s. tesla shares rising again as the company hit new milestones announcing the new location of the new giga factory. and new stimulus where they've reached a common ground. >> a flood of earnings we'll bring you results from at&t, travelers, american, southwest and more thursday, july 23, 2020 and "squawk box" begins right now good morning welcome to "squawk box."

i'm andrew ross sorkin with joe kernen and melissa lee becky is off again we are about 111 points up now s&p 500 looking to open about 11 points higher. flip is around and show you we are at .952. still under the six handle i always wonder what the bond vigilantes are thinking now relative to our little equity world. >> worth noting we are still 3% well away from the february record highs some highlights. the ceo of tractor supply, auto

nation venture capitalist, treasury secretary mnuchin, house leader and twitter ceo. a huge lineup straight ahead >> that's a big show >> yeah. you guys always have a big show but this is particularly large. >> for you because you are here >> people said, melissa will be on book her i think they wanted to do it for you but i think they were scared if they didn't do it >> of me >> that's the feeling they got they didn't want to disappoint you. i doubt it that's nice to say but i doubt it i'm not a scarey person. i'm not. maybe to you nows this morning

out of washington. reaching common ground with the relief package and the plan reportedly includes $16 billion in testing a compromise for the white house that had opposed new testing $100 million going to schools mostly for k-12 schools with plans to physically reopen reportedly considering an extension of enhanced unemployment insurance at a rate of $100 a week that is now at $600 a week that expires this month we'll talk to steven mnuchin about that this morning about this deal. a big beat for tesla reporting the fourth con security quarterly profit that could clear a hurdle now a lot of investors making a bet on that. maintaining the target despite

the 2020 shutdown and plans to build the next factory in austin texas. more on tesla's results. we should talk about it. fascinating to see it hit the numbers. >> you are right about automotive revenue you see them saying well it is regulatory credit. >> the thing that always strikes me when i hear these comments. that's something if they pulled it out of thin air should be allowed. they've done this quarter after quarter.

you may discuss whether or not actual business of making and selling vehicles they are allowed to do that. they did that to the tune of $48 million. here are the numbers within the numbers. they did beat the street to a wide margin. the estimate was within 3 cents profit that is the third straight quarter they posted a profit we'll talk about that in a bit let's talk about the announcement involving austin, texas where tesla will be building the next assembly plant. near tex near austin, just outside the city limits. where they'll build the cybertruck, semi, model 3 and model y for eastern u.s. here is elon talking about texas giga >> the location is five minutes

from austin international airport and 15 minutes from downtown austin. it is about 2,000 acres. we are going to make it a factory that is stunning it is right on the colorado river. we'll have a boardwalk where there will be a biking, hiking trail. it will be an eco logical paradise >> the fact that tesla has reaffirmed its target of delivering at least half million vehicles this year that's a dramatic increase where they delivered 367,000. it does clear the path for tesla to be included in the s&p 500. we wanted to show you what tesla

has done in the past year compared to the s&p 500. a lot to talk about. i know a lot of people will complain about those regulatory credits. it is legal. they've done it quarter after quarter. >> so phil, stay where you are we'll continue this conversation and do the bulls and the bears right now. senior analyst he has a sell rating on this stock and $100 price target. how do you think about a stock on a morning like this they did beat and there is an idea they will be part of the s&p. a lot of money would come into this stock >> sure. thanks for having me we raised our price argue et last night to $1,220 we've raised it from that $1,100

target we think the stock has really become decoupled from fundamentals that growing risk on the story phil is right on the credit. the $428 million is more than double the average the line item that is really where they beat and where they've posted a gap profit on the quarter because of those credits. if you look at the release, their free cash flow was down 30% year over year their reported cap x was at the highest level in two years because of the new factory in austin, texas will follow. they are entering that cycle where we will become more caution on the story coming out of the spending cycle. they are entering that cycle now

where we think the free cash flow will be depressed on the spending occurring in the next several quarters >> derek and phil can weigh in on this as well. explain how these credits work so everybody understands what we are talking about and to the degree of the controversy and that some investors will look at this and say, you know what, this is not selling cars and how sustainable selling those credits over the long term would be >> it is sustainable essentially where they can sell those to other automakers that are not producing zero

emissions. so that is how it works. that is very difficult to that line item that will vary quarter to quarter that average is $183 million here they did $428 million over the last four quarters. that's a big reason we've seen these beats and was the driver of the beat for the second quarter. >> the other question i had, if they did get included in the s&p, almost by default that will push the stock higher at least in the short term, no? >> on our issue with that, there has been a lot of buying leading up to this, really since the second quarter production since that early report in july. there has been a lot of money coming into the stock.

a lot of retail investors and funds buying it in anticipation of this. essentially, they would have to buy the stock in order to add it we do think they would add it where the market cap is far and a way the largest company in the s&p 500. the largest is facebook. we think it will be added later this year. that's what a lot of investors have been playing. that is a big question of how the stock has become decoupled and why they are rerating to sell on friday the short interest has really come down. if you look at the shortages only at 7.5% a year ago, it was 23% that has contributed in the runup to the stock price

that is less of a factor going forward and the stock moving higher >> before you go, talk us through the new factory in austin curious if you think any of the bruhah in california over reopening led to going to texas or was it always going to take place in texas is. >> alwait was always going to t place in the eastern half of the u.s. it was always going to take place in another place of the u.s. if you look at the geographic foot print, texas makes perfect sense. in terms of taxes and talent, location for logistics it all makes perfect sense people will say, they could have expanded in fremont, california.

have you seen that plant they are landlocked there. they put up those tents and added a second one in the parking lot there. they are wedged in then the question becomes would you buy a second location in california why would you do that when you can reexpand and all investors will try to do that to a certain extent >> thank you i love having these conversations with you you just know so much about so many things. thank you, guys. programming note, texas governor greg abbott will be on tomorrow and we'll talk about that new giga factory with him and we'll talk about the latest coronavirus outbreaks in that state. numbers just in from dow ink. the company is announcing a

restructuring that will see it cut 6% of its work force and sell uncompetitive assets. it samaims to save $300 million year with that move. coming up, microsoft shares are under pressure this morning. we'll talk about the company's quarter and the new legal action it faces in europe from competitor slack a few of the companies reporting before the opening bell today we'll be watching. at&t, travelers, american airlines and southwest airlines all in the next 60 minutes keep it here you are tuned to "squawk box." even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership.

