what you're trying to avoid, and that's by helping kids survive for the future so they can enjoy their careers >> and they're young and we know how -- at least a little bit

about covid. they're not quite as at risk but losing anyone would be devastating to many of the decisions that were made, right, patrick? it's untenable to be able to move forward even if the risk is whatever it is it's -- if it's less than 1%, you still can't do it. >> that's right. you know, jabari just touched on it you think of these professional athletes you mentioned, joe, major league soccer two teams in the mls's tournament in orlando having to pull out in the women's tournament, one team had to pulled out these are people getting paid. they had financial incentive to be safe. if you have student athletes without the same financial incentive, they may be more lax in their behaviors one thing on this, stanford cut 11 of those 36 college sports. now prior to that most of the sports that had been cut in

college athletics had been from the group of five schools, which are the schools that don't generate as much money, schools from the mac, mountain west, but withstand ford's move the other day, that just brings to bear just how much financial pressure is on these schools. if you don't have a college football season, all the more likely that many power five schools who have already furloughed staff, cut salaries, so forth, you're going to see some of them start cutting programs >> you know, jabari -- >> so -- >> go ahead. yeah >> the mls, first of all, me and patrick was talking about this last night credit to them it's easy to say everything they're not doing. i watched one of their broadcasts and i thought they did a great job. miking up the players to take you away from the empty air you'll hear. camera angles were fascinating they did a good job. i'm not going to sit here and not give the mls credit.

i'm curious how the nb a&m lb. i think did a a good job their broadcast will be some things that we're going to be used to moving forward miking up the players, it was a great idea credit to them it's hard. it's hard to bring these sports back because you're dealing with human beings, these lives. you do not have professional leagues without the people and that's why you have to protect the people. >> just makes me think, jabari, you look at what -- you look at the money involved and you look at what networks are willing to pay for nfl and you see -- you've got to keep that in the back of your mind at all times, that there's going to be a lot of motivation and maybe misdirected and misguided and motivation that's not -- that doesn't have the players' well-being in mind i mean, just because the players make a lot of money in

professional sports and there's a lot of money for everyone involved in it, does that mean you should take more risk and the money makes up for the risk to your health i don't know there's a big impetus to do that i'm not sure -- we need to keep it in mind constantly, that money shouldn't be the overriding factor here >> it shouldn't be -- >> yeah, joe, but at the same time from an athlete's point of view -- >> i'm sorry, patrick. >> go ahead, jabari. >> from an athlete's point of view, it's a manageable risk >> well, it's not a manageable risk but it's a risk that some of these guys -- i understand why they take it remember something, joe. the owners will always get their money back they cash out, they will be fine players, this is money that's gone they'll never see it again i understand why you have to go and make the money at the end of the day, we all have a livelihood. i'm not up at 6:00 in the

morning for fun and games. i'm getting paid to do this. if you don't play, you don't get paid that's money that you'll never, ever get back. i understand the risk, i understand the nba they're doing a good job trying to protect people. adam silver was one of the first people i heard say the data, not the date the nba and disney are putting all of that aside and they are going straight into the hot spot number one and they're putting their science on the line and they're saying, listen, we believe that disney has the proper protocols, that we have the proper protocols to get this thing done we have enough players to get it done no turning back. i understand why they're there this is profits player wise they'll never get it back. owners can make this they'll cash out players never get the money back. >> thank you, jabari patrick, thanks. these young guys, great health, but, you know, even if it is -- what do you think it is for those guys probably less than 1%, but there

are anecdotal stories that scar everybody to death about what the virus has done to young people tough one. tough one to try to figure out thank you both patrick, jabari, see you soon. >> thank you, guys >> andrew. >> okay. coming up, two big hours ahead. much more on the markets as we head into the last trading day of the week. take a looatk the biggest losers in the s&p so far we're back in just a moment. ♪ 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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tale of two markets. the nasdaq hits an all-time high we will break down what you need to watch ahead of the weekend. joe biden laying out his plans for an economic recovery back on the table, corporate tax hikes. we'll debate his message to wall street and his plan to get the country back on its feet. disney world planning to reopen despite a rise in covid cases. a look at the company and what it means to investors as the second hour of "squawk box" continues 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. a little bit better on the dow down 100 points. the s&p 500 looking higher 12 points up the nasdaq off just about 31 points joe? >> thanks, andrew. coronavirus concerns pushing investors further into tech stocks dow raised the week to date gains during yesterday's session. mike santoli joins us now with more good morning, mike >> good morning, joe continues to be a story of what's working, what's not saying the glass is half full, half empty here's a look at data. stocks versus bonds. s&p 500 against the 10 year treasury yield that is also kind of plummeting some lows that we've seen earlier in the spring.

now you would look at that and say that somehow there's a different message being told here by the way, the treasury yield's really remaining compressed even as there's a ton of new treasury supply it feels like there's a firm bet as short-term rates remain anchored at zero there's a way to explain the divergence stocks are over optimistic or pessimistic. in the market, banks, small caps against the s&p 500,this also would be on a year to date basis. the victims of low yields are suffering and that would be, of course, banks, small cap big underperformance you're seeing year to date. those stocks that are working, we keep talking about the big tech stocks, they trade much more in line with bonds. they are essentially bonds with some extra up side they are disinflationary assets if you want to think about it that way we don't know how long it can stretch. we don't know if it can make

sense that amazon is up $200 million in market cap which is what's going on this month you can explain what's going on relative to the bond market without saying, you know, bonds get it and stocks don't, joe >> we were talking about it earlier, mike. i hadn't thought of it that way. i'm not sure technology just illustrates froth or whether it illustrates a part of the market that will be somewhat resistant to a resurgence. that was a question i asked, you know what i mean >> no, absolutely. i think it can be both i think you can have a very solid rationale for why people are gravitating there. it can get crowded and you can overpay for the certainty that they seem to deliver that's the riddle. >> watching it is -- you've got to admit certain days where we've talked about the -- it's always red on the center one, which is the

dow, and usually red on the s&p but it's almost never on the nasdaq it's just like -- it's like relentless >> it's apple and microsoft in particular they seem to trade in line and just kind of pile up market value without really reference to what's going on headline wise or anything. >> best in class. mike, stay with us let's continue this conversation for that we bring in liz young she's with bny melon investment manageme management we'll talk more about investing in the market. you're still in the camp of being on the offense, right? >> i am. i think the best way to look at this is that the market has been comfortable with the resurgence in cases but not a resurgence in restrictions as long as we can keep the restrictions at a manageable level, there's up side especially over the long term. the reason i'm talking about still being aggressive in

stocks, defense isn't what leads us out of recessions in order to win the game, you have to be on the offense. if you think about the objective of equities in a portfolio, it's to produce growth. you have to own things that are going to produce that growth is it going to happen in a straight line? no especially not going into an election season, going into a time when we're expecting another fiscal package headwinds, seasonality, all of that happening in the next 60 days that will pressure us over the longer terms, if we look out 6 to 12 months from now, we do expect things to be higher >> in terms of the conversation we were just having with mike, would you be telling people to be piling into the crowded tech trade we've seen that's done so well or would you be telling people it's time to start nibbling on the stocks that have underperformed like the banks even though you're looking at the 10-year yield. >> i'm not a big bank bull even though i work for a big bank i'm not a big bank bull.

