final check on the markets dow down about 33 points that's all i'm going to say about the nasdaq is up melissa, thanks, andrew, thanks. did we read tolstoy? was today's show like "par and peace" i laughed, i cried >> all of it. >> three hours sounds like it was years ago. great booking, andrew, i'm glad we did that with ackman. make sure you -- and we will see you tomorrow, melissa and andrew make sure you join us tomorrow "squawk on the street" is next ♪ good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber. got some chop to futures this morning amid new china tensions, the u.s. telling china to close its consulate in houston got results from united, snap, microsoft, tesla tonight, pfizer news, oil is below 42 on this

api inventory build, jim, along with the president's comment yesterday that covid is likely to get worse before it gets better. >> there's so much confusion right now. we've got pfizer news because the going is going forward, will be able to produce a vaccine if it goes forward enemas the president saying masks are patriotic. then he said things are going to get worse. i think that's counterintuitive if you wear a masks it won't get wors worse. >> the pfizer news you mentioned is that the u.s. government engaging to produce 100 million doses and you have to 600 million doses, jim, starting with 100 and that would be available to the public at no cost, although the government would write a check for about $2 billion. >> carl, when this happens

typically what we get is all the covid-19 stocks get hammered the nasdaq gets hammered, all the companies like an amazon that would no longer be able to have the way of the world because we have a vaccine, we have the stimulus which they might do well but then we have the vaccine where they don't do well those stocks go down what goes up are what went up yesterday, the industrials david, there never seems enough money to go into the two-thirds of the s&p that is not doing well and there always seems to be enough money to go into apple, to go into amazon, alphabet, facebook and of course tonight is microsoft. >> right tonight is microsoft, also tesla. you know, listen, we've said it many times, it's not a stock market anymore, it's a market of stocks and it's a handful of stocks that we are really talking about. yesterday, jim, we did see a little bit of weakness in some of the names you just mentioned but overall that has been the story of this market many of the sectors down 10, as much as 20%, but the biggest

name, the mega cap names have performed extraordinarily well, leading the average, higher for the year the s&p up .82%, it's the nasdaq that really is just incredible, up 19% this year guys, certainly talking about vaccines is important, we do it and i assume we will be doing it hopefully a lot of mornings to come, not just what we're seeing in early results, but the dod stepping in, they may do that for some of the anti-virals making their way through phase two and potentially phase three trials as well i have to mention china this morning. jim, the tensions are going straight up, kind of like tesla's stock price. the houston consulate now going to be closed, they burn documents there, basically the charges are sort of these broad charges of spying, let's call it i don't know this is not going anywhere good. every day seems to get a bit more concerning. >> look, totally, david.

what i find is that you will get -- i will get footing in the stock market and it's almost as if, okay, let's use that footing to be able to trash the chinese, but the chinese are doing things that, i mean, china i think we all agree has been spying, i don't think anybody disagrees with that. the british just cut out huawei. what worries me, david, is that we're about to go into apple's earnings, okay, and i don't think the president has a view either way on apple, but apple needs china and i think -- starbucks, nike needs china, all the usual suspects need china with the exception of facebook and alphabet although alphabet was attacked by attorney general barr for his -- their work in china,which was ill-advised. i just feel like that we're going into the week that we don't need this stuff if we're stock market guys, but if we're cold warriors, fire away >> yeah. and, again, i do come back to as well the teenage girls because

tiktok if that gets caught here and every day they seem to up the tension there as well, they try to close that down, that's going to be really interesting to watch, carl i also mention it kiddingly teenage girls but one of the largest media companies at this point of the world valued perhaps as much as $150 billion in they manage to stay open in the united states of america. >> yeah, i mean, it's amazing, jim, to david's point the things that have happened in the past couple of weeks which are easy to forget because the news cycle happens so fast, but hong kong losing its special status through the eo, visa restrictions from pompeo who had comments yesterday in the uk, now the consulate and, again, china with comments that they will make countermeasures. the request he is to what degree does that target american business >> they have the flexibility to be able to hurt us, but they've been so subtle about what they're buying, what they're not

buying they don't as upper hand as they indicate because a lot of the companies that are dow gainers don't do a lot of business there. you have -- what are they going to do, slap a tax on apple they could do that, that could hurt the stock market but i think that what really we have to be focused on is there's a cloud software ipo today, jamf, let's see how that does. but next week we have a deal called lufax, it's a chinese ipo. that could be a total flash point. let's say that the administration is watching this show and they hear about lufax someone makes another call, makes another call, next i think you know it's like lufax may be delayed. that would be the real shot across the bow if the chinese weren't allowed to come into our markets, we are raising money as a cloud based company and the next thing you know, david, peter navarro says, do you know

what, i don't know about that. that would be -- >> yeah. you've been -- you've been echoing navarro's sentiments for some time there in terms of talking about this, jim. >> maybe he's echoing mine why do you think i'm oaking his? >> that's a good point. >> i've had my position longer than he has. >> i know who has more brain power. >> that's nice. >> i'm all in your camp. don't you worry. >> carl, did you hear hadthat >> that's nice to hear you we trust you more than peter navarro. that's fantastic. >> do i have more standing in choosing fauci than navarro? >> jim, you have more standing in every single way than he does okay >> that's not fair. >> every single possible way i can imagine. >> it reads like tolstoy. >> oh, please. let me go back to your point,

though, because you made it many times which is barring chinese companies from being able to raise capital in the united states that would be a dramatic action. that would raise tensions up to a very high extent and that might actually reverberate in the stock market in a way that none of these other geopolitical moves seem to. >> i agree with that i think that that's the one that says, all right, our door is closed, like we closed the door to the soviet union, other than arm and hammer going over there in the '20s to try to get the new economic policy out of lennon we basically stopped commerce this would be incredible to stop commerce by shutting down that ipo. i have to tell you i'm not advocating to shut down the ipo but i do believe that they will say something, i believe there will be an ipo tweet or navarro will be on the tape and we will worry and that will cause on july 27th the market to go down which is the date that i'm using to say that this short-ter rally might be over. thank you to larry williams for

getting me that one, he is a known chartest, david. >> july 27. >> july 27 peak. there you go at 2:59 p.m. >> that's interesting. >> no. larry williams is the dean of technical -- he is a guy who has been around forever. he is a great technician and he has called this rally nonstop and he says be careful july 27 so who am i do not say that all hell could -- no no that july 27 could be a down day. could be the start of -- >> we will talk to art cashin later on this morning. i noticed today net alliance says corporate selling, insider selling to buying five to one is the highest we have seen, only two times this decade has that ratio been that high insider buyers were -- >> how much of that is moderna >> they gave you a good tell

back in march the insider buyers called that right. >> it's a bad stat what can i say we have some bad stats after july the market is weak, we've got the possibility of a shot across the bow by shutting down a chinese ipo and we've got -- this is in the pipe so, you know, just call me a little more circumspect. i told the guys who run the charitable trust with me let's find something to sell i want something sold today. there you go david? >> all right something. >> something. >> that's very specific. >> well, yeah. >> what's the symbol for something? does it have a symbol? >> ackm. >> no, it's very -- yeah. >> what is it? >> i like pontine. >> pontine

