still have more new content coming down the pipe than other companies. >> got it. jason, want to thank you always appreciate your perspective. we will look for those numbers obviously after the market closes later today make sure you join us tomorrow, "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla, with jim cramer, david faber live markets are red, markets digesting the twitter hack we will talk to james gorman later on this hour along with laxman narasimham. >> i think that the futures day down no matter what happens.

johnson & johnson better than expected, it doesn't matter. taiwan semi last night fantastic, doesn't matter. apple price bump doesn't matter. when you get like that that says, let the sellers get their job done, there is some agenda here, they're obviously not caring about news, not reacting to better retail sales or jobless claims down again. every time that happens there's usually a great trend up someone is a seller. there is big money that wants out right now, i think a lot of people are confused about what's going on in nasdaq, amazon down 10% since the week began consequently there is no bid underneath no matter what the companies say. that will change probably midday i think it's an okay day >> all right we'll see, jim obviously we talk about the market looking forward through some of the news flow and, you know, you take some of the bank commentary about second half growth versus first half,it's

not nearly as constructive and we will see whether gorman backs up what citi and wells and jpmorgan have said this week. >> i do think, david, you have to chime in on this, that the losses are far lower than expected and yet there's a kind of an -- each bank has been saying we just went through the greatest stress test in history and we came out with flying colors and that is equal to a down 1% to 2% for all of them. that's not what i would have expected people just do not like this group, david, and they are still not giving jib their due james gorman, whole new model, less risk, nine times earnings, why? >> well, i think in part it's got to be that people don't expect anywhere near the level of financing activity that we saw in the first half of the year and certainly in that condensed period from, let's call it, mid march or late march until end of june, jim you know, you just can't maintain that, or can you? how many companies are going to

need to go become to the equity and or debt markets to raise more money we see norweigian filing for another $250 million worth of stock, but, you know, there's that, so it's seen as perhaps a one-off, there's still a lack of m&a activity here i'm talking more about the likes of goldman sachs and morgan stanley that do rely a lot on that, jpmorgan to a lesser ex at any time than some of the others. there's that and there's the concern given the uncertainty out there, given the rising caseloads in so many states and the prospect of potentially future closures or lack of economic activity or lessening of economic activity. >> well, i think, carl, those of us we all bank at different places bank of america it's completely -- it's so easily digitized, isn't it terrific, it's like paypal no it doesn't matter that brian moynihan has come up with the digital bank goldman sachs unbelievable what they've been able to do is be able to make it so they have a

giant wealth management business that doesn't have a lot of business and they did great in m&a. doesn't matter what they do. bank of america the stock this quarter wasn't that bad, down 3. motor vehicle al core vath did a pretty good job at citi group, charlie scharf, wells fargo, they trade as if there is one bank it ain't faang, i will tell you that much. there is no faang here and i just -- if i was one of these banks i would be like what do we have to do any ideas? >> again, jim, it goes back to what they've said on the calls this week, wells, our view of the length and severity of the downturn has deteriorated considerably citi, the pandemic has a grip on the economy and it doesn't seem likely to loosen not to mention the data that just -- that david just mentioned, 31 states with rising caseloads, records

states getting religion on masks, governors at least some of them. that's what maybe the market is keying on, don't you think >> yes, and i think that what we have to try to do as people who interpret and report the news is decide -- let's just say shine some light on the bank executives who have tried to deal with that head-on ten years gorman, and we will be hearing from him, has made it so that he is not one of those banks. his bank is a flow of fund not credit risk bank and no one cares. we have to start distinguishing because this is not just -- this etf-ization. i'm not saying "star-spangled banner" for morgan stanley but they are not doing it the same way. we have to stand up and pay attention to that because that bank should not be valued as low as it is when we ask gorman, we have to try to figure out whether he himself just says, i don't know. i throw up my hands. buying e-trade, make it so we don't have credit risk, i guess it doesn't matter.

if you are at paypal you're paying we're $200 billion going to $400 billion. if you're morgan stanley or goldman sachs we're $77 billion and going to $77 billion how is this possible >> all right but, jim, does the lack of response to what has been largely positive numbers from the banks and i'm excluding wells fargo from that, is it a reflection of the economy overall? can we expect to see that that went of sentiment is starting to creep into other areas or are they going to continue to be this group that is penalized because of concern about the future, concern about things like their roes and their capital retention and the election and, i mean, you can throw in a lot of different things, or is it a sign of what may be coming? >> i think it's more of the former not the latter because other than -- jamie dimon did have a gripping moment where he

basically says we don't know what's going to happen and therefore that gives you a 12 multiple as soon as you say that, but i just think that some of these banks have worked very hard to not look like what they used to be and nobody cares. will one day people care do you know something, i have to believe they will. i have to believe that you cannot -- kellogg used to trade with general mills which used to trade with kraft which used -- then they became differentiated and suddenly they don't trade together kraft upgraded today, i don't know why, i think it's just because the others have broken out. we have a company tonight -- today, david, that makes lysol all of a sudden they are worth a hell of a lot more than a company that makes corn flakes so there is differentiation occurring in some groups. >> there is. >> jim, do you think -- >> also the governor of georgia will not prevent people from using lysol, he's telling them that they don't actually have to have masks >> that's an amazing story. >> isn't that? >> on a day when georgia has had

its second highest reported hospitalization. jim, do you think there is a suppressive nature that david mentions the election, to biden with 11 point lead, worries or thoughts at least about who might be treasury secretary under a biden administration >> well, they are building things, people are beginning to build that theory in and people are struggling which of the things that matter most, the inn consist ensees of the president versus a consistent but not necessarily stock friendly agenda of candidate biden. i think we're vaccine/no vaccine and today was a day that johnson & johnson put out some very good news about the vaccine, but they did not moderna it that means we are the best, we know more than everything, we are fantastic, you don't know anything j & j is a very nonpromotional company but what they said about two two tests not only for

people who are i'd say not going to be knocked out by this thing but the plus 65 cohort they are also going to give a test to, they have billions of vials, they are ready to go, moderna to ramp up i think would take forever. yet because the people who are gripped by day trading and gripped by the stuff that meg tirrell talks about, it's not exciting enough. no one is buying the stock market because of j & j. they bought the stock market because of moderna and that's not making a lot of sense to me frankly. >> guys, we have a lot to get to as we said we will talk to james gorman of morgan stanley after the break, we will get to some of the down grades, peloton, disney, cisco, you won't believe the comps out of dominoes and of course wt ppedhahaen at twitter last night back in a moment of it. it's a thirteen-hour flight, that's not a weekend trip.

fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪

i mentioned a moment ago it's our job to put these bank earnings in some sort of let's just say -- so you can understand why one goes up and the others go down morgan stanley posted second quarter results that blew past analyst estimates, stronger than expected trading revenue let's get some context here. joining us now first on cnbc is morgan stanley chairman and ceo james gorman james, always great to see. >> you great to be with you, jim. thanks for having us. >> all right, james, we have seen terrific top line growth, much more than i thought from almost all the banks but a lot of that growth is credit based and that means its got risk.