what are the things that would drive bank returns you have to look at the price return probably not going to see a lot of that with such a flat yield curve. now the limit on dividends that's another headwind for bank returns. i wouldn't necessarily be looking at banks, but the question of technology is right now if you're already in it, do you stay in it yes. if you are not in it, do you add new money? i don't think this is the best entry point especially as we head into a period of time over the next 60 to 90 days we probably see a little bit of weakness when we get weakness tech stocks get hit if we have weakness on big mac crow themes and we have some of that head wind that could be coming down the pike. >> if you wouldn't put your money in the tech trade, you wouldn't put it in banks, where would you put new money to work right now? >> we're optimistic on this recovery and that it does hold up i think you need to be in those cyclical areas

i would be in industrials. i would be in small caps you have to look in the small gap space. the small cap growth space is different than large cap growth. small cap growth is health care versus large cap is tech i do still think you have to have your foot on the pedal here >> mike, can you explain why the 10-year is back below 0.6% i don't get it i know there's concern about coronavirus cases or different things happening, but it's shocking to see these levels at this point >> yeah. first of all, it starts with 0% short rates as far as the eye can see. it starts with scarcity around the world. and then just even if we are moving in the right direction on things like employment and things like growth, the bond market is probably very comfortable that there's so much kind of slack capacity in the economy that's built up over a

short period of time that it will be a real long while before you have to worry about risks up, inflationary uptick or anything like that i don't know if there's a better explanation of all of those things together. there's still the yield premium in u.s. treasuries i think there's a lot more attention on the shorter end of the treasury yield, like five years and things like that people basically saying maybe rates don't go up from the fed for a long portion of that five year you would manage. >> mike, let me ask you one more question about the markets and the feel of it it feels to me at least like you're not seeing the sort of sleepy trading days that you would normally be seeing that week after fourth of july. i feel like people are on edge people are used to working from home so even if they're somewhere trying to be on vacation, i feel like people are more involved. what do volumes tell you >> it's jumpier than you expect.

it's illiquid. there is small trader retail-type activity that investors want to interact with. that keeps bubbling up the bid in the teslas of the world and some of the smaller kind of faster-moving stocks, that has remained. i do think if i look at a volatility index, that means big money is hedged up a little bit on alert for something that can come down the road july is seasonally a strong month. you actually have more excuses for the overall market to break down if you want to look at the news the market's decided not to. you can take that however you want it doesn't seem that it's entirely gone. >> mike, thank you we will see you later today. i know you're around for the 9:00 liz, thank you have a great weekend >> thank you >> andrew. when we come back, a lot

more on "squawk box" this morning. companies like procter & gamble taking on racial bias. we're going to speak to the head of strategy for p&g after the break about social experiment in the battle against racism. a check on the housing market data being released a few minutes ago that could shed a light on the state of the real estate industry as we work through this pandemic. 'lta about it after this short break. "squawk" returns 49... 50!

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welcome back to "squawk box. many americans taking a look at the impact on employees and customers when it comes to issues of diversity and inclusion. one organization doubling down on its approach to combatting racism is procter & gamble a video called "the choice" encouraging white americans to speak up about bias. fostering conversation about race between strangers joining us to talk more p&g strategy is damon jones. >> good morning. >> before we get into some of the details, just tell us how this came about. i'm curious about what kind of debate there may or may not have been inside the company about how to approach this >> well, for years we've been

using our voice and position as a leading advertiser to spark these constructive conversation on race and bias back in 2014 we launched a campaign like a girl to talk about gender bias. and we had the talk. black mothers were having with their children and last year the look we wanted to help given all that was happening in the world we know that a lot of the evils we're facing now, racism, sexism, they all start with bias we can't tackle these problems until we begin to talk about them so the challenge is always how do you do that in an accurate way? how do you do that in a way that brings people voices invite them in to be part of the solution that's our objective. >> it's an important message we're living in contentious times amid of what some people are called a cancel culture.

starbucks many years ago put together their race together program which immediately drew criticism despite i think its well intention my question to you is how you think about that sort of nix in terms of how you approach this issue and what kind of feedback you've gotten thus far >> sure. i think what we know because we're all about serving consumers, consumers want to know the values behind the brands they buy every day. as we consider all of these types of programs, we do it in a fair and accurate and very respectful manner. we're very clear on our goals. we want a society that fosters great public discourse, even when we disagree we bring multiple views to the table and we handle those views in a very respectful way we're clear on the objectives and outcomes not everyone is going to disagree we want everyone coming to the table bringing their lived experience and perspectives beyond their own what we did is we paired

strangers together, people with different lived experiences, white, black, gay, straight, all of these images of diversity and we said, let's talk about these things sometimes we disagree. that's the proper process of learning we've actually taken that same process within the walls of p&g. we're walking the talk when it comes to bringing people together and getting through some of those difficult conversations. at the end of the day it's not about a popularity contest, it's about getting to the culture of respect and understanding that we all want to live together. >> how do you think about this in terms of branding i know that may sound crass but that's -- there is a branding element to all of this you know, historically people -- p&g would sell a product this is selling a brand and there really is no -- i mean, there is an over arching brand, but you have lots of brands underneath the umbrella, if you will. >> we do the answer is it's a little bit of both.

there are times we've chosen to speak out using both of our brands secret is a brand that's been very vocal about gender equality doing a lot of work with the u.s. women's national soccer team there are times other brands have gotten in we've used the brand of procter & gamble because we want to make sure that message is clear that there's not another distraction. sometimes people feel the message is to commercial people feel like you're doing it to sell soap we're not doing it for that reason we want a better society those are careful, measured decisions we make making sure it has the impact of really changing minds, opening hearts and leading people to action >> the otherquestion i was going to ask you has to do with advertising, i don't know how much you've been involved with this situation with facebook and some of the others how do you think this changes the advertising approach for a big company like yours >> i mean, i think we've been

clear on the standards of advertising everywhere, right? we're not going to step in and advertise where there's hateful, denigrating, derogatory comment. the higher level objective for us is the accurate and respectful portrayal of all people that's a standard consumers should hold every company to we are seeing lots of consumer interest on that, and we're taking action and really clear on what our standards are. we're applying those standards equally to all of our partners we think we're going to be part of the solution by setting the great example that we've been setting, taking action where it's needed, being very clear on the standards and walking the talk to make sure we're getting the accurate and positive portrayal of people. >> damon, we've got to go. one final question, which is this from a commercial perspective, not advertising on facebook, do you think it's actually had any

impact on the business >> i can't speak for other companies. there are many different ways in which we can choose to get our messages out we're going to put our dollars where those decisions are made in a clear, accurate, respectful way and i think consumers will recognize the things we do for them. >> damon, nice to see you. appreciate what you're doing appreciate you coming on the program this morning thank you. >> great thank you. >> joe. thanks, andrew coming up. mortgage forbearance data. we'll get a check on the health of the housing market. futures have recovered a little bit but threatening triple digits on the dow now. the nasdaq is now down 27. "squawk box" will be right back. time now for today's aflac trivia question. who is the highest paid female e sw wn bcsqwk thanerhecn "ua box" continues not covered by my health insurance. and this is the aflac duck who helped me cover it.