>> yes. >> i had it -- eric makes a pontine like you have never had before the ackman spac will be one to watch. his general views about the stock market remember this one is at $20 a unit, typical spac is at 10. there are a lot of things that are different about this, but the main thing is it's the biggest of all time $4 billion so we will see how it goes and another billion or so coming from pershing as well. putting them in a position to do what would be one of the largest spac deals of all time, particularly if they -- if a large company -- they're sort of looking for a mature unicorn, guys, is what they talk about. he mentioned airbnb. i mentioned it a few weeks ago when we were talking about this. here is ackman explaining their

approach >> that's why having a cash shell where someone can instantaneously raise $5 billion and be in an offensive position in accelerating the growth of their business or deleveraging their company is a good opportunity. it's that uncertainty that creates the opportunity. >> jim, i don't know because it does require you to want to partner with bill ackman. >> right. >> the last company i remember him partnering with in a significant way was valeant when he partnered with them in their hostile bid for allergan. >> didn't he end up doing burger king >> he did, in terms of spacs or in terms of -- yes, absolutely that was a good investment. >> let's be more objective, david, like me >> okay. i'm still waiting for something. >> see, carl, i'm jimmy chill. i immediately point out burger king when he points out valeant. it's not the old days, carl.

i'm just not that guy. >> you've been pretty resolute in your chill, jim it's been months now. >> it is not easy. i have people -- i mean, cramer and portnoy, i've been saying -- i haven't blocked portnoy. portnoy, he had -- what, he was up 10,000 yesterday, he was up 30, i think. you check that every day, right, david? >> there something going on where you have to mention portnoy's name four or five times in the first ten minutes of our show. >> we're about to get sports and i want to know is he going away. more advice on baseball or betting on someone than we do on whether he likes the four letters that come out of a bag hello? >> if he goes away do a lot of the robin hood traders go away as well and move back towards betting on sports? yes. absolutely carl, i have to tell you it's the twilight of the robin hood isles when sport opens. >> that would be remarkable,

jim. if he is a true pied piper. >> yes, he is. >> to that big a contingent of retail investorinvestors. >> a stimulus check of $1200 it goes right to buying plug power. >> we're going to find out, jim. speaking of robin hood names we do get tesla tonight, we will talk about musk's new big payout, whether or not they're going to enter the s&p 500 if they turn in a profit. some of the crazy tweets that happened overnight ckn mitearmid. ba ia nu at do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. mhm, yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. now offering zero commissions on online trades. we charge you less so you have more to invest. ♪

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out of the wires on slack filing an eu antitrust complaint against microsoft, jim, alleging that the tying of teams software to the office suite violates eu law. of course this comes from a company that has long maintained that microsoft and slack are in different businesses to some degree. >> look, this stuff is it like the old days, this is like 1999 when you heard that microsoft was tying its browser in i think it's interesting that they're doing it in europe not in the united states i've long felt that slack has said, look, we've got the peer i don't remember product and if it weren't for the fact that microsoft ties this product everyone would use ours. i don't know my take is -- and, dave, you can disagree with me -- but slack doesn't need the government's help if it's the better product then people will use it. i don't care if it's tied or not

tied it's not the old days, people know how to immediately break any sort of tying. it's not like in 1999 when we were all buffoons. or neophytes >> yeah. well, right. net scape and, yeah, and explorer and, yeah i don't know, jim. slack is, what, an $18 billion market cap company teams has become very -- you know, a very significant force in that area of office collaboration, particularly of course given the remote nature of work now being so ubiquitous. >> yes i know that for the most part i've switched to teams why? because everybody has got teams. slack may have a superior product. when i was at the street -- before the street.com was sold we used slack, but i do think that teams is everywhere now i find that i'm pushed towards teams. i'm pushed towards webex a lot

instead of zoom. it's corporate it feels very enterprise now, teams, and microsoft has got its fingers in so many -- that's why people think this number is going to be so great tonight, the stock was up 2 bucks earlier. >> yeah, i think it was ray jay last week, they went to 225 and they called the try owe of azure, office and gaming a three-headed hydra so the expectations going into tonight are elevated you could argue. >> it is. >> we will talk more about microsoft obviously and tesla which reports tonight. i think after we take a short weahe weill be back in just a moment this is decision tech.

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the trailing six-month market cap of tesla has now exceeded $150 billion. jim, that means that elon musk gets 1.7 million options at 350, which means if he were able to exercise and sell them all today $2.1 billion, the second big chunk of that pay award. >> just incredible and bank of america is questioning whether the move in the stock has been supported by the fundamentals calling the stock overheated driven by momentum obviously not a fan. by the way, i should mention that bill ackman bought up

tesla. i do think when you look at what tesla is doing it's got the most momentum into a quarter than i have ever seen usually when it has that kind of momentum even if it goes down the buyers come right back they can't get enough of this thing and so i kind of think that it could get hit and then people just go buy it again because it has become a stock that it's a must-own stock and, david, we've seen this before where there are so many things that he can say. people talking about being able to build ten factories ten factories. to meet demand how many factories do ford and gm have to shut to meet demand >> it's extraordinary. and there is no lack of imagination from any of the investors who are weighing into this stock in terms of what this company is going to be able to accomplish, jim. we should point out as well it does look more and more likely it may get added to the s&p 500. >> yes. >> which would also add

potential buying as index funds need to add. >> would you offer stock if you were him to make it so you have all the money in the world or does it either matter? could he do a bond at 1.5% coupon from some firm that wants money. >> he can do whatever he wants in terms of capital raising at this point. >> you're telling me this man can do whatever he wants, we've heard from a carl that he just made a billion and a half. at a certain point are you jealous of him or are you just so confident in yourself that you don't feel that way? tell me. >> yeah, i'm not i'm just not i don't know why i'm not. that's not how i roll. >> really? >> i wish i had more time. i wish time wasn't going so fast that i'd like. >> i'm not asking for existential wrap. >> i'm sorry. >> yeah, he is a he got more than i have. that's what i want to hear. >> i don't, i don't roll that way. i feel so lucky. so lucky every morning. >> you are a diplomate. >> how about you guys? >> yeah, do you know what, i've got the edge on him, too, because he called me a hologram.

>> yeah. >> so i've got the edge on him because i'm real. >> he still only gets 24 hours a day, guys, just like us. >> true. puts pants on, i guess, same way. >> yep >> i don't know. >> he does he does. >> we have the edge on him the heck with him. >> the heck with him >> ackman bought a tesla. >> he did, he's got some notes for elon i'm sure elon will review them very closely >> guys, i did want to tell you that we were talking microsoft earlier. this guy was once the cfo of microsoft talking about time, a long time ago greg maffei has been liberty media president and ceo for quite some time as well. they have a big stake in trib adviser, big stake in charter, sirius owns pandora. lko m ounta braves, so much to ta thiabt later in the show

>> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. let's get to a mad dash as we get to about two and a half minutes before we start with an opening bell capital one, jim. >> there will be a lot of people

talking about various stocks and notes, texas instruments obviously very important, aldi's very important, but capital one they talk about taking a very high provision, 2.7 billion. this is richard fairbank who has been around forever and is fabulous at his job. obviously they know how to lend, what's in your wallet, david, but the fact is they're taking a big charge and saying the consumer is incredibly strong. kard business is particularly healthy. they're talking about very few people took the forbearance, this he offered forbearance, but they did say this. let's be careful we are seeing this great paradox of extraordinary credit performance in the middle of the worst economic new york 90 day moratorium on rent about to end. you can obviously kick people out. talking about the vertical drop in the elevator and he's saying

you need stimulus. stimulus is the key. without stimulus then i think you're going to run into some trouble. we need masks and stimulus to get to vaccine and everyone should read capital one because the oddities of a recession where the consumer is making a lot more money and not spending much is interesting, but when we get rid of the unemployment benefits that are extra, the $600, i don't know what will happen it's worth focusing on a great conference call to read. >> okay. and of course it takes us back to washington, d.c., carl, where negotiations continue on what a potential bill will look like. of course, the house already having pass add $3 trillion bill but that is not where they're at in terms of negotiations right now. although it does appear that payroll tax cut is not part of the conversation or at least not part of many conversations that seem to be going on between senate and mnuchin and everybody else >> it's interesting. the interaction between some of the senators like thune and

reporters, they bring up the payroll tax and it sort of gets a you can chel but the other chuckle they're getting right now, jim, is mcconnell being asked do you expect a deal by the end of in ex week and his answer yesterday with a laugh was no so it's going to be another race to the wire for those who are dependent on that extra income. >> wow >> opening bell. >> that gap is no good >> yeah. this morning at the n kbrchlt sc celebrating bill ackman's pershing square how do you say it, david? ton teen >> ton teen. >> ton teen holdings, yes, the largest spac offering ever at the nasdaq, another ipothat's jf pro visor of apple enterprise software, we will talk to the ceo later on on "squawk alley. katie huberly had thoughts going into that. june quarters like to outperform and so forth. >> it's one of those pieces

where it reads to well there is a line in it that did bother me which is that there is an idea that this is now the high quality safe investment there was a day when you used to think that apple was a dangerous stock to own so, i mean, the idea that a company that could have just had this dramatic run is not set up for possible fall i think would surprise people, but, again, it's a service revenue and 5g. it means if you get a fall the buyers will come in. and that's what i think is going to happen. i just don't think that you're going to get -- like tesla, i think that buyers come back. hey, look, i think netflix is going to come all the way back they come back to these stocks, just not the same day that they kill them. they don't remember ton teen partners, wasn't that jeff again degen ge. >> that's right, there was a hedge fund >> jeffrey gendell -- ton teen

associates, i'm sorry, it's different. could be like michigan state, university of michigan for all i know, right? two great titans, ton teen and ton teen. >> we are going to watch the ackman spac in part because will it be the top in some way given how enormous it is. >> right. >> some of the names that he had been talking about, whether it's airbnb that might want to roll into it, not all of airbnb of course but it would be a percentage that they would own or he even apparently has been mentioning bloomberg it seems hard to imagine. >> bloomberg. >> in any way, shape or form i mean, please but it's big. >> you brought it up. >> it's really big by the way, on burger king he was just an investor there, that was marty franklin, that was that spac, jim one that people have brought up more is the target spv do you remember that one the special purpose vehicle on target, didn't work out at the time. >> david, i think you're showing

a sardonic signed of yourself. >> i have that. >> you're sardonic. >> thank you you mentioned netflix, talking of music streaming company you've been covering closely is spotify. >> oh, boy. >> this morning the company putting out news with a new deal with universal that has been getting at what they've been trying to establish, this two-sided marketplace. we pay you for the rights to stream your artists but now you're going to be paying us because of all the data and marketing that we can provide you to increase sales. so quite a response this morning yet again, jim, from that new agreement that spotify signs with universal music group. >> look, it is artificial intelligence, machine learning it's kind of a reversal. suddenly you have to pay us. i think that spotify -- there was someone the other day

downgraded it to a sell, missed it the whole way they don't understand the transformation that spotify is trying to be all things to all people and when it comes to hearing. anything that you can hear they're going to have and they're very well run. it is a great company. undervalued. mispriced. i think. >> even now? even at almost 300 bucks a share? >> it was undervalued and mispriced for a long time, now it's starting to get the recognition is deserves. carl, one of the things i think isincredible is we just got great news of pfizer, anyone scared of the illness got great news and that has led to the nasdaq and covid plays going down and they are not happening. caused me to wonder whether everyone was thinking ahead of time that pfizer was going to get this because this is a market that once again -- pfizer was up 2.5 bucks, now it's up a buck and a half. the usual suspects that do well

in the time of covid, the shopifys are moving up nicely, regeneron moving up. i'm wondering whether people are saying this time huh-uh because we've got some of these companies that do well in the time of covid doing quite well today. amazon, only up 2. i know, it's early it's early >> yeah. it's hard to discount what the president said yesterday, jim, about things getting worse before they get better. >> right united, scott kirby on "squawk box" this morning did say he sees a quick return to 100% revenue after a vaccine, but who knows when that is, jim. in the meantime they're trying to get the cash burn from 40 million down to 25 million a day. i did notice marriott said occupancy in china could get back to 60 next month, which is a pretty good number if you are in the hotel business given what they've been through. >> i'm looking at these companies that are now starting to lap and do -- and actually do

okay i had logic tech on last night, they are crushing it in china. that's l-o-g-i that has been a total horse. hit its all time high today, up 50%. this is the 50% club that there are so many of now what a strange year. unbelievable logic tech says china is totally back. >> seeing a split in retail as ubs cuts macy's to sell, goes to 3 bucks, cuts kohl's to sell best buy saying that online is 3 x quarter to date, the s&p gainers today. >> and best buy said that ever since all their stores were open their numbers are up really, really well, 15% that's amazing but this is a really strange day, carl, because you have a best buy which is a company obviously consumer discretion. hca health care reports a terrific number, a lot of people thought they would have a shortfall, no the enough elective surgery

bingo, you have companies that are about the consumer being strong, health care being strong, you have a number of companies that are just kind of along for the ride and against those you have snap. look at thermo fisher. thermo fisher -- secretary azar was talking about how there are more machines, why can't the states buy more of the conditions they are pumping out machines thermo fisher and pumping out stock. >> go back ten years take a look at the long term, too, jim on that stock that has within an incredible value creator. thank you, guys, that was a quick one. look at that look at that. >> look at that, will you? >> yeah. >> better than your index fund, david. >> that's true. >> i think most people would take 725% for ten years. that's pretty good numbers. >> did you know that mark casper built a plant in kansas, six

weeks, he built it, to provide testing kits for specimens for covid. six weeks. so basically he is what we thought the defense production index -- defense production would do timo does not get enough credit. why? because mark casper is so nonpromotional that it takes guys like me to be able to you can at that about the fact that he did 389 million when people were looking at 289 million with organic growth up 11%, $1.3 billion of covid orders. look at that. >> amazing. >> they were where you had to be >> they really were and they do rework that deal to acquire kygen as well. >> are they going to get them? >> you know, it's not our takeover laws, it's a different system >> who is blocking that deal >> that's not -- it's not of great importance that one. >> really? >> yeah, that was not a real thing i don't believe. i think, if i recall. >> just slap me down. >> yeah.