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welcome back to "squawk box. yesterday, slack accused microsoft by forcing users to install teams because it is bundled. blocking the usage and making it inoperable with other software >> there is a perpetual question that at some point, microsoft is just going to kill us. >> microsoft fired back against slack's complaint saying, quote, with covid-19, the market has embraced teams in record numbers while slack suffered from its

absence of video conferencing. in response, slack said microsoft's comments are untrue and shows how microsoft can only view microsoft from their walled in garden. the bruhaha and now legal debate will continue. melissa. microsoft reporting a surge in revenue driving demand for its product to support their woerk trend. nadella saying originalizatioga that embrace that will continue faster >> one of those that we saw was

quarter on quarter sequential decline. how concerned should one be on this particular line item in the context of microsoft as a grow story? >> absolutely. the first thing i would say, melissa is that in many ways, this feels like a little bit of kn nitpicking after building in the pandemic, we were able to beat by a billion and a half last night. discussing what each side wanted, it feels like we are cutting hairs. this is the business now analyzing over $20 billion in revenues i don't know any businesses

growing 50% while doing 50% in annual revenues. this is not something i believe will shake out active money managers >> last night was not a thesis breaker. i think microsoft would prove it would be one of the key winners of the new paradigm to work, live and play from home which you saw in their extraordinary gaming results last night. >> still in tact but other small businesses given the run it has had. operating margins came in a little light productivity and business came in a little light. right now, that stock is priced in at 10.2 price to sale at what point do investors step back to say, what am i paying

for? priced to perfection and small businesses given the valuation, should investors overlook them? >> i think the beauty of the business model has always been so diversified that it has been facing very natural problems if you look at what microsoft cited as lower issues. impacting the search result. as gdp would contract in lower quarters you also saw linkedin job's report you also saw tremendous strength in those areas of business gaming was incredible. pcs were also very strong with windows as well. the reason stock is priced for

perfection it is a machine operating on not always firing at once. taken as a whole this is a company that grew 13% year over year at $38 billion in quarterly revenues despite the fact that we are in a worst global pandemic than we've seen in years i think it is phenomenal >> thank you for your in sights. >> coming up, controversy over bill ackman's comments accusing this network of replaying his teach that was apparently only 15 seconds long. going into the break, warren hathaway sharing that it bought

more than $800 million of bank of america shares raising its stake to more than 11% "squawk box" will be right back. hey, our worker's comp insurance is expiring. should i just renew it? yeah, sure. hey there, small business owner. pie insurance here with some sweet advice to stop you from overpaying on worker's comp. try pie instead and save up to 30%. thirty percent? really? sure! get a quote in 3 minutes at easyaspie.com. that is easy. so, need another reminder? no, i'm good. reminder for what? oh. ho ho, yeah! need

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welcome back to "squawk

box. billionaire hedge fund manager the first tv interview when he issued a warning that had rocked the investor community >> health is coming. okay i've never had this experience before in my life. the closest is the financial crisis when i said things are coming bad stuff is coming. this is a feeling like i've never had. a tsunami is coming. you feel it in the air >> if you remember, throughout the rest of that day, markets fell sharply less than a week later, ackman disclosed a profit of $2 million after he sold his bets against the market this of course raised eyebrows we asked him about it yesterday and he addressed his dire comments and a few other market headlines. >> my comments were not dire

i said if we do nothing we'll be dire we are more long we made the decision to go long. i blame cnbc it took 15 seconds for my interview. you ran around scaring you ran it all day and all night. look at the bullish message i made sch is i'm buying stocks right now. what an advantage does, it damages some and helps other look at microsoft. the markets are a reputation of the most successful, most capitalized dominant companies in the world there is no market for the private family-owned business. that market is down 80, 90, some cases 100% we are bullish on the economy.

i am cautious over the next bullish time >> anything bill ackman seems to say causes lots of reaction -- emotional reaction i think there was a lot of reaction to those comments in march and to those comments yesterday. i'm curious where you guys land on it. i think people listen to what they want to listen to in all of these interviews i've gone back, read the transcript maybe i'm more sympathetic i know he had publicly declared prior to going on tv in march that he had these short positions. i thought that was known he wasn't asked about it at the time on air. if he was asked, he would have disclosed it one other comment, which is, i think and this is something that has been a problem for myself.

people don't want people to talk about panicking the quote/unquote market or the public frankly, i'm of the view that had we panicked the public a little more we may have saved some lives there is a distinction of panicking about the health issue and about the markets. i think if you really listen to what bill was saying part was about the markets and part was about the health issue which is demonstratable. i'm a little more sympathetic. >> if you can compartment it that way, you can. 150,000 people dying is hell we did go into hell. if you look at that on the other side, that was an overreaction even being down 35% on markets obviously. maybe we go back down. we never know how events will play out i was wrong about the market his tone that day.

for him to come out and say it was 15 seconds his tone the quivering of his voice talking about his father dying >> he was virtually in tears >> going back. we had the conversation in makeup i remember it well, andrew we were focused completely on the absolutely horrific scarey tone of the entire piece i love bill ackman general growth, he is a genius herbal life, he was not. jcpenney, he was not he pushes the envelop. he calls it good hygiene he gets as close as you can get. you got to hand it to him. he's the one flying around on a g 6, not us. not that that makes a person

great. >> there is lots of times i thought billwas on the wrong side of things i would say things he was smart about, now we can get into what the comments were, he was right about this at least what he was doing with his money what he was doing with his mouth, if you think that was different. i'm suggesting if we are listening to the fact that if we are buying at the time, which wouldn't want to listen to bill ackman went on in march and sounded scarey because he knew he had shorts on and yes, he said he was bullish on the markets. he was on tv chatting up the scarey part of things. that's what the critics are saying he was buying the stock and the position not only was he covering his shorts he was able to go into the other stocks he was interested in at a lower price. >> exactly

>> i don't know about you guys, i remember listening to that and we talked about it the next day. there was confusion if you were paying attention deeply. he said, here i am buying these stocks i'm buying these companies and yet he thinks hell is coming it was a mixed message but i don't think people saw it as a mixed message. >> on the way, on the stack front, air b&b ceo said they were approached by a spec about going public remember bill ackman spent a lot of time and used air b&b as an example. >> keynote 45 minutes. when you are talking to ackman, that silver tongue, you are

hypnotized yes, bill. it never happened. you ask him about valent how can you acquire a position in alergan he talked about it and you go yes, bill. he's so smooth, you know i think we saw that yesterday. >> silver tongue, it's like yes, bill it is cnbc's fault because we put you on it's our fault >> look, the thing about bill, he's only trying to hit home runs he's either going out of the park or he strikes out >> swings for the fences the dire warning was on cnbc so i guess it was the network's share responsibility for putting him on >> anyway, we'll see thanks guys for the conversation coming back, we'll talk southwest airlines crossing the wires. the numbers and reaction we'll hear from at&t and travelers and reaction on that

straight ahead a huge lineup still to come including ceos of tractor supply, auto nation and we'll talk about stacks an all of that venture capitalist who always makes news by just opening his mouth. and treasury secretary steven mnuchin followed by senate minority leader. twitr thtewi its earnings and their ceo. back with all of it in a moment.

southwest airlines just reporting a loss of 2.67 a

share. now down to $18 million a day and hit sufficient liquidity to get through the pandemic total liquidity at the end of the quarter $15.5 million. let's dig deeper into the results. a lot of commentary about capacity and things won't return until there is a they arapeutic vaccine on the market. >> there is going to be limited return of passengers until there is a vaccine in place. from their perspective, what you've got to manage are things you can control. cash burn, schedule, liquidity a couple other notes you talked about that being $18 million a day for the month of

july q 2, it was at $23 million a day. what you are looking at here, you bring that cash burn rate down july had more flights we'd likely see since august and september. reevaluating the august and september schedule that is a reaction of what we are seeing in terms of plateau and demand this gets back to your point, which is when do the airlines see a true recovery that is sort of settling on the fact that there is not ghoing to be a true recovery until there is a vaccine in place a limited demand by the way, they get credit for how much they brought down their cash burn. bringing it down to $18 a day in the move july is significantly better from where they were starting at the beginning of april. >> yes phil thanks.