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now the answer to today's aflac trivia question. who is the highest paid female athlete? the answer, tennis star naomi osaka. breaking news on the housing market and new mortgage forbearance numbers. diana olick joins us now with more hey, diana >> reporter: hey, joe. yeah, the numbers of loans in coronavirus mortgage bailouts is dropping, but a lot of borrowers are now extending their terms. as of july 7th the volume of loans in active forbearance where they are allowed to delay for at least three months, it fell by 145,000 week over week

according to black night roughly 4.14 million loans were in forbearance that's 7.8% of all active mortgages. that's the lowest amount since april 28th by category, 6% all backed by fannie and freddie 12% of fha/va loans were in the bailouts private/bank loans 8.2%. the drop was driven by the fact that all of them were started at the beginning of april the majority of those were extended more than 26% of loans in forbearance were extensions for the week ending june 28th. that share has increased steadily for the past three weeks and we expect it to continue to increase i want to turn to another sector of the housing market that is seeing a lot of pain and that is senior housing very vulnerable to covid-19. we just got some new numbers out this morning that it saw a huge

drop in occupancy in the second quarter to just under 85%. that according to the national investor's center. that nearly 3 percentage point decline was the largest quarterly drop since data reporting began 14 years ago it is the lowest occupancy on record the only two markets with occupancy gains were sacramento and cleveland. atlanta and denver experienced the largest occupancy losses that puts several senior housing reits at risk. bentos has an advantage as it owns both senior housing and medical housing, the latter doing much better. seniors looking at different options, whether it's home sharing, multi-generational living with family this is going to be a big issue going forward as senior homes have been hot spots for the virus and seniors are most at risk joe? >> diana, on foreclosures, do you expect to see those just ramp up and become a real

problem at the end of all of this what do you think? >> reporter: no, i don't not like we saw during the last recession. that's because we have a record amount of equity in housing. homeowners are in a far better position than they were 15 years ago. if they weren't able to hold onto the house, if they felt they weren't going to be able to pay that house past the limit on forbearance, they could easily sell it and just get out from under it i don't think we'll see foreclosures but we could see people forced to sell their home. >> senior housing, a lot of construction lately. how does that play into the drop in demand? >> reporter: well, yeah. builders were looking at the aging baby boom division thankfully a lot of it is not really scheduled to come online until next year. hopefully demand will come back. there will be pain in the sector as people decide what they want to do, how they want to live that's a sector of the housing market that's going to be in

trouble, i would think, at least through the end be of this year and going into next one especially as we see the new supply come online. >> diana, thank you. appreciate it. i was looking at the shot. really nice. what are those -- are those blooming beauties? what are those those are really nice. >> what are those again? what are they called hydrangea. >> new computer app where you put the -- you impose the flower on the phone, the picture, it will tell you what flower it is. there are people that have -- i don't know whether you can do that, but i saw it highlighted the other day. that would be good for me, it's like -- i can spot a daisy or a rose. a rose is a rose is a rose thanks, diana. becky. >> joe, there's an app that i used the other day that can identify a bug when you put it over it, too that was really cool it was trying to figure out what the heck it was. >> which ones to squish and

which ones to -- which ones might be eating -- some bugs eat roaches. >> is it a bad one or not? >> a spider is not a bug either. i would never -- i am very gentle with spiders. >> no. >> they go after the bugs we don't like >> mosquitoes. >> i think bats eat mosquitoes so you may not like them. >> they do, in large quantities. >> we used to have a bat house yeah, they're good >> very helpful. still to come on "squawk box" this morning, joe biden's plan for corporate tax hike. we will talk about his plans for an economic recovery right after this break then disney world in orlando is set to open despite the spike in cases in florida the stock seems to be at a covid crossroa crossroads we'll talk about what the reopening will look like and what it means for disney's bottom line. futures at this hour, let's take a look the dow is still under pressure. down by 105.

nasdaq down by 29. s&p off by 10. when we were showing the s&p was higher that was a mistake that was not the case. s&p has been down all morning too in line with the dow and ghknnaaq rit ow it's indicated down by about 11 points we'll be right back. you're first. first to respond. first to put others' lives before your own. and in an emergency, you need a network that puts you first. that connects you to technology to each other and to other agencies.

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former vice president joe biden outlining his plan to revive the economy in the wake of the coronavirus pandemic. his plan includes raising taxes on corporation >> it is time corporate america paid their fair share of taxes

we thought in our administration we should lower the tax from the high 30s to 28%, and lower it to 21 i'm going to raise it back up to 28 provide hundreds of billions of dollars to invest in the growth of this country. in the days of amazon paying nothing in federal income tax will be over. >> joining us now, pwc tax services co-leader and seth hanlon with the center of american taxes fund did anyone tell you i was talking about you earlier? did it get back to you were your ears burning >> i missed that. >> i read my who ahoroscope, the will be people on you won't try and not change i need rohit to do the heavy lifting.

i'm going to preempt what seth is going to say because i saw the vice president yesterday saying that all the promises that the trump administration made about bringing jobs back, manufacturing and how that was going to help wages go up, he said none of that happened and that he was going to make sure that we delivered on these promises this time i went back and just saw in my own mind before the pandemic, i think those were pretty good employment numbers we saw. unemployment was very low. it helped a lot of groups that hadn't participated. we had some of the fastest wage growth that we've seen in a decade and we had some pretty good stock market action did any of that come from the tax cuts and from the -- what we saw the first part of the trump administration or was that all going back to obama and vice president biden and president obama and vice president biden and their policies >> look, i mean, certainly the economy had been growing and

then, you know, you have the tcj, tax cuts and jobs act enacted in the end of 2017 when we looked at the data what we saw in response comparing the eight quarters to the tcj to the 8 quarters after, you saw a significant increase in factors, and significant can't drop in deleveraging and significant increase in research and development all of which will create more innovation, more jobs, kind of continue to fuel the knowledge economy that is the future of the united states. i think there is a story to tell about what happened after the tcj. that quickly gets clouded by the pandemic. >> that was going to be my point, seth. i am not arguing with you right now,i'm not trying to convince you of anything, but i do remember before the pandemic there was just a thought that

democrats were going to have a hard time running against the economy that we had seen prior to the pandemic in terms of unemployment and wage gains and everything else. hearing the vice president say nothing was working now that the pandemic has hit, you're able to say that because we're in dire straits at this point, but i think that's a false narrative, seth i think it would have been tough to run then against the economy. >> i think we're in the last few years of a recovery that began about ten years ago and i think a lot of those positive trends had continued in terms of job growth job growth was slower in the last couple of years than they were during president obama and vice president biden's term. >> when you're at 12% it's easier to get to 5 than 5 from 3. >> there are underlying trends that continued

the promise of the tax cut, right, was there would be such a boom in business investment that u.s. workers would become so productive that they would get a $4,000, $9,000 raise business investment declined after the tax cut. i don't know what numbers they were looking at. that was the big promise of the tax cut and it completely didn't happen what happened was corporate revenues fell off a cliff and they got hundreds of billions in services the message before the pandemic, rank and file workers still weren't sharing in the recovery as well as they should have. those trends are long term >> that was a long-term trend. income inequality got much worse during the obama years because the fed or however you want to blame it when you cut business taxes,

revenues are going to go down. that was the whole point of doing it you're hoping that the growth it engenders, you make up for that elsewhere. rohit, tax revenue did not decline overall at that point. i think it was basically flat, was it not >> well, no. revenues as a percent of gdp did decline. you have a $1.5 trillion tax cut. that's certainly to be expected, although remember, of that $1.5 trillion -- >> decline how much? decline how much, rohit? i remember, did it decline 1%? i thought that tax revenue was fairly flat. >> that's a percentage of gdp. it wasn't like it fell off a cliff. >> right >> nor would you have expected it because even a $1.5 trillion tax cut, remember, that's over ten years. in the same ten-year period the federal government will spend $43 trillion. >> rohit, remember there -- i can just remember that

republicans said we heard there was no magic wand to bring back manufacturing jobs they said, see, we did we were able to do that. seth, is that a false narrative that we did find something that started bringing manufacturing jobs back here we were on our way, weren't we >> the manufacturing sector was in a recession in all of 2019 and i think all of the promise about capital coming back to the united states, investment boom simply didn't pan out and this is before the pandemic. >> rohit >> yeah. so, i mean, we looked at data from the s&p 500 and what we found is between the eight quarters pre-tcj and the end, the data suggested a significant increase in capital expenditures some of it starting before the tcj was enacted. lawmakers said you're going to get a benefit of this starting the first quarter of 2017 so go