that didn't -- no, it's much more about the shareholder vote, about what's going on in the jurisdiction of where kygen is. >> okay. >> quickly back ba to best buy because it is worth mentioning, they had furloughed 51,000 hourly employees on april 19th they say now that as of june 15th they had brought back about half of that 51,000 of those domestic employees, hourly employees have returned. we should also point out, guys, they are going to $15 an hour as their minimum, their floor wage. >> right. >> they increased pay, 4% increase in the hourly rate, will replace short term incentive compensation but they also go to $15 for anyone who wasn't yet there adding that name to any companies that have done that in retail. >> web bush came out today, david, and said they took the price target from 75 to 95, it is at 95 right now so that's a little value subtracted, but

they're saying that there is a permanent shuttering of competitors that are really helping them i think that's happening in a lot of different industries, whether it be chipotle, you see there's a lot of places that serve that are going under, restaurants can't make it. i think we will hear about that. best buy a lot of the competitors just couldn't make it so this is the beginning of the titans taking over and a lot of the marginal players including the mom and pops getting boxed out entirely especially the local pizza parlours, they can't compete with dominoes. this is an amazing time. there is just a division in the world, the big guys won, small medium size need stimulus, if they don't get it they're gone. >> that's the dynamic we were talking about really from the get-go of covid, jim we through this was going to happen. >> yeah. >> and it has. really quick, finally on snap, 9 cents loss was in line, revenue ahead, dau up 17 was a bit disappointing, rpu was

ahead, guggenheim goes to neutral. we will see what twitter says in the morning. >> they needed theatrical releases, this he needed return of sports. you have to have something to talk about something special that would get to the advertisers that's what the advertisers wanted them for movie releases and sports and those are obviously not around market is still not doing that badly. >> yeah, well, but speaking of sports, we do get opening night tomorrow night, opening day on friday for baseball. yeah, it's only a 60-game season but a lot of us, well, we will take it. coming after this break we are going to speak to the man that owns the company that owns the atlanta braves, greg maffei.

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welcome back no shortage of things to talk with our next guest about, of course, liberty media, owner of the atlanta braves, we were mentioning baseball season starting very soon, as well, that shot phi deal this morning, what about pandemic, 72% owned by liberty media, let's bring in greg maffei now as he has been teased, president and ceo of liberty. nice to see you this morning, greg thanks for joining us. >> thank you for having me, david, good to see you. >> good to see you, too. exciting of course with the

atlanta braves want to get to baseball, but let's start off if we can on streaming of music, pandemic, sirius, you know, we talk so much here about spotify, we've talked that stock or the company's market cap grow recently why are we talking more about pandora, why isn't that perhaps part of this conversation? >> i can't answer that part of it i've watched the rise of spotify on their podcast deals and pretty much any announcement they make seems to drive the stock up i'm not sure i understand it, but more power to them >> well, you know, it's funny you mentioned podcasting because jim meyer the ceo of sirius at a conference about a month ago sort of referred to some of those deals that they're doing as at least his opinion not rational do you agree >> well, look, i think

podcasting is going to be an important part of listening and we're big believers that the ear is going to grow in market share, that people are going to spend more time listening to things there's lots of opportunities between smart speakers and between air pods and new kinds of content like podcasting so i think we're bullish on podcasting, but our belief is we're definitely in the early days, that there's so much more content that's going to come on to podcasting and that at some point it might -- today it's low single digit shares, at some point it might be 10%, 20% of the market but it's unlikely to overtake all listening of music and other kinds of content so it's an important part, but i think the market has probably outpaced the stock market has outpaced the actual market to date. >> and i want to talk to you about the broader market as well and your view of it, but on this topic, again, spotify this

morning announces this new deal with universal music group they have an enormous amount of data that they say can be used by universal to help promote their artists, increase sales. certainly pandora and sirius are in possession of a great deal of data are those potential deals ones that pandora could pursue as well with the big music companies? >> well, i don't know the specifics of the deal that spotify cut, i just heard about it this morning. i do know that we have a strong relationship with the record companies and have been doing much to share data and improve the experience that they offer their customers. so i think all sorts of things are possible between both sirius and pandora and the record labels >> are you frustrated at all in terms of the performance of pandora and or the lack of attention it gets within the sirius portfolio >> look, i think the streaming business, streaming music business, is a hard business

i'm more bemused by the generosity that the market has shown to spotify, but we will see. >> okay. let's talk baseball. i was told you may be wearing an atlanta braves shirt there i don't know i can't see the logo. >> i did it for you, you are the mets fan >> yes, i am as you well know 60 games i mean, how do you view this season as an owner, greg is it just a write-off >> no. no i think, first of all, the most important thing is that we build a safe environment to give the fans what they want, which is baseball i think it's important that they get baseball in the best way possible and i think the mlb and players association have come forward with a series of protocols to make that happen and we are excited for the season 60 games is somewhat of a sprint, but i think the braves are prepared >> and what are your expectations, though, in terms of revenue

obviously the park is not going to have people in it and the quality of the games, you have had a number of players -- well, you have one who is not playing, but, you know, a few who have come down with covid, freedy freeman. >> freeman, hernandez as well. look, i think -- >> and markakis as well. >> freddie, you know, freddie is healthy, we fully expected freddie will be in the lineup on friday for our opening game. we have had a couple of players best positive, but they seem to be recovering well i think baseball has done a good job of building a series of protocols to make sure as much as possible that we are safe and i suspect the players are far safer in the environment that mlb has created than they would be in their home environment unregulated and untested in the same way you know, baseball, as i said, is important bible is exciting. you know, i think it's in the national interest and in the

interest of america to get it going. >> yeah. no listen, there are many of us who are excited for it at the same time it's such a strange time and a season. do you think it will generate the same amount of enthusiasm come the playoffs that it typically does >> well, i certainly lots of res to think so. i look at other sports and demand is way up as you know, we also own formula 1. the ratings are high the ratings for golf have been high clearly there's a lot of demand for sports we're going to start out without fans but we haven't given up that somewhere down the road fans are able to join. i think the potential to have sports be a unifying thing, the potential for obviously there's demand for people at home to watch it, give us a lot of incentive and hope for the future of baseball this year >> yeah. gregg, i'd love to sort of end

here on the markets, because you mentioned spotify. you seemed to indicate you're somewhat bemused by how much that stock has moved up on the podcasting deals >> we checked on robin hood people we have to work on that. >> you got to work on that i remember when you were ceo of microsoft in the mid 90s and went to 360, i think it was january of 2000. the -- >> not necessarily fortuitous time >> no, your timing was not great, although, nobody is complaining. i looked through what you own on your stock portfolio you're doing just fine, but as an asset al cay or tlocator rigw someone who does lots of transactions, what's your view of what's going on in terms of where assets are and some of the key stocks that we talked about so often are having moved up so

dramatically >> well, david, you guys have been articulate about how the faangs and the nasdaq have been dominated by tech. and that their share has -- of the market has grown enormously. in contrast, you know, things like energy have collapsed over the last ten years and even more this year. that seems unsustainable you know, these things run out of steam the overall market, as you guys have noted, is not the stock market but a market of stocks. i think the average stock is down something more like 10% and smaller stocks down 20 i think in the underlying economy there's a lot of issues. we're seeing about how what will get extended in the ppp and cares act. how much true unemployment or underemployment there is in the market i think lots of issues in the economy, and i think many of the near-term challenges have been discounted certainly by the

overall market of stocks >> yeah. and finally, gregg, i mean, given you have a broader perspective on the economy because of the ownership stakes, you don't seem positive on what you see coming >> look, i think there are winners and losers we have a portfolio, some of which are currently challenged things like travel you mentioned trip adviser, and others i'm bullish on both the businesses long-term they have near-term challenges we have companies in our portfolio like a charter or gci which is the alaskan cable company or sirius or even qvc which have benefitted from stay at home, demand for bandwidth and home products and the ability to shift the nature of what they're selling in the case of qvc, more toward gardening a.m. and home and safety zulily has sold over 1 million

mask masks. the economy is adjusting we try to take advantage of the ones that are able to adjust to the stay at home environment >> always appreciate you taking time with us and always appreciate your insights thank you. >> thank you, david. good luck to all of you. >> ceo and president of liberty media. we're right back on "squawk on the street." look here, it's your very own all-in-one

