>> we'll tell you about a semi conductor between two companies could turn into one of the year's biggest deals squawk box begins right now. good morning and welcome to squawk box right here on cnbc. i'm andrew ross sorkin with joe and melissa lee is hanging out with us once again it's nice to see you becky is off today.

>> i'm back. great to be back. >> back in the stacks -- >> with the books. >> yes, yeah >> the library stacks are nice i wanted to show everybody where things are headed on this monday morning. is it always up? i guess maybe it opens it feels like that i was told not to invoke his name when i mentioned him the other week he says everything goes up and it all seemed so crazy dow about 160 points nasdaq looking to open about 69 points higher in the s&p 500 looking to open about 16 points higher treasury yields right now, let's do it. let's show you the ten year note as we speak you're looking right now at the ten year at .636. melissa has news happening

overnight. >> news out of china overnight beijing announcing sanctions and a spokesperson and the move comes after a top member of china's ruling communist party and three other officials over human rights a b abuses. bo we'll ask senator rubio about this when he joins us live at 8:00 a.m. eastern time on squawk box. separately the u.s. asked it's citizens to be high risk due to arbitrary detention. citizens may be subjected to prolonged interrogations and detention or detained or deported for sending private electronic messages critical of china's government australia advised it's citizens

not to travel to hong kong for similar reasons. >> economic news out of beijing, china's central bank says it isn't planning much more stimulus as the economy recovers from a pandemic. an official telling reporters that special loan programs completed purposes and the economy will return to normal in the next half of the year. stocks in china rose sharply overnight and the real winner at 3.5%, andrew. >> hey, thanks melissa and this is the first week of earnings if you can believe that and it's going to be interesting to see what happens it will be the first quarter as we all know impacted by the covid 19 pandemic. earnings expected to fall by 34%. that will be the worst quarterly guidance performance jp morgan, citigroup, they all kick off the earnings report we'll hear about later this morning. the first of the fang stocks will get netflix that happens on thursday

i wonder how much you can take away from netflix. also a busy week from data we'll get the latest consumer price readings tomorrow and import prices on wednesday and we'll get the closely watched claims and housing starts data coming out on friday and as joe mentioned at the top of the show, we have a deal this morning, analog devices by rival maxim in a transaction it's an all stock deal combined enterprise value of $68 billion. these are names that probably don't get enough attention on and off requesting time now i should say analog semi-conductors are used in things, as if i know it, car batteries and the deal will create a big powerful competitor to texas instruments which joe, did you have a t.i. calculator back in the day? >> you know i did.

you didn't do equals it was like you put it in and that's very confusing. the deal, i don't like that $68 billion number that's a lot of debt it's $20 billion. >> no, it's a silly headline number. >> we don't need to deal in that type of hype i did see this though andrew i just saw that and i'm glad it's not the front page. thank you. thank you for pointing that out. the virus perhaps. they may be effected i was watching the news. i am horrified when i see what's happening with cov irid and i

always wait until 6:00 p.m. to see what the futures are going to do. there's people assigned to different financial places and i think they had it ready to go. it was markets blank as covid prices spike and they either put in markets sell off or markets rise in spite -- they have nothing else and they either put in spite of or because of. last night it was another in spite of but i'll tell you one headline. >> mad libs on a sunday night. >> one headline that disturbed me, i can't remember the date but it was in 2017, supposedly the overall market is flat except for five stocks and i know that you have seen that before i see that and i don't know whether -- i don't know whether that's really bad or really good i don't know whether that shows that most stocks are not way up there and have been going up in the face of all of the bad news

or whether it shows that there's so much -- like in netflix, which is my life now i watch so many things on netflix now because i don't want to watch the news because the news is so depressing. >> i have a show for you joe money heist. >> what? >> money heist. >> money heist. >> it's good >> is this a series? >> i'm on episode 10 of season one. it's in spanish but they dubbed it and the dubbing is amazing. it's an amazing show. >> i'll tell you -- >> my wife thinks it's a little silly. there's certain silly elements. >> you can watch the unsolved mysteries, that's pretty good. the epstein. >> unsolved mysteries. >> it's back. >> isn't that circa 1990. >> the epstein doc is a little boring but i'm glad they caught her. >> okay.

but did you see the -- >> but so graphic. >> we have to move on. and now have you seen it it's very popular. >> no. >> it's british. a lot of stuff happening >> a lot of stuff. >> this is the headline that you're making fun of this conversation 607 about what we're binging on netflix making fun of the earnings outlook. >> is that obvious >> that's true >> what are you doing? you're going -- >> i don't have any time i have twins i have no time for tv right now. >> this is bitter party of one right now that you're not able to all right. let's go on. peps pepsico is going to report core earnings coming in at $1.32 and

we're going to go over these even actually. i think sarah is going to help us with that revenue of $16 billion also topping expectations so you only have an hour at night don't you? you only have an hour. >> only an hour. >> it's my hour. you have to do three times as much. >> well, you share it with like 12 of those whack i can tradey . pepsi benefitting. it's breaking news late yesterday. the redskins are expected to announce that the team would retire the name. no new name was expected to be announced immediately because trademark issues are pending

evidence 11 days ago fedex threatened to take it's name off the team n stadium if it wasn't changed and nfl commissioner roger goodell said he was support i have of the new name there's a lot to go still. i forgot how many there are. like florida state, conditions kansas city. you have to do that. it's just a lot of different -- i think even illinois, isn't it the fighting -- i mean i think there's just a lot -- if you start, it's going to be hard to stop coming up, florida reports the biggest increase of any state during the pandemic. as we head to break, here's a check on a few stocks trading at all time highs dominos, adobe, tesla, clorox and nvidia to name just a few.

we'll be right back. stock slices. for as little as $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership. schwab. own your tomorrow.

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and xfinity is your home for the return of live sports. florida reported more than 15,000 new coronavirus cases yesterday and that's the highest single day total for any u.s. state since the pandemic began and brings the total number of infections in the state to more than 260,000 florida reopened it's economy in early may. testing for the virus also

ramped up and amid a spike in cases disneyworld welcomed back a limited number of visitors we'll have more and talk about this story but first let'stalk to the former fda commissioner, cnbc contributor, on the board of alumina and pfizer and his new op-ed is entitled schools can open safely this fall. and you go into a lot of what that means in terms of being able to do that and you also -- you reference the politics surrounding this that it is a contentious issue doctor and when i saw the headline, i said scott is waiting right into the middle of this which takes some courage and saying you think it can be done. a lot of people say it should not be done at this point. what got you to that conclusion? did you think about it

and what would it take to do it safely >> you need to leave discretion to local school districts to put in place measures that will prevent outbreaks. some people will throw caution to the wind and say we shouldn't be worried about outbreaks because kids are less likely to catch the virus and less likely to spread it and that's true and less likely to have bad outcomes and the data does suggest that but less risk doesn't mean no risk and we have seen bad outcomes in some children and even though kids are less likely to spread the virus they compensate for that in terms of their behavior but they do things that make them more conducive to spreading and the viral load on the nasal swabs in children is just as high as adults that suggests they may be just as contagious

so i think that local districts need discretion to put in place measures to try to avoid outbreaks. that might mean going toward a hybrid model where you have some distance learning during the week and some classroom earnings what would be regrettable is if districts were forced to put in place approaches to the school day that took away the discretion that they would have to implemented it and different districts may have different opportunities. >> to do it safely how much money do you think it will take? everybody is strapped but it's going to have to be federal? how much do you think it would take >> it's hard to say. i've had discussions with folks on capitol hill. i think that you're going to see money from congress to help support the schools. i think we need to take an approach, try to provide incentives in carrots rather than sticks.

and opening into conditions that may not be conducive to try to control spread and certain things are going to become routine distancing between chairs. they're going to put in place conditions to try to keep students together so you don't have all the students intermingling and you keep students within a social network. other things are prohibitive if we can get testing into the schools and do a better job of routine surveillance testing, that would be a high degree of oversight or protection. we also need to make sure that teachers get proper protective equipment. and they need to have ways to protect themselves and that might mean good masks if they can wear it during the day and change as appropriate. >> so there's controversy now about dr. fauci. i think that he's great.

obviously. but am i wrong to say that doctors are about saving lives, protecting lives at all risk and there's sort of a tension between doctors and let's say someone -- a social worker that sees what happens in times when people don't have jobs or people are cooped up or whatever and they don't necessarily overlap completely and i don't know whether this -- this is a quote here that nearly twice as many people under 65 have died from overdoses as from covid. would that surprise you? does that put anything in perspective in terms of just highlighting that there's things to consider in terms of staying closed for example, if schools did not open at all, which a lot of people would like in the fall, do those benefits of opening the

school even with the risk outweigh what happens to the economy and the negative things that happen from a closed economy? it's hard to even talk about it without people saying that you're callice or something but it needs to be taken into account, does it not >> look. i've talked to republican and democratic governors and they're all struggling with this and they're all going to reopen schools in some fashion. i talked to michigan, connecticut, maryland, baker and massachusetts. and i think sometimes physicians are guilty of not looking at all the implications because you're not aware of the data. i don't think dr. fauci is one of those physicians. he's very schooled in this and he understands the imple kagss a -- implications and trade offs.