we'll see you back at the top of the hour when american airlines is expected to report. bringing you numbers and an exclusive ichbt exclusive interview with ceo doug parker. our next guest called the stock market decline and the rally and what he makes of the quality of earnings. joining us now on the squawk news line, mike wilson, chief equity strategist for morgan stanley. i went through a lot of your comments, mike and finally arrived at the conclusion that you are not ready to say it is overdone and to take money off the table. i think your view is maybe we do see some weakness in the economy that keeps rates really low and multiples continue to expand so you should stay long is that about right? >> joe, good to talk to you

again. in the 12-month period we are very constructive in the short term, there is more consolidation that would happen here the question around quality, it is early more coming this week. the bottom line is that we cut numbers too much just like we cut for the economy so far things would get back faster in line with expectation. we are beating a very low bar. that is easy to do the quality of numbers are crummy right now that's what we expected. looking out 12 months, we'll see the operating. talking about the cost to cash burn coming down for southwest that is a good example we are seeing cost cutting across the board. >> that will lead to tremendous

cost cutting that's why we can get to higher price targets on the s&p over 12 months, we are bullish we can see some consolidation and collective activity that began in june. that is continuing the average stock hasn't made any progress for two months. >> stood where you stand on cyclicals versus growth. are you still seeing that switch you seem to be positive about growth still >> that's the growth still you need both. last year was all about growth stocks and defensive stocks. now it is about growth and cyclicals working together it makes perfect sense much the thing that is unusual is that they are not really working together in april, it is about growth stocks may and june are about those

now it is the back and forth i suspect in this consolidation correction we are having, they are recoiling again for the next move higher as we get evidence about the vaccine and the virus coming under control and the election outcome and things they are worrying about in the near term set to subside. >> how are we going to get comfortable with the outcome if it is a democratic president >> the market will get comfortable with whatever the outcome is we'll move forward no matter what next year >> yes life goes on i don't know if we can just assume -- you think the market, clean sweep with the democrats, no problem there is a case being made that the economy is so slow, it will be tough to raise taxes for

anybody with a straight face maybe that inoculates us from a real severe tax hike >> i think that's right. i think next year it will be very difficult to get tax legislation through in the first year of a new president's regime next year looks quite good either way let's be honest, whether we have a democrat or republican president has really determined what the stock market does we have good periods of both it is all about the economy. that will be the overriding factor for the stock market. >> how far are you going out on your targets we have a baear case, a bull case how far are we going out and what are those numbers for the s&p? >> we look 12 months forward and base case, we are at 3350. not that exciting.

we have a bold case of 3,700 i'm starting to feel more comfortable with that. right now, i'm leans towards our base and our bull which is 3,750. on that, we are back to 2,90012 months from now which is down. right now, we are somewhere between 3,750 in our view. >> 2,900 is not headed into hell, shall we say and 3,700. what did you say, 3,450, 3,350 that's pretty bold

just a stance that this is not just all enough and central banks and unjust tied valuations that is saying as we are okay in taking a stand in my view. a lot of people are ready for us to take this back if things worsen >> people are too cautious on the earnings recovery. the story for the next 12 months we'll be surprised at the earnings power of the average company into next year because of the cost cutting going on and how fast things snap back. >> all right thanks so the quality of earnings is not strained that goes in with the actual quote. something close. mike, thank you. melissa went to harvard. she knows what i'm talking about. >> coming up, a big morning of

interviews from the c suite straight ahead we'll hear from tractor supply ceo next and mike jackson to talk about his company's earnings stay tuned my name is christine payne, i'm an associate here at amazon. step onto the blue line, sir. this device is giving us an accurate temperature check. you're good to go. i have to take care of my coworkers. that's how i am. i have a son, and he said, "one day i'm gonna be like you, i'm gonna help people." you're good to go, ma'am. i hope so. this is my passion. if i can take of everyone who is sick out there, i would do it in a heartbeat. that selling carsarvana, 100% online wouldn't work. if i can take of everyone who is sick out there,

but we went to work. building an experience that lets you shop over 17,000 cars from home. creating a coast to coast network to deliver your car as soon as tomorrow. recruiting an army of customer advocates to make your experience incredible. and putting you in control of the whole thing with powerful technology. that's why we've become the nation's fastest growing retailer. because our customers love it. see for yourself, at carvana.com. hey frank, our worker's comp insurance is expiring, should we just renew it? yeah, sure. hey there, small business owner. pie insurance here with some sweet advice to stop you from overpaying on worker's comp. try pie instead and save up to 30%. thirty percent? really? get a quote in 3 minutes at easyaspie.com. wow, that is easy. so, need another reminder? no, no no, i'm good. uh, yes please. oh. ho ho ho, yeah! need worker's comp insurance? get a quote in 3 minutes at easyaspie.com.

coming up, a huge lineup of ceos, the ceo of tractor supply.

followed by ceos of american airlines and treasury secretary mnuchin with us followed by house majority leader and twitter cfo. lot to take in squaurk returns after this

tractor supply is the largest rural lifestyle retailer recording record sales and earnings for the second quarter. the stock gaining more than 50% so far this year as investors bet on the great outdoors during the coronavirus pandemic the 80-year-old farm and retailer has more than 1800 stores, 49 states. hawaii now howe lawsuit toughton >> right now we don't have a store in alaska. thanks for having me on the show. >> you're welcome. i love reading about this. there's so many reasons why this makes sense that i hadn't really

thought of in terms of covid stocks, for lack of a better term, or pandemic stocks also, you're a great example of how your business has shifted and it may remain this way even after it's all said and done hopefully some day why these? the results are crazy. up 54% you're one of the best performing stocks in the s&p 500? why? what about this environment makes you perform so well? >> yeah, again, joe, thanks for having me on the show. first off, i'd like to thank our team members, all 38,000 of them for all they've accomplished during these unprecedented times. and if you think about the why, really three things for us let's start with just the foundation of the business this is a resilient business model. demand based needs-based driven essential to use kind of a retail buzz term over the last six months we complement that with really

unparalleled mission and values. then if you look at the trends that have occurred in the industry over the last six months where there's nesting, world revitalization, things like great spring weather, you know, the shift to digital, all those things have given us a nice tailwind, and then we certainly have been investing into that tailwind we've been investing in that tailwind in terms of investing in team members. wuf' launched the first national marketing campaign in the last ten years. we've implemented a number of technology and features to meet our customers' needs during this time like same day, next day delivery, curbside pickup. we just recently launched our first mobile app business with a great foundation those tailwinds have played well to our business model and we certainly are investing into it as our goal is to emerge from the pandemic stronger than we went into it >> some people love super

stores, hal. that's not exactly what tractor supply -- i mean, i might be comfortable instead of overwhelmed. in home depot since i'm not handy, i'm overwhelmed tractor supply i can manage to walk around in there without feeling inadequate it's not nearly the same >> it's a good point we do -- i'll talk about two things on that first is our format. with almost 1900 stores now across 49 states, as you mentioned, our format's 15 to 16,000 square feet inside so it's a smaller sized format. kind of a lifestyle category assortment they want to consolidate trips i don't think people are going to shop at retailers right now where they need one thing. they're looking to go into a store and buy five, six, seven things at a time that really meet their lifestyle needs the size of our store, which creates more of an intimate,