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it's time for jim and stop trading. >> people didn't talk much about texas instruments today. that was going to be the bellwether people were disappointed with it why? because they have a lot of automotive that was down. their personal computer, everything from the office stay at home was fabulous don't take away that semis are bad. take away they have more auto than others and it was not a bad quarter and i'm surprised the stock is down as much as it is >> all right jim, a couple seconds left key questions for pelosi tonight? >> we have to find out if there can be a meeting of the minds. when you go to capital one, if we don't get stimulus, we don't have the bridge we need for the

vaccine. we need a bridge to the vaccine. >> which is part of the news flow this morning. that's for sure. we'll see you then >> thank you, guys >> 6:00 p.m. eastern time. good show, jim thank you. good morning welcome to "squawk on the street." we're live from separate locations. diana has existing home sales to kick the hour off. >> carl, existing home sales in june jumped 20.7% month to month to a seasonably adjusted annualized rate of 4.72 million units. that's the largest one-month jump ever since the realtors began recording in 1968. it is just a tiny bit lower than expectations the street was looking for 4.73 million units sales were 11.3% lower annually. not at prepandemic levels but coming off three months of falling home sales sales were strongest in the west up 32% month to month and in the south, up 26 % also up in the northeast and midwest but not as strongly.

the biggest problem, of course, as we keep saying is supply. the inventory of homes for sale at 1.57 million at the end of june that is down over 18% year over year to put that in perspective, last year in june there were 350,000 more homes for sale. if there were more homes on the market, likely they would sell homes are flying off the shelves at 24 days on market that's down from 27 days a year ago. and that's keeping prices high because we're seeing bidding wars again the median existing home price in june was $297,300 that's up 3.5% year over year. that's nominally an all-time price high we saw investors step away, 9% of sales they were in the teens before. first-time buyers strong at 35% of buyers. now, to chief economist for the realtors, they said they would see more sales if there was more supply

there was a very steep shortage of homes for sale. he's concerned about a second lockdown he says just 7% of buyers of existing homes are doing virtual homes, buying homes they haven't been in. we've seen the numbers higher for the builders he's also concerned that without more supply coming on to the market we will see prices continue to overheat, especially with mor gatgage rates at recor lows he says his realtors think he should raise his forecast for the home sales for the full year he expects sales to continue to be strong unless, of course, we do see another national lockdown again, 20.7% increase month to month. the highest monthly increase realtors have ever recorded. >> mind blowing numbers. thank you. the other big news is pfizer has signed a deal with the u.s. government to provide 100 million doses of a covid-19 vaccine once it's approved with

an option for more meg has more on that >> good morning, carl. the deal is for almost 2 billion for the 100 million doses from pfizer and the partner that's if these get through the phase 3 clinical trials and through the regulatory process and on to the market there's also an additional option for the government to acquire up to 500 million more doses. they say that americans would get this vaccine for free. remember, this is a two-dose vaccine. the 100 million doses cover 50 million people pfizer on track to start the efficacy trial in the u.s. in july in all goes well, seeking regulatory review in october "squawk box" talked with alex azar this morning about his optimism on the data he's seen so far in this deal. here's what he said. >> it is a contract an advanced purchase contract where we can acquire 100 million doses of this vaccine as early as

december of 2020, and have the option to buy an additional 500 million doses and we just saw clinical trial data from the phase one of the pfizer vaccine this week that shows that it produces what we look for in early stage of the vaccine which is neutralizing antibodies at levels equal to or better than what we see in recovered patients >> this is just the latest of the operation warp speed deals that the government has made earlier in july 1.6 billion to novavax. they support development and manufacturing of the vaccines as they're going through the process. the pfizer deal is only if it gets through regulatory approval and gets on to the market. back over to you >> meg, i find this absolutely fascinating, especially the fact that these vaccine, the vaccine

from pfizer would basically not only would the money be paid contingent on the effectiveness and getting the green light but also the fact that americans who actually choose to take that vaccine are going to get it for free how does it speak more broadly to what we're seeing shake out in terms of pricing? we had some of the drug makers on capitol hill testifying some are taking more of a nonprofit approach and some of it looking at this as something they're going to look to price for profitability. >> it's such an interesting bifurcation that we're seeing. and during that hearing yesterday, executives from the different companies were asked do you plan to profit on this vaccine? companies like j&j reiterated they've pledged to make this available on a not for profit basis at least during the pandemic you know, that kind of comment makes it seem like thises if a vaccine that does need to be taken annually like the flu, this could be profitable for companies down the line. just at the beginning they say

they don't plan to profit from it pfizer's ceo said they did plan to profit from the vaccine there's a debate in the drug industry world right now about the best approach. we are in a pandemic so people say should you profit during a pandemic? others say you do need to have a profit incentive to make this work happen and to get perhaps better iterations of the vaccines after the first ones come to market >> meg, do we have an expectation given this deal that the u.s. government is going to make any vaccine that passes the fda available for free to the u.s. population? >> secretary azar was asked about that this morning. he said either free or at an affordable price for this one, it will be free, they say the government will be providing it for free. there is a question if you go to your doctor, will the doctor be billing you for them to give you the shot how that is going to shake out for what people are giving out of their pocket, we want to

learn more details about >> meg, on the pfizer news, thank you for that this morning. we'll talk to you later. in the meantime, hopes for a vaccine and the market's reaction is driving stocks today. let's check in with art cashin this morning >> good morning, carl. >> we've talked the past few weeks about those june highs, and whether or not it would be resistan resistance s&p managed to blow through it now the conversation is turning to narrow breadth, especially in the nad zasdaq how do you think about this and does it remind you of february of 2000? >> well, you know, david cited a very interesting thing about the s&p advancing more than 5%, and then still having eight of the components close down and that it only happened back in february of 2000 which for those

of us old folks around for that recall to have been pretty much part of the blowoff and the nasdaq in the time bubble. and they get painful after so those reminders, if you would, of the look of blowoff. you know, the nasdaq with the massive amounts of buying we saw in things like amazon with the upgrade, and tesla and a variety of others have kind of fluffy impact, and veteran traders look at that and say maybe not time to ring a bell yet, but certainly time to be wary. so for now the market is in great ship as jim pointed out early in the week. there's a massive amount of s m stimulus support m2 versus the gpd.

historic levels. better than it was at the bottom of several other recessions. on the one side we've got a lot of underlying support for the economy and for the market and on the other side, those hints of frothiness worry. we're going to watch the next two weeks very carefully, particularly at the internal technicals of the market >> yeah. i want to get you on the tactical moves here and what the end of july means and all of that longer term, art, you mentioned m-2 growth fed balance sheet. we're going to do another trillion dollars which seems tame come can papared to prior prices do you think gold and silver are accurately reflecting concerns about inflation? >> well, the gold and silver

moves are partially concerned about inflation. the money supply is historically inflationary it's something people worried about back when bernanke and the fed started pumping money into the system what has happened during all this, however, is there's been no velocity of money people have to lend or spend money. so far the assets are resting in bank vaults and other places it's bullish in the sense that it's additional funds that are waiting to be placed and, therefore, that's reasonably good for the market. but if you watch and velocity begins to pick up, that could lead to a little bit of a burst in inflation which nobody wants to see so there are some warning signals out there. for now the underlying amount of

built-in stimulus is helpful this morning is a little bit of a pause in the market as we're worried about whether mcconnell can get the new stimulus package through you referred to. and some of the china tensions with the closing of the houston consulate. so cross currents as usual on the market the cycles indicate the end of july often has a mild topping process. no sign of it yet and the technicals will be watching to see if the insinasdaq can get ae 10,870, and that would let it join the s&p and move it to newer highs. >> drw had great charts of drawdowns beginning in the third week of july 2011, down 12. 2007 down 12