ahead and start making the investments. certainly now capital expenditures have bottomed out the whole economy has bottomed out. i think the cap ex data is fairly strong. you can quibble about whether or not there's cause and affect the data is there on capital expenditures if you're comparing eight quarters before the bill was signed into law and eight quarters av it was signed into law. >> so, seth, we wonder if this is the time because of the jobs picture. as an illustration, i heard the vice president talking about amazon amazon doesn't cheat on their taxes, it's just the way the tax laws are written, there are certain times where they are expanding so quickly that they get to appreciate, whatever causes them to be able to have a low tax rate has the good that amazon has done in terms of job creation,

it's a huge amount of people that are now employed by amazon and paying taxes and there's a huge amount, i mean, of wealth that's been created for shareholders and elsewhere, has amazon not contributed to the good of this country and society in spite of not -- you know, what people -- did they not build this did the government really build it for amazon? should they be putatively taxed because they're so successful? >> i don't think this is about punishment at all, it's about a minimum -- essentially what vice president biden is proposing, it's a 15% minimum tax there used to be an alternative minimum tax that the 2017 law got rid of this puts back a sort of version of it. all it's saying is that companies like amazon, enormous companies like amazon that are showing profits for book

purposes but not for tax purposes have to pay at least a minimum amount of tax. so there's nothing punitive here nothing is going to stop companies like amazon from innovating what biden proposed yesterday was another $300 million investment in r&d, 5g, they've brought the economy and innovation forward. >> there are times the government drives innovation there are other times you would like to leave it in innovation we could always have that argument you're very low key. i preempted you. i softened you up. i like this seth a lot more. let me ask you this. do you think that -- there was some criticism that this was like make america great redux. populus what president trump ran on the first time around, we're

hearing it in vice president biden's plan and there's not nearly enough about the new green deal and about some of the other things we heard about during the primaries none of that is really in there. is that disappointing or is it just what happens when it's a general election instead of a primary? >> i think a lot of it you've heard about investments. that's a major part of it. i don't think it's a departure during his stance that democrats were talking about during the primary. everyone is saying, he's sort of borrowing trump's schtick. what he's doing is actually outlining -- you know, he's actually sort of delivering on the suggestion, you know, and the rhetoric that trump had used in 2016 and completely different deliver on >> right rohit, you're a numbers guy. if i got -- if we got a real

flame thrower on the other side, you wouldn't be there to really, you know, push the mcconnell -- you work for mcconnell, right? it's like you don't want me to tell anyone that. >> yes deputy chief of staff before i left and joined enoc. >> i get it, seth. i get it you think you're winning so you're being really gracious you think you've got it in the bag. i don't need to come here flame throwing we're -- we've got a comfortable lead going to be very reasonable, right? huh? >> no lead is comfortable. no one's getting come place september on our side, i guarantee it. >> yeah, right that's a good idea complacency never works. i appreciate that. we're definitely having you back, seth kinder, gentler. >> thanks. >> see you guys. great conversation, joe. when we come back, a check on what's moving in the pre-market

plus the reopening of disney in florida amid the spike in covid-19 cases a look at what it means for investors and the company. talk all about it after the break. 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. don't get mad get e*trade and start trading wow. jim could you ipop the hood for us?? there she is. -turbocharged, right? yes it is. jim, could you uh kick the tires? oh yes. can you change the color inside the car? oh sure. how about blue? that's more cyan but. jump in the back seat, jim. act like my kids. how much longer? -exactly how they sound. it's got massaging seats too, right? oh yeahhhhh. -oh yeahhhhh.

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i can see you, becky you know i can see you at all times. >> i know. >> why do you think i'm taunting you? why do you think i'm taunting you? >> welcome back to "squawk box." it's friday. >> i wouldn't do it if you couldn't see me. >> i'm in love i'm in love with the prospects of having only like 70 minutes left in this -- no, no, no

it's going to be the best 70 minutes we've had, i think i'm not looking forward to the weekend -- >> so pull up a chair, folks >> join us no i'm not looking forward to it anymore than normal. >> as we count down. >> these weeks are hard. people don't understand, they really don't what was it, i was seeing something -- >> i think they do. >> remember yesterday we were talking to arthur brooks i said his son gets up at 5:30, got this great job in idaho on a wheat farm he's living life every day is full. he gets up at 5:30 god, i would love to sleep in until 5:30. >> i think his job is a little tougher. >> it might be i'm not good at things like that the wheat would not get ploughed it wouldn't. we wouldn't have any bread futures down 120 then the marine corps. forget it. i've asked people, what if you cry during basic training?

i think they -- here are some names dragging on the dow today. walgreens, boeing, chevron the biggest laggards this morning as you can see there. leading the s&p 500 lower, united airlines, devon energy, mgm resorts. we will come rhtig back, finish this hour out and move into the new hour stay with us

welcome back to "squawk box. it is a very big week for disney and the magic kingdom and animal

kingdom, yeah, set to reopen it comes amid the spike in coronavirus cases. the stock down 20% the company has a lot riding on the theme park business. julia boorstin joins us on the developing story julia? >> reporter: good morning to you, andrew. disney is starting the phased reopening in disney world in orlando tomorrow this comes after yesterday it started its phased reopening of downtown disney. that's the outdoor mall by the anaheim park including masks and social distancing. this is an important moment for disney's parks and resorts division which last year was the largest by revenue analyst michael nathanson said they lost due to the closures. it comes as the shares are at a crossroads it's down 17% over the last year

now analysts are on average bullish with 13 buy or overweight ratings, 11 holds and one sell rating. telling us the question when parks will return to last year's levels, that depends on the case of infections, health of the economy, consumer's willingness to travel to orlando we're told absent a vaccine, the most important thing for disney is to focus on safety and make sure attendance continues to climb higher we'll have to see how it looks based on the turnout saturday, how consumers feel and we'll have to see what disney says how quickly it can increase capacity remember when they opened the ov overseas parks like shanghai, it was only 20% capacity. >> before you go, how does this fit in with the rest of disney's business we think about streaming, we think about movies how is that part of the business

fairing? how does it relate >> the theatrical part is on hold "mulan" was supposed to come out the end of july. what we're seeing now is the one part of disney's business that is thriving during covid is the streaming part of disney's business that's disney's plus as well as hulu it seems like "hamilton" last weekend was a huge hit for disney we will learn more about streaming numbers, streaming additions when disney reports the next quarterly earnings. back over to you >> julia, thank you very much. >> thanks, andrew. for more on what this means for disney, let's bring in alexia quadrani and tana mobi. welcome to both of you folks you both have buy ratings.

alexia yours is overweight one of the things i noticed in your notes, your only anticipated revenue comes as a little bit of a shock for me being shut down in theaters. why do you think it's only 2.8%. i didn't realize that was such a small part of the overall business >> that's a great question becky, good morning. things have been very fluid the last few weeks and months. we're now seeing spike in cases in florida there's no question we talk about reopening. this is coming at a very inauspicious time for disney that being said, i think there's a lot to be said about, you know, steps that the company have taken already they've got the reopening of shanghai hong kong, tokyo under their belt and with the domestic park close enough for months, one can have some comfort level that there is a huge pent-up

demand you saw what happened downtown disney they're reopening on july 9th. the place was literally mobbed people couldn't wait to get going again. so to your question on revenue, i think it's still very fluid right now. disney florida relies a lot on international visitation and we know that tsa passengers are well off year ago levels all things being said, this is something that i think is subject to being revisited at this point in time as julia alluded to, there are a lot of other businesses that are starting to come back to life. we think it will pick up the slack. >> alexia, julia mentioned one of the biggest things to do is focus on health care and get attendance back up as soon as possible that's a big rolling question. how quickly do you think they'll be able to ramp up attendance and allow people in the park while at the same time being

safe have you figured any of that into your plan on this >> oh, absolutely. i think capacity and attendance is a huge part of the story. so we're assuming that disney will open well below their probably allowed capacity in shanghai i think we'll see the same thing at disney world when they open tomorrow they want to do it carefully to answer your question more directly in terms of what are our assumptions for capacity, we're assuming 20, 25% on opening and then slowly building up to 50% capacity >> guys, we are tight on time so i'd hate to do this. you each have price targets that aren't very far off from where