i've been in a room with him when he takes an expansive views. >> i don't think he necessarily would come down and agree with you on your op-ed today. but i don't know maybe he would or maybe he wouldn't but you two must have diverged on certain things i would think. >> well, not really. i mean, tony and i, we collaborate on things and we have a lot of agreement around development of certain therapeutics and trying to bring new products to the market but i suspect he would see the trade offs inherent in not reopening the schools and look for a way to do it most people that i talk to want to get the schools open. the question is how and how worried are you about large outbreaks. and try to reduce the risk of them it's a lot that we don't know about the virus and it has not been epidemic in children yet. we don't know what would happen

if it got into 10 or 15 million kids as the flu does because we have largely sheltered children to date. >> two things, by the way, just on the drug overdose number, 68,000 people died in 2018, that's the last cdc number that i can find >> under 65. >> on an age adjusted basis i'm sure that number may very well be right but just in terms of total death number for the year, 68,000 relative to the 130 we're at right now. >> but we're talking about it's under 65 the risk for the disease, we talk about it again and again and again. it's where 95% of people can live under 65 or more go ahead doctor. >> we're getting better at it too. >> the question that i had, and

schools should be open with a big asterix because you had 5 or 6 points and for this to actually workout and to workout well and the question that i really have is if you sited germany and denmark and cited israel separately we have gone down this road before but in the case germany and denmark it's worked out. in the case of israel it didn't and there seems to be no scientific consensus about why that was except for the fact that germany and denmark didn't have lots of spread and israel did and so how many sits in this country do you think can't open right now. >> if you look at every other country including israel they reopen against the backdrop of having crushed their virus

and reemerged after they reopen their economy and the only country that had schools open against the backdrop of a fair degree of spread with sweden and that's what everyone extrapolates from. we didn't study that systematically and there were prevalent studies done in that country so we really don't know action we also can't compare the swedish population of children to the u.s. we have more illness among young people in this country more asthma, more obesity, more diabetes there's going to be higher risk with our school aged population but in terms of the situation in the u.s., i said this before, i think that it's going to be very hard for certain states or certain cities to reopen on time and in fact, they might have to do it again. it's going to be much easier to reopen schools this fall in massachusetts or maryland or michigan than in miami or houston right now and i suspect some of these cities are going

to have to delay their openings even if they haven't done that yet because when you're in a situation where your hospitals are overrun, your morgues are overrun. you can't get enough medical personnel. you're not going to take a step that you know on the margin is going to increase spread you can't argue that opening the schools isn't going to have some impact on additional spread even if it's just among the teachers but the students themselves, the evidence shows that they are vectors. and so when you're right on the precipice and might be able to do this. the number one thing to do is get your spread under control. that's what the city should be focused on. >> so with all of that said, do you think disneyworld should have opened on saturday. in a state where covid cases were spiking it's a place where lots of children go from all

parts of the country. >> they pushed very hard to get it open. i would have prioritized opening up things like schools things like business that contributed to the gdp, disney is an important part of florida. i wouldn't have opened the indoor setting disney is a separate matter because most of it is outside. i'm not sure how they're opening but bars and restaurants should have been last on the list if you were trying to prioritize getting yourself into a situation to be able to open your schools you would have put off opening the bars this seems to spread very efficiently. indoor settings particularly in air conditioning which seems to suggest it's sort of a vehicle to spread and remember with sort of airborne or droplet transmission, that's not binary. it exists on a continuum and something with droplet transmission, this may well be droplet transmission can proximate airborne transmission under optimal circumstances and that's indoor settings with certain kinds of air flow and

those are the sen yovenues i wot have opened first. >> i know that you look at all the numbers and florida is setting records for new cases. are you seeing the troubling rise in deaths and hospitalizations i do see that everybody seems like they have a horse in this race and trying to point things out or because it's in a younger demo, are you seeing less icu and less hospitalization than you would expect and then is it still at a point where the health care system was not overwhelmed in florida >> so previously, depending on the study you were looking at was 20 to 30%. i wouldn't be surprised if we

cut it in half i wouldn't be surprised if it's 10% now but we're hospitalizing a lot of patients. they were admitted to the hospital and even if it's only 10% dramatically, 10% is still alive. we're also seeing positivity going up among older people and we're seeing this get into nursing homes again. 40% of the deaths in texas right now are people in nursing homes. something that started in younger people is now seeping into an older population. >> so there's a lag and it's -- and we have gotten better at it. >> it will go off but maybe it's -- >> times of diagnosis and times of death we're diagnosing people a lot earlier so we used to diagnose them and diagnose them a week

before we get into the hospital. it's gotten a little longer. >> it was crazy the market was down about 150 points closed off almost 400 when we read it, it was tough to see why it was brand new or refining the data we already had but it was taken positively. >> it was prespecified but it was a study looking at match controls that were enrolled to different sites. and it needs to be confirmed >> we'll dig into the school question more. coming up when we return exclusive new data that shows how hot the real estate market was getting.

off 39.81. on the rise up about 2 cents per gallon for an average of 224 that's up from the april low of $1.98. squawk returns right after this.

welcome back real estate markets across the country are heating up and a new report showing that june, new home sales saw the biggest spike in nearly a decade diana joins us now with more on that. >> the official government count for june isn't out for a few weeks yet but we have exclusive numbers showing sales of newly built homes jump 55% annually in june that according to john burns real estate consulting that's the largest annual gain since the last housing crash and would put sales at a pace not seen in years. now an 86 annual jump and in florida where sales were 84% california did see gains but those sales are allowing builders to raise prices about

57% have that higher this is in line with the june sales report from taylor morrison last week they reported a 94% annual jump in june sales to a record pace buyers are looking for new, high-tech homes with more individual rooms to allow for home office and of course home schooling. several big builders will be reporting earnings in the next few weeks. the issue for builders going forward is how to meet all the new demand lack of land and actively selling communities will keep starts and social distancing slows work pace. land acquisitions were put on hold and some jurisdictions are not back to the normal staffing. >> how much of this do you think is being driven by covid this idea that people want to build a new home and create spaces for, you know, distance learning in schools and all of these sort of new things that we

talked about or do you think this was pent up demand from before >> part of it is pent up demand. we have such a low supply of existing homes for sale. a lot of it is people wanting to get the new high-tech homes and get more space for home schooling and home office, et cetera, also looking to get outside of cities which is where builders are mostly present. use it's also a lot easier to tour a newly built home or even to go to a model or tour it virtually because everything is exactly the same getting into an existing home is harder now because of social distancing it's just much easier to go new. >> thank you it looks like how many bedrooms do you think that house is behind you. >> you know, we were just talking about it it's very well layed out though. everybody has a basement. >> nice to see you

>> coming up, stock strategy up next, u.s. equity futures pointing to a higher open. dow up 171 at the open as we head to break, take a look at the biggest premarket gainers in the&p00 wel rhtack. you're first. first to respond. first to put others' lives before your own. and in an emergency, you need a network that puts you first. that connects you to technology to each other and to other agencies. built with and for first responders. firstnet. the only officially authorized wireless network for first responders. because putting you first is our job. amazing school district.

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good morning, u.s. equity futures were in the green on

this monday morning. let's show you what's going on 161 points up on the dow nasdaq about 75 points higher and s&p 500 looking to open 15 points higher. we have these earnings kicking into gear melissa. >> second quarter kicking into high gear this week alone. this week we are expecting reports from big banks netflix, dellta, johnson & johnson. we'll get a clear picture hopefully of the impact on business joining us to discuss this is the principle and investment strategist at edward jones and brian, the global market strategist do you think that we'll get a clear picture of what is going on because so far, you know, for instance, pepsi reporting earnings this morning and still declining to give guidance for the rest of the year. >> yes, i think it's going to be about as clear as mud. so no i do not think we're going to have a very clear picture of

earnings because this is an unprecedented unpredictable trigger for earnings this time around but what the consensus shows is that the pain, the hurt, will be largely felt in the second quarter and then improving in the third and fourth quarter and seeing some signs of a rebound in 2021. so while we may not know the numbers directionally, what we should see is some consistency and as the economy reopened even if it's bumpy, even if there's rising rift with these new outbreaks that there is some sense that the economy is recovering in the second half of the year and that earnings will live up to that recovery and stock prices will continue to climb. >> i'm glad that you mentioned consensus. i was reading it this morning that the spread of analysts earnings forecasted for the second quarter and that's up from 30 cents.

and don't really have a good handle on it either. and the volatility that could be born out of that dispersion. how do you recommend them in an environment where it seems like a lot of momentum and tech stocks are getting all the favor these days and those could potentially be the highest volatility the dynamic of this market has changed in recent weeks from this idea widening to the more value oriented parts of the market and i suspect given with cases rising it's going to take time until we get there. it's going to continue to be any opinion of overall where we favor growth where ever we can find it and i suspect that a number of these true growth companies are actually going to look better through this earnings season than people suspected because these are the companies that are taking advantage of structural shifts that are happening in the economy and in society but, you know, i would advise investors

to and i think the market has largely started to look beyond the second quarter and the market down almost 40% in 20 days in february and march forecasting a very nasty couple of quarters but, you know, now the focus is on this recovery and where earnings go from here and it's not going to be a straight line. it will be intermittent and it will be challenging but on the other side of this, we're going to be in a what i think is a very long protracted recovery and that should be supportive of risk assets and it will be supportive for the true growth companies. >> what parts of the market do you like in terms of the earnings expected this week. there's a whole slew of them are there any particular that you're watching sort of as bell weathers for the rest of the market. >> absolutely.

first of all we think that there's risk in opportunity. especially if you have a protracted recovery, those are the opportunities to really diversify across sectors we're looking at sectors and tech and health care and we're not being broadbased we're looking at industries. we want to take advantage of this growing need for connectivity so we like software and we like internet services companies. we like companies that are not tied to physical manufacturing and global supply chains that we think will be disrupted for a period of time and then again in the helt caalth care sector it' sector people need regardless of the economy but also they tend to be the firms that are inknow have a ti -- innovative and it's the companies with a strong balance sheet that can grow their dividends overtime and are the ones to watch this earnings season they with weather the covid storm and come out on the other

side ready for that recovery and ready to kind of take advantage of these trends going forward. >> all right thanks so much for your time appreciate it. >> joe >> coming up, much more on the markets as earnings season kicks off heading into the reports take a look at the biggest winners in the dow so far this year microsoft up almost 36%. pepsico out, beating by 7 cents on the bottom line we'll talk to the company's cfo at top of the hour first on cnbc. $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership.