1998 down 21 is there something about late july, art? is it related to earnings that week, or is this just cherry picking data >> well, no. the cyclical pattern or seasonal pattern, if you would, isn't always there i mean, the fact that the market's always had problems in october and may was historically easy to figure when we were an agrarian society over the last 70 years when we've been filled with more smokestacks and hay stacks, it didn't fit there's something about seasonal cycles that sometimes defy explanation, but seem to hang in there residly. that's why i said, the end of july sometimes shows a topping pattern, and traders always remember those things and say, you know, it's like the sell in may and go away routine.

it's persistent enough that you got to include it in your thinking more on a trading basis. >> you mentioned china and the closing of the consulate in houston. bloomberg today called it the biggest blow to diplomatic ties between the two countries in decades. i wonder if you'd go that far and how you're trying to calculate what china's potential response could be. >> well, it's -- i wouldn't call it quite that big. i respect their estimate, but i think we're far away from all-time extremes. china continues to buy agricultural products. china itself is experiencing strains on its economy they're having massive flooding in some key areas. that's drawing their economy down while the verbal friction continues, i'm not sure we're going to see follow through on

either side. trump needs the economy to hold up for the election, and china needs the economy to hold up overall with things like the flooding and other strains on it >> finally, you mentioned stimulus what's the potential downside if, in fact, august 1st comes and we still don't have a deal yet? >> well, i think we'd have to see how far the technicals kick in i would assume we would see a pullback as people start to review some of the industries that are most vulnerable to the co-vid shutdowns and where they stand. the other thing to factor here is the outbreaks the signing of the long-term contract on the vaccine gives people hope that we will, in

fact, have a vaccine by december and that is a big plus a vaccine would be an absolute game-changer it would allow possibly people back to movie theaters, bars, restaurants. you might see a major reversal vaccines are critical, and each bit of news stimulates the market perhaps more than it should >> art, that's good stuff given what limited information we have we'll talk to you again soon thanks for that. >> thank you, sir. bye. >> art cashin. college campuses won't look the same this coming fall semester we asked the company that develops and manages university housing what the broader move online means for their business. that's coming up next with the s&p up .2% 3264 led higher by tech and health care stocks. stay with us

our next guest manages a college housing portfolio with p 069 top ten university locations in texas florida and arizona it trades under acc. bill, nice to have you with us first off, given so many questions right now about students returning to campus and you manage a portfolio that includes the likes of university

of texas at austin, arizona state university what can you tell us in terms of these colleges and universities' plans for the fall >> yes and actually, all of the 92 campuses, the universities pretty much all have the same operational plan whether they say they're going to have in person classes, online or hybrid thereof, what they're undertaking is virtually the same that is to have deal capabilities to deliver in person or online and to toggle between the two. and so social distancing in the classroom is first and foremost. the 200 person lecture halls will be online smaller classes, 30 and 40-person classes are being moved to classrooms where social distancing can be achieved and then more importantly, the colleges and universities while the 18 to 22-year-old demographics has been low risk in this co-vid environment, for the people at higher risk or

auto immune, universities tend to be giving the instructors the flexibility to go online, in person, toggle between and so really they've created great flexibility to continue to deliver curriculum throughout the co-vid environment they've done an excellent job planning to fully incorporate the cdc guidance in a continuation of the academic operations regardless of what the trend may be goinginto the fall >> right and so what can i expect, then, in a dorm at this point where despite i would say the best efforts of administrators to keep socializing in a minimum, we're talking about 18, 19, 20-year-olds what are your expectations and what are you doing to try to keep students safe >> yeah. and first of all, it's important to look at how student housing has evolved over the last 20 years. 86% of the products in our portfolio housing over 135,000 students, 86% of those products

are a partner stop housing students living in households or two or four people they have a full kitchen full living room private typically private bathroom and then that two or four person household, they can completely control their own sanitizing, quarantine and isolate as they see fit. when you then look at the residence hall products that exist on campus, of which we also privately own a lot of on campus residence halls, the modern products over the last 15 years feature bathrooms in all the accommodations it also households of 2 to 4 where work comes into play for colleges and universities is the remaining stock that they have of the older residence halls where you had community bathrooms where you had as many as 20 to 40 students sharing sinks, toilets and showers and in that case it's not a

highly desirable product among students and parents and it's not as easy to sanitize to stop the spread of the virus. and in going into this academic year, one of the major trends we're seeing at 48 of the 68 universities where we own assets, universities are dedense if iing that product type. in total they're taking 55,000 beds out of service, autoout of 470,000 total to cut down on students sharing the accommodations if you have a surge in co-vid throughout the year, that's the only product that really isn't conducive to being able to facilitate sanitizing and cleaning the other thing we've done beyond how products themselves facilitate or prohibit sanitizing, we're unleashing a program called -- we're doing with rb life, the rb, the makers

of lysol, called be safe, be smart, do your part. the first part of that with us doing our part is having done a complete facility assessment and assessing all the touch points that exist in common areas from entry to circulation to migration through the building using anti-bacterial surfaces and attempting to create as much of a touchless community as possible we then worked with rb lysol to develop state of the art protocols on hygiene cleaning to make sure we can maintain the highest levels on our earnings call yesterday we said that's probably 2.5 to 3.5 increase in operating costs. >> bill, i'm looking at shares of american campus up 3% they were up this week you reported earnings a couple days ago, and i think if there was a headline from that, it's preleasing is solid. i wonder how much to do you

expect to convert to fall occupancies and rent collections? >> and this is where we have been very pleased throughout the co-vid pandemic and also as we -- what we're hearing from student sentiment and their parents. we're currently 91.1 % prelease for the upcoming fall. within that 40% of our current and existing residence that have been with us through that are renewing and moving in in the next academic year we continue to have good progress with the new students coming in. we also saw that regardless, as universities were announcing their plans for curriculum delivery, whether it was online or in person or whether it was a hybrid, with 63 of the 68 universities we serve being either in person or in a hybrid model, that even where the universities were saying they were going online. cal state, university of southern california, we saw consistent leasing across the

board. the consumer sentiment we've seen throughout this lease up for fall regardless of how the universities are going to deliver curriculum, and it's really at all schools going to be a mix, students want to be back in their college towns and their college environment with their peers in an academically oriented environment that supports their academic endeavors. we didn't see a lot of variation based on the ultimate mix of in person online or the hybrid thereof. it's pretty consistent >> so listening to those comments from you now and then the fact that you basically said there's supply coming offline at a number of universities, what does that mean for the prices that students are going to be paying for housing this fall >> the one thing that we saw is pretty consistent pricing. we talked on our earnings call yesterday that the -- through the current lease off we've implemented for next year, rates at a modest 1.of% increase we and all companies that are

responsible, this is a time to be conscientious of the financial hardship that students and parents are paying we actually formed a resident hardship program throughout co-vid 93.7 % of our residents continued to pay their rent in the months of april, may, and june that's 6 % dlin quincy we through our hardship program gave direct financial relief of $9 million over 6,500 students whose family situation had changed. we also had a significant amount of on campus housing we owned in partnership with colleges and universities where the university administers the operation of the communities and in the spring, when they were not yet well-prepared to deal with co-vid as they are this fall, and they went ahead and let students in many cases lead the campus, we also refunded an additional $15