safe environment and the lifestyle orientation. joe, we've invested heavily in the safety of our team members and safe shopping environment for our customers. that's the number one priority all the way back into early march we started implementing things like paid time off for workers, team members if they're sick we did appreciation bonuses, heavily invested in ppe. we implemented mask requirements for our team members many, many weeks ago. we recently implemented a mask requirement for our customers. we have a cleaning position. we included a greeter position so we think just the setup of our store really invites people in during this time and makes them feel comfortable. we're doing everything we can to reinforce that >> i know cramer's talked about it i don't know if you follow him on twitter he grows tomatoes that almost look like they're mutant almost, but he's got a garden. people stay at home and they're gardening and they get a lot of

the stuff that's part of the whole theme of being -- not unfortunate for you but sheltered in place you garden, grow stuff, occupy yourself that way. i wonder if you don't do as well when this is all over. maybe you're trying to build the blocks for when you can keep it going. >> we've got a number of new customers. over 3 million new customers shopped with us this quarter. >> all right >> over 2 million re-acquired customers. our goal is to lock them in. we announced a number of investments we're making and our goal is to lean into the business while we're seeing this unprecedented demand and, again, to emerge from the pandemic stronger than when we went into it. >> we kept showing that chart for you to make you happy. i don't know if you have a monitor. amazing. thanks appreciate it. >> thanks, joe thanks for having me on. >> tractor supply. coming up, american airlines set to report in the next couple of minutes doug parker and steve mnuchin

speaking to us exclusively "squawk box" coming right back

a trifecta of earnings we have second quarter results from twitter, autonation and american airlines. we'll have the numbers and the

news-making interviews with executives from those companies straight ahead. plus, sec chair jay clayton joins us exclusively to talk about the agency's latest decision on regulations. it's thursday, july 23rd, 2020, and the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe kernen, of course melissa lee. becky is off today take a look at u.s. equity futures. we have a slew of earnings coming out we'll see which way this moves the dow is moving up 87 points higher, nasdaq up 33 points. s&p 500 up about 8.5 points. we should just mention at&t just reporting its earnings adjusted quarterly profit of 83

cents coming in four cents above estimates with revenue essentially in line with wall street forecasts a programming note at&t ceo john stankey will be on at 9:45 a.m. in a cnbc exclusive interview. we're looking forward to hearing from him on these numbers as well joe. thanks, andrew let's go to phil lebeau with american airlines quarterly numbers. >> reporter: slightly wider than expected for american airlines it's $7.82 that comes out to $3.4 billion revenue a little better than expected, $1.6 billion the estimate was for revenue of 1.44 billion we have three or four data points i want to run through liquidity at the end of the second quarter, $16.2 billion. that includes a treasury loan and it also includes a new debt raise that the company is announcing this morning. they are going to be selling $1.2 billion in senior notes

the collateral on those notes, intellectual property and other assets that the deal is being run by goldman sachs cash burn. in june it was $30 million a day. what about for the third quarter or the fourth quarter? right now american is not giving guidance in terms of expected cash burn, daily cash burn for the third quarter. finally, 41,000, approximately 41,000 american airlines employees are taking early out offers, whether that's retirement, a leave of absence remember, we've talked at some length about these airlines becoming much smaller come october 1st. 41,000 will be leaving american airlines in some fashion we'll get more clarity when we talk with ceo doug parker. that is an exclusive you do not want to miss that's coming up in 20 minutes we'll send it back to you. looking forward to this interview. >> thanks, phil. appreciate it. looking forward to that as well. meantime, we're going to go to the west coast because twitter's

quarterly results are just out want to get over to julia boorstin with those. julia? >> twitter growing its users faster than expected while its revenue came up short of expectations twitter adding 20 million monetizable daily active users, 70 million outside the u.s. to end the quarter with 186 million. that's a 34% increase. its highest year over year far exceeding expectations the revenue of $683 million fell 19% from a year earlier missing analyst expectations of $707 million in revenue the company reporting a non-gap loss of $1.39 per share. it includes a $1.1 billion loss related to a non-cash deferred tax asset. as for last week's hack attack, ceo jack dorsey saying in the press release, quote, we moved quickly to address what happened

and have taken additional steps to improve resiliency against targeted social engineering attempts, implemented numerous safeguards to improve the security of our internal systems, and are working with law enforcement as they conduct their investigations twitter cfo ned segal telling me with a much larger audience, with the proper steps they've made and the revenue products roadmap we believe we're much better positioned to deliver to advertisers when live events do return revenue improved gradually over most of the second quarter which melissa would indicate a positive trend. >> julia, stay with us for more on twitter's results, will it's bring in ed lee. he's a cnbc contributor. ed, great to have you with us. we're watching twitter shares climb and presumably on the mda number that implies that investors are satisfied with user growth at least on this platform even though revenues came in short. >> reporter: yeah. i think the user growth is

always going to be a key thing for twitter. also, i think, you know, one of the few stocks out there that certainly can benefit from the unfortunate lockdown people are stuck at home or sort of stuck indoors ultimately and having any kind of access, whether it's a netflix type service, social media type service so you can benefit i'm going to try to take a closer look at what they might guide for the current quarter. what we've seen with netflix and other internet-related businesses where you're going to benefit from covid unfortunately, there's a slowdown maybe there's a pull forward in terms of more activity happening earlier on they're basically borrowing from later on in the year and i think that's the thing i want to get a closer look at the uptick in users is definitely popular. >> julia, as you mentioned, the revenue trend through the latest month, that was positive specifically in the ad revenues, they did come short of what

analysts had been expecting. there were some expectations that ad revenue would be weak but it did miss for the quarter here >> reporter: absolutely. definitely a miss in the ad revenue. the question, of course, is how can twitter grow the users by 20 million instead of 7 million and still have ad revenue come so far short of expectations. i think that comes down to a couple of things advertisers are spending less. there's been a general contraction. twitter's ad revenue is tied to the events sports, movies aren't happening. it's worth noting 17 million of those are overseas and that's a market twitter hasn't built out as yet, is not generating as much revenue as it does for the users here in the u.s. >> ed, that's a good point in terms of the activity twitter benefits from. all things are not happening because of the pandemic but what

will happen is the election. what are some of the regulatory issues for jack dorsey when he goes to the hill >> reporter: it's interesting. maybe it's a little silly. twitter is relatively small compared to facebook, google, even snap now is bigger at least in terms of its user base. twitter at the same time is a big amplify mechanism. whether it's president trump, stock issues, world changing events or world news events, twitter is an important element. yes, it's influential but in terms of its size, its sort of -- whatever power it has, it's relatively small. the other question i have at this point is what is twitter going forward? i personally am on the service all the time, but i don't think it's ever going to get as big as facebook where does it live in this sort of social media universe

i have a feeling it's more like a sentiment meter. they have a buyer that they sell that is their best performing business at least in terms of year-over-year growth. it's like a data or ad tech company as opposed to more of a consumer facing or front-facing business. >> yeah. good question. ed lee, thanks for your thoughts julia, thank you as well. programming note here, we have ned segal, twitter cfo joining us as twitter sales are up 5%. autonation ceo mike jackson joining us and an exclusive interview with doug parker of american airlines plus sec chair jay clayton check out the shares of private equity firm blackstone matching street forecasts at 43 cents. results getting a boost from the

stock market's rebound before you head to break, let's get a check on markets and see that we're up just under 100 points on the dow. nasdaq as well "squawk box" will be right back. hey, kids!