the stock is now it's at $116 tuna, your price target is 120 alexia, yours is 122 i'll ask you both very quickly would you tell people to sell if it hit your price target >> no, absolutely not. i actually think our price target is 135 so we do have still a long way to go to our price target and it's a question of really the longer term view, what happens with disney+ how can they continue the plan of reopening, both -- in all of the businesses, not just the parks. if you start reopening the parks, the losses start cutting back a lot, which will give people more conviction in forward estimates which will help the stock a lot. >> short answer, we're not asking anyone to sell even at this current price target, which is subject to being revisited. we're still very optimistic. we think the surprise is on the up side. disney is arguably the best position in the media company to recover from this pandemic with

a very solid balance sheet still intact. >> right tuna, alexia, great to see you both, thank you. >> thank you coming up, senator shelly moore capito on the prospects of more economic stimulus "squawk box" coming right back

good morning futures pointing lower as we make our way towards the opening bell this friday morning the dow wiped out the weekly gains in one session yesterday the service sector pushing the nasdaq high. the next round of government stimulus what could it look like. who will benefit

we'll get into the leading proposals. it's a sad question but which retailers are going to be the next to go bankrupt? we saw iconic clothing sellers go bankrupt. the ceo of box.com talk to us about how businesses need to adapt and fast the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc. i am joe kernen along with becky quick and andrew ross sorkin u.s. equity futures are down this morning on the dow. 153. in fact, down on the nasdaq up both sessions. up 53. the s&p down 17 and change treasury yields have not been the key story.

alan greenspan said put that ten year up so we see it all the time we're seeing in recent weeks below .6 at .584 we saw oil prices pulling back a little bit there were some bills and inventories a little bit unexpected this week and then you've got the continuing concerns about the uneven reopening of the economy really not just in this country, andrew we probably have to worry about covid everywhere >> we do we do. here in particular given the continued spike. we're going to start this hour right now with the debate over more government stimulus from washington treasury secretary steven mnuchin says the trump administration does support more payments to americans. >> we do support another round of economic impact payments. you know, in most cases those are not checks, it's direct

deposits and we can get that into hard working americans' bank accounts very quickly >> joining us right now for more on what we can expect from the next stimulus bill, senator shelly moore capito from west virginia good morning to you. what do you think this should look like? how much money should we be spending what should the program -- what should the contours of the program actually be? >> well, i think we've got to look at a couple of things i think we still have issues with our small businesses. we still have many that cannot reopen or cannot open fully. i think we'll probably look at 9 ppp and probably try to tailor it more to the remaining businesses that have yet to reopen or be able to bring as many people back as they need to to have a full economy the other thing is individual assistance we know that the enhanced unemployment runs out at the end of the month that is a source of concern for

many of us, but on two fronts. one, it's a source of concern of those who are still unemployed but also trying to get people back to work we're going to try to weave something there where we can get people back to work but also help those that still can't go back then i think we're going to look at the issue of flexibility of state and local. my governor's received $1.25 billion. he needs to have the flexibility to say to our cities and counties that you can use that to replace lost tax liabilities. we need to have a ceiling on how high we're going to go here. we can't keep throwing trillions and trillions here we need to be very targeted in our relief >> senator, there are a lot of businesses going on, restaurants and the like that don't have

outdoor space are going to move into the fall, the winter. there are lots of businesses where the math isn't going to add up is the ppp meant to help those businesses what businesses don't you think have either access to it now and need it. >> smaller business. things of that nature where you're not going back full board. you can't have a full house of customers and i think that's an issue. so i think we've got to figure out some way to keep those folks connected to their employee like we originally envisioned with the ppp. still able to open the doors we're seeing businesses close. >> senator, that's the question.

i can make an argument that gyms for the next 12 months are going to struggle mightily until you get to a vaccine or some real therapeutic, the chance that you can ever fill gyms up the way you used to, it's a business model up to itself that doesn't work so we have a business on the other side >> well, i think that that's something that we need to look at but at the same time we're looking at large employers across this country. i was talking to somebody last night who owns not just wellness centers but also physical therapy centers. they can't go back full yet either because of the restrictions on distancing so i think those are the ones that maybe lost a second round -- i'm just thinking, a second round is more targeted or something of that nature where

we can gradually work these folks back to full employment. >> hey, senator. good morning >> yes, good morning. >> i've been thinking about some of the big companies, too. obviously the public markets have opened up and a lot of these companies have been able to get additional financing and funding. you are very likely going to see a lot of companies, big companies. we've heard it from places like united and that's an industry that's been hit hard my expectation will be towards the end of this year and next year you've seen other companies that have cut back as they realize the revenue is down, struggling in other areas. what if anything can the government do about that or what happens to those people who are part of those waves of layoffs >> yeah. i think the best thing that we can do is keep our foot on the pedal in terms of development of the vaccine and the testing equipment. i think the same day point of testing, results as you're

walking into a manufacturing facility, you're walking into a university i think is critical we had a hearing on that a week and a half ago where nih and others were moving very rapidly towards that obviously development of the vaccine is very, very critical here as we see the spread start to pop up in certain areas i am concerned about large layoffs. i did see the news on united i think also some companies have realized they don't need as many people as they had before. we saw that in 2008-2009 i think that's a phenomenon as people are working from home, maybe more efficiently in some ways companies are going to say, wait a minute we don't need to be as heavy on the employment side. i think that's a source of concern that we need to monitor as we're moving our way through this trying to work our way out. >> senator, the other question you mentioned lie brilt protection >> yes. >> it's an interesting one because a lot of businesses want that liability protection.

at the same time we have states, if we're being honest, that are being more responsible in terms of how they're even dealing with some of these issues how do you think about liability protection in the context that, you know, some states and businesses are saying, you know, we require masks, others are not. it becomes -- it's a tricky one. >> well, it is, although i would sayit's not just businesses. it's universities. it's non-profits if you have an oxygen company and you are sending people out to other people's homes and you're not adhering to cdc guidelines, not acting responsibly, you need to have an avenue for your employee to say, wait a minute, you caused me to be in an endangered situation. on the other hand, as more and more people are coming back, if our employees are following cdc guidelines, i know they're all a little bit different, but i think we see our national companies setting guidelines

themselves i think they can play a big role here, and i think that -- i think that we have to have this protection in place or we're going to have more difficulty getting people back to work or we're going to have more difficulty with employers calling people back to work if they don't feel like they're adequately covered and they're adequately -- i don't want to say -- if they're not adequately prepared they shouldn't be reopening. if they are adequately prepared, they should. we've done pretty well in our state. i see the statistics we're up right now, but we're up from being like second to the bottom i think you have to put that into context >> okay. senator, we appreciate your time and your perspective and wish you lots of luck we all need it. >> we're rolling to the weekend, aren't we? yes, we are. >> thank you becky. >> thank you thanks, andrew. when we come back, what's really behind the market's tech surge? solid performance from the likes of amazon and apple.

another big driver of course is chips. we have a rundown of the most important sector and the players in it next right now as we head to a break, take a look at shares of united airlines the company and a union representing the 13,000 pilots have reached a tentative agreement for furloughs and early retirement packages. a memo said the deal still needs to be ratified we'll continue to watch it that stock is down 5.25% stay tuned, you are watching "squawk box" on cnbc 49... 50!