yours is fee based which to me is more constant and sticky. tell us about the changes you made and why your bank should not necessarily be valued like others. >> thanks for that observation couldn't agree more right now. you know, the whole business model changed in the last decade was to move us into stable recurring fee-based revenues to give us the balance at the same time to have a low-cost investment bank which has always been our core dna. and this quarter you saw exactly the culmination of both of those. so, you know, we haven't been in the unsecured credit consumer credit space, we're very small in the emerging market credit space, we're basically nonexistent in small business middle market lending. they are not bad businesses but they are not our businesses. when we produced the revenues, we didn't have the credit losses that would typically come in this kind of economic scenario. >> that's what i want to drill down on. when i looked at the provisions of the other banks that reported they are rather large, some

people said, jim, we have to be conservative, but your provision is actually, remarkably small versus the other banks. >> it's just business. if we had a large card business, for example, credit card business, with he would have provisions that would reflect that you know, most of our wealth management lending is to our existing clients, highly secure, collateralized -- we had basically no defaults, no provisioning across all of that franchise. that's the business model, it's with intent. >> you have spoken to me many times about the idea of wealth management management that doesn't have government risk a wealth management business that is really sticky. so let's talk about the e-trade acquisition. i feel in many ways that e-trade is a feeder, it's the place where people cut their teeth, they get started you don't want to seem to wait until people get wealthy like the old days to get an account at morgan stanley. will e-trade be part of a continuum where you get them young and then they continue to grow and you hold them all

along? >> yeah, you know, i mean, listen, people find their financial wealth management in three different forms basically, one is some sort of advice, financial planning, we've nailed that, we've got that clue the combination of smith barney which we've built and the last decade, that business is doing great, $2.5 trillion of assets the second is through their place of work, usually on the back of 401(k) type plan, stock option plan, so those kinds of businesses and we've now got that through the solem acquisition and e-trade has that and combine those two together we will be number one i think in the whole stock plan business in the country. the third is the digital platform and they tend to be as we've noted over the years active traders, options traders, emerging investors and they have a younger profile and that's what e-trade has so it gives us a channel into that investor base which we didn't have before some of them will over time become full service advisory relationships, many of them

won't. and we are agnostic to that. so it's a really terrific opportunity to participate in some of the fast growth in this segment. >> hey, james, it's david. you know, let's start on -- stay on e-trade for a second. you said during the call that they have attracted hundreds of thousands of new accounts. you also said it's real money, not just kids playing. >> yeah. >> which i would assume is maybe a reference to what we've seen in this robin hood phenomenon, this level of speculation in certain stocks in the market what do you make of that when you say not just kids playing? >> yeah, i mean i was probably being a bit flip and certainly not digging on anyone, but there's been a bunch of stuff written and you guys probably talked about, a lot of people sitting at home, markets get crazy, everybody gets excited, people put their $2,000 of savings in that's not a strategy. with he saw that in 2000 with the dot-com thing, we are seeing a little bit of that now, e-trade is a more mature

business model than that, has hundreds of thousands of active traders, professional traders, it has as i said the workplace business and people whose money goes into stock plans, vests into their e-trade account and it has the folks who want to invest and want to have a relationship online. what's different about their business model i think from some of the pure electronic plays that have started up in recent years is the dollar asset per account. they are attracting several billion dollars a quarter right now, almost to the level that we are across all our wealth management business. that's what i mean by real money. >> right when are you closing that deal >> let's see, i think the shareholder vote with e-trade is imminent, july 17th, so it's tomorrow just talking to my calendar here, been a bit distracted. we hope to get fed approval, i'm highly confident we will get the approvals i'm not sure the exact date, david, but somewhere in probably the first half of the fourth quarter so it's coming really soon and it helps our

funding profile and helps our ratios so, you know, i'm really excited about this deal. i just think it's a great transaction, it was stock for stock, we've got to know their management team, i really like these folks, i think it's just culturally going to fit. it's going to be great. >> i want to switch to the financing markets which were incredibly strong, i want to get your take on it. what are your expectations for the second half of the year? it would team almost impossible to maintain the same rate of momentum and activity we saw for that three or four-month period or is it possible? >> no, i think it's -- it's possible, it's highly unlikely, though you know, i think this quarter has started off, you know, very solid, but not at the lerl that they are in -- i trying to think what the most embulum month was, march, early -- i'm sorry, april, early may there's a lot of financing going

on, a lot of m&a deals getting signed up, which is interesting. that sets up -- you know, it's the pipeline for next year we won't see those revenues in the back half of this year but we are going to see them next year you know, somebody said recently m&a doesn't go away, it just takes a hiatus in times of absolute uncertainty because ceos don't want to commit. as the economy continues to strengthen and as hopefully we get past the worst of covid, although the outbreaks in the south and west parts of this country are troubling. m&a will come back more strongly so do i think we're going to repeat the first half? no, i don't. do i think we're going to have a poor second half, no, i don't. i think business is very stable. >> james, i was listening to brian saltzman this morning, amazon, if you put $10,000 in amazon then you have $12 million. >> i hope you did that, jim. >> i bought $10,000 worth of books, not stock have we seen the peak in

indexing you've got great advisers, e-trade has a lot of interesting things to be able to help you pick individual stocks there is great wealth being created if you bought apple or facebook and amazon, but if you just bought the s&p not so well. are you set up for this new generation of people who are just really enthralled with individual stocks and we don't talk about them that much? >> yeah, i think there's clearly a pipeline to the next generation which is really exciting and people want to be excited about the financial markets. we can help both in the education, the research and obviously we bring so many companies to market you've got pipeline, you've got flow, you've got product but just talking become a testify management, i just want to give a call out to dennis lynch, unbelievable his growth funds what he has done number one again this year across all of morning star you know, you can create alpha through a smart long term investing and dennis and his

team have done an unbelievable job and that's created enormous wealth for a lot of our clients. there are ways to navigate these markets rather than just being an index now, i've always said if you have $39,000 to invest you don't mess around with individual stocks, you should be an index and unless you're very young and don't have financial responsibilities, but as you start developing your portfolio you can create alpha over time and our platform does that as well >> james, you were recorded on the call this morning saying you would love to expand the dividend in time and get back on the buy back train we don't want to sit on this capital you said can you talk about the likelihood of either of those two things happening >> yeah, it sounds like, carl, i can't see you guys on my screen here, but. >> yeah. >> you know, carl, it's interesting. our dividend is a buck 40 a share, we've got a billion and a half shares to a total payout is

a little over $2 billion we just earned $3 billion this quarter, you know, first quarter we're roughly $5 billion through the first half of this year so we've made almost 2.5 years of dividends in the first half of this year. the federal reserve results show we had about 300 basis points of excess ses capital on our c t1 ratio, will have further capital with the consolidation of e-trade in the fourth quarter. i'm thighly confident we're going to create earnings in the third and fourth quarter of this year we're already sitting on, you know, 6 to $10 billion of excess capital, we create high ratios with c t1 from e-trade, we've added another $3 billion net of our dividend already this year you know, we are talking about 10 to $15 billion of excess capital plus we're still arguing for some relieve on the ppr, not to get too weedy about it but the way it capital clats fa

compensation we can invest in our business, we want to have world class technology, we're going to invest in that, we are investing in the next generation of investors that jim is talking about, that's critical to our future growth, we also should increase our dividend and we should be back on the buy back trail. not just yet, let's get through the new stress test in september, let's see how the economy performs in the next three to six months, but 2021, you know, morgan stanley should be doing something with this capital for the benefit of our shareholders and for our clients. >> jim, let's talk about the growth side because i think that no one is going to give you credit for a future dividend risk but they should have been giving you credit for something you mentioned as a throw away which i thinkis most of the exciting acquisitions you you have may made which is the solium tell people what workplace wealth solutions mean because that's one of my favorite businesses that you have >> listen, it's a great