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the host of e's the soup! camp tonsafun. it's like summer camp, but minus the poison ivy. unless you own poison ivy. in which case, why? just say "summer camp" into your xfinity voice remote to join. welcome back to "squawk box. stocks to watch today. tesla reporting the fourth

consecutive quarter of profits after the close yesterday which means it can now be considered for inclusion on the s&p 500 index. separately, chipotle's second quarter earnings and revenue beating estimates. adjusted earnings were down 90% from a period a year ago amid coronavirus closings digital sales as you might imagine more than tripled. then microsoft said the coronavirus pandemic has increased demand for the flag ship products. beating estimates and grew revenue by 13% that stock under pressure this morning despite that beat. joe? >> thanks, andrew. autonation out with quarterly result posting earnings per share of $1.41 far surpassing analyst estimates of 37 cents. i don't know about that. that's backing some stuff out because continuing ops, there was a gain in there, $3.18 which i think was a record autonation planning to open 20

new stores joining us now, he's back, mike jackson, ceo and chairman at autonation mike, mike, mike, analysts are -- >> what? what what >> analysts can't add? how -- why -- is there anything in that $1.41 that analysts didn't know about to make it so far above where expectations were >> joe, it's truly an unimaginable quarter that i will remember forever, that in the middle of this awful pandemic we as a company produced our best quarter ever and here were the drivers. we talked about it back in april. we heard a major shift in demand from consumers towards personal mobility rather than shared mobility they want their defined space. so we saw that the demand is

there and of course the factories were closed with new, so even though there was a lot of discussion that the used market was too risky, we went out and bought a lot of pre-owned. we said if customers can't get new they'll switch to preowned and that's exactly what happened we managed our margins around those shifts very, very well the next major shift was demand to do digitally. joe, as we've talked, we've invested extensively in that capability and we were prepared when the moment came and we were taking costs out with digital capabilities and now we had a moment where we could take a big step so we dramatically reduced our costs during the second quarter and it's sustainable and will go forward. the final demand for consumers was safe environment i have to say, we went out and secured masks for our employees late march, going into april that we were at the point by mid

april that we mandated all associates will wear a mask and we will have social distancing in all the stores and the company provides new masks on a regular basis. and this combination of demand for personal mobility, being prepared for the digital shift that came very rapidly and i think being ahead of everyone and saying, you know, the mask is the key to keeping everyone safe all contributed to just a truly remarkable est-ever quarter. >> you were almost leveraging. i remember just a couple of years ago there were a couple of earnings reports where you had to explain that you were investing a lot of money, remember those, mike >> yeah. >> you were investing in digital stuff. >> of course. >> then all of a sudden there's this not everyone comes into a showroom anymore, right, to buy a car? and they don't need to >> so, joe, i would describe it this way they want to do as much as

possible digitally but they still prefer to come in and finalize the transaction in person, do a test drive sometimes or switch colors or whatever, but they want to do as much as they can digitally you have to know what they've done before you come in if you are going to have a constructive conversation with our digital platform which we invested in, paid the costs to invest in, we now have a 360 degree understanding of our customers from coast to coast. if you buy a car in california for your daughter but you yourself walk into miami the next day to look at a mercedes benz, we know what happened the day before and we have analytical tools we see your entire relationship with us over history and just manage it in a remarkable way. so we were fully prepared for

the inflection point that came and i don't think it's going backwards. we've taken costs out permanently. we're on the other side of the mountain that we have to climb where we're more efficient because we invested before. >> mike, what's the product mix? suvs, pickups. you said pre-owned, but what are we talking about what do people want? >> wow america's love affair with the truck is not going to change it's trucks, trucks, trucks. pickup trucks were the least impacted vehicle through the whole pandemic thus far. america loves to be in control they love the high seating position they love the utility. they love the panosh of the trucks trucks are 70% of the mix. i don't see that training. we're short of trucks, especially on the new vehicle side because the plants have

been closed, but as phil has said, they have restarted and expect in july to be about 75% compared to last year. >> are you ready to hand it to elon musk yet that he's quite a visionary or something i mean, do you believe what's happening with tesla >> well, i think the stock price is insane and the valuation is insane i'll give it, he has a great brand and he has good products, but he has a business model that still remains very dependent on the government let's not forget that. the government pays his sales incentives every manufacturer wishes they had that deal. with this clean air transfer from other manufacturers to tesla, which i think was like 400 million last quarter, that's not going to last forever. that's not sustainable in my view because every manufacturer is bringing electric vehicles and they're going to have zero

emission vehicles, that will happen if he's doing that without government support, i tip my hat. that would be aggressive he's not there yet he's got a ways to go. >> melissa >> mike, i was wondering if you could talk about the notion of pull forward sales some would say you benefitted from stimulus checks which may be reduced or eliminated in the worst case scenario. there are only so many cars people are going to buy. do you have a sense of how much business >> i don't see any pull forward whatsoever i think for the rest of 2020 there will be twists, turns, bumps, surprises we're not through this pandemic yet. we have a rather interesting election coming at us, but that to me we'll get past all of

that let's talk about '21, '22. i'm very optimistic about retail vehicle sales, both new and preowned for two reasons i think this is a fundamental shift in demand towards personal mobility and i think interest rates which are very beneficial to the consumer and our company as far as financing the inventory, i think interest rates are going to be low for years. those are two strategic shifts that lead me to be optimistic about auto retail sales for the next several years. >> mike, i want to get a quick comment on -- you're in ft. lauderdale and florida's a hot spot being there today, what's it like when do you expect things to improve, near term, long term? obviously you're not an

epidemiologist, but what's it liekt now in ft. lauderdale? and miami isn't far. >> yeah. i think basically people are understanding the seriousness of the situation and acting responsibly. all i can do is -- i will -- myself and worry about it and we take temperatures every day, a wrist band, any social situation where you don't have distance and my feeling is it's going to be this way until we have a vaccine. now there are better treatments that come along the way, which is great, but i don't see us out of this pandemic until a vaccine is readily available and then god bless america. i hope everybody gets their shot or shots you know, i'll observe that only

40% of people a year get their flu shot you could save a lot of lives if people got their flu shot. everything i see, hear, read, i watch you, joe, leads me to believe before the year is over there will be a vaccine. >> mike jackson, thanks. >> great to see you. >> stock made it all the way back to where it was it's close to a high thanks we'll see you. melissa? coming up, american airlines ceo doug parker will join us he had a busy morning on "squawk box. the futures are pointing to a higher open. a lot of earnings. stay tuned you're watching "squawk box." time now for today's aflac trivia question. what u.s. city has the most starbucks locations? the answer when cnbc "squawk box" continues and this is the aflac duck who helped me cover it. aflac. these are all the cab rides to my physical therapy.