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now any room can be a tv room. stream live tv, on demand shows and movies even your dvr recordings. download the xfinity stream app today to stream the entertainment you love. xfinity. the future of awesome. the nasdaq continuing its record run up over 3% this week as the dow tracks for a loss and aside from the faang names, much

of tech's leadership is joined by big names before we finished last hour, rog, we didn't have enough time. we're going to talk to a chipabchip ab analyst. the only place chip stocks can go is higher think if you knew that think if you were god, rog, and think if you -- if our viewers really knew that, wouldn't that be -- wouldn't that be phenomenal if we actually knew something like that? we could all put all of our money in it? but you do have a compelling case that the likelihood is that outperformance continues let's start with that. >> yeah, i agree with you. i'm not god but i do have some insight on the industry. the semiconductor industry has been surprisingly resilient during the covid impact. the industry did take a

near-term hit in january and february as a lot of their customers factories were closing in china however, most of the factories in china are back up to kind of normalized production levels, 90, 95%. we're not seeing as much supply chain disruptions as we did the beginning of the year. what's been happening on the sales side is we've seen a surge in demand in cloud and data center spending, particularly to support the stay-at-home economy. we've seen nvidia, micron and others who are benefitting as more and more businesses are moving to the clouds, as more consumers are spending more time on the internet doing ecommerce or gaining and employees are also working from home and using applications like zoom. so this is creating a tremendous amount of data on the network. there's a lot of bottleneck in terms of the performance and there's upgrades going on

significant lip. we've seen a surge in cloud and data spending in chip stocks we're seeing a big buildout of 5g infrastructure to support hyper scale data centers but also in tandem with the 5g rollout that's been happening in china and the rest of the world. we're seeing also positive memory cycle where memory pricing is relatively stable the automotive industry, which in some cases represents 30 to 40% of chip revenue had a big impact, negative impact in february, march, however, china automotive is recovering back to pre-covid levels in the u.s. and europe we're seeing some signs of life in the automotive industry so production is coming back online it's up 11 or 12%. the nasdaq is up 17% the s&p is down 2%

it's outperformed the s&p. this is coming off a very strong 2019 the semiconductor index was up double the nasdaq last year. despite a lot of the volatility and uncertainty, the semiconductor industry has been surprisingly resilient. >> i was thinking about, you know, the fluctuations and boom and bust times that stocks have. it's urprising, raj. supply and demand. when you consider modern day living and what part of our life isn't dependent on a chip somewhere, it's unbelievable it's not going to change and thank god there are people who know how to do that. putting those micro circuits on silicon and -- on silicon and having it work and having -- it boggles the mind and to me it's just magic i don't know if it is a physical

basis. >> there wouldn't be the internet without the semiconductor industry there wouldn't be the mobile phone. >> keep going. >> artificial intelligence. >> keep going, biotech wouldn't be anything without it. should always be a buy but it's not always a buy consider there is quite a bit of cyclicality, you just gave the most compelling reasons that the cycle continues, right >> well, i think the cycle continues because investors that i've spoken to are looking at 25 2021, 2022 they're looking at 2021 as a recovery year as we get to some kind of normalized earnings. in terms of valuation perspective, the shares are not as expensive if you look at 2021, 2022 i think that's the investor sentiment on the valuation side. i think what's important to note is that the semiconductor

industry has really fundamentally changed since 2008 the industry has moved to a just in time supply chain the industry is not operating with a lot of inventory. you have to react quickly with short lead times there's been a lot of m&a. that's created a more benign cycle. you still see boom and bust, but they're not as extreme as you've seen it in the past. what's been the main cause of the volatility in industry is external events. it's been the china trade war that was initiated in october of 2018 that carried forward into all of 2019 and then the covid impact it hasn't necessarily been due to kind of fundamentals or like a massive boom/bust anymore. that's important to note. >> top three that you would -- the ones that have nowhere to go but higher are the ones i'd like

you to give me the names for, the three. >> so we are -- continue to be very bullish on nvidia we upgraded the stock when it was around $200 in march we think that continues to go higher that's a primary beneficiary from the stay-at-home economy in two respects 45% of the revenues from gaming, they saw a 50% increase in gaming hours on the nvidia g force platform gaming and online gaming in the cloud is driving growth. on the data center side they're the leaders in terms of training and chips going into the hyper scale and vertical customers like facebook, amazon, microsoft. also, we are bullish on micron micron hasn't moved as much as nvidia because many think there

is some sicyclicality in the stock. we also like microchip, which is a play off of broad-based recovery in the sector >> so if your life depended on it, could you design a micro circuit? >> no. i just analyze the companies i don't deal with them. >> we would be in the stone age if it was dependent on -- and i remember some ee, some electrical engineering who understands that that's why people don't want to do that. it's hard, hard work. >> difficult profession. >> a lot of math >> complex math. thank you. >> thanks, raj andrew, can you imagine? we don't want to be building bridges, ither we don't want to be mechanical engineers, civil engineers no type of engineers except a train engineer. >> you don't want me doing anything in this space

probably don't want me doing anything at all, but when we come back, a lot more on "squawk. stories from two corners of the economy being rattled by the coronavirus. we're going to tell you about them first, why recent moves from the trump administration are causing doubts about the typically safe world of college issued bonds. which well known retailers could be next in the avalanche of bankruptcies this year stay tuned you're watching "squawk" on cnbc

president trump weighing in on the american education system this morning he just tweeted, now that we have witnessed it on a large-scale basis and firsthand, virtual learning has proven to be terrible compared to in school or on campus. not even close schools must be open in the fall, if not open, why would the federal government give funding?

it won't this comes as california has decided to sue the trump administration over a new education that they want to revoke the visas of international colleges that are only offering online instruction in the fall. that could be disastrous for school's finances because they rely on international students scott cohn joins us. this has gotten pretty contentious. you saw harvard and another school suing, but now this is the first state to come after the government for this level too. >> reporter: that's right. we expect, becky, that there will be more states. harvard and m.i.t. also sued there will be more states. this lawsuit in california seeks a preliminary injunction against the policy that the state attorney general calls arbitrary and capricious the california state university system is a party to this suit it is the largest system by tuition in the country and the fifth largest issuer of debt this university has about 10,000 international students as a percentage of enrollment,

here are the schools with the most international students. illinois institute of technology followed by carnegie mellon, northeastern, nyu and stanford they are big issues of debt. they have been traditionally among the most credit worthy the vast majority rated aa or better for now >> so you layer on international student declines potentially, more so than in the past, and it creates a very challenging budget situation for colleges and universities >> reporter: of course, international students typically pay top dollar, full tuition in some schools they're making up 15% of tuition or more. susan moody says the ones most affected are smaller schools without big endowments

this can cause problems if students decide to study elsewhere instead of the u.s this could be long-term issues we have already started to see some revisions of outlooks, smaller schools both public and private. the hope though is they will be creative with this issue as they have been with the other challenges that they've faced so far this year. >> scott, is there any indication that schools are actually trying to change their plans? we had talked to robert frank the other day who said some of them had talked about potentially offering one course or something that would be in person maybe there's a way to get around some of these rules >> yeah. that seems to -- there seems to be talk about -- university of southern california yesterday tweeted that students who need to have an in person class for visa purposes will be able to enroll in an in person class free of charge so the idea is they're trying to be able to keep these students

here the concern is that, you know, this policy, which pretty abruptly changed, this was talked about in the california suit, there were international students who had plant to be he here based on the previous guidance and signed leases the schools are trying to find a way, both to keep that important tuition revenue stream going but also trying to keep these important international students >> we have seen the markets rocked by all of the changes that have come with the pandemic and then the economic shutdown from that. how about the college bonds that you were talking about, how have they been performing since the entire pandemic began? >> yeah, it's not exactly a widely traded index or asset class. they definitely are out there. these as i said are very credit worthy, stable debt instruments. the yields did soar back in

march when the pandemic first hit. it looked like schools were going to have to -- were shutting down, were going virtual and might be faced with some of these issues they've stabilized to some extent right now, but it has been an uncharacteristically volatile market in the last few months. >> i'm guessing you're somewhere in the mountain time zone. i don't see any daylight coming through those blinds right now you're not giving us any clues you've just got a plant. >> pacific. >> wow, you're behind. >> so are we guessing which state you're in? are you in the best state for business now or is this something else >> this is -- pay attention, joe. >> oh, oh, oh. that's what i'm -- we always want to know where you are >> can you tell us where you are? >> i'm in california i'm in california.