question you know, there was interesting story, we had workplace business, we weren't managing it great, we outsourced it to solium which is a company based in calgary in canada, they did an unbelievable job. i don't know if you remember the ads, i remember growing up in australia watching victor kiyam with the razor company, he said i liked the razors so much i bought the company i always loved that idea well, solium did such a great job managing our stock plans we went and bought the company. so we bought them back, paid about 300, 400 million premium on the tokyo stock exchange. a lot of people thought it was expensive. i could care less. what we were buying was a platform combined with e-trade that makes us number one in the workplace. what is workplace? it's where you have money in a stock plan or stock options and those vest, e-trade then converts them into e-trade accounts we didn't, they went to whatever bank or institution somebody had

a relationship with. we can then provide research, we can provide product, we can engage with the c suite to manage their personal wealth it's a great growth story. a lot of money comes through where people are working and we want to be part of that channel. fidelity has done a grit job in that space, with he want to do a great job in it. >> oh, come on >> james -- >> james, real quickly, the world we live in right now, you know, and the world that we've been a part of, you are working from the office, i can see it. how many people are going to be working from your office, let's say, at the beginning of this year, how are you viewing things at this point? >> yeah, it's -- it's tough, david. i came in, i've been coming in a day a week for the last few weeks just to get in the flow, do the temperature tests, go through the app that we ask all our employees to do, you know, see how the elevators are working. i want to live and experience it and i want the senior management to do that i don't want to be here all the time, that's not because i can't be, but i don't want everybody to feel like they need to be in

the office all the time. i'm not sure the infrastructure in the city and in our building can absorb the number of people that were working here pre-covid until we have some level of immunity or treatment. give you a sense of numbers, up until the start of july we had about 250 people in this building, including a lot of security and health care workers. on a base of 5,300 today we are probably, i don't know, mid 300s, we will be, you know, 600 to 1,000 i think through the early fall and, you know, my long-term sort of start of year globally is we would have about 50% of our employees in the offices not every day of the week, but about 50% of employee hours worked would be in the offices but, you know, a lot of ground to cover between now and then. >> all right. >> we're going to go really slowly, david. the plan is working well, people are working well.

>> okay. >> what i care about is them feeling safe and sound. >> unfortunately, james, we're going to have to cut short. >> no woierrs. >> congratulations good quarter we will talk to you soon we have to take a break.

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a leader in income, alternatives and responsible investing. let's get to the opening bell here in just a moment busy morning as we've been talking about earnings from j & j, morgan stanley, bank of america. retail sales up 7.5. obviously not as good as the prior 17.5 and claims 1.3 million is the first rise in unadjusted claims since early april. people watching that there's the opening bell at the nyse digital media solutions celebrating its ipo and at the nasdaq oncology biotech, relay therapeutics, also celebrating it's ipo david, interesting to hear gorman coming back to work, because yesterday amazon said they see work from home through 2020, as did viacom in an employee memo. >> yeah. there's a lot of companies, i think, and by the way, it's 25 years since they began the

website, the company went public in '97 but you're right, carl, quite a few employers in new york city and you would imagine in other areas as well given this is not now a new york issue at all, are delaying what was seen as the re-entry of many of their employees and mr. gorman seemed to indicate the same for morgan stanley. really amazing when you think 5,300, they are at roughly what did he say 300 or so in the building, perhaps ramping that up to as much as 1,000 in the fall, but nowhere near capacity. it continues to be a question and, jim, you know, we haven't talked as much about the virus of late, but it's raging in a lot of states that we know well, and we're not even near the fall and flu and cold season when, by the way, if you were in an office environment and people start sneezing or coughing because they're sick, you're going to be overly concerned perhaps or very concerned even if they don't have the covid virus. >> look, i think, david, one thing we've seen, especially for

goldman's quarter, big transactions are occurring via zoom, some places via webex and cisco. the idea that you have to go back, i know jamie dimon would like to go back, a lot of the guys at goldman want to come back, the bosses want people to come back but they don't want to go back. the work from home thesis since friday has been in tatters, i question whether that should be the case given what we've seen in florida, arizona, texas, california i think the work from home thesis is alive and well we will be speaking to -- david, lysol is killing in. >> lysol is. >> people should not abandon the work from home thesis. it's too early. >> no. you know, it's funny because foreman mentioned mergers and acquisitions there is a hope it will pick up at the beginning of the crisis i was referring to a slowdown there in part because of the lack of face-to-face meetings. like so many other things everybody is adjusting you heard earlier this week when

we had analog devices on the ceo indicated that entire deal had been done virtually. he did have a relationship with maxim ceo but i'm hearing that more and more. there is a willingness to move forward with major transactions where none of the principals get in a room together it is the current reality. jim, to your point, it just indicates behaviors change and willingness to engage in these things changes in terms of people staying home. >> yet at the same time the nasdaq where there's so much technology that's meant to be able to make it so that you can do that, whether it be the zoom or whether it be the cyber -- we will have to talk about cyber attacks, it's relentless the selling in the nasdaq, the dow is doing so much better and the nasdaq is the repository that makes it so you can do those deals. carl, what it shows you is i think right now the market, the big buyers, have had it with the idea that the nasdaq is so much better and when you start doing

this price to sales, peloton downgrade today, price to sales too high people want to go back to price to earnings, but when they want to go back to price to earnings they are not willing to go back to banks, which have the lowest priced earnings. they are kind of huddled in different areas like a caterpillar. it's very hard to understand what people want right now, carl, and i think that that's one of the reasons why the nasdaq is going to continue to go down until people say, hey, amazon, let's go buy microsoft amazon is telling people what to do. >> it's not a clear picture. you mentioned the peloton downgrade to ubs today, they cut to neutral but raised the target because they were at 48, they go to 58, this he raise their numbers but when you're trading at 4 times 22 revenue, they say it's expensive. >> people are sick of that they want dollar tree, this he want lowe's, they want the outside trade. they want thor another upgrade for harley-davidson, it's getting so much love you have to believe it's going to go higher and they

really don't have any love for faang right now. i think that the love for faang always teams to come back, but there is omwi, instead they're revisiting quarters that weren't that bad when stocks went down united health had a dynamite quarter and people said they borrowed from the future and analysts come back today and say, wait a second, that is one cheap stock. i'm looking for companies that are being rethought about as being cheap. i pre day of the accident that morgan stanley tomorrow will be higher than it is today. >> interesting guys, i will give you one stock that's a lot higher today than it was yesterday and that is dell we've talked about this previously a few weeks ago of course the journal to give them credit broke the story, i followed perhaps with a little bit more detail, but thought people certainly believed the likelihood was high that they were going to pursue the spinoff of the m ware. yesterday the company essentially saying it is at least investigating that

now, the question as to why they felt the need. vmware does have a program, they do need to buy back stock, perhaps that was part of it, they wanted information out there into the marketplace before they did this as we pointed out at the time, guys, the transaction itself can't occur until september of '21 due to tax reasons, got to be five years since they bought the asset before they spin it off. what will take place now and gives it what i'm hearing at least is a high likelihood of occurring is the negotiations about how you keep -- how you make dell an investment-grade company so you offload debt or send in a big dividend from vmware that allows it to pay down a significant amount of debt could it be $12 billion? $15 billion that will be a negotiating thing. governance they will have to negotiate as well in terms of whether they will give up their super votes to some extent a lot to come here talks with the rating agencies but you can see the response once dell made public what we

already had told people was likelihood it doesn't mean it's going to happen but it does appear to be on a track as this year moves ahead and as next year does for september of '21. >> david, this is one of those, again, it's driving me crazy that thing is not going to happen for a very long time. in the interim you're going to get several delivers will dell deliver good quarters? i think vmware is doing incredibly well, it's been a little bit suppressed by this, but in a couple days we are going to forget that this market has no memory even for the good i just -- i question whether dell can sustain this rally given the fact that there is tremendous selling pressure on any stock that goes up very big. carl, we are at a weird moment and the best example is there's just a huge amount of day trading right now and i am not against day trading, it's incredibly fun, can be incredibly lucrative, guys and women who do it please don't get