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positive cash flow and profits. that's according to the company

speaking to the financial times. he said a massive koscost cuttig drive helped sure it up. wework slashed as you know more than 8,000 jobs. a couple of weeks ago now and talking about how the pan dem si -- pandemic is creating demand for more space the company is looking for satellite offices and the like because of social distancing and people wanting offices closer to home so an interesting trn if urn if turns out to be the case, joe. crossing the wires now had to look at this quickly to see this medical news. difficult to analyze and it's actually helping it's actually going as you might

expect given the difference in market cap both of them, that's a technology being used which is similar to the one that maderna is using back to you. >> when we come back, is it time to get back into casino stocks that's the question. our next guest brings you three names she likes in that sector stick around to findut w ohich ones they are.

welcome back to "squawk box. mgm is reopening the massachusetts casino after a four-month shutdown and doing so amid some very tight restrictions contessa brewer has the story. >> reporter: hi there, andrew. mgm has had a lot of practice recently reopening casinos, but springfield, one of its newest and smallest, might also be the toughest

first, there's the difficult travel restrictions in massachusetts. mandatory 14 day quarantine for visitors from most states, including nevada so, you know, getting executives and staff from corporate headquarters would be a huge headache secondly, the gaming restrictions may be the strictest in the nation. no even carrying drinks through the casino and detailed mandates on the height of plexiglass and the spacing of games >> we have to actually physically move a lot of machines around to free up some of the more popular machines so they're more socially distant. it was a combination of game popularity, what games drive the best revenue and where they were located on the floor and how we could social distance them. >> reporter: occupancy capped at 25% so turning a profit here may be challenging, but next door new york's casinos are still closed we have seen a lot of pent up demand elsewhere in the nation,

andrew >> it's pretty fascinating i'm curious, contessa, we're going to talk stocks about which casinos have the biggest opportunity. from your vantage point since you cover this sector, what's the most interesting place in terms of what they're doing right now? >> well, el dorado and caesars are getting ready to close we're waiting on new jersey. gaming regulators, that's very interesting and that's the big story for casino stocks. also, penn aside from sports betting which takes up a lot of space, they're seeing gaming revenue daily that is outperforming 2019. so in indiana, 26%, 31% higher than last year and in ohio, in toledo, only been open for 12 days they saw gross gaming revenues daily of 76% higher than 2019. that's interesting >> okay. contessa, we're going to talk about it right now i want to take a closer look at

the investing in the gaming sector world and some travel and leisure names as well. joining us is stephanie link hightower, cnbc contributor. a lot of folks have tried to stay away from the stocks because they didn't know what was going to happen. now here we are. which ones do you like >> reporter: well, i think you want to be very selective on travel and leisure because we are going to see fits and starts in terms of demand given reopenings, partial closures, et cetera i think you want to focus on high quality companies with balance sheets, liquidity. all of the gaming stocks that i cover that i like, wynn, las vegas sands, mgm, they're still down a huge amount, andrew wynn is down 48% mgm down 51% and las vegas is down 33% the one i like the most is wynn, i actually own it. they have quality assets, in las

vegas and they have a diversified revenue stream the rest is food and hotels. they are diversified the real reason you own wynn is for macao, not las vegas 75% of the revenues are in macao. i think the china economy is recovering faster than the u.s. economy. we'll see gdp this week for the second quarter running around 2 to 3%. that's a 52% is he againstal annu sequential annualized rate they are reopening in june and july liquidity is okay. 1.7 billion. that's 18 months worth 10% of the flow is short the stock. so it's not going to take much for this stock to do better. that's the one i'm playing that's the macao story if you want las vegas, that's mgm. 50% of the business comes from

mgm. >> let me ask you though, to invest in either of these stocks, let's just do mgm since that's the vegas story what does the time line have to be about a return, if you will i don't know if this is a vaccine bet. i don't know if this is a travel bet, younger people get on airplanes getting to vegas what do you have to anticipate how much leeway? we're talking about earnings season and people looking past it how many earnings seasons can we look past to make the bet work >> mgm you have to -- you have to be very patient that's why i'm focusing on wynn. china is recovering faster than the u.s. if on mgm you're talking about a recovery, you're a year you have to be patient, next several quarters here's the interesting thing about mgm, they have an aggressive cost cutting program to do. they implemented mgm 2020. they cut the dividend. they cut cap ex. they're very decentralized

50 to 60% of the business costs are variable so they have a lot of room that they can do and they have a liquidity in the meantime. so they have the time frame to do it. this is not going to be this quarter you're going to make a ton of money, but i think in the next 12 months you will. >> stephanie, great to see you appreciate it. >> thank you >> talk to you soon. sending it over to -- are you guys colleagues? we're all colleagues, i guess, melissa. she's a semiregular regular. >> my friend and colleague friend and colleague colleague is fine. anyway, coming up, former white house chief of staff mick mulvaney joins us to talk about what the next round of stimulus might look like and how he sees the 2020 elections unfolding stay with us you're watching "squawk. always wants to hang out. and you should be mad your smart fridge

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good morning futures pointing to a higher open to start the week as investors shake off a spike in coronavirus cases. earnings seasons open. texaco reporting earnings benefitting from people eating more salty snacks at home. the company's cfo will join us live next. plus, elon musk has another

reason to dance this morning these stories and more as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe kernen and melissa lee who's hanging out today with us. becky will be back a little bit later this week. take a look at u.s. equity futures at this hour a strong start to the week right now. dow about 193 points higher. nasdaq up 83 points. s&p 500 up 20 points china's shenzhen jumping overnight. we may be keying off of that european stocks as well. flip the board around and show you what's going on. you'll be seeing green arrows in

europe as well keying off of that news in the market in asia as well. joe? >> we talked about this, andrew. pfizer news and biontec. biontec is surging they're a nouning they've been designated fast track designations for two covid-19 candidates there were four candidates this is for two of the investigational mrna-based vaccine candidates against covid. so kind of interesting i don't know how much they know about efficacy at this point, but i also thought that this was kind of interesting. they're already going to start manufacturing the vaccines they plan to manufacture 100 million doses by the end of 2020 potentially more than 1.2 billion doses by the end of

2021 so can you say we went from 140 on the dow to 206 on the dow i don't know, after watching friday where we were down about 200 premarket and then the gilead news came out, we ended that day up 400. we pointed out a lot of different things, a lot of it is in the nasdaq and there's a lot of reasons why it's still in high gear. who knows what's really going on we have seen it move up a little bit from up 150 up to now up over 200 it says 182, don't ask me why. it's because of fair value been doing it for 25 years trust me. in deal news, analog devices is buy maxim worth nearly 21 billion. melissa, i don't want to get off track with you again i don't want you to get upset, but when you did say salty snacks -- >> i'm never upset with you.

i thought of you. >> when you did say salty snacks, i'll tell you what i thought of i need to know from hugh johnson, maybe sarah can ask i've been eating cauliflower based -- are they called tortilla chips they're cauliflower based and salty. they are salty and i don't really feel like i'm giving up much, sorkin, with the salsa or the -- but i'm not convinced -- >> who makes these >> i'm not sure who makes them but they're cauliflower -- all of these cauliflower based snack products i'm not sure they're better. >> cauliflower is a cruciperous vegetable, joe. >> whoa. did you google that? >> no. knowledge. >> i'm asking -- >> i'm wondering if you have other sort of effects from eating so many cauliflower

chips? >> seriously, though, is it better or should i go for the corn i think it's the same calories i'm fooling myself sarah might know >> all right let's talk pepsi pepsi reporting quarterly results in the last hour or so earnings and revenues topping expectations frito lay america increased. sara eisen joins us now with pepsi could he's cfo >> reporter: we can certainly ask. i think it depends on the salt content. good morning joining us first on cnbc is hugh johnson, a member of the cnbc global cfo council welcome, hugh. good morning nice to see you. >> good morning, sara, nice to see you all as well. >> reporter: clearly food was strong during the pandemic beverages not so much. i think the results overall came in much better just tell us what happened, what

consumers did during the last three months >> yeah, happy to. it was really a very interesting quarter. we started off very strongly as a result of a lot of the pandemic buying that you saw early in the quarter then moved from that to sort of softness as we went into lockdown towards the end of the quarter we saw a notable recovery. the snacks and foods business very much benefitting from people staying and eating at home beverage business doing less well as mobility increased towards the end of the quarter you saw the beverage business start to come on more strongly and snacks sustaining well we feel like we're a perfect hedge in terms of we benefitted from lockdown, we benefit from people becoming more mobile again. we're really in a sweet spot in terms of performance under the conditions we're operating in right now. the one note annual factor for us is lots of increment al costs related to covid, about $400

million. we would have been flat eps on the quarter as well. some of that will sustain, some of it won't. >> let's dig into that a little bit. what did you have to spend on? what percentage of your work force is actually working right now and how much of those costs continue >> yeah. pretty well everyone is up and running and you're right, a lot of the costs were related to our terrific front line employees providing them with personal protective equipment, providing them withadditional benefits a we go through the crisis we also spent a considerable amount making sure our people were safe when they were out in the marketplace servicing our customers and keeping our supply chain running, and as a result of that combined with the fact that you saw some customers that were closing up for a period of time, restaurants and the like, the number was large in q2 but it will likely diminish as we go forward. >> on the reopening, the business that got hit hard, what

are you seeing now as states have moved towards that prime but we've seen hot spots in many populus areas in this country, in the convenience stores, restaurants, how's that business holding up >> yeah, convenience stores seem to be doing quite well the pure lockdown mode that we were in early in the second quarter i think has largely come and gone convenience stores seem to be very much back on track. the food service and restaurant businesses, the office businesses, obviously that's going to take a bit longer because people haven't gotten themselves back to that and that may take a bit of time as i noted, when people are staying at home, they are tending to consume snacks. they are tending to consume quaker foods you probably saw quaker was up 23% in the quarter and profit was up 55% that business clearly benefitted from that. one of the things that we're seeing though is even as the

markets open up a bit more, consumers are sticking with some of their habits. they are -- they went back to large and trusted brands and they seem to be sticking with those. they do seem to be balancing, indulging with healthier eating and our portfolio plays to both. we see ourselves very much in the sweet spot in that regard. >> i'll ask for joe. are cauliflower chips healthier eating do you make them i was going to the frito mack and cheese which you're about to launch and wondering if the world needs that might as well get both of them. >> the world needs healthy and the world needs intelligence a little healthier in the morning, a little bit more indulgent later in the day i don't know much about cauliflower chips. i don't think we have that my guess is joe's spending quite a bit of money on that one. we are on the indulgent side as you noted. we're launching a cheetoes

flavored mac and cheese business i think we did that for joe kernen >> we have talked many times, hugh and sara. i have said doesn't matter which toes you're talking about, i like them all. i like fritos, tostitos, anything ending in tos >> but you know what, he also, joe, has pot chips it doesn't end in tos but it is salty and delicious. >> hugh, i went back to normal scoop tortillas no, i didn't notice anything above baseline levels of the gas. didn't notice any difference really over the years i used to ask indra about non-carb snacks if you're on one of those low carb

things you are craving something to scoop the salsa. pork rinds, i don't even know what those are so i can't -- you know, those are too scary. have you come up with anything, hugh have you given up? >> we're still working on that, joe. we haven't quite crossed that threshold for you yet. we were hoping in the interim we could keep you happy with the cheetoes mac and cheese. >> you don't have to eat the whole bag. we've gone back to a lot of things we're never supposed to eat. what are you supposed to do? you have no other vices. sara -- benefitting you, you are good to do the salty snacks. i always thought that was genius the controversy between coke and pepsi, you are on the right track. obviously i think it's clear >> reporter: it's certainly helping now. >> yeah, seems like.