>> so you don't need to -- all right. good first time you've ever been honest with us about where the hell you are >> we are seconds away, joe. we're -- we're seconds away. going to get them right now. june producer prices data. rick santelli, the one and only at the chicago cme the numbers. >> the june read for producer price index down .2 on headline. that is a big miss considering we were looking for a number up .4. when you strip out the all important food and energy, down .3. we're also looking for up .1 down .3 especially on that core is important because the all-time low from february 2015 is down .4 so you can see that there is definitely a deflationary wind blowing in this producer price dataset this morning if we look at the trade number,

that was up .3 if we look at final demand, that was down .8. we are expecting a number to be down that follows an .8 read that was unrevised. year over year -- that was final demand if you look at year over year headline, it was up .1 year over year x food and energy, down .1. this tells us a lot actually i talked to many sources that believe we're going to go through a deflationary cycle, but i also talked to other sources that believe that in conjunction with that we're going to have a back-to-back inflationary cycle so it really is a mixed outlook on the short term versus medium term on inflation. it's very important to monitor this as we move into next week and see cpi, consumer price index, we'll have more info the big news continues to be treasury yields. the only maturity level that did

it yesterday, many were in the box were 7-year note yields. this morning 3s and 5s that could have been interday trades if they had closed there would have been new all-time-low closing yields now 3s and 5s are should they close at current levels. this real flight into the sovereign, even fixed income space in general, especially if you look at investment grade, look at the investment grade etfs, the spread on the barkley index. securities are in vogue though returns are much smaller this gives credence to the notion that what is going on with some of these spikes is affecting the psyche of equity traders. that is showing up in the price and yield of treasuries and high quality fixed income and sovereign paper across the globe. joe, back to you. >> rick, as always, there's something in it for bulls and bears. so things are so bad, rates are plummeting so the economy, you

know, it's slowing and so scary, flight to quality. rates are so low, there's nowhere else to go on the stock market you should sell the stock market or buy the stock market. >> i couldn't agree more. >> that's why a bond guy should never try to pretend they know which way stocks are going you can do -- anyway, thank you, rick santelli. >> wait. there is one other reason we should pay attention to, and that is all the liquidity that's been pumped in on jobs thursday last week i talked to us and goolsbee. there are things us and democrats and republicans can agree on, that's more money. there is a lot of money in the system, there was a lot of money already voted into the system or put aside by the fed that's hardly been used and they're talking about more no matter how you want to slice this, in the end liquidity is going to make a huge difference especially if the worst case outcomes regarding vaccines and such don't pan out by year end

>> all right thanks, rick. guys, i just got on good sources that scott cohn is actually in barbados >> see -- >> lie he's in california >> someone just tweeted in that -- >> he's not in barbados. oh, you got that from twitter. reliable sources. >> that's funny. that was from a -- if people aren't watching from 6:00 on, they're like, what are you talking about? >> watch all three hours. >> i think scott cohn's down in barbados which retailers could be the next to go bankrupt? we already saw brooks brothers file this week, but there are more stories teetering on e th edge we'll talk more about it when "squawk box" comes right back. n to help us fight back. the plasma in your blood can literally save lives. but we need to act fast. please donate plasma now. please donate. donate. donate. donate now.

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welcome back, everybody. brooks brothers and sur la table the latest to file for bankruptcy businesses have been decimated and many are expected to go bankrupt courtney ragan joins us with who's on the bubble at this point. courtney, this has been so painful for so many of these retailers. >> reporter: it really has,

becky. you might remember on march 17th on this show i pointed to eight retailers on this bankruptcy watch list since then four of the eight have filed for chapter 11 among several others we think that's just the beginning. 11 major retailers or brands have filed for bankruptcy since the pandemic shut down much of the country joining five names earlier in 2020. this includes 200-year-old brooks brothers and sur la table. yesterday nieman marcus, jcpenney, j. crew, all of these were weakened and the subsequent store closures ascena retail, that's the parent of ann tailor, loft, justice, lane bryant and others they are preparing a filing. its debt is considered distressed interim chair kerry teffner said, quote, it is evaluating

all options available. tailor brand warned in an sec filing, quote, if the effects of the covid-19 pandemic are protracted and we are unable to increase liquidity and/or effectively address our debt position, we may be forced to scale back or terminate operation and seek bankruptcy protection moody's has 20 names on the list include rite aid, party city, j. jill, petco and others those are the names we should be watching carefully back over to you. >> courtney, you know, you start thinking about this and the incredible number of jobs that are associated with these retailers. >> yeah. >> what do people say when you ask them whether these jones are ever coming back, whether they're gone for good? >> it's such an interesting question, becky. we dug into the job data and

what happens to some of these employees when stores close or they file for bankruptcy when it comes to when do these jobs come back not exactly. we know a lot of retail has gone into sort of a warehouse distribution space not all of those skills are exactly transferable a lot of the people that work in stores, they're service oriented those are the kinds of jobs we want we see them end up in more of a hotel-type job, maybe even phone customer service less so for a distribution center because by the way geographically those aren't in the same place the workers haven't been able to find work. >> courtney, thank you great to see you >> thanks. you, too let's talk more about how the retail industry is changing with one of the biggest agents of change in the grocery delivery business. we're joined right now by chay wa, the co-founder of

box.com. thanks for being with us. >> thanks for having me, becky wondering if you were going to play the guess what state i'm in there's no sunlight here as well. >> you could be anywhere i think that's all of us these days let's talk first of all about what courtney was just mentioning, in terms of retailers under pressure you've obviously seen this i want to dig into this with box.com. this has been change that was kind of on the way the pandemic put everything -- kicked it all into high gear what do you see happening? >> that's exactly right. there are a lot of retailers and the pandemic pulled up a lot of those trends, online adoption and death of the retailers i think we're going to see a lot more 11s coming up i don't know about 7s or retailer 7s.

definitely a lot more 11s in the months to come >> so chapter 11 versus chapter 7, meaning these companies will continue but just have protection from the court? >> that's right. i'm sleeping way too late and the youtube algorithm about the crash that was getting picked up by seagull it amputated its own arm what a euphemism for the retail industry you look at the retailers, what happens is they say, okay, you know, store traffic is low so let's close a few stores if that doesn't work, we're going to lay a few more people off around the corporate office. if that doesn't work, a lease back of our real estate. you see that over and over again. we'll see a lot more 11s versus chapter 7s. >> boxed has a pretty unique take on home delivery for groceries and things you guys are more like a costco

in that you're providing things in bulk. what have you seen during this pandemic >> we've definitely seen folks stocking up. folks stock up that i'm a toilet paper salesman 2020 is the year to be in the profession from the crazy stockup of home products, cleaning essentials. folks are stocking up on everything they need every day >> have you been able to handle the problems with the supply chain that just about every retailer i know of has faced in terms of trying to get your hands on enough toilet paper that people are ordering or things like hand sanitizer, clorox wipes or things can you get ahold of those >> yeah. if you come on the site right now we'll have a litany of all of those we did throughout the pandemic it's partially because of our wonderful buyers and merchants who went out and sourced those materials and being able to receive and push out the orders

in one of the many automated fulfillment centers. it's not a fake zoom background, it's a real background behind me >> what did that mean for traffic? how did your traffic increase during the pandemic? >> i mean, you know, from a business perspective, our consumer business was more than double throughout the pandemic traffic definitely spiked. it's come down since then but still at an elevated new norm. what's most important is when you look at the data of the customers that came in during that time, the cohort data shows the customers that came in through the last 90, 120 days are the stickiest customers in the history of our company i'm guessing many other retailers are seeing i think the shift to online is sticky and it will accelerate. >> chiew, the pandemic is not over people don't want to go to stores frequently if at all. do you think people will still

be buying in bulk and stay once there's a solution to the pandemic >> i think so. we're already seeing the growth trends this is going to layer on some mental scar tissue of folks all over america folks won't forget we will get through this i don't think on the other side of this folks will say, things are normal, 2020, let's forget about it it will produce a mental scar tissue. >> you're based in new jersey, right? >> that's right. that is the -- that is the winner so i am in jersey. not far. >> that's what i thought, right near rutgers where do you operate i'm trying to get a feel for what kind of customer are you looking at are these urban customers? suburban customers where are you delivering these things we've watched such a huge change in where people are working and just migration out of the cities at this point.