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american airlines reporting results about 30 minutes ago lets he a get right to phil lebeau. >> reporter: let's bring in doug parker, the ceo of american airlines he joins us from the company headquarters in fort worth,

texas. doug, we're going through a lot of the numbers and things you announced today including a new round of raising debt, $1.2 billion. what's your sense of what you're seeing in terms of demand in the market right now >> well, it's the crisis continues, phil. no doubt about that. it's demand's been weak for a while. it came back, you know, during the second quarter saw nice improvement through may and june as the virus spread, restrictions and quarantines, it has an impact on demand. we've certainly seen it plateau in the third quarter that's not to be unexpected, i guess. we're prepared for all of that, but the demand remains really slow it's brutal in terms of demand environment. teams managing through it incredibly well and we're prepared for the future. it's going to be still a long, tough road >> given the pull back in

demands, does that make you question whether or not you should have added as many flights as you did in june and you've done that in july i know you're probably reassessing your schedule for august and september do you think you added too many flights too quickly? >> oh, no, actually, i mentioned that we did -- we improved in the second quarter largely indeed because of our -- because of what we did in the scheduling this is a tactic during crisis we all have different tactics. it's been reported how we're twice as big as some other airlines the reality is we're flying about 40% of what we flew in 2019 some other airlines are flying 20%. that indeed is twice as much, but the real point is we are all down 60 to 80% in our case being down and our revenue into june was 6 times higher as april and april was

the trough we performed very well loads good through july. we're happy where we are this is a bit of a tactic in crisis, not an answer. it's not a long-term strategic bet or anything like that. as demand has tapered off, you'll see our demand adjust it will be about 40% what it was in the third quarter 2019. >> when you look at your debt right now, how much is your total debt this morning you're out announcing you'll be selling another $1.2 billion in senior notes backed by intellectual property and other assets. where do you stand in terms of total debt right now >> our debt levels are high. we raised a good bit of debt six years ago as we modernized our

fleet. we've raised a lot once we get through the crisis and once we get to be cash positive, the good news is, we've raised $4.6 billion in the second quarter in debt and equity you combine with the treasury loan and on a pro form ma basis, we ended with $16 billion in liquidity, which is an extremely high number for us more than enough to withstand this crisis. our goal is to get through 2021. we've done much of all we can on the cost side. we head into 2021 generating

catch and use that cash to begin to pay down debt >> doug, it's joe kernen >> hey, joe. >> whenever we have ceos on, i'm always like based on how much it's costing to run an airline, prices should be higher, but i understand because of demand it's impossible to raise prices which just points out the actual problem with trying to run an airline profitably it's almost impossible for years warren buffet said, look, i'll never invest again. it's a terrible business then something like this comes along and drives home or should there be some type of, i don't know, utility or -- i mean, it's anathama for me to suggest that but it's so difficult when something like this comes along. best laid plans of men, and then this happens, and it just

seems -- you're going to be dealing with this every five years or something it's so hard to be profitable. shareholders could sacrifice theoretically. >> yeah. joe, we of course we wish to remain profitable. even warren buffet was in. >> yeah, but then he wished he hadn't been. >> this is unlike anything we've ever seen before i certainly don't know that we'll ever see anything like it again. we have restructured the business over time this is a demand driven crisis very little demand for business travel as it returns, our industry will return to profitability.

we happen to have a business like many others >> it was going so well. there were no empty seats, capacity, finally getting costs. it seemed like airlines finally had it the stupid actors were gone. you're only as good as your stupidest competitor then this. it just makes you wonder that's just a comment, not a question >> hi, andrew. >> melissa had a question first. >> okay. yeah >> sorry >> i'll gladly take it it's melissa i want to go back to debt and liquidity. what's your sense of how much more debt you and your company

want to take on? i believe you started this year with more debt than any of your other competitors. you had $33 billion or so and you're raising more than a billion with this latest debt offering how much more could you raise if needed what else could you collateralize at this point? >> we have more capacity we're not looking to raise anymore, that's for certain. again, you know, pro form ma basis ending this quarter, $16 billion is more than ample cash to get us, you know, even in this type of crisis environment, you know, well past a year from now. we're -- we believe that will be more than enough we don't need to raise more. if we have to, we will at this point in time, none of us are worried so much about additional debt as we are making sure we have enough liquidity. that's the case at american. we feel good about that. once we get through that, we

will begin to work on generating cash and using that to reduce the debt levels over time, which i'm confident we'll do >> doug, two questions one really coming from what i would say a former large airline investor, not warren buffet, but i was having conversations with the investor about airlines and he said, look, in the aftermath of the financial crisis of 2008 there was a real push in washington to say never again. never again should shareholders have to bail out banks and make sure they have cushions at the fed and treasury now do he thinks that once the airlines

get past it as well, it wouldn't surprise me if there is legislation or attempts at legislation to do something like that with the airlines what do you think of that as a challenge to the business long term >> yeah, look, again, i think the president is sound not in anything like we have now. i know you have secretary mnuchin on later the c.a.r.e.s. act that he led the negotiations before did exactly what it needed to do the carnage that would have happened in the industry without the c.a.r. empt s. act i can't imagine. shutting down airlines or potentially shutting down airlines we continue to be thankful america will be fine, our industry will be fine. what's stressful is the impacts

on our team. while the c.a.r.e.s. act did what it was supposed to do, the other thing it was supposed to do is make sure all of our team members were employed. we all agreed in exchange for some of those funds to keep our team on board until october 1st. the clear view at that point in time was that by that point in time the airline will be back. the virus hasn't done that as c.a.r.e.s. 2 is being talked about as a union-led initiative to extend the psp portion of the c.a.r.e.s. act to protect the employees for yet another six months, not something the employees need, it's certainly something we support

we'll continue to support them in any way we can. in terms of other government support, like i said, in terms of true stability for the airline industry, c.a.r.e.s. took care of that. we're extremely grateful we've done what we all needed to do to make sure we're going to get through this. >> doug, a very practical health care question. people worry about the spread and people are wearing masks on the -- do you know how many people have gotten covid >> we know about our employees where they actually contracted it is hard to tell what we know is this, the rates of infection amongst our pilots and flight attendants is lower than the ground employees and lower than the national average.

the air flow, cleaning of the air filtration flying those and they're seeing lower infection rates than the national average, lower infection rates than the people working on the ground. that's what i can tell you for certain. where exactly are those that do contract it, if it's in flight or otherwise, it's very hard we don't know. >> hey, doug, it's phil. one last question. i know you and every other airline executive has said nobody knows when we'll get back to full. whether that's the first quarter, into next year, until that happens, where do you expect demand to level off at? at current levels? we're down about 73% as an industry or is it going to be at 50%?

60%? what's your guess? >> i don't know. one would expect pre-vaccine we would sell at a level higher than this. as infection rates fall and as we as a country get better at wearing masks and things like that and we see the infection rate fall. it's certainly what we saw, as i say, up through june there's the opportunity to respond to whatever rate of infection there is the point is we'll be here when demand returns the people at american did a great job of taking care of the customers that are flying. >> doug parker, thanks for joining us this morning. one of these quarters i'll get down there in fort worth and i'll see you in person and we

won't be doing this virtually. >> please to. >> we'll get down there. guys, back to you. busy morning for airlines earnings we'll get his perspective as well >> thanks, phil. thank you for bringing us that conversation with doug who, by the way, i mentioned it a while ago, the article made me cry when he sat next to an airlines employee. se kc aianchrm jay clayton will join us "squawk" returns after this.