>> we think we're in a good spot in that regard the one thing that has helped us quite a bit during the quarter was getting into ecommerce earli earlier. we launched that five years ago. we'll do $3 billion in ecommerce. that business is booming we feel like we set ourselves up well to manage the pandemic as best you can in our business. >> finally, hugh, wanted to get the international report card from you it looks like your results in places like germany, china were really strong. are you seeing a correlation between consumer behavior and buying and the health, the shape of the curve, the virus curve? >> we do clearly as people tend to get out of it more, you certainly see movement into the channels that are more like restaurants and convenience stores and things like that. overall we feel like we can manage it well the other notable factor is

volatility of international. as markets open and close, we're well positioned to handle that as well. we feel like we're in a good position. >> except we're a few percentage off of 4x. >> thank you for joining us. >> thank you >> vice chair and cfo of pepsico. back over to you. >> sara, thank you for that. i'm drinking my bubly. the sorkin family's vice, sparkling water, not much of a vice at all. it's a question asked on washington wall street, main street is another round of the stimulus needed and is it coming we'll debate the topic with mick mulvaney right after the break as you head to the break, check out the futures this morning we've got green arrows dow keeps moving higher. up over a percent.

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florida has more than 260,000 infections to date they opened their economy in may and testing has ramped up. disney world opening up and letting in a limited number of visitors we asked dr. scott gottleib about it earlier this morning. >> well, look, the governor pushed very hard to get it open. i would have prioritized opening up schools and businesses. i wouldn't have opened the indoor congregate community. disney is different. i'm not sure how they're opening. >> op ed for cnbc.com, mick mulvaney writing that the next round of stimulus should be focused on the root cause of the recession, fighting covid-19

mick mulvaney joins us right now. mick, it's great to see you. let's go right to that piece, which is to say when you say fighting covid-19, what do you mean by that because there's a lot of people that want stimulus money to go to small businesses that are still struggling there are other people who want money to go to schools so we can try to reopen the economy. then there's others who want the money to go directly into the health care system >> right i think the latter is probably the best place to start. face it, there's been discussion, for example, about giving people money to go on vacation the reason people are not going on vacation has something to do with the fact they don't have as much disposable income right now. it also has a great deal to do with the fact they don't feel safe people don't feel safe sending their kids back to school. people don't feel safe visiting their elderly parents. if we can solve some of those problems, the economy will fix itself of its own devices. >> there's increasingly a sense that we have been throwing to

some degree good money after bad. in large part the original programs were meant to last several months because there was a view the country was going to take this seriously, that we were going to be able to stamp this out, we were going to be able to crush this virus and try to return. that's from the time line in terms of the way the money was set up the ambition. clearly the country has not done that the question, therefore, becomes what do we do about it do we keep throwing money at the business end of the problem? how much money would you throw at the medical end of the problem? it seems like the private market, private sector right now seems to be at least doing a pretty good job in terms of the number of vaccines that are on the table. we'll see whether any of them work, but i'm not sure their success or failure is going to be necessarily a function of money. >> correct look at the places where there could be success based on a function of money. the amount of personal protective materials available which we're running low on again in certain markets number two, probably most importantly, testing continues

to be a challenge. people can't get tested. i'm going to visit my elderly parents this week end. i didn't qualify to be tested here in south carolina so i'll go in with a bit of trepidation. we still don't have people being tested as often as they'd like, as quickly as they'd like. people are waiting a week for their test results folks will solve the economy, fix it but the government has to give them the tools to do it that means giving them health care money as opposed to throwing money on the back end as opposed to the symptoms, the cause. >> in terms of how much money do you think is in the offing, not how much should be spent but given what you know about washington, what do you think the appetite is right now to spend some money >> appetite's been pretty good to spend a good bit of money my guess is it will be a trillion dollars because politicians love the next level up of money. what's less important than the total money is where that money

goes keep in mind they've already spent between the fed and congress north wards of 6 or $7 trillion worth of stimulus here into this economy. the amount of money is a lot less important right now than where that money goes. >> and in terms of how you would direct that oney, would you give it to states in terms of their testing? would you mandate testing in a broader way? i mean, a lot of the conundrum and challenge has been, frankly, that every state has done it differently. >> yeah. that's what people have to realize is public health in this country is and has been, probably will continue to be a state-based system if you ask do they have to send the money to the states? probably so. does that make -- mean that one state is going to get it better than another yes, they probably will. that's why you elect state governors and state legislators and so forth the federal government cannot create a national health care system onthe fly, nor should

they public health continues to be a local matter much more than a federal matter if you're going to continue to face that challenge, but that doesn't mean that these challenges are insur mountable that doesn't mean we should still be waiting we are waiting to get test results even if you're able to get tested that's not acceptable. >> mick, how do you think the elections play into the allocation of the next round of relief i mean, the things that you're talking about, putting money into testing, putting money into vaccines, those are longer term sorts of investments as opposed to throwing money at the solvency issue that so many businesses and so many people across the country face? >> i don't want to diminish the solvency issue, it's real. i used to be in a small business that's a big deal. i get that but my point when saying we should focus more on the root cause is that, you know, you could bail out an airline, for

example, you could bail out a cruise line but it doesn't solve the greater problem. folks want to go back to work. folks want their kids to go to school my kids want to go back to college. we want to go on vacation. how do we allow people -- allow the economy to function normally that's what i think is lost in washington right now they ever' looking at extending the unemployment benefits. that doesn't get to the problem. if you don't solve the problem you can extend unemployment benefits for another six months and you still have to extend them after that. >> this is politics as usual though, right, mick? this is politics as usual? going after the low hanging fruit, so to speak. >> look, they'll be in washington -- congress goes back to washington for the next couple of weeks and then they're done basically until the election elected officials want to go back into their district as they run for re-election beating their chests saying, looks, we've done something that's great that's why you're going to get a

bill in some fashion i think they would be better served saying, look, we did something that's going to help you. you cannot buy elections but you can help solve problems. if they look at the next round of stimulus in that fashion, i think it might actually be productive >> mick, before you go, just wanted to ask you. on friday biden came out with his jobs plan which included tax increases. i'm curious how you would approach it come 2021, hopefully when we are i want to say on the other side or at least almost on the other side of this pandemic given the costs and the debt that we've gone into, how you would raise some kind of money to at least begin to pay some of this down. >> yeah. listen, there's going to be -- that's the classic argument, andrew, between the right and left how do you raise more money. take a bigger slice of the pie or smaller slice of a bigger pie. if anything, upuntil the covid

crisis this administration proved was supply side economics does work. biden is talking about revitalizing manufacturing, we've done that already. created hundreds of thousands of manufacturing jobs that the obama administration said wouldn't exist again you can do it. you can grow the economy, grow the size of the pie and increase government revenues. will there be pressure to raise taxes? absolutely will it exist at the state and local level? absolutely is that the best way to grow the economy? depending on the outcome of the election, i think you get a chance to find out. >> and in terms of raising taxes, both at the corporate level and individual level, you wouldn't raise taxes at all in either instance? >> listen, depending on the outcome of the election, my guess is taxes are going to go up in some fashion if the democrats retain the house at the very least there will be tremendous pressure to raise taxes. no question about that the one thing we've proven over the course of the last 3 1/2 years are corporate taxes are

not the best place to raise dough. corporations as anybody who understands economics knows, they don't pay taxes shareholders pay taxes and customers pay taxes. when we cut the corporate tax rate to 21%, all that happened was we grew the economy. excuse me, corporate tax collections went be down but individual tax collections went up and the economy got bigger. i hope that message, that model has been learned my guess is it probably doesn't. >> would you advocate or support raising -- i understand the corporate tax argument i think this past couple of years has helped prove the point that you're making right now the question i would ask is on the individual level would it change the dynamic given that a lot of people have gotten -- you know, talk about inequality. covid has created more inequality to a large degree we had talked about all of the working people who have actually gone on the front lines and gone to work and yet there's been a lot of people who have made a

lot of money on their backs. the question is whether their contribution to this covid-19 pandemic should be in the form of money. >> if your question is will there be pressure to raise taxes after the election, the answer is absolutely. there will be pressure to raise the income tax rates the question is how far down the economic scale will it go. will you be with the rich starting at $1 million a year or $250,000 a year. that pressure will be there regardless of the outcome because i think most of it will scramble or look for ways to pay for things if they look for infrastructure, no one has talked about the gas tax. if they're doing infrastructure, they should look at gas taxes as a way to pay for it. that will be the one place where there can be a consensus in the near term. >> before we go, if you were still in the white house with the president, how would you advise him to work or not work with dr. fauci

>> listen, it's tough. i really admire dr. fauci, but i was also one of the persons he told to go on television and tell people not to wear masks. i was one of the people who went on tv to say, look, you can get it from hard surfaces, you can get it from folks who are asymptomatic we're learning now that information is not entirely right. it's a challenge when you tell the president of the united states something and it turns out to be wrong but as a result of that we've had tremendous economic impact. tough -- when you don't have credibility to work with the president of the united states, i think that's a fair concern to have i would encourage the president to continue to listen to folks who have perspectives that are different from his i know that he will do that. we've listened to the scientists, there's no question. i don't think we should focus on that 3er7b8 reaction between the president and dr. fauci. these are real relationships, ordinary relationships if you've been wrong a couple of times, it makes somebody wonder

whether you're wrong again. >> so interesting though because with the american public he has enormous credibility, right? that's a distinction here. >> how much has the media criticized dr. fauci look, when he goes to a press conference, sort of like when i used to go and do press conferences. 9/10 were whether he agreed or disagreed with the president the media plays up that interplay between the president and any of his advisers instead of getting down to brass tacks one of the reasons they like fauci, they should, he's a likeable guy they don't remember he was wrong on masks, hard surfaces, isometric transmission the president knows because he's dealing with first order information. i get it i get the dynamic. as long as the president is getting that information, if it's coming from somebody else, that's fine. it doesn't have to be dr. fauci. >> mick mulvaney, we appreciate your time as always.

look forward to talking to you soon. >> thanks, andrew. coming up, covid vaccine news this morning from pfizer and biontech we'll talk to meg tirrell about it next.