mad at me. let's talk about norweigian cruise lines for a second. this company docannot sail. the day traders bid this up furiously so what does norweigian do? hit the bid for $250 million they jammed the day traders. it's hilarious they took advantage of guys who don't understand the balance sheet, carl. >> $250 million in i think new common. >> right. >> another $900 million in debt. >> yes. >> royal caribbean, memo to richard fien, the day traders took you up gigantically yesterday. do your work, call your banker jam it >> jim, you know, boeing is the dow laggard this morning you've got warn notices out of american now, united is at work on it, we have a code share between american and jetblue for the new york area and that's all leading to worries about

overcapacity delta will keep the middle seat up beyond september, not giving an end date to that. the disney downgrade today saying there is a meaningful chance that the parks could be forced to close again. florida and california housing their two parks account for a third of the new case growth so all of this sort of funnels into the same space. >> vaccine you need a vaccine >> got to have one no choice. >> we will take a break here, guys, i think i'm hearing music. we will talk about twitter of course and the impact on that company and facebook and then as jim said, the ceo of the maker of lysol in a market that is definitely coming in their direction. down is down 150

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firstnet.ium. the only officially authorized wireless network for first responders. because putting you first is our job. last week lysol was approved by the epa for use against covid-19 joining us now is laxman narasimham the ceo of reckitt benckiser. nice to have you this morning, laxman. >> it's great to be here thank you for having me. >> have you seen a bump up in lysol sales since the epa says this is an effective way to get rid of the virus on surfaces

>> i think from the time of the start of the pandemic we have seen a lift in sales of lysol as well as other products like detol. again, it gets to consumer trust in brands like this that have been earned over a long period of time. lysol over 140 years, ever since it was introduced and detol which is a brand over 80 years these are brands available around the world so yes. >> you know, of course, that gets us to the sales of the company which were up sharply in the last reported quarter as we might expect given what you just mentioned but the key question is will that continue? are people just loading their pantry with many of our products or are you continuing to see significant increases in usage >> our portfolio has been set up to capitalize on four tail winds as we see it the first tailwind is, you know,

demographic change, urbanization, globalization that is making infectious diseases, communicable diseases an important thing. we couldn't have predicted this but brands like detol, lysol and others that play in that space the second port of our portfolio is in the area of sexual well being. there are 1 million sexually transmitted infections every day and we have a portfolio of products in that space available globally a third part of the portfolio is around self-care with he see hospitals under pressure, medical systems under pressure, we see self-care otc, brands like mucinex, nurofan, gaviscon, again, available around the world that is the third part of the portfolio. the fourth part of the portfolio we see nutrition, emphamil, that part of the portfolio is well-set for this time what we're seeing consumers do is clearly a bit hygiene sensitivity, a greater increase

in penetration and frequency we don't expect that to stick for a long period of time but we do expect it to be at higher levels we saw that happen during sars and mers we have products like finish, people are cooking at home, with he see that. >> right. >> and we do see, you know, some pantry loading happen with otc and that's playing itself out over time. >> a question i thought i would never ask, laxman, which is are people having less sex during this pandemic? >> oh, geez. well, let me just put it this way, this is a family show, i would imagine, the number of intimate occasions is down in a few countries because think of it, the level of socialization is low and so it has had an impact on durex, but we have an e-commerce business which is very strong, e-commerce is a single teen spot of our entire business, in the first quarter

it grew at 50% if you think of durex it is absolutely set up for it we have operations in 53 countries, durex had a big quarter online and we continue to see great progress in that direction as people look for privacy as well in this area >> i'm not as interesting as david, laxman. i'm holding up something, though, that is borgt me about your company, i am holding up airborne when this pandemic started i used to take an airborne gummy every single day and i was thrilled to have them because i had them before. i can't get them how does it work what's the hold up why can't you work 24/7, maybe you are, so that i can get my gummies? >> jim, first of all, i'm sorry you aren't getting your gummies. airborne has really taken off as you can well imagine, people are concerned about immunity our factory in salt lake city is working around the clock to

ensure that the gummies are in your hand, we have increased lines, we have increased capacity, our intention is to do even more. >> i think that i'm kind of thrown off is that there are products that you have, lysol, for instance, i hate to say it but i can't get lysol. i want lysol i did hoard lysol initially. i've gone through all my lysol again, i know you probably have some factory working 24/7, but i don't get it if we think that hygiene is important, why can't you do greenfield build in america of new lysol plants because you don't have enough lysol and if we're going to stay high jen nick and deal with this pandemic we need more lysol >> jim, you will be glad to know that we are, in fact, doing just that we have increased capacity just so you know in q1 lysol grew over 50% year over year we are investing in lines, we are investing in capacity, we are changing the way we work our first focus clearly is the protection of our people, but we are doing things as well in

order to ensure that that happens. we have a factory just out of wuhan, outside of wuhan that mention detol. we cut our sku count by 80%, in some skus we're making ten times what we did. when you look at the amount of sanitizer we are making we are making 20 times the amount of san r sanitizer in july sthaz we did last year. it gives you a sense of the demand that there is and we are responding there's more capacity coming along every single day we hope as we get into the fall there will be even more and there will be more coming on next year. both the cold packers as well as lines we are putting on on our own. i fully get you, jim we want to be sure you get the gummies and the lysol and we will work hard to make that happen. >> and the sex >> jim, that's in your hands, jim. i'm pulling for you and david to really make a difference here. >> all right. >> the reality is humans are humans, it's going to come back and it is coming back this places like china. >> i take responsibility for taking us there.

but it was a reasonable question given -- given the importance of some of those brands in your portfolio. but, laxman, you mentioned digital sales, for example, you also have been an aggressive user of tic toc, for example, i think you had a campaign that had $88 billion, i think i'm reading this right, views which seems almost hard to imagine >> yeah. >> is that an effective way to get to consumers there is a lot of talk amongst in administration of potentially closing down to some extent tiktok in the u.s. i wonder what your thoughts are about that in terms of its effectiveness as a media platform. >> part of the reason i'm also here today is to talk a bit about our record global hygiene institute. you know, we feel that evidence needs to be sharpened and a partnership with a range of universities that are going to help us get that evidence, but also we need to communicate it in a way that people change their behavior and this is where this campaign that you talked

about, the short video campaign that you talked about in india that we did. you know, it's an ear worm of a song my kids like it, but it's an ear worm, 20 seconds we thought it would be a few billion, the number is updated it's 124 billion views of people learning how to their hands. this is as simple as that. and it gets to this notion that we have to make a difference, not just in creating evidence, but also using behavioral science and insights in order to get people to behave differently. we're seeing a lot of difference in the way individuals and by the way groups are behaving. we've got to fix that. this form of making that kind of communication happen in simple, effective engaging ways is a great way to make that happen. >> back to how you view the second half of the year and beyond, you were talking about tin crease in capacity you were

focussed n how do you make sure you don't have too much out there if, in fact, we do get a vaccine and behaviors change, or do you think it remain the same even after a vaccine. >> we really hope we get a vaccine and treatment. what's happening out there is way more important than what's happening with us. in the meantime, we have products that can meet what consumers need we've seen if behaviors change for 6 0 to 90 days, they stick we saw that with sars and mers i don't think you'll have the peak you had you will see a change in behavior and we're seeing that with the penetration in frequency in the cases we see if you look to the end of the year, we're continuing to make progress to ensure that jim gets his airborne gummies that's a big priority. and we want to ensure the

consumers get all the lysol they need, but we're being thoughtlful. building with flexibility perhaps at higher cost to make sure our supply chains are resilient to get consumers what they need but having flexibility. >> you have the global hygiene institute. it's terrific. while we've interviewed you i had an statement from uber they're now clorox clean when is the institute going to be able to say like others that look, it's lysol clean because this is a great new business >> if you look at the work what we've done with the hilton chain, it's mayor, hilton, and us they made an announcement of hilton stayed, it's a state program with hilton endorsed by lysol. we made a variety of other announcements as well.