million, and so we have provided a total of $24 million in direct financial assistance to students and parents. we also waived all fees associated with the payment collection of rents. about another $2 million and so when we did report our q-1 2 numbers our total revenues were impacted by about $30 million with $26 million of that associated with trying to be financially responsible and compassionate to what our students and their parents were going through. >> finally, i mean, you mentioned, of course, the fact that you are at over 90% prelease, at least at your same store properties really fewer than 10% of students that won't return to campus despite the remote learning is that your expectation >> yeah. and we're 90.1% prelease today,

and we have five to 11 weeks left in the leasing season until classes begin. we're only 340 basis points behind our lease at pace we also commented to the market when we look at our three, ten, and 20-day trending in traffic, applications, leases and renewals, we're actually significantly above this period last year. so we're actually seeing an acceleration of leasing velocity over the last three weeks that does make us cautiously optimistic obviously at the end of the day, all the consumer indicators lead us to be optimistic. manages students that may change their mind and no show is something we have to work through. as the environment unfolds, how many students continue through and come back which our sentiment is positive toward what we're hearing >> all right we'll watch it closely it's an important component

overall of the reopening story bill, thank you for joining us >> thank you it's been a pleasure now it's time for our etf spotlight. today the retail sector, ticker xrt in positive territory for the year as you can see, it's up about .8% today. best buy helping the group this morning. rising sharply after announcing overall sales up about 15% since it began reopening the stores in mid june online sales have more than tripled during the current quarter through july 18th. and best buy's shares are now up double digits so far for this up up 12% year to date. up 9% in today's trading session at a 52 week high. the major averages are higher dely ayitusmost hey there people eligible for medicare.

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welcome back, everyone here's your news update at this hour the u.s. has ordered china to close its consulate in houston before that was made public, houston police and fire officials responded to calls about documents being burned in the courtyard. china is reportedly considering ordering the shutting of a u.s. consulate in retaliation in denmark secretary pompeo defended the closure >> we are setting a clear expectations for how the chinese communist party is going to behave, and when they don't, we're going to take actions that protect the american people, protect our security, our national security, and also

protect our economy and jobs >> with protests continuing in hong kong this week, britain is offering a new special path to uk citizenship for eligible hong kong residents the changes take effect in january. the move comes in response to china's sweeping new security law on hong kong you are up to date that's the news update this hour "squawk on the street" continues after a quick break. experience the joy of a bigger world

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welcome back to "squawk on the street." is it time for congress and the fed to cut the cord with a stimulus help they've been providing to businesses? our steve liesman explores this emerging can't, you could call it steve? >> yeah. for sure, morgan for kevin o'leary, aka, mr. wonderful declaring yesterday on "squawk box" it's time for the government to stop helping at least some businesses that won't survive and let the market

figure it out. >> and i actually don't want the government to prop up zombie companies anymore. stop doing that. let the market be the market figure it out. a new america will emerge in 36 months investigate it's going to be more profitable what we're about to do with the next round of stimulus in my view could be a mistake. >> a chairman of president obama had the toughest response to a leery. he told me that people calling for the government to get out now are, quote, being terribly naive about how the bankruptcy and liquidation process will be when millions of businesses are going out all at the same time he warned of mass layoffs and fire sale liquidation prices if aid is withdrawn too soon. but another believes it may be time to start recognizing reality. the economy is going to be permanently changed by the pandemic >> it's easy to identify some

sectors where we're going to need restructuring airlines aren't going to look the same, restaurant, leisure and hospitality is going to have to restructure >> if aid is going to be cut off to companies, an economist agrees the government must provide massive support to workers. it's workers that matter, and for credit losses to rise at some of the banks. but they generally agree, it's good policy to avoid creating and fostering zombie companies, but it's wrenching to figure out which ones should live and which ones should not. >> some tough calls having to be made right now steve, thank you for bringing that to us our next guest's latest op ed addresses co-vitd's impact on the economy saying a double dip recession may be ahead if the virus isn't stamped out soon a former federal reserve vice chair allen blinder joins us

great to have you with us. first, to piggie back on steve's reporting right there, this emerging debate around government involvement, government stimulus, whether it's on the monetary side or the fiscal side, or propping up essentially some zombie companies versus letting capitalism, ugly, painful, difficult as it may be, do its work, how do you see it? >> look, i'm generally in the generically in agreement with that, but these circumstances are strange beyond belief. the time for decisions like that will be when the economy starts crawling out of the deep hole, and i don't want to say gets completely back to normalcy, but is somewhat on the path back to normalcy then we should let zombie firms go, but it's pretty hard to identify zombies right now when doors are shuttered and people are afraid to go out >> i think it speaks to your op

ed we're seeing this surge in coronavirus cases right now which does seem to be based on some of at least commentary from companies, be having an impact on consumer sentiment right now versus stronger recovering economic data that may be more dated right now. how do you see the state of the economy? how concerned are you about the idea of a double dip recession >> i'm quite concerned and it's regional, of course i mean, on the first big wave of this horrible disease it was centered in the northeast, especially where i live in new jersey and new york and connecticut. the second wave is centered in the sunbelt, and it's presumably -- it's just as veer lant as the first wave national cases are higher than the peak in april. a lot higher

and we're not talking about states where practically nobody lives like wyoming and montana they have problems too, but not that many people live there. we're talking about california,, florida. that's a lot of gdp. one of the things we learned from the first wave is people started sheltering in place and not going out before the government ordered it. even though the governments in those states, california excepted maybe a little behind the eight ball, but people may not be behind the eight ball we're not going to see that in the data for a while >> allen, it's david faber there's a decent amount of debate right now about whether or not to extend the $600 additional benefit to unemployment insurance where would you stand on that, and what would you tell congressional leader who is are arguing on both sides right now about whether that should be extended >> well, if they would listen,

which hthey won't, i would thosw them something i wrote a couple months ago a solution is to maintain the number of dollars flowing but restructuring it i don't believe congress thought this through some people getting 150, 170, 200% of the preco-vid wage when they were working in unemployment benefits, especially if we think we're going to reopen and firms want to bring people back online. but cutting the dollar flow in this emergency would be a catastrophic mistake we can restructure it instead of the 600 a week, we could raise the replacement rate that is what fraction of your previous wage gets replaced by unemployment benefits while maintaining the same number of dollars. by the way, that would leave

over enough money to pay some bonuses to people who go back to work so don't cut the dollar flow, but restructure it is the right thing to do. >> speaking of dollars, allen, i wonder to what degree you're watching the dollar itself there's some discussion in some circles that the degree to which it's come under pressure recently reflects our inability to control the virus like some other developed economies have the euro today at i think it's october 18th high. mizuno yesterday said it has the potential to become a new reserve. what do you make of all that >> well, i think we're a long way from having the euro as the new reserve currency but as you suggested, the norm and we've seen this in crisis after crisis, even in 2008, in a crisis people flood into the dollar and the dollar goes up this one is not going that way