biontech announcing they've been granted fda fast track designation for two covid vaccine. meg tirrell joins us they're both messenger rna should we assume these two are showing promise, meg >> reporter: yeah, i think so, joe. i mean, we've seen these phase one results on the most advanced of those four and they did show promise. they say they've got this fast

track designation based on the two, we don't know what it means for the other two. maybe they haven't submitted the data for those what we do know is they're going to choose the most promising one and take it into phase three potentially as soon as later this month that's going to be 30,000 participant trial run to determine the efficacy and the wider safety of this vaccine they say if all goes well then potentially they could be applying for approval in the fall the thing about fast track designation is it is a good sign it means that the fda has determined that this is a product that requires more attention and focus and speed to get it through the regulatory process. i would argue that it's fairly obvious that a coronavirus vaccine showing promise in early stage trials should be getting that kind of focus so i don't think this is news this morning that's necessarily that surprising i would be more surprised if a promising vaccine didn't get fast track designation or at least this kind of focus from

the fda. talking with folks about why there's sort of optimism around shares, they showed further evidence that the government is really focused on pushing these vaccines through, which i think we all knew. >> when did they start actually making it there? they're talking about how much they had in 2020 would they start manufacturing it now in anticipation of using it if they're getting to 1.2 billion doses in 2021, when would they actually start stockpiling it, making it? >> reporter: yeah. they've been working on the manufacturing forea couple of months now just getting everything in place. so the whole plan is to manufacture at financial risk to have these doses ready to go, at least the 100 million, by the end of 2020 if they get the emergency authorization sometime in the fall. and then ramping up throughout the course of next year to get to the 1.2 billion this will likely be a two dose vaccine. so that's enough this year for 50 million people and 600

million next year. >> they're making it now, manufacturing it now and stockpiling it or not? >> reporter: they are working on it now i don't know if it's finished or if they're stockpiling it yet. >> i don't know which one they'd use. they'd have to pick one or the other. >> yeah, that's one of the complications. there's four different ones. >> messenger rna some people like the other way of doing it where you get some cell-based immunity. 28 companies working on something, meg we'll see. still to come on "squawk box," should schools reopen this fall major question from coast to coast. the president of the national education association will join us to talk about thane wn rurn.t xthe

in an opinion piece in "usa today" the president of the national education association wrote, the white house pressure campaign presents a false choice between the health of our students and the health of our economy. joining us is the president of the national education association. good to see you. we had dr. scott gottleib on earlier in reference to your piece and to this upcoming intervi interview, could there be enough money? where would it come from you how should it be spent his op ed piece is schools can open safely this fall. he has some guidelines for how we could do this can your view and dr. gottleib's view be reconciled in terms of if there's enough money and if

it's done the right way? >> well, we know where it was done correctly in other countries that ironically donald trump has mentioned, denmark, germany, australia the first thing they did is they said you have to get the infection rate down in the community to a place of 14 consecutive days you see you are controlling it safely or unsafely, no one has tried to open schools where you have an infection scourge the way we do. and we're talking weeks away for some school districts. here's the bottom line, it is going to take resources. that's the first thing that completely confuses educators is we've been working on plans for months and months when donald trump and betsy devos aren't saying a word. we're saying, to open a

restaurant safely they're saying you've got to distance kids, you've got to disinfect in a very specific way. you have to have health checks you have to have people tested and traced if you're going to put them in small classrooms i have 39 sixth graders in my little classroom one window open. no one was saying it's safe to rush 39 sixth graders sneezing on you with runny noyess the bottom line, we can plan for these things but donald trump wasn't talking about where's your masks, split sessions, he was offering zero leadership, zero help on all of the things that we're going to need. >> okay. just getting back to the places that would qualify with the 14 day. you have a fundamental disagreement with dr. gottleib

then he's well aware of where the infection rates are. he knows all the numbers he knows exactly what's been done in the countries you're pointing to. his op ed is schools can open safely this fall you and dr. gottleib just disagree -- >> i didn't read the piece that you are referring to but i will tell you that it's going to look very, very different if you're in some rural community that has no new infections and if you're in miami-dade. so that's the other thing that i take great exception to. all schools, all students all day just like you left it and with no resources. i don't know if the doctor you are talking about would say he thought that was a good idea. >> he has a list of things that would work he points out that as far as people most at risk, that the children aren't. he wants to do it so that you don't have nearly as -- maybe you stagger days so you don't

have 39 kids in a classroom. but if you did have the money, you want ppe, you want -- where should the -- where would you -- how much money do you need to do this safely and where do you think it should come from? federally? what would you use it for? because people do -- there are people that will argue there's reason to try to get the schools open for a lot of reasons, for kids and for adults. >> i'll answer there is no one who wants their kids back in those schools more than their teachers. maybe their parents. maybe their parents, but we miss our kids we are going crazy doing things on zoom calls. like i said, it would be really hard to do what i did with all of my sixth graders on a zoom call, especially those now who may not have wi-fi in their home there are some kids at an absolute disadvantage. we are does perfeare desperate s correctly.

billions of dollars to your local school districts to help with all of the things we're going to need to do this safely. he's sitting on it he went on vacation and we don't know why we rushed to get the money into the businesses and, by the way, nea supported that those were helping the families of our students. why wouldn't you give a public school the same consideration? shake shack. we need all hands on deck. i have to say this, i have seen donald trump bully generals and senators and governors into doing things they knew they shouldn't do he knows nothing about american educators. he doesn't know the school nurse, the lunch lady, the school custodians, the school board members who were elected he cannot bully us into doing something to hurt our students and that's the bottom line. >> we're looking for solutions in how to get it open.

we understand you have some strong feelings about people currently running the show we got it. all right, lily. thanks coming up, earnings season has arrived. what iesrs nnvtoeed to know when we come right back

rolling out quarterly results this week. we'll talk expectations and ask what investors need to know next save hundreds on your wireless bill

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it's a big week for the banks. starting tomorrow we'll be getting reports from jpmorgan, citi, wells fargo followed by goldman sachs, morgan stanley and others the sector has been hit hard this could impact the broader markets. wilfred frost joins us with a look at what to watch. wilf. >> reporter: good morning, melissa. the key question is whether we've reached peak provisions, that is money set aside for potentially bad loans, or whether there's more pain to come in the second half of the year so investors will be focused on the level of q2 provisions

relative to g1's elevated level which a few banks will see them fall and improve and also what commentary sounds like on this topic relative to when we last heard from management which was sort of early june they have an up beat tone back then the other key question for commentary is whether we've seen a change in the economic data they are seeing since early june given the spike in covid cases in certain states. as well as consumer spending, loan growth will be in focus there as science suggests that has really tailed off significantly in recent weeks. on the bright side, trading revenues should be very strong they were up 30% year over year in q1. the forecast is to be up 40% year over year in q2 we know wells fargo will be cutting their dividend the question is by how much. we're looking for an update on goldman sachs on the capital position after their recent miss in the stress tests.

jpmorgan, wells fargo, citi and u.s. bank corps kick things off tomorrow. >> wilf, stick around. we want to bring in greg branch for a look at the banks as well as the bank's impact on the broader markets. greg, good morning to you. >> good morning. >> it sounds like you like the banks. they are cheap should they be cheap we are in the midst of the pandemic we don't know how the consumer or small or medium sized businesses are going to come out of it. there are so many unknowns when it comes to the health of the banks. >> yeah, you're right. i think the area of focus, as will indicated, will rightfully be provisioning and what the banks anticipate is losses on loans going forward. that said the banks traditionally trade at about 1.7 times price to tangible book and they're currently trading in the 1.1 times. they're one of the few sectors in this bifurcated market that hasn't really participated in any rally. so even within the group, which

is cheap, there are opportunities of -- for those banks that are trading even less than that 1.1 times price of tangible book. so if you're going to look at this sector which is, again, overall under valued, what i would be looking for are banks that are going to show and participate in areas of strength and so as will indicated, loans are tailoring off. they're shrinking. auto loans has been a source of strength mortgages should be a source of strength as the spread between mortgage strengths and the ten-year yield should be going up so i would look for banks that are well positioned to take advantage of those sources of strength >> greg mentioned auto loans and, wilf, i'm curious from the bank's perspective, the health of the consumer may be a little bit in question, wilf, because consumer has been bolstered by

stimulus checks and other help which could run out at the end of the month if congress doesn't get its act together do we have any indications so far in terms of maybe mid quarter updates on the helping consumers? >> reporter: we have been seeing some of that credit card data come out as we often do when the banks will release it via their brokerage investing units. the credit card spends from some of the small banks is pulled back a little bit in those states this is the setup, melissa, where we might see relatively encouraging numbers relative to expectations followed by commentary a couple of hours later which says, look, things in the last couple of weeks looks much worse we had hoped second half provisions will be low based on the last couple of weeks we can't now promise that. we can see some volatility around that. just in terms of the sector share price wise, clearly kbw banks down 5% year to date

it's not like the setup is absolutely possible. that said we did jump 5% on friday and it looks it's up another 2, 2 1/2% premarket. you've got 7% up side coming into earnings tomorrow i'm sure we're going to see big swings in both directions. the interesting thing within that will be whether a couple of banks that they do well relative to the rest can hold on to gains or whether the whole sector is going to keep trading together largely as one in terms of the week that we've got ahead. >> greg, i understand that you like the banks here and you think they are cheap at the same time do you acknowledge and do you think that money in general is better placed in other sectors like technology banks as a percentage of market capitalization has been trending lower for weeks and years now. just less important to the overall markets and technology, of course, has been picking up that slack >> right and so when you look at the performance of growth over the

last 12 months to 18 months, you've seen that it has really outperformed, to the point where i think we need to start to look at whether the relative valuation or any valuation that we're applying to this is something that we're comfortable with so, again, i think we've seen a bifurcated reality where growth and particularly growth that is well positioned to take advantage of our stay at home situation right now has really outperformed to a significant degree and some sectors have been left behind i believe that the banks are one of those sectors that's been left behind. trading far less than its historic average i believe within that group not withstanding wil's point, that we need to keep an eye on credit and what the banks tell us about their provisioning, but they're cheap. they haven't participated. at some point the market always resorts to the mean. though we can't pinpoint when that will be, the financial system is secure it's well capitalized. it's liquid.

some of these names are trading at less than one times price the book take a name like conaco ventures, they've been anticipatory they built reserves and they'll tell us if they need to do that as will indicated. this quarter we're still going to see significant building. the important thing will be what they tell us about the back half of the year. >> greg, thanks. greg branch and thanks to our own wilfred frost. andrew >> coming up when we return, tracking coronavirus cases reopening the economy and the need for more stimulus we're going to talk about all of those topics and more with senator marco rubio will. t. joel: us in just a little bi we're back with a big hour ahead. quadrupled their money by 2012? and even now, many experts predict the next gold rush is just beginning. so call us money reserve, the only precious metals

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enthusiasm not dampening senator marco rubio. on a tear powering elon musk further past warren buffet on the worldwide list and a huge pay day. disney world now officially opened critical test for how public facing companies can handle the risk of the coronavirus. a live report on an important weekend is just ahead as the final hour of "squawk box" begins right now.