i've avis will be ie lysol clean. there are others we're in discussions with we believe lysol has the trust credentials to help get to the anxiety that sconsumers feel they know a hilton has been cleaned and lysol has provided the trust mark >> really appreciate you taking time with us today and all the different places that this interview went thank you. >> thank you very much, david, and jim, my son's a fan. i'll let him know that i saw you, and, well, and -- >> yeah. >> take care >> you never know if you don't ask, david in the meantime, we briefly took out yesterday's low on the dow, the nasdaq and the s&p, holding 3211 we're back in mitea nu

rough this hours for twitter as the unprecedented hack disables many accounts last night. although market seems to be taking it in stride. really, no lower than it was a couple days ago. we'll talk later on this morning about cyber security and how it pertains to social media these at cinup th'somg you can't predict the future. but a resilient business can be ready for it. a digital foundation from vmware

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let's get to jim in stop trading. >> this twitter hack i think you need an outfit like palo alto network. we have to figure out if this is nation state akaye yos ahead of an election or they have 50, 75 pass words we don't know. we probably haven't seen the end of this. you have to bring in cyber security this is too big for twitter and we don't want nation state ahead of an election >> does it sour you on twitter in general >> no. twitter has become, i think, it's not a farce, but it's like, but i don't like the fact that it was so -- maybe they have a couple people inside, i don't know, but i think that the company the much more of a -- it's more of -- it needs something. it needs sports to go with it's not a place people are talking right now. and this doesn't help.

not at all >> sure. well, we hope to learn more from twitter support. palo alto tonight? >> no. i wish it were nick, if you're out there, explain what to do i have mark bristow, barrick, a special program tonight. acorn. rich allison, dominos. nick, i'll find room because this hack was a bad one. david? never mind >> yes >> it was bad. it was a bad hack, jim it was >> they hacked you they hacked your brain >> no, they didn't >> tonight jim with "mad money", 6:00 p.m >> welcome to "squawk on the street." business inventories, let's get to rick. >> yes, business inventories, now, this is a may number.

it doesn't dismiss how important rebuilding our tearing down inventories is down 2.3%. this is not only exactly as expected it's the second worst number going back to 1948 for this series the worst level is down 3.2 of june of '91. you could definitely see we're losing a little ground that follows minus 1.4, but don't lose sight of the fact it is a may number now, for a much more realtime number, let's go to a july read on national association home builders index and for that, we go to diana. diana? >> yeah. rick, home builder sentiment jumped 14 points to 72 in july that's exactly where it was in march before the pandemic really hit the academy. now, anything above 50 is considered positive sentiment. the index plummeted to 30 in april. so there is your v-shaped recovery now, of the index's three components, current sales

conditions jumped 16 points to 79 sales expectations in the next six months rose 7 points to 75 and buyer traffic rose 15 points to 58. builders point to strong demand, urban flight, and low mortgage rates setting new record lows almost weekly. they are struggling to ramp up production after shutting down in march and april, and that means for builders, finding labor and land again material prices especially lumber are soaring lumber at a two-year high. producers did not expect this swift a recovery the biggest gain in the northeast, up 22 points to 70. the midwest jumped 18 to 6 the south up 10 points to 73 and the west increased 14 points to 80. morgan >> yeah. key reading. especially one where the consumer is concerned. housing has been a bright spot at least based on this reading it seems to continue to be the case thank you for bringing us the late latest numbers now to twitter

shares under pressure after a security hack that targeted some of the company's highest profile users. impacting former president obama and elon musk. we are joined with the latest. >> this hack was really a reminder and a warning in both in one the reminder is a reminder of cyber security best practices for people in companies around the country. this work from home environment lends itself to vulnerability for the type of hack that we think we saw in the case of twitter. it's also a warning for what we could see in this country going into a tightly contested election year in which hackers and nation state intelligence services may be trying to play a role here's the latest information we got from twitter overnight in terms of what happened here yesterday. twitter said this was a coordinated social engineering attack they said it successfully targeted some of the employees with access to internal systems. and they say they're looking into what other malicious

activity they may have conducted or information they may have accessed it's when the attacker uses your network of friends and associates against you by creating communications that show up in your inbox or email or slack or what have you that look like they're coming from people that you know and trust they may even reference details or previous communications that you've had with those people it makes it really tempting to click on the links or open up the access or even reply to the email perhaps giving some security information away in the process. all of that is standard fair for hackers. it's easier now in this work from home environment that we're all in everybody is using new software. they're in an unfamiliar environment. they're not having the face to face communication with their teams as much as they are used to all that sort of disorientation plays to the hacker's advantage here as they try to get into company's information and convince someone to click on a link or reply to a potentially nefarious message. there's a lot to pay attention

to back to you. >> yeah. and i know you will pay close attention. i'm curious, is there anything in terms of the high profile names that you showed there that connects them in some fashion or that could lead to some not conclusion, but census as to who might have been behind this? >> we don't know for sure. one thing a former fbi agent pointed out was all the people that were hacked appear to be sort of left wing or left of center figures in american society with exception of maybe of kanye it's hard to tell where he falls in the political spectrum. that might give you an indication of the motive of the person who did this or what the person wants you to think their motive was the real concern here is that this could have been some kind of dry run this wasn't all about trying to steal bit county from unsuspecting people. this is about testing capabilities for something that you might want to do later so we do see a pattern here in who was hacked but that could be intentional

misdirection >> yeah. eamon, the fact that it does seem potentially like this access happened through employees within the company, if it was, for example, an inside job, what could be the ripple effects. i ask because if this is a dry run and we're coming into the elections, i would imagine that's going to bring a world of scrutiny not just from within a company itself but also from the government and political entities and make this potentially into more of a national security conversation >> yeah. there's going to be a couple conversations that have to happen one is inside twitter and the other social media companies about who has this kind of access and how those people are monitored. and whether or not there's anything that the companies can do to reinforce sort of overlapping layers of security to make sure the people aren't able to just on their own go off and do something like this the other conversation that's going to have to happen is more broadly in the society right

i mean, imagine the political or economic damage you could do by taking over a number of social media accounts of high profile figures and coordinate them to put out actions and reactions among those high level officials. you could cause massive economic chaos, massive political chaos we're going to have to figure out as a society how to deal with that. it took twitter a long time to deal with it yesterday the country figured out pretty quickly there was a hack going on >> yeah. it's one thing to target a bill gates account. another to do the treasury secretary or the president or other world leaders. hopefully we get more from twitter support in the coming days the twitter hack last night. important to keep an eye on the markets as we did take out briefly wednesday's lows let's bring in citi's national rock dale's tom galvin and i think rad diate for more

good morning >> good morning. >> tom, i want to get you on the banks here it's just been a week of blowout numbers. i guess decent commentary going forward. why isn't the market giving at least that particular sector a little more love or confidence in leadership? >> as it relates to the banks, i think it's a tale of two cities. there's a lot of winners those with capital markets, trading, investment banks, those with asset management divisions that have benefitted from the fixed income markets we've seen. and those strengths are overcoming the pressures in the core banking business. loan growth is lackluster. reserves are building. i don't think the banks are yet to take off from here. we've been underweight because we think the reserve building is still yet to come. challenges in the fundamentals are going to be here for a while. >> huh ingrid, on that front, do you