i don't want to exaggerate it's not exactly a catastrophic collapse in the dollar, but it's gone down against the euro and other currencies why? first, you never know. it's just markets. but the most obvious hunch is the absolutely horrific way we have failed to handle this virus compared, say, to europe i mean, we all know it what it looked like for italy, france. they had terrible peak and they brought it down way, way down. like my state of new jersey. our state, our curve in new jersey looks like europe but the national curve looks nothing like europe, and it's worse than it's ever been. that's not exactly going to instill confidence in foreign investors. >> allen, i wonder if gold and

silver rallying so significantly and the dollar coming off in recent days, certainly the stimulus spigot is open. i realize we're waiting to hear more about what a phase 4 fiscal stimulus plan in the u.s. is going to look like in general looking at the policies implemented, really across the board whether it's in this country or even just earlier this week, in the eu, with the fiscal plan that was struck there the market discussion seems to be increasingly including one around inflation and the possibility that we could actually see inflation begin to raise its head for the first time in a long time. how do you see it? and how likely is it that we get to that point given the fact that there is so much spending out there in the world >> i characterize that question as a scarlet o'hara question i'll worry about that tomorrow our near-term price problem is -- >> okay. >> what's that

our near-term price problem is to be disinflation or even deflation. did market produce inflation we have too many dead markets in america and in other countries some day, somehow the fed will probably have to reign in the huge volume of reserves. its very large balance sheet, slow down money supply growth if you pay attention to money supply growth, but that is down the road a ways. my guess is it's down the road years. but we'll see. but it's certainly not upon us any time soon. >> allen blinder former vice chair of the fed thank you for joining us today >> you're most welcome dow is up 73 points. we're keeping an eye on the airlines, of course.

united with results last night the loss of 931 was a little worse than expected. revenue ahead, though, and trying to mandate masks not only on planes but in airports as well we're back in a moment 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. as congress debates more stimulus, moody's top economist says without more relief the ndtevery could deteriora fi out more on trading nation.

more "squawk on the street" coming up.

united airlines had earnings last night and scott was on squawk this morning with phil who joins us today hey, phil. >> hey, carl how are you? what we're looking at is united airlines that is trying to as quickly as possible cut its daily cash burn rate look at shares of the airline keep in mind that the unit revenue or what they're seeing in from passengers down 8 3% in the second quarter and it was made clear it's going to be a long slog back before they can say we're back to normal >> our guess is revenue will get to about 50% of what it was in 2019 in a prevaccine world once we get past a vaccine, we'll quickly recover back toward 100%. but our guess is that's going to be -- we're going to plateau at about 50% before a vaccine >> bottom line, do not expect a snapback in passenger levels

until we get a vaccine they're down 73% to 75%. the numbers for yesterday lowest since late june. this is earnings weeg for the airlines five of them reporting we're focussed on next, american airlines that comes before the bell tomorrowmorning now, american's strategy, far different than united's in terms of it has been very aggressive at adding flights, trying to get as many people on board as possible contrast that with united, which has been restricting its flights to a severe degree we'll be talking with american's ceo, doug parker you do not want to miss this exclusive. i know you guys are going to be involved in this, carl this will be happening tomorrow, 10:30 a.m., about this time. morgan, we'll be talking with doug parker, see what he has to say, get his outlook on the industry >> and we are looking forward to it phil lebeau, thank you for bringing us the latest meantime, the largest spak ever raised and how billionaire

investor bill ackman is involved we'll explain it after the break. woman: my reputation was trashed online. i felt completely helpless. my entire career and business were in jeopardy. i called reputation defender. vo: take control of your online reputation. get your free reputation report card at reputationdefender.com. find out your online reputation today and let the experts help you repair it. woman: they were able to restore my good name. vo: visit reputationdefender.com or call 1-877-866-8555.

welcome back always a big mover, after-earnings results snap shares getting crushed this morning after seeing daily active users drop. a full breakdown of the quarter is just minutes away on "squawk alley," but as you can see right there, stock's down 8% today we're back in a moment

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the biggest spac -- special purpose acquisition corps -- is here it's known as bill ackman's spac, but it's a lot more than that leslie picker explains leslie >> hey, david. good morning $4 billion of outside investor capital, and then an additional $1 to $3 billion of capital from pershing square funds, making it, as you mentioned, the largest ever, trading higher in its debut today. spacs are also known as blank check companies because investors blindly hand cash over to a manager and trust him or her to ink a deal within a few years. in the case of this specific spac, and in the prospectus, pershing square tauntine, ackman outlined the broad contours for the deal he's looking for, including a mature unicorn or private portfolio company or family-owned business. the spac is the latest project for ackman with activism pretty much dormant this year he's been focused on the economic implications of what he calls the, quote, sloppy

shutdowns across the u.s regardless, he said on cnbc this morning that he's largely long with an aversion to highly indebted companies >> we are bullish on the country, but i would say i am cautious on markets over the next period of time, and we have today, you know, a short position in a high-yield index we are bearish on highly levered companies to some extent i view that as a hedge on whether we make money under it or not, but the highly levered businesses will struggle because it's going to take time for the economy to reopen. >> now, you may recall ackman's bearish bet earlier this year in the form of credit protection against investment-grade and high-yield debt indexes. net at the firm more than $2 billion. he came under fire for appearing on cnbc in mid-march while unwinding those hedges and issuing a warning that, quote, hell is coming, if the government does not shut the economy down now we're looking at that bet

and others on the long side have helped pershing square's fortune. pershing square is up 31% in the year through mid-july. it was up nearly 60% last year, but that followed four years of losses so the question for investors now, which bill ackman will be running the spac david. >> yeah, and of course, he changed terms here it's interesting in a lot of ways, from the typical spac. $20 a unit, for example. you don't just get to exercise your warrants. you kind of leg into those warrants the longer you hold, leslie, but you know, at the same time, they still will have shareholders that just -- the ability to make the decision as to whether they want in or not based on whatever he goes out and chooses. >> sure, yeah. they have the ability to redeem, if they don't like the acquisiti acquisition. and the structure of this tauntine model is such that, you know, from his perspective, he believes it encourages long-term ownership, because the longer

you stay in, if other people do redeem and defect the spac, you as the one who has stayed, will receive more in the form of warrants than those who have, obviously, those who have departed will return their warrants, and that would be divided among the fixed pool of investors that remains so, that's different they've elevated the role of minority-owned firms as underwriters, which is different, paying them about 20% economics of the fee pool. so, a lot of different things here in addition to just being the largest spac ever. >> yeah. leslie, i think it's interesting, too, because with spacs, it's essentially a reverse merger, but it also acts as a direct listing for the companies that decide to engage in a merger like this. i mean, it certainly means like airbnb and palantir are being tossed around, but how likely is it, especially because direct listings have become a hot topic in silicon valley that one of these big vc-backed names actually do the deal >> it was interesting this morning, when ackman was talking about it, the hypothetical company that he used was

actually airbnb. now, of course, before you go out and raise money, you're not supposed to be having these conversations with potential targets. it's against the law so, it's, you know, unlikely that they've actually engaged in due diligence and started that process with airbnb specifically at this point. but you know, i think it's possible he laid it out as one of four potential types of companies that they could acquire, carl. >> all right, leslie fascinating day. certainly a fascinating interview this morning with bill our leslie picker. thank you. david morgan, we'll see you later. good morning, everybody. welcome to "squawk alley," i'm carl quintanilla with jon fortt and julia boorstin from separate locations. another choppy day as we work our way farther from the flag line china tensions are upset by this pfizer news and there's earnings the calendar marches on with microsoft and tesla. tonight, julia, even as we try to process the results from last night, including snap. >> yeah,