good morning welcome back to "squawk box" here on cnbc i'm joe kernen, andrew ross sorkin and melissa lee becky is off don't dance on camera. if someone has a camera, do not dance on camera. just don't do it have you learned -- do you agree with me on that or not, andrew >> i think that i shouldn't dance on camera. but i knew that before today. >> okay. all right. >> i mean, it always goes down badly, right steve vollmer, ma, elon musk. >> you're going to see it again, again, and then some more and some more. >> you know what though, that

guy's got every reason to dance. he could dance like that every day forever. doesn't matter >> i understand that. >> he doesn't care that's fine. >> he can proudly dance. >> if i had a millionth of what he's dancing about, i'd probably be dancing but you wouldn't see me because i wouldn't be here. u.s. equities up 230 points adding to the big gains on friday last week we actually ended positive the nasdaq surging 118 points. getting insight into how some of these big faang stocks are doing with netflix this week that's a special case obviously, as a lot of people are i can't believe that it works all the time so many people watching. getting bigger and bigger. you can explain that to me, andrew a lot of people watching netflix. asian markets helped i think get things off on the right foot last night with the global markets. you can see they're up as well

melissa? >> today's top corporate story, pfizer and biontech announcing they'vebeen given fast track designation. shares of the two companies up biontech surging by more than 9% pfizer up 2.75%. pepsico up and they surpassed the expectations on the top and bottom line by consumption of salty snacks during the lockdown this was pepsi's cfo hue cfohugh johnston >> beverage businesses doing less well. the beverage business started to come on more strongly at the end of the quarter >> and pepsi shares, as you mentioned, up this morning by 2.6% right now. disney world in orlando reopened for a limited number of visitors the magic kingdom and animal

keng come to reopened on saturday masks are required parade floats rolled through the park and characters popped up at safe distances from crowds studios scheduled to open on wednesday. >> all right even we're going to talk more about this as disney world reopens. florida was seeing a surge in coronavirus cases yesterday. the state reported 15,000 new cases in a 24-hour period. that's the most for a single day in any state since the virus -- since the pandemic broke out dozens of hospitals in the state are reporting. icus at near capacity. testing has surged in florida. the state announced 140,000 results. joining us now, senator marco rubio of florida you would characterize the on the ground state of things in florida how, senator getting ready to go out of control or still within the realm of not overwhelming the

health care system >> well, i wouldn't use the term overwhelming the health care system quite yet a couple of points it's a very serious situation. it's one we need to continue to watch and do the best we can with we have to deal with this virus for the foreseeable future as is every country in the world as they try to get back to any sort of normalcy, which we are going to have to do. i would say just about yesterday's numbers, not to diminish them, it had a lower negativity rate and huge -- they're not reporting on the testing in real time because they're going to different labs. sometimes the backlog has accumulated and they announce them in one day. suffice it to say it's a lot of positivity cutting it and seeing if there's a higher risk.

potentially in an icu. that's always been the concern >> so can you open up schools safely and if you had everything needed in terms of gas can you do that safely in florida. >> florida's an enormous state we have 67 counties. i spent a week in northwest florida where the vast majority of the counties could reopen they're not facing this. so i think in many of our counties the answer to that question is, yes, we could in others i think we are going to have to take additional measures to reopen schools and we'll have to be flexible. it isn't going to be schooled away like normal times you have to make the decisions oen a cost-benefit analysis. what are the costs of not reopening schools? what are the benefits for the

virus. i think in the short and long term the costs are extraordinary. the costs of not reopening our schools are extraordinary in terms of learning loss, in terms of unable to open the rest of our economy. what is a parent who's required to go to work supposed to do with a 9-year-old? leave them at home all day alone in front of a computer it's not feasible. we have to mitigate risk here. as long as we don't have a virus, we won't have zero cases. that's something we'll have to accept and work around and try to do the best we can with. >> do you think disney world's been successful in reopening will that stay open? and do you think there's certain parts of florida that need to reclose businesses >> i don't think there's any evidence that the businesses we're talking about closing are in any way driving the infection surge. i think the bottom line what's happening -- this is anecdotal i feel comfortable in this living here in south florida

what is happening -- what happened and what is happening is people are going out, younger people, they're getting together they're getting together in public spaces and getting together in each other's homes hanging around, graduation party, father's dye weak end, fourth of july weekend, when you're in close proximity, you're going to get infected both of you may go home and infect your parents, grandparents and that's where it becomes a problem. you can't close those things off. i don't think there's any evidence that restaurants, disney world which is an outdoor setting, beaches, parks are the cause of this surge. i think the surge is coming from people behaving like people and that's what makes a virus like this so problematic. it asks us not to do what comes natural to us, that is interact with other human beings. this is going to be a challenge we're going to face for the foreseeable future we're going to have to do the best to mitigate risks. >> do you think the rebound in the economy that we've seen in

let's just say for example the last two jobs reports, do you think that it's decelerating because of the resurgence or the surge in states that maybe are going through this do you think that's going to be more uneven than we're planning for right now? if that's so, do you and your friends in washington need to do more >> two answers to that the first is i think in those places there are still places around the country that are moving towards opening they face different circumstances. i don't know how that balances out in terms of the places pulling back or slowing down versus the places reopening. certainly we know the news and negative news that people are reading about the pandemic has an impact on travel. talking to a hotel owner in northwest florida and they were packed during fourth of july suddenly they lost 30% of their reservations and people are watching on the news and south florida. so i think there's going to be a lagging factor here that could

be at least slowed down a little bit. in terms of do we need to do more i don't have any doubt that we need to. we are working on framing up a plan we're 90% there about how to help small businesses, micro targeted and the costs for paying for some of these adaptive technologies that they have to come up with in order to comply with local regulations. we have to be nimble and flexible here because as this virus's impact on our economy evolves our policy will have to evolve. >> senator, the vice president released his jobs programs or comments about jobs and manufacturi manufacturing. were there things that had merit? did it appear things you heard

from when donald trump said it, do you think we're going to have tougher economic times if we take back tax cuts and reregulate >> i think we are doing a reboot and we've had multiple waves of this technological changes bring about economic changes so we're going through that now i also believe you cannot be -- since the industrial revolution there hasn't been any great power in the world that hasn't been an industrial power we have to remain an industrial power and rebuild that it's great to see the vice president talk about that. i think he's been in public service for the better part of three decades. why didn't he do that before

again, i'm glad he's now joining the chorus if you look at some of the things president trump has done, he's laid the ground work and continues be to lay the groundwork and that will include doing some of the things that we have normally been uncomfortable with doing the world has changed, the cold war is over. some of the relationships with some of the cold war partners need to be re-evaluated. what's happening in china cannot continue they have taken advantage of what we -- we allowed them to cheat and they have used that to become a rival instead of a responsible country. >> andrew? >> hey, senator. i have two questions for you but just picking up on this issue of biden. curious about taxes. take corporate taxes off the table. i know that's something biden wants to raise how do you feel about individual taxes for the wealthiest and those of us who frankly have been blessed throughout this pandemic we have workers, as you know in your state and everywhere else, who have gone to work every

single day showing up, blue collar workers at factories, at cashier lines, on the front line and that's been their contribution to this pan dem mib mick do you believe those who have money should be paying higher taxes as part of their contribution to this pandemic? >> i never viewed taxes as a way to be punitive or socially engineer outcomes in the economy. taxes are about generating revenue for government it should be done in a way that's, number one, fair and, number two, conducive to economic growth. i would prefer, frankly, rather than taxes that that money be incentive advised through certain tax breaks or looking at certain tax loopholes or behaviors. i would prefer to use that and to incentive advise them to invest that money, for that money to be invested in planning industrial capacity and investing here in the united states on functions that create dignified work for americans that's what i would prefer to

see some of that go towards and to work on policies that help achieve that but what i'm never going to be in favor of is the notion that we should use the tax code to go after the people that we decide make too much money. the purpose of taxes is to generate revenue and it should do so in a way that's fair. >> by the way, i absolutely agree. we want to generate revenue for the government so that we can do the right things i don't think it's to be punitive one way or the other. this pandemic is costing us trillions and trillions of dollars. you talked about wanting to spend more money on top of this after months have gone by where states have not behaved as properly as they should. i'm from new york and we made lots of mistakes early on, but you look at what's happened. the question becomes, who is going to pay for all of this how are you going to do it >> that's a great question you're absolutely right. the first point is very much like being in a war time footing in that regard because

ultimately if we don't rescue and we don't help stabilize elements of our economy, it won't matter what we do going forward. we won't be able to pay any of this back. we won't have an economy to generate a revenue around. how are you ever going to get yourself to a place where you can generate a revenue we are talking about industries that will vanish, may disappear. small businesses are an example. it will take a decade or more to help rebuild some of these things i think that's the reason. i don't view any of this as a bailout, i view it as preserving the basic infrastructure of the economy so when the time comes to recover we have an economy to recover around as opposed to building it up from scratch once again. >> senator, do you think that should be -- >> we've got to get this china question in, andrew. we've got a minute to go go ahead >> i was just going to ask, do you think there should be more federally mandated restrictions, though, on how frankly -- i hate

to say it, people behave the reason i ask is to some degree we have been spending good money after bad because the ppp plan and so many other plans were for a several-month duration with the expectation we were going to crush the virus. as you know so well, so many states, including florida, have not. >> yeah, two things. i wish there was a standard that everyone agreed on in terms of what the best practices should be i wish from the federal government, the white house, governors, mayors, everyone was saying the same thing. too heavily politicized. masks should never have become a symbolic statement of your political leanings. it's tough to do mandates. there are parts of the country, frankly, there are counties that have very few cases and it would be difficult to just sfie masks there. this is not about people behaving badly this is about people doing what people are supposed to do. we always knew there would come a point when people would interact with one another. i think we have to encourage them to do it in the safest way

as possible. there isn't a nation on earth as it's tried to return to some economic normalcy hasn't had some level of outbreak we knew that was going to happen we're going to have to deal with it and mitigate it we can't make the risk zero as long as we couldn't have a vaccine. >> you're going to introduce legislation, senator what's going to be in it and what are the pros 13ek9s i'm talking about to deal with chien fla in certain ways, capital markets, companies, i guess maybe even sanctions what's going to be in the bill >> we've already talked about these ideas already before i just believe if you're listed on a u.s. exchange, you should have the exact same transparency requirements as any other company that's on there because you have investment funds, you have american investors both directly and across the funds investing into the future with very little insider transparency on their books i just don't believe that if you're going to be listed in our exchange you should not have to comply with those requirements we're going to keep pushing hard with that.

we've made progress with the bill senator kennedy passed. >> very good, senator. thank you. >> thank you. >> appreciate having you on today. we hope to see you again soon and we'll need to see you again soon to talk about florida we wish you and the entire state well down there in dealing with this >> thank you thank you. >> melissa coming up, the bronco rides again. we have a preview of tonight's big reveal just ahead. plus an auto sector health check with the ceo of carvana. analog devices is buying maxim integrated worth $21 billion. maxim popping 17% premarket. stay tuned, "squawk box" will be right back achievable steps along the way... ...so we can spend a bit now, knowing we're prepared for the future. surprise! we renovated the guest room, so you can live with us.