think some of the loan loss provisions on the commercial side are overdoing it? exuberance of -- an abundance of caution, or is this really being done because they think they're going to need it >> i think jamie diamond said it the best no one can predict the future. and you really need to figure out how to position your business to meet the uncertain times. it's highly volatile there's lack of visibility and from our perspective, this is the time for active management you're focusing on fundamentals and balance sheet strengths and trying to find businesses that have the ability to withstand another economic downturn but also those that not just standing by but those that can participate as we have a recovery because we view this co-vid as finite i can't tell you the scope and duration, but we do know there's enormous amount of money being poured at this problem, and right now we're overweight

health care because we think health care is a good place to be both in this current environment, but on the other side we have diagnostic companies keep in mind diagnostics only account for 2% of health care spend but they inform 77% of decisions. the long-term secular growth is strong and we see this as a primary market for active managers >> tom, whether it's the diagnostic piece or the treatment piece of it or now all the vaccine news we've been getting in recent days as well, the fact that this does move markets, not today today much more focussed on the economy and where it's going with the recovery potentially looking like as we get more data, but overall the fact that the market has been reacting to things like vaccine news, is that warranted to you or is it an overreaction? >> great question. i think it's premature to project that progress being made

is going to produce successful results on the scale that's necessary to really change the fear that people have and get the world back to normal yes, we're optimistic we'll have a vaccine mid to late '21, but there's going to be a lot of losers there's over 100 companies seeking the vaccine. a few will win and produce many are going to lose and those companies are going to have to step into the confessional, tell their investors, whoops, we failed, so our approach has been -- that's like going to the craps table and gambling you really want to focus on the companies helping the companies that are trying to develop the vaccine. we want to focus on companies that are providing the co-vid tests and also the companies that will ultimately be the manufacturer of the vaccine once the winner is finally determined

so tmo, charles river stocks, things we like very much >> tom -- >> there are strong players in the current environment and as we get to the other side >> tom, i can remember the mid 90s and your name, and the market, of course, at that point where we saw significant level of speculation as the decade came to a close. recently we've seen some price to earnings or price to revenues multiples that at least are rim nis end of that period i'm curious about your thoughts of similarities and differences right now between some of the technology names we're seeing and what we saw during the bubble period in the late 90s. >> david, you are absolutely right. i've been investing in tech since the early 80s. you're right the similarities to the late 90s are very really. today as i look at it, there are

a lot of stocks out there that have what i like to call bubble valuations they're rising up on short coverings, on hopes and a dream. not on cash flow earnings and other real metrics now, the investors have to be careful to not want to chase the stocks you want to be focussed on companies that have real sustainable business models. dominant of businesses that have the secular trends behind them, and the valuations, they're a bit high, but they're not exceptionally high so there's many similarities to the late 90s i think investors have to be careful. tech stocks are overdue for a correction and when that comes the bubble stocks are going to get hurt instead, focus on real leaders in software, payments, mastercard, microsoft, for example. >> finally, ingrid, we're going

to get fed balance sheet today it's down four weeks in a row. and there's this running theory that the commentary this week has been on the dollar side. many believe they're that foaming the runway for additional support once they see what happens when the programs run out at month end does that make sense to you? >> i think the fed, the central banks, the government will do everything they can to throw money at the problem to get us through this challenge it creates lots of opportunities for businesses that have good secular growth and strong balancesheets, and we're optimistic that we can find companies. one thing that is going to be front and center is our sustainability issues. electrify kags, fuel efficiencies these are all good as tom was mentioning, finding secular growth it doesn't just reside in technology it's across sectors. we have a ton of companies in our portfolio going after that opportunity.

texas instruments and even boring companies with dividend yields like utilities that are part of the solution so yes, we think both central banks and the government will come to the rescue but scope and duration of this virus is really uncertain. >> yeah. great conversation, guys thank you for that ingr ingrid, tom, hope to see you again soon >> thank you very much >> thank you >> morgan? >> coming up, the co-vid spike in florida one restaurant owner in the state tells us about the impact on his business. stay with us major averages all in the red. experience the adventure of a bigger world in a highly capable lexus suv. at the golden opportunity sales event. get zero percent financing on all 2020 lexus models. experience amazing at your lexus dealer. - [presenter] stand up if you are..: on all 2020 lexus models. (audience applauding)

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welcome back florida continues to be one of the hardest hit states in the country as covid-19 cases see a resurgence in the sun belt over 10,000 new cases reported on wednesday bringing florida's total case count to more than 300,000. some political leaders in the state have called for the governor to roll back reopenings or at least roll them back further. joining us on the path forward is burt rapaport president of a restaurant group based in florida thank you for being with us this morning. >> good morning. >> you have three restaurants in palm beach county. they are open for dine-in and takeout, but obviously at limited capacity

are patrons coming? are consumers coming right now >> so, actually, we have four restaurants. and people are coming. but since the resurgence in the virus, our -- it's been very quiet. we are at about 60% of what we were last year at this time. >> and have you found there's been a direct correlation in that i guess weakness between the increase in coronavirus cases or is it more an effect of the fact that there are capacity constraints on your restaurants? >> it's totally people are scared to go out we have enough seats to do three times as much volume as we're doing right now.

but since the resurgence, people are just scared. >> yeah. you know, i wonder how do you make plans for the future whether it's near-term or even longer tmpl right now. given the fact that there is so much uncertainty in a place like florida that the case counts and other data continues to increase what does that mean in terms of the plans you're making for your restaurants, whether it's from an employee standpoint or an operational standpoint i guess how long can you be sustainable in this environment? >> we did our cash flow projections through the end of the year we based them on being 50% of what we were last year we're actually a little ahead of our projections. we planned onramping up starting in october, and by the end of the year getting back to where we were last year at this time

so based on those projections, our cash situation looks okay. but we've had the benefit of the ppp program, so that took a lot of pressure off of us. >> yeah. i want to follow on that given the weakness you're seeing right now in traffic, you mentioned you took ppp would it be helpful if there was another round? >> absolutely. it would be great. it's a win/win >> but you believe you can stay at least in business it sounds like, given your projections on what you're seeing right now through next year, hopefully to what is a better time? >> yeah. i'm not worried about going out of business.

we're fortunate that when we originally shut down on march 20th, it was the peak of our season, and we had ample capital that we are using to help sustain us. and as long as there's no major hurricanes this summer, we should be fine >> well, we wish you the best of luck thank you for joining us today burt rappaport who owns four restaurants in florida thank you. >> thank you it's now time for our etf spotlight. taking a look at the airline sector ticker jets. under pressure today still looking to rebound for the year down more than 40% in 2020 it's down about 3% just today as you can see. two names in the group teaming up american airlines and jet blue into enter an enhanced co-share

agreement allowing the airlines to sell seats on each other's planes and earn and burn frequent flier miles we're going to take a quick commercial break meantime, stay with us

as you can see a mixed

picture. a bit more red on the realtime exchange back at our head quarters. let's get to sue herera with a news update. >> good morning, everyone. here's what's happening at this hour the u.s. canada and great britain are accusing cozy bear, a hacking group believe to be part of russia's spying apparatus of persistent and ongoing attempts to steal covid-19 vaccine information from researchers russia responds it's unclear following two decades of new executio executions, the second person is killed by federal officials this week after saying he was deeply sorry and, quote, this sanitized murder really does not serve no purpose whatsoever, end quote, he was killed by lethal injection. he had been convicted of raping and killing a 16-year-old girl gop officials are limiting attendance to 2500 delegates for the first three nights of a

convention in jacksonville a larger crowd will be allowed when president trump accepts the nomination you are up to date i'll see you again in an hour. i'll send it back to carl. all right. sue, thanks. when we come back, we'll talk about the twitter hack from last night. obviously in some high profile accounts targeted and then disabled by the company. stocks under pressure down 3%. don't go anywhere. experience the adventure of a bigger world in a highly capable lexus suv at the golden opportunity sales event. lease the 2020 nx 300 for $339 a month for 36 months. experience amazing at your lexus dealer.