what have you seen >> that is such an interesting question because traditionally our fulfillment centers are closer to urban populations but what we've found over the last 90 to 120 days we've spread out. the states that are seeing the biggest covid surges are seeing the highest conversion rates and highest traffic rates. we're seeing that demographic information shifting. >> thanks for joining us good seeing you again. >> thanks, becky >> take care i was watching santelli do the inflation data the dow going into that, down about 200 points, 180 pints. aft also at 8:32, after the data came out, gilead released some information, additional data on

remdesivir and -- for the treatment of covid-19, and the company says data presented includes something that looks like a 62% reduction in the risk of mortality compared with standard care. it's additional data in addition to what we reported six weeks ago. dr. scott gottleib said it is not a home run, but it is another arrow in the quiver, the arsenal to deal this disease they're calling this additional data on some of the testing. >> it's big news. >> up a little gilead is up a little. they also say it needs to be confirmed with additional testing. so they're saying it in kind of a soft way, but i don't know whether that's what caused the market to come back so significantly or not. >> the day you hear gilead announce, we've got to wait for this, but the day you hear they

announced an inhaler version of this -- >> right. >> -- that you can effectively go get a a cvs, walgreens, whatever, is the day the market will really, really move it will be the game changer. >> i don't think we saw -- just for the efficacy of the compound itself, i don't think the last study was 62%. this is a 62% reduction in the risk of mortality compared with standard care. then they go on to say an important finding that requires confirmation in perspective clinical trials. we have no inflation because the entire world is shut down. that doesn't sound like what will make the market come back. >> joe, i missed it at the top how big of a patient study or population did they look at? >> i looked at the bottom. they talk about that it went across all subgroups but i don't see the actual -- 800 -- >> numbers on here >> comparative included 312

patients i don't even think that's -- i think that's a comparative one i think this is the first -- this is additional data from the first trial that they were doing. it's a phase 3 trial >> right i don't remember how many people were in that either. >> looking at it now to see. i don't know >> maybe meg tirrell knows if she knows and is listening, email us, meg. >> i'll look through this to see how many people they are talking about. maybe 397. globally no maybe -- that may be a subgroup. coming up, key upgrades and downgrades you need to noah head of the bell. stay tuned, "squawk box" will be right back the hoa has been very involved. these shrubs aren't board approved. you need to break down your cardboard. thank you. violation. violation. i see you've met cynthia. at least geico makes bundling our home and car insurance easy.

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coming up, what to watch ahead of the opening bell on wall street. bank of america will join us stay tuned "squawk box" will be right back.

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welcome back to squawk we've got two big target increases on two faang stocks this morning, frank holland joins us with the latest on those, frank >> good morning. faang and fake meet am focus citi upgrading its price target to a street high of 3550 increasing from 2700 and maintaining a buy rating the e taylor had a 22% share of e-commerce shares are up nearly 70% keir yahoo err to date. goldman sachs raising its price target on netflix to 670 forecasting that netflix will add 12.5 million new subscribers

in q2 well above the guidance of 7.5 million. coverage of beyond meat initiated by citi with a sell rating and price target of 123 analysts forecast the company will face near term pressure due to restaurant closings and long term pressure from competitors entering this market beyond down nearly 2% in the early trade. frank, you're still here -- you're still here at this point, frank, you haven't left yet? >> i'm still here. >> you're still here. >> i'm going to get to barbados right after the show >> you're quick. you immediately -- i called you a team player. >> i have room in my bungalow only for you becky and andrew have to stay. >> that's nice you're selfless, you immediately volunteered to report from down there you're a team player. >> i'm there reporting i'm there for you. >> team player thanks for offering. thanks for volunteering, frank futures moving off the lows of the session among the

possible reasons gilead sciences hard to say exactly the company stressing -- stressing that as soon as we get any additional information we want to put it out. so there was also data that showed that mortality had been -- was first the standard of care mortality had been sharply improved, in this case it was 62%, the company went on to look at a comparative analysis including pregnant women and some -- some other groups of patients and had similar results. so the stock is up joining us now savida. far be it from a company to ever want to, you know, release early info on covid that is premature. the company does point out it needs to be confirmed, but when, you know -- does this say that the market is hinging on covid mostly and vaccines and

therapeutics >> it seems to respond to each bit of incremental info whether it's a huge advance or not, savida. >> i think you're right, joe i mean, if you look at our survey we do every month of our clients, the number one tail risk is that our clients are citing is the second wave of infection. i think that that's what all eyes are on, you know, the number of case counts, which seems to be rising again i think that's front and center. whether the market is pricing in a strong recovery or whether it's pricing in a second wave, our work suggests that, you know, valuations of stay at home beneficiaries are kind of in line with valuations ofthe cyclical come back to work beneficiaries. so, you know, i think that the market is pricing in a 50/50-ish probability of a real second wave risk at this point.

but it's interesting to see that what's driving the market higher and you and i both know this, is really tech and kind of more of the online, you know, maybe more of the stay at home types of beneficiaries. i don't think that the market is pricing in that everything is fine and we're all going to come back from this, you know, imminently. >> have you been -- i mean, when you see the nasdaq every day, savita, what's your feeling with that does it make you feel good about the prospects or does it make you say, oh, my god, what's happening? >> it makes me think there is no place else to go i think that's why tech has seen inflows. think about it, tech companies are the future, tech is growth, tech is not necessarily as economically sensitive as other parts of the market, but the risk is tech is getting super crowded and this is by institutional investors, hedge funds, mutual funds

[ inaudible ] -- >> i think savita -- is my michelle caruso-cabrera still on we have -- this is the second time we have had some serious background noise savita, take it away. >> it sounds like a fire alert. >> it's a fire alarm, but it happened earlier and i didn't smell any smoke so i guess we're okay savita, you say that no place else to go the other take we had some people saying was that these stocks are going to do -- these are the ones that people say are covid plays to some extent, digital, you know, stay at home type situations. does that make sense >> i mean, i think that ultimately they are immune to second wave risk, you know, relative to banks or industrials or online retail so i think that's -- that's the mantra right now i mean, i think it makes sense but i think that people need to really think about how crowded

technology is getting and as we move out of this i think that tech is going to be used as a source of funds for institutional managers to get long other parts of the market. >> savita, have a great weekend and we've got to go. andrew, becky, have a great weekend. everyone at home as well make sure you join us next week. "squawk on the street" is next ♪ good friday morning, welcome to "squawk on the street." i'm carl quintanilla with david faber, mike santoli, cramer is back on monday futures are soft amid another day of record covid deaths in the u.s., china state funds put a cap on that rally in shang high although we have improved on this additional mortality data from gilead on remdesivir disney opens tomorrow and oil is back below 40. david, as joe was saying with savita it is a reminder of how starved the market has been for medical news these last couple of weeks >> yeah,el