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welcome back to "squawk box. after more than two decades ford bringing back an iconic brand, the bronco they're hoping this will give them a bigger piece of the suv market ford has a lot riding on the strategy phil lebeau joins us now phil, you know what i think of when i think of the bronco, right? >> reporter: yeah. originally they planned on unveiling this on july 9th guess whose birthday is on july 9th. i kid you not. o.j. simpson, that's why they moved it they are unveiling it tonight. this is an important vehicle for ford because the bronco is in a segment that ford really hasn't played in for the last two decades which has become much more popular yes, they have many more suvs. all of those play in the suv

market but the off road suv market, the one we're talking about where jeep is incredibly popular, that's where they're targeting the bronco this will be a sub brand for ford they will have three versions of the bronco they're going to sell they're targeting jeep they have their work cut out for them the sale of jeep in the blue line, they blew past ford in terms of suv sales in 2013, 2014 they have not looked back since then fourth is in third place in the suv market share that is the jeep brand right there. keep in mind that ford will be reporting q2 sales at the end of the month. we'll get a sense from them about what type of demand they are expecting from the bronco. this is critical for ford. even though that's not a huge market, you have to be more active in the suv market

it's a hole in the lineup. they're finally filling it we'll see what it looks like tonight. fiskar electric vehicles is going to go public through a spec ipo this is who will be merged with fisker electric vehicles spartan energy they're hoping to produce the first fisker electric vehicle in 2022 call it the nicola effect. fiske rey, let's see if we can put a deal together. that's what's happening here. >> phil, before we let you go, there's been a whole state of spacs recently >> yes. >> do you think if this company tried to go public on its own that the public would have accepted it? we have the biggest spac deal,

this multi-plan health care deal, 1$11 billion you know your space so well, what do you think is driving that transaction >> oh, i think it's the excitement over pure electric vehicles if fisker would have tried to come out three months ago, not in a spac deal, would not have gone anywhere. nicola for years, they were trying to find a deal where they could go public and they were struggling until the deal was put together so what you're seeing here, andrew, really is i think the market as well as investors saying, now, wait, this is a good way for us to get into the pure play electric vehicle invest share. look, they don't have a vehicle right now at fisker. they're not going to have one until 2022 they have a steep hill to climb. i bet you you're going to see this spac well received in light of what we've seen with nicola and tesla is the ultimate ev pure play right now. we know what's going on with that stock >> okay.

phil, thank you. appreciate it. meantime, used car sales are one gauge of how the economic reopening is going joining us right now is one used car retailer with a soar in stock. earnest garcia is the ceo of carvana known for the famous car vending machines good morning to you. >> how you doing >> there was an expectation that the pandemic was going to tamp down interest in vehicles, both new and used yet the opposite is happening. what do you think is driving it? >> well, i think it's undoubtedly very interesting when this first hit there was no doubt there was a huge hit to demand we saw car sales drop 30, 40, 50, even 60% very early on they started to recover very quickly in late april and they've continued recovering many retailers are up year over year significantly in our case it's definitely recovered very quickly. that was probably not the baseline expectation heading in. >> in terms of the customer that's coming in, are we talking

luxury are we talking mid are we talking low where are we looking at here >> i think it crossed the board. probably the biggest change has been with the decrease in gas prices there's a lot of demand for suvs, a lot of demand for trucks there's a lot of demand across the board. a lot of demand for off lease vehicles as new production starts to spin back up there's a lot of demand for older cars they're less expensive i think across the board we're seeing a lot of command in all the tuomotive retail. >> how much do you think this is pulling from new car sales right now? >> i think to some degree it's pulling from new car sales because used cars are a little less expensive i think to some degree there's maybe a push away from new car sales because production has slowed down and incentives are being pulled back as a result. i think that's probably likely to continue for at least the immediately foreseeable future there's a pull towards used and

a push away from new as well >> in terms of profit margin for you guys, you know, you guys have a lot of, a lot of, a lot of competition how do you hold the margin >> i think automotive retail is a very interesting market. on the used side there's 40 million transactions per year. on the new side there's 15 million give or take transactions per year. there's 40,000 transactions out there. it's been enormously fragmented. dealers have found a way to percent severe and have pretty decent margins what we represent is a new kind of business model where it's an ecommerce centric model, they go to our website, selecta car, g through the purchase process, we deliver it to their door using first party logistics and they get a seven day return policy. that has a different cost structure. and so i think as a result of that we have additional opportunity above and beyond most automotive retailers.

>> earnest, how are used car prices holding up in i'm wondering what the impact of the bankruptcy of hertz could be on used car prices and whether or not carvana could be a buyer of some of those cars that are lick whi which dated. >> this has been an interesting and volatile place to watch over the last 3 1/2 months. in april we had the greatest decrease which is one of the measures of used car prices that's probably used in may and june we saw sequentially probably the biggest increase in used car prices and they're at some of the highest prices they've ever been at. i think maybe the highest price they've been at. that market has spun around quite a bit just like the stock market gauges and other gauges of economic activity it's been very difficult to forecast and i would not want to forecast where it's going from here on the used side, there's likely to be shortages.

trying to figure out what demand is going to look like with increased unemployment potentially expiring with less stimulus in the economy, it's very hard. i wouldn't want to try to forecast exactly where that's going to go. forecasting the immediate future is the best way to immediately be proven wrong. there is undoubtedly a lot of supply out there from hertz, other rental car companies a lot of off lease volume. i think the value will drive prices that drove it down, it drove it back up. >> earnest, before we let you go curious what you think of what's happening with tesla and the expectations around that company. if shareholders are right, the market share that tesla is going to have over the next decade is going to be huge could ultimately take away or be part of your business in the future >> sure. i'll comment on the product.

they've built an unbelievable product over the time. no doubt it's differentiated no doubt it's high quality you have to give them credit they build an unbelievable customer experience and they've generated a following and they've executed very well people have been watching it very closely and that's a hard thing to do, spin up a business from scratch i think you have to give them credit from there. where the stock is, what market shares are going to be, i'll leave that to people who are closer to the forecast i would take my hat off to them and give them credit for the product they've built and the customer experience they've built. >> we're going to leave it there. we appreciate your time and perspective. hope to talk to you again soon thanks. >> thank you very much. coming up, the tech surge growing. analyst dan i was will tell us why he under his price target on apple as well as how high he thinks tesla's stock can rise. may show elon musk dancing again. be prepared. you're watching "squawk box" on cnbc

coming up, a big step forward tore disney. opening the doors even as virus cases surge to new records in the sunshine state we'll bring you a live report righaft ter the break when squawk returns after this. now is the time to support the places you love. spend 10 dollars or more at a participating small business and get 5 dollars back, up to 10 times with american express. enroll now at shopsmall.com.

disney world is now open again. open visitors were back to the magic kingdom and animal kingdom even as new covid cases were spiking in florida a big step for the company that relies heavily on revenues from its theme parks. julia boorstin joins us now with more you always thought, wow, what a great business model they don't have cable, broadband. got all of this other great stuff. whoa, i don't know anymore then it turned into a perfect storm, right, julia? >> reporter: certainly just remember, joe, that they opened this weekend as florida reported more than 15,000 new cases on sunday. that was a daily record for any

u.s. state this as disney welcomed thousands of visitors to the start of its phased reopening of disney world after the closure of domestic parks reportedly cost the company about a billion dollars in the past quarter. disney parks chairman in an interview from the park said people were following the rules and were wearing masks disney would not say how many people it admitted there were some reports of a bottleneck getting into the park, but the grounds reportedly did not feel crowded wait times for the rides were short. i asked demaro whether he's considering reclosing the parks due to the spike in viruses, but here's what he said. and it looks like we do not have the sound bite, but he did not answer specifically. he said that they designed the process so they could put the right protocols in place, they could expand and shrink the number of visitors they're letting in because they're not letting people buy tickets at

the gate you have to prereserve the tickets. he did not say specifically whether they're considering closing the parks. he did say they're very pleased with bookings for later this year and next year just this morning goldman sachs initiating coverage with a buy rating that they expect the parks and studio segments to fully recover post covid synergies direct to consumer are under appreciated. meliss melissa? >> julia, stay with us bring in michael nathanson from moffitt nathanson for more great to have you with us. your note in may that i've got, fast forward to fiscal year 2022 you're looking way past all of this is that just because the them park reopening is going to be so spotty, hard to judge? >> yeah. the pandemic and the time for it

to improve and secondly just the economic cycle typically when the economy goes down and the economy is high the parks tend to suffer it's a combination of both, right? it's not one or the other. >> at the same time a lot of the streamers are getting the benefit of this market, people being at home and disney+ falls into that bucket although you and others have made the argument for so long that disney+ is a company that disney has to spend money on and it won't add too much to the bottom line, at least initially how much credit should we give in disney's valuation to that right now given the headwinds of the parks? >> yeah. that's the essential question. you have a business that's early, growing nicely. it has no profitability because it's so early. you know, we think it could be

worth, you know, 50, 75, $80 billion and the stock reflects on that today. you know, we're seeing the issue of what are the personal risks to theatrical and theme parks and espn which is the much bigger source of cash flow right now it's a balancing act because things are so tough at the other businesses that are valuable and driving cash flow, we're neutral on the names because we think the duration of improvement will take a while here >> yeah. on that note in terms of production in espn, sports aren't happening right now production is very limited right now. their newest releases have been post poepd what's some of the status of the expectations to when things can pick up on this front? >> well, you know, from the film side of things, melissa, we're really waiting to see if leaders start to reopen. for mulan to be released in august, mulan a big movie for

disney has been delayed. they want to see if audiences will turn out. so you have that question around theaters in terms of tv division and espn, there's a lot riding on the restart of the nba season. there's a sense that sports will happen without fans and that will still be great for people watching at home and will really help espn ratings, but a lot of things still up in the air and a lot of questions about when those business models will kick start again. >> michael, what's your pick in this space if not disney, which bulls will argue is a blue chip name with brand recognition, full library of content, then what stock in your universe do you like in this environment, in this pandemic environment >> so it's ironic. we've been big disney bold and we downgraded the stock recently because of all of the

uncertainties. our name in media is fox right now because fox owns two assets, fox news, which we think is very reliable and stable at this point, and secondly fox broadcast which owns the nfl rights, college football rights. to julia's point, we need sports to come back if sports doesn't come back, fox call doesn't work. nfl has to come back it's a key driver of fox and the ecosystem. we're still positive on google and facebook which is easy to recommend, easy to own >> michael, thank you. michael nathanson and thanks to julia boorstin andrew. coming up when we return, apple analyst dani ves on why he under the take cheese sandwich and ask, "why?" i see a new kitchen with a grill and ask, "why not?" i really need to start adding "less to cart"