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welcome back to "squawk box. a whole slew of earnings out this morning as futures digest them, we are looking for a higher opening dow is up 83 points. nasdaq up 20 points. s&p 500 up 7 points. tractor supply beat estimates on both the top and bottom lines with comparable store sales up 30.5% that stock if it opens here will be a new record for the stock up 2% at&t meantime came in and the pandemic impacted business across all of its segments that stock is up by more than a percent. twitter saw 34% jump in the key metric of monetizable daily active users more than the street had expected it is popping. cfo ned segal will join us.

jay clayton will join us to discuss the new lerus on proxy solicitations and much more. we'll be right back. ♪

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welcome back to "squawk box" this morning sec approving new rules that govern proxy advisory firms. joining us on the phone for an exclusive interview to discuss this and so much more. sec chairman jay clayton mr. chairman, we appreciate yo joining us this morning.

we only have a little bit of time and a lot to talk about before we get to the proxy rules, this is the first real chance we've had an opportunity to talk to you since you were nominated to run the southern district of new york i just wanted to ask you about that because it's been reported that you were the one who suggested that you take that job and, of course, you've been relatively apolitical but when that happened it became very political and a view that you were aligned with the president and questions about your qualifications given that you haven't worked as a prosecutor before can you just speak to this whole issue right now? >> sure, andrew, i'll do it quickly, then let's get to the issues of the day. look, i took this job and i made a couple of promises one was to do the job for an appreciable period of time, let's call it one presidential term the other promise was to go back to my family in new york as i looked at that on the horizon, the job was am head of

the southern district was attractive i've had the privilege of managing 1300 enforcement attorneys here at the sec. we've done incredible work fighting for the american people is something that i would love to be able to continue but for now that's something that's on the horizon and i'm focused on the work here at the sec >> okay. we will follow the progress of that in the meantime, we want to talk about the new proxy rules because they will have a significant impact on the investment community you called for more transparency for proxy advisers the critique on the other side is this gives more power to corporations what do you say to that? >> well, andrew, let's look at what we're doing here. first of all, there's nothing changing in the responsibility the shareholders have. that's corporations as well as officers and directors

what we are doing is focusing on the responsibility of investment advisers the people who run mutual funds and the like we have 50 million american households they turn their money over to these investment advisers. those investment advisers have an opportunity to discharge the duties how do they make the promises to the funds, the underlying investors and how do they discharge the duty well, they do a pretty smart thing. they hire outside advisers to help them with that because it's a big task when you hire outside advisers, you don't outsource the duty, you still have it. and what we've done is we've reminded investment advisers of that duty. that's step one of what we did yesterday. and the other thing we've done is we've put processes in place to make sure that they can discharge that duty effectively, that they have a mix of information when they vote those

proxies that is robust and analogous to what you would get at the paradigmatic shareholder meeting. you have the chance for there to be a response and that's the kind of mix of information that people should be voting on yeah, we heard some criticism from the right, but this package of measures we took yesterday really codifies what's best practices in the industry today. >> right i don't know if you saw jim cramer on the air yesterday -- last night, but he also took a look at another component of this, which is, you know, every quarter hedge funds, at least historically, that had over $100 million had to disclose all of

their openerships. jim cramer says we should be able to see that information that's better for the market to be able to see that information. why do that? >> well, look, a couple of things i love jim cramer because he's not afraid to express his opinion and this is the time for opinion. this is a proposal this is a rule that's been on the books at $100 million for 40 years. it's long overdue for an upgrade and a modernization. the purpose is for us to be able to like -- for integrity a lot has happened in the last 40 years 100 million clearly is not the right number we propose 3.5 billion which still captures the lions share of institutional money in the marketplace. we're going to be looking at comments and the like. one thing to note here, andrew,

i like -- i, some investor a, i like to follow the holdings of, you know, one of these investment managers that, say, has 100 million, 200, 300 million. i like to track what they do that was not the purpose of 13 -- there's a question, should people be able to track these and follow their managers? that's one of the questions we've asked. >> one of the questions in the headlines is looking at the marketplace whether certain stocks are becoming disconnected from reality, what that says and how you protect the investor the market cap, clearly it is bigger than the top three or four automakers in america yet they sell a fraction of the same

vehicles how concerned are you that the market may be in a place -- i don't know about the market in total, but certain stocks may be in a place that are disconnected in that way? >> andrew, let's talk about that from the perspective of the individual investor. here at the sec we think about somebody investing for the long term, doing it on a monthly basis. what we are seeing is significant in flows and does that concern me? sure that's more trading. trading, we allow people in america to do it i encourage people to educate themselves short-term trading is much morrmore risk y than long-term investing. we've put out guidance for brokers and investment advisers on how to have conversations

with those retail investors about the risks they face and i hope that people are heeding that >> right jay, we want to thank you for joining us this morning. there are so many other things to get to, including spacs and so much more we hope we can have you back very, very soon to talk to that and more thank you for joining us >> andrew, thank you please keep these earnings dialogues going. they're giving us great insight into the market and on the ground much appreciated. >> appreciate it thank you. melissa? coming up, another big hours of newsmakers straight ahead chamath palihapitiya, steve mnhi snyucn,te hoyer, and ned segal. "squawk box" will be right back.

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good morning it's 8 a.m. on the east coast and we've got a big, very big final hour of "squawk box" ahead. i'm joe kernen along with andrew ross sorkin and becky lee. social's expert cha mat palihapitiya, steve mnuchin, house majority leader steny hoyer and wrap things up with twitter cfo ned segal fresh off this morning's second quarter results. u.s. equity futures have pulled back we were up in the pre-market session. we are up just under 80 points on the dow nasdaq up just under 20. s&p up 6.5 points. andrew >> okay. thanks, joe. we have so many special

guests today the first this hour, here to talk about the markets, earnings, surge in big tech stocks and so much more, we are joined exclusively by cha mat palihapitiya, social capital, we have a whole mix of things to talk about chama chamath, let's start with big tech, tesla, really just the move that we have seen does it make sense to you and is it sustainable >> it does make sense and it unfortunately will be the status quo for a while, but i think it's important to understand why. in the year 2000, andrew, there were 8,000 public companies in the united states. by the year 2020 there are about 4,000 and falling quickly because of consolidation, m&a and the massive spike in private equi equity what we've done is effectively shrank the investable universe by 50%

meanwhile, the number of hedge funds have grown when you have five companies that can predicttivelily grow, what happens is everybody just throws their hands in the air and says, you know what, this is the easiest schmuck insurance kind of trade to do so they pile into these businesses. if we are really frustrated by the amount of market cap, 20 plus% in the big five, i think what we need to do is figure out ways to change the incentives for more companies to be public. >> i want to talk about that i want to talk about spacs as well you've been behind a few let me talk about tesla because they had the earnings last night. they beat, you know -- the bears would say they beat because they sold these tax credits, how long are these credits going to be a sustainable business model what do you say? you bought into tesla, bought into the debt a long time ago.