welcome back let's turn back to that massive hack that twitter disclosed yesterday among the accounts affected joe biden's, jeff bezos, elon musk, kanye west, and many others. twitter shares are down. although, not too badly. a tech analyst joins us to discuss. mark, i guess how serious is this for twitter >> first, thanks for having me

it's serious in a few ways and perhaps not in others. clearly on the first side, very much public perception this is very visible it's not the first time this has happened we had the saudi arabia incident earlier this year and a few years back there was a contractor that fledeleted trum account for a little bit more names involved. feels more coordinated for stocks and companies, i expect twitter will make the necessary changes to adapt i expect users will stick around and perhaps some of the higher profile names may think twice about using the platform and what they communicate. overall, i don't think this is similar to the call it the kylie jenner moment that snap chat had when she announced she was leafing the platform and the stock tanked it's moderate and visible, but i think tit's something i believe

is solvable. >> but the idea of high profile users having second thoughts about using the platform does not seem to be an insignificant concern. >> i think it's fair do i think they'll continue to use it i do i think it will take time. you need to regain trust this is top of mind. i think the way twitter has been, it's reflective. as al trtruistaltruistic you don't consider there are bad actors that manipulate the platform we've seen others come out the other side when they regain trust. i think it's top of mind right now. a lot of attention this may be similar to the advertising boycotts for facebook which are barely discussed anymore. >> yeah. mark, i mean, you just rattled off a number of different examples of hacks or attacks or incidence that have happened at

twitter in the last couple years. when i hear you talk about it being solvable, i wonder why maybe security hasn't been beefed up more ahead of this moment in time, and i also wonder whether other major social media platforms could be susceptible to something similar? >> i agree for me it was disappointing to see that something like this was still able to occur, and especially given the previous incidents. you would hope in would be the urgency and attention to be more pro active right now i fully expect all social platforms are looking for internal vulnerabilities on their platforms. >> you mention you don't expect a lot of user erosion, but how about advertiser erosion >> twitter is already in a unique moment in time. many advertisers are pulled off the platform they're closely tied to events and brand based and have

stipulated a lot of conditions around ajay sen sis. they don't want to appear next to content that may include co-vid, et cetera. and so i think those affects will persist i don't know if any advertiser will look incrementally closer at this and say is it a place i want to advertise if the events come back? there is some potential. clearly we saw it with the ad boycott on facebook. there was some but also included twitter in the group. if you expand this enough looking at data security, but the overall almost as an investor and esg metrics and say what are they doing around data security and is that a place i want to advertise? certainly that's up for dakota as we go through the rest of the year if it's a place they want to come back to as the events and sports come back >> mark, you know, it's not the first time people have looked at twitter and noticed that it's

buggy occasionally there was the problem with the ad product a few years ago obviously it's resurfacing questions about dorsey splitting his time do you think there is a pattern of either lack of attention from the chief executive, or lack of requisite spending to make sure these things don't happen? >> i can't comment on executive attention. there is a history of moving a touch slow on some of the issues clearly for the last couple years we know that health of the platform is top of mind. but i don't think anyone could look at twitter and say they solved all the health problems on the platform. it could be a very expensive issue to solve for example, facebook has more content moderators than twitter has employees. that's looking at content moderation you look at protocols and rights and you can expect an increase in at least some expenses to comply and to try to get ahead or catch up on this. absolutely right i think historically there has

been that pattern of just moving a touch slowly to address some of the issues. >> so i guess in the coming quarter, i mean, we're going to watch for earnings and revenue, but expenses it seems to me just took a leap up in terms of metrics people are going to want to talk about. >> yeah. i think it's something people will want to talk about. i don't know if there's going to be a lot of clarity around what the expenses look like they're already spending quite a bit on data security and infrastructure and you could absolutely expect some incremental spend to comply, but no one knows the level, if it's going to be a small kind of 50 to 100 increase or something a little larger i tend to skew towards perhaps the conservative side of expense growth, given what i know they've roughly developed today and at least for my own point of view, what i think would be acquired to meet the needs of what's currently happening >> as the earnings season for tech names gets underway to

broaden it out a little bit, whether it's twitter or other names, what are you most bullish on going into the print? >> you know, going into the print, this is separate, i guess for the longer term view of some of the names i was bullish on twitter on this print, because i think they're going to be the net winner in terms of user ads off the back of all of the co-vid and the stay at home we saw this in japan with the fukushima disaster new users came onto twitter, stuck around, and now they've got better on boarding tools to keep the users for engagement bump we've talked about across all the internet names, when things go back to normal, assuming they do, a rot of that engagement lift with dissipate. twitter should be able to come out ahead on that metric i very much like facebook. going into the print here. the reason is i think -- i was called the rubber company in this space nothing seems to stick to them

all the head winds we continually talk about all my conversations with ad buyers and everything i've seen suggests they're going to do well on beating some of the elevated expectations on ad spend on the plat form those are the two names i probably highlight that could potentially do well this earnings season. >> got it, mark. just quickly, then, do you think parlor is going to become a bigger part of the conversation here >> potentially i think whenever the example i'll point to is in india when we saw kind of the tiktok ban taking place, local names popped up to the top of the google play store. still early days to be determined if they're going to get traction to be a threat in the space. i think you'll see a short-term bump in a lot of hype around using it a bit more. i'm still skeptical on anything coming up truly to become a real competitor or displacing twitter. >> mark, preerappreciate you ta

time with us thank you. >> thank you very much watch morgan stanley stock here a five-month high on the blowout record 21% higher revenue than their prior record on that metric. we talk with james gorman about that as well as employers coming back to work >> i think the last few weeks, just to get in the flow, do the temperature tests, go through the app we asked our employees to do. see how the elevators work i want the senior management to do that. i don't want to be here all the time that's not because i can't be, but i don't want everybody to feel like they need to be in the office all the time. i'm not sure the infrastructure in the city and then in our building can absorb the number of people that were working here preco-vid until we have a level of immunity or treatment >> fascinating comment there, david. i mean, you got to imagine chief

executives are going to want to experiment and understand what their employees are going to be asked to do once they all come back to work >> yeah. and what their employees are comfortable doing. so much of this goes back to the fact that at morgan stanley as we are here, remote work is working pretty well. it's funny, in fact, when i speak to investment bankers, some of whom employed at morgan stanley, they tell me they're as efficient, if not more, in part because they're not traveling at all, and everybody has gotten much more comfortable with doing serious business virtually but it will be interesting to see. particularly in light of the fact morgan that the virus case count in new york is very low right now unlike other parts of the country. you'd imagine that other chief executives are having similar thoughts about their office environment. >> yeah. knock on wood. it is. it's low

at least for now, and something i think certainly many of us are grateful for it's going to be interesting to see how many of thee companies do, and we've had the reports in recent weeks, how many of the companies start to think about moving, shifting or expanding their footprints outside of the city to, for example, the suburbs which we know in the new york metro area, many people have relocated or are considering relocating out of the city given everything we've seen with coronavirus. just in general, though, i mean, looking at morgan stanley, 68% jump in trading revenue. 168% jump in bond trading. equities trading revenue up 23%. investment banking up. wealth management up it really sort of speak to what we've seen all week play out which is kind of the tale of two earnings tapes for the banks whether it's morgan stanley or goldman sachs performing better than many of the main street rivals, whether it's jpmorgan, bank of america, citi, which all have had to build the massive

reserves for loans, i think one of the key questions now is going to be how long this trading boom is going to last and what a company like a bank like morgan stanley is going to see in the second half of the year which he talked to you about. shares are up 3% we're going to take a quick programming note as we head to break. today cnbc in partnership with acorns is hosting a virtual live town hall special bringing together americans affected by the health crises. financial experts will answer their questions to help them reset and rebuild their financial futures. that's tonight at 7:00 p.m. eastern. must-watch tv. in the meante, wlle ghime' brit back stay with us