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. welcome back to "squawk box. robert frank has more on musk's growing fortune. robert >> good morning, andrew. elon having a lot of reasons to dance over this weekend. he added $6 billion to his wealth just on friday. that brought him to over $70 billion. that's 1 billion more than warren buffet. he is now the seventh richest man on the planet behind larry page and steve vollmer he started $60 billion ahead of musk musk is up 40 billion due to that 21% stake he has in tesla now he's going to get another boost, perhaps this month from his pay package. he got the first tranche in may. those were options valued at 1.8 billion. if tesla reaches a 6-month market cap of $150 billion, it is currently at 286, so in another two weeks he could get

another $2 billion plus. that is if tesla stock remains where it is or even higher in the coming weeks the real battle is between musk and jeff bezos bezos now worth 190 billion. where would tesla stock have to get to for musk to reach bezos well, that number is $4,200, which sounds crazy, but if you had told me in january that tesla would be at over $1500, that sounded crazy then, too, so we'll see. >> so thank you, robert. do you realize that elon musk personally is now worth more than gm and ford combined? the market caps of both of them, just his personal stake in the whole thing? >> that's -- it's amazing. tesla's worth more than all of the car companies combined plus several other companies, but, yeah, i didn't realize that he

personally was worth more than those car companies. but add to that, of course, not just the tesla stake but the $15 billion spacex stake which could increase in value as that company succeeds as well he's got a lot of money coming in from both sides >> right thanks, robert tesla shares up sharply again this morning we just were referring to them let's talk about the stock with dan ives, managing director of equity research. what did you do, dan >> yeah, i mean, look, to me tesla here i think it's just the start. we have a $2,000 bull case and i think what you're going to see with earnings is just going to be another lynchpin of the stock moving higher. >> we have seen faang stocks, we have seen technology stocks. can you divorce the story from the underlying fundamentals? is it now just that ev is going

to be something that the world embraces and, therefore, no metrics really matter at this point? you just pick the industry leader and just go with it and don't even do any math how do you get to 2,000? >> sure. i view today 3, 4% penetration it all comes down to when can they get to 20, $25 of earnings power. that's going to be the key for tesla. when we saw the delivery numbers, 90,000, and that china number spiking, i think you could be 150,000 coming out of china in the first year. i think china's worth $400 and ultimately $2,000 could just be the next step. talk about that battery day. you talk about the million mile battery, what they're going to talk about on september 22nd that could be another catalyst moving forward as right now they continue to be a teflon like modeling for what we're seeing

for demand. >> melissa >> yeah. obviously what we're seeing in the premarket right now, tesla stock up 6%. this would be a new record for this one, dan. another big catalyst for the stock has been the expected inclusion to the s&p 500 which could happen after it posts its next quarterly results i'm wondering, walk us through, that would be a near term boost. there's about $4.5 trillion indexed to the s&p 500 so that would leave many fund managers to buy the stock at the same time it would be more closely tethered to the movements of the s&p 500 which is of course a much more muted sort of trajectory than what tesla has seen walk us through what you have seen in the impact longer term. >> look, i think it's a knee jerk impact. i've seen it over the last six to 12 months institutionally thinking i think more investors are buying into the concept in terms of what you're seeing with tesla. in terms of the indexing, when we see more and more buying,

there is a little bit of a double edged sword there i think the big sort of headline here, tesla's accrued over the last six months that demand trajectory it's all about china if you get the indexing fees institutionally speaking, i've talked to many that were haters six months ago today it's in a top 20 position. >> got to get that infrastructure i know you can find chargers because we're all going to be driving cross-country now because we don't want to take -- and that is something i have to think about. i'm just wondering whether you heard my suggestion, dan, that you combine waffle houses with charging stations because it takes like -- how long does it take to charmg the tesla >> some of them can be charged in up to 45 minutes. >> exactly do you see -- do you see what i'm saying i mean, do you see the genius of what -- why not combine every waffle house with a charging

station? because i've got 45 -- i've got 45 minutes to burn at a waffle house. >> musk could be listening and i think it just speaks to, you know, this is a company -- look at the super charger network, that's a continued barrier. that's a moot. if you go back a year or two ago, year ago that's a big advantage. >> people didn't realize how profound this idea is. and i just don't -- melissa, were you here for that did you know that was my idea? i don't want you stealing that on "fast money." >> it's a brilliant idea i don't know that waffle houses are anywhere beyond the south. >> put them everywhere take your pick is there a place you like more than waffle house? i'm open to suggestions here. >> i don't know. mcdonald's is a better footprint. >> mcdonald's is fine. i don't know something about the biscuits and gravy maybe this was just me with waffles. >> you're driving down south, that's a great idea, joe,

brilliant idea. >> is it really just down south? i think it's nationwide. i don't think you know when was the last time you were on a cross country trip? i think they're everywhere. >> never, never. >> i'm going to find out. >> thank you, dan ives. >> you find out. >> thanks, dan. >> you do that coming up, jim cramer is back we'll get his first take on the ayading day ahead. st tuned "squawk box" will be right back. like adapt. discover. deliver. in new ways. to new customers. what if you could come back stronger? faster. better. at comcast business, we want to help you not just bounce back. but bounce forward. that's why we're helping you stay ahead and adapt with a network you can count on, 24/7 support and flexible solutions that work wherever you are. call or go online today. we're helping members catch up by spreading any missed

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get to cnbc headquarters jim cramer joins us now. well-deserved rest, i think, jim. you actually don't tweet a lot you sort of put it away, don't

you? >> well, under orders. >> under orders, that's good mentally, you're feeling -- you got to feel a little bit better. the whole world isn't on twitter, is it >> no. >> we need to think about that once in a while. what about the markets while you were gone? i think they did okay last week. >> nasdaq, 7%, no end in sight, joe. you've been around i've been around we want to avoid a 1999 situation. but we're not there yet. we can continue to have a rally as people get converted. >> the difference is that these are pretty amazing companies in terms of being digital, stay-at-home earnings, fundamentals and some of them probably aren't even necessarily looking at down quarters, right? they can -- i can't believe we heard pepsi. pepsi is a stay-at-home stock, jim. >> yes, it is. one of the things that people don't get is that there are many

companies that do better in a pandemic and it's almost as if they plan that if there's ever a pandemic we're going to do great. of course, that's not true what it does mean, though, is that we can pay a higher multiple for higher earnings you heard dan ives the other ones are all really making a case for when you have to stay at home. these are winners. and i think that no one thought this could happen, but it's happening. >> all right, jim. welcome back. >> thank you. >> we'll be watching at 9:00 see you in a couple of minutes andrew >> we're going to continue that conversation about big tech right now. joining us right now to talk about the implications of the extreme interest we're seeing in tech stocks is co-founder and portfolio manager. good morning to you. stocks have been on this remarkable run it's great to see you. we look every day and say can it go higher? so the question is, can it

>> at matarin we are still forecasting for the market but it's come down since march when we had a very strong outlook at first, we were just seeing a relief rally, that the worst was over and now we have to ask ourselves whether we are really set up for a full recovery rally. one thing that i think you'll find interesting is that one of the drivers that has caused our market outlook to begin to decline is a bit of a pickup in potential inflation expectations we really have come out of that period in march where you had energy so beaten down, heavy industry, industrials, airlines so beaten down and now that we see those types of stocks starting to pick up, a lot of capital available from monetary and fiscal intervention

for people to spend and get things going, we do have to start to wonder if inflation could become a risk again. >> my question to you, though, is, what are you doing about it? >> well, one of the things that's interesting is that right now when you look at the markets, inflation protection is actually really cheap, while at matarin we're seeing this. if you look at the way break-even inflation is being priced in tips, it's very low. i actually picked up the phone last week and called mills overdal to ask about this. they're inflation protection specialists. he pointed out if you take a look at the tips forward curve, it's currently pricing in that the fed will not be able to reach their 2% target for the next ten years and that inflation expectations right now

are lower than they were coming out of the great financial crisis if we're able to get a vaccine at the end of this year, beginning of next year and things start to turn around, that starts to look like maybe too aggressive of an assumption. so, one thing for investors to start thinking about, and they're talking about it on our investment team, too, is dusting off that old rule back and thinking about what does asset allocation look like, what does stock selection look like in a different kind of environment? there would be many implications that would change the way that would look. >> two things real quick what is the tipping point for you on the inflation picture and the reason i ask is we've all been waiting for inflation for so very long and a lot of us have been baffled, but here we are. the other question is, if you're not going to keep all your money, you know, in the nasdaq or in some of these fang stocs,s

where do you put it? >> yeah. so, to your first question about the tipping point, i think that a lot of the interest should be on what happens with the animal spirits? we had these conversations after the great financial crisis, huge bailouts, lots of money in the market, but we didn't see any inflation. that was largely because households began to save they were deleveraging and businesses were not ready to invest so, a lot of the stimulus went into essentially inflating financial assets rather than the real economy this time, we think it will be different. >> right. >> one thing to look at is those animal spirits. >> nili, we're going to -- >> your second question -- sorry, go ahead. >> yep we're going to have to continue the conversation the next time on that very issue we'll have to leave it on the animal spirits issue right now in part because we have to get

to our good friends on squawk on the street great to see you always appreciate your perspective and look forward to talking to you again very soon meantime, want to thank melissa for hanging out with us this morning, as always hope to have an opportunity to see you again very soon. joe, nice to see you, my friend. squawk on the street begins right now. make sure you join us tomorrow. >> good monday morning i'm carl quintanilla with jim cramer, who is back, and david faber. welcome to earning season. pepsi kicked things off this morning as the market weighs covid worries, florida's single-day record with pfizer winning fda fast track copper, one-year high. jim, welcome back. it is great to have you. we have a lot toace