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welcome back the debate on whether or not to reopen schools this fall has become the new political litmus test in the presidential election we explain in the latest states of play survey from cnbc >> reporter: morgan, there is at least one area of bipartisan agreement, and that is that the cost of a college education is just too high. that is especially true right now in the middle of a pandemic with 40% of institutions planning to go either partially or fully online this fall. our exclusive polling with change research across six battle ground states found an overwhelming majority of likely

voters believe that online learning should come with a lower price tag. 7 2% said studentsshould not b charged full tuition for virtual instruction. and only 16% of students think that they should be paying full price. now, that strong majority does hold whether you're looking at republicans, democrats, or independents the bad news for students, though, is that many big names don't agree. harvard, rutgers, california state university is all going online and charging full price despite pushback and petitions from students. colleges argue students will have the same access to the same teachers and curriculum they would have in the classroom and they're already facing a massive financial hit from the virus in the cares act colleges received $14 billion in funding, but institutions say that the cost of reopening safely this fall is more like $74 billion. and guys, that is two or three

times higher than the number that republicans are reportedly talking about in terms of aid in the next coronavirus relief package. back over to you >> you're seeing it on the community college front, especially on the international student front. that's notable especially with the visa issue between the government and the institutions. many of the schools did take cares act money. what did that money -- maybe i'm throwing a curveball your way, but what did the money actually go to if tuitions are going to be staying in place at many of the colleges >> so there's a number of different costs. some of that money went toward helping students who are financially strapped colleges say they're going to face physical costs of social distancing, investments in technology, testing, ppe, all of those safety measures.

that's what's adding to the $74 billion they estimate will be required to open safely in the fall now, i understand that colleges are actually going to be advocating potentially for a smaller amount because they know the dollar figure is likely not going to fly on capitol hill but they are saying they will need additional help in order to get through what is going to be a tough school year for everybody. >> yeah. rice university saying they're going to hold classes in tents outdoors for the entire school year that's something you can do in texas. we'll keep our eye on that watching colleges and reopening today. we'll take a short break as we said earlier, markets doing okay financialsho sw backbone we're back in a minute knowing we're prepared for the future. surprise! we renovated the guest room, so you can live with us. i'm good at my condo. well planned, well invested, well protected.

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welcome back virgin galactic announcing a change in leadership you can see shares responding positively up 12% the ceo12% george whiteside stepping aside after spending ten years in that role but staying on as the company's newly created chief space officer. former disney executive to take over at the new chief executive. that's going to be effective starting next monday i think the bottom line is this move signal as shift from development of that suborbital space tour iism that's been at branson's. "virgin galactic" is moving closer and closer to actually launching service and recruit more customers there was a note this morning

saying basically colglazier is an outsider. there are similarities between four-day space port experience and a disney vacation and also mr. colglazier's experience. it's also considered a positive by the street that whiteside ar u stay onboard. shesp 13%. we'll be back in a minute. so stay with us. and you're technically a genius... and it appears you're quite the investor. i like to trade. well, td ameritrade has pros ready if you need help, say talking through a new strategy... ... just in case things, you know, get a little rocky? i'm sorry on the upside i think that's waterproof. maybe not...

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about not just the phenomenon that it's become but the investment led by blackstone that includes luminaires such as oprah. welcome. good to see you. >> thank you so much glad to be here. >> you've been with the brand and company for many years you see it at starbucks, you see it at the grocery store. my wife doesn't use anything else in her coffee but can you talk about the origins for where the idea actually came from >> this whole company was based on the idea of just making a better milk, milk that was designed for human beings and better for the planet, and that's what i think we do, you know, with our pro sechls we make it liquid throughout that whole process. we keep the goodness of oats without adding anything.

it was born out of swedish skriechbl science. you know, it doesn't really get relevant, you know, unless you really connect with people, so that part, the emotional part of the business is super important for us as well. >> we follow meat as well. a lot of the research around it used plant-based measurements as a template they say look what they did in replacing a product. imagine what meat can do i wonder if you think that second wave in meat has sort of accelerated and rejuvenated maybe the trend beverages had to begin with. >> absolutely. you've got to remember, this is just the beginning of the whole curve. we're still in the early stage

it's about 15%, 16%. if you look at yogurt, cheese, it's less than 4%. less elsewhere there's still a lot to do. we haven't seen the mass generation yet that's still to come what are we doing in the meat replacement base or plant-based milk, it's just -- it's just an expression of what's going on in the world today, how people are becoming more conscious and aware of their own consumption, how it affects the world. >> toni, i have to tell you, i have oatly in my refrigerator right now. huge fan i use it every morning in my coffee. >> great. >> how fast are you growing? there are a lot of copy cats in the market how are you navigating that? >> hey, you know, in terms of

copycats, we're the original you have to have a fantastic and amazing product. it's more about who you are as a company, what you stand for. yeah, we might make oat milk, but the idea of the company is way bigger than that, and it's based on sustainability. we all know what needs to happen is the shift from animal-based food to plant-based food i think that's what we're driving, the bigger picture. you want to drive it into a bigger dimension i think that's what's happening and that's why i think we're working so well versus the competition. >> mr. petterssopettersson, the

industry will say there's only one kind of mill, that attached to a cow is. that an issue for you or could it be in the future? >> hey, i don't think it's fair we can't call ourselves milk you know, i think that's the right word for what we're doing. does it matter you know, i'm not sure obviously, you know, i think cow's milk are designed for baby cows what we're trying to do is design something for human beings and our bodies and what we need in terms of nutrients, proteins, carbs, fibers. i know it's a debate, but i think the science -- you know, what science says and what we believe, i think it's the right direction. >> finally, toni, the covid disruptions, having to shift as

all product makers have had go do, shift away from food service and go into retail, not to mention the capacity constraints, how do you manage that being relatively new to traditional rivals >> going back to the other question about our growth, we grew almost double the growth last year. and despite the pandemic, we expect a similar result this year you know, we're humbled by the situation we're in as a company. it's a tragedy what's going on in the world today, you know, but as a business, we're performing really, really well given that the major part of our business comes from coffee shops and food service, it didn't collapse, but the decline was heavy both in asia and the u.s., but we've seen how it's been absorbed completely by retail.

we routed the biz into china as more oe-commerce and europe. it's about things -- the last month's events are acceleratiin the shift that was already happening, you know. and the growth for our business is one way of expressing that. >> right, right. toni, congratulations on everything so far, certainly on the blackstone-led investment. we hope to see you again toni pettersson of oatly thank you. have a good one. >> thank you so much. >> david and morgan. we'll see you later. good morning welcome to "squawk alley." as the markets try to work their way to the flat line, we took out yesterday's flow intraday. looking back, banks showing life even amazon is on pace for a fourth day down, something