>> i think this is a really important example of a much bigger trend that's happening in the stock market, which is that retail investors now have access to so much information that it's almost on parity with people that work in traditional investment organizations, and what we've seen as that's happened is that the quality ha been better than traditional investment firms and the way they view the problem. from day one you've had a massive tension between the bulls and the bears. the bulls basically saw a long-term trend and the bears tried to play with balance sheet mathematics. of course if i said you can sell 90,000 cars but then if you negative sell 100,000 you've not sold 10,000 and you would say, what does any of this mean you can use any convoluted logic to try to be short the stock,

you will see the stock becoming part of the s&p 500. what the bulls will get right and what the bears will ignore from here is that this is no longer about cars. that's the first wave of growth and i think people are pricing in an evisceration of traditional autos and an enormous shift to evs of which tesla will get the enormous share. if you ask me as an investor who loves that company, it was in page four or five of their quarterly earnings release where they talk about the energy business they said a couple of interesting things first, it was profitable the second is that they're also producing software that allows effectively anybody to become a distributed utility. now think about it for a second. you were talking about one of the most predictable, reasonable businesses that have raised

hundreds and billions of dollars in debt. what tesla will do is allow each of us to be in the energy business people will get angry. they will not understand they will try to push back and they will be wrong the stock is going to represent the totality around decarbonization and sustainability it was great to own this thing around cars for the first four years, i did it, i made a lot of money. now i underwrite this company as a threat towards decarbonization, towards deregulated energy and towards the opportunity for all of us to become utilities. >> what is that stock worth, chamath. since the end of march tesla has added $2 billion in market cap how much more is there on the enrecall nernl gi thing, he

talked about that business and what did he have in mind. >> by the way, you framed it is exactly correctly. he has been consistently giving us the trail of bread crumbs to understand the business. he had a quote, unquote, secret plan that he published on the web. then he updated it and published it again all you had to do is read it and put together a reasonable one or two pager to underwrite the investment i try to force myself to simplify things versus complexifcomplexi complexify what is this worth millions if you look at the regulatory framework that has allowed local utilities to thrive, it is measured in hundreds of billions and trillions of dollars and if individuals can get the solar panels, buy the battery packs and get essentially free

software or low-co software. what you are going to see is utilities basically go upside down that was the class of debt that people would have told you is completely, completely the safest and basically would be guaranteed yield ad infinite tum. in the next 20 years you'll see examples where that's not the case. >> chamath, let me ask you to get to the numbers we're at now you have to -- politely, you have to grow into the numbers, right? so how much runway should an investor be giving they're looking out 12 months, 18 months, maybe 24 months to make the math on this work you have to be looking out maybe five years, possibly a decade. who knows what's going to happen between now and then to some degree i wonder how much you think of tesla parallels oddly enough like a thing like

bitcoin which i know you talked about over the years because you have to buy into a really long-term vision >> so you're talking about something that's really important, again, for the institutional investor, and i think less so for the retail investor if you give the retail investor a 5 or 10-year investment horizon, many will take it because they're not in the business of perpetual motion they're not trying to go in and go out of stocks because they need to earn management. for institutional investors, one thing has changed, which is that rates have essentially gone to zero not to get, you know, sort of like arcane and in the bowels of financial modeling, but when your rate is essentially zero, you have to invariably look much farther out down the line in order to figure out over what period of time will you capture reasonable amount of earnings. to your point, andrew, when

rates were 6%, they needed to look 6, 10, 12 months out. now you need to look 5 to 10 years out. this is where the capitulation and frustration has been they have refused to internalize the changing of the tactics that have to be employed in a zero rate environment for somebody like me, you could say, well, this is a naive tech person who hasn't been an investor over multiple cycles. maybe that's true. the one thing i realize is when rates are zero, you need to look five to ten years for growth when you do, the reality is this company has inflected towards multiple markets that are measured in the hundreds of billions and trillions of dollars. on a risk adjusted basis it's a really good risk parity trade. >> chamath, i want to pivot to spacs. you've launched a couple of

you've talked about them in terms of an ip o2.0. how much of this though is an indictment of the ipo model but at the same time what does it say about transparency because there's a lot less in the spac model than there is in the ipo model? >> i actually think it's the exact opposite and i'm glad you asked this question. let's just talk about transparency for a second. when you go through a spac, what you, the ceo and the company are allude to do is take your time you're allowed to take as many months, as many weeks, frankly longer if you want to, to educate the buy side, both educational models you can walk them through the models and the stress tests. instead of speaking at them, what happens is you have a conversation in that conversation is meaningfully more transparency

you saw that play out firsthand with virgin galactic it was one of the key things i tried to do is demonstrate the value of transparency. transparency is critical the reality is we are now moving away, andrew, from a very, very different model. for example, the rules now on 13fs are going to move where large hedge funds only have to publish what they own. when you lift the bar, that's not more transparency, that's less, we should force every single hedge fund to publish their longs and their shorts it would allow us why are certain investors piling into certain companies or short others are they trying to manipulate or is this some fund amount ool idea >> in terms of the traditional

model, the banks serve customers, the customer are the hedge funds, folks like me that pay them tens or hundreds of millions in fees then they reward me with cheap stuff. i'll gladly take it. what i'm telling you, viewers and all retail and institutional investors, that game has to end. we need to allow companies, more of them to go public faster. let's get the 4,000 closer to 8,000 and we need to allow them to talk about what they're doing in a way where there's more transparency, not less fewer mind blowing tesla examples you'll have more investor support and elon and folks wand

have that. it makes good companies win. >> let me ask you about two other topics, one, silicon valley which you know so well and sports silicon valley, next week all of the big executives are going to be virtually testifying in washington in a virtual sense including your former boss, mark zuckerberg i'm curious what you think the outcome of that hearing is going to be. >> it'll be perform mative theater of which the outcome is not much, to be honest i think everybody will be looking for their sound bite, not just the cvideos the result will be nothing really the lens to view it with is the following, we are at record high

levels of debt, both domestically and internationally. we have five companies that are sucking up all the oxygen. they do that not just economically but now as well politically and in all of that i think there is a huge incentive to legislate, at a minimum to slow these companies down. at the middle ground it's going to be tax them more and make sure they earn less and break them up. >> chamath, would you break them up >> yeah. >> you would >> yeah. >> all four of them? >> it's good for competition yeah, it's good for competition. they all had a good run. the reality is the incremental dollar of investment is relatively wasted inside of the companies. i wrote this two years of the debt could have re-created apollo. we have random little features here and there and things that don't really advance, you know, the causes that we all care

about in humanity. on the margin -- >> chamath, let me just ask you though do you believe though that those four companies have either created a monopoly -- first of all, are they a monopoly do you believe they've got a policy i'm curious as someone as a former insider in one of those companies, do you believe that that monopoly, to the extent you can believe it is one, is illegal? >> i don't think anything they've done is illegal. i think they have created monopolies and i think that our lens with which we view companies like this have changed and the lens is no longer solely about dollars and sentences cents. there is a level of moral septemberbility and a level of

moral responsibility by the way, this happened with broadcast. we realized that broadcast cable and traditional television, we realized this about newspapers they had a role to play in in that there was more regulation and what was septemberab absept acceptable or not. if you're an employee, you won't be harmed. if you're a consumer you won't be harmed. if you are a shareholder you could be harmed. if you are the people who derive your ego from sitting on top of these companies, you absolutely will take a hit. if you can rationalize that, realize that it's in the greater good, everybody will be okay, i think. >> chamath palihapitiya, it's a much longer conversation and we hope to have you back. maybe we should do it next week

after that, but we'll reach out to make that happen. thank you so much. >> okay. the horn means it's over going to secretary mnuchin they've reached an agreement to talk about the aid package, treasury secretary steven mnuchin. a lot happened yesterday can you just fill us in exactly what we know is in the bill at this point, mr. secretary? >> good morning, and it's good to be with you let me just be clear on the president's priority in the bill as you know, this is a negotiation so we need both republicans and democrats support, but we are on the same page with the republicans. the president's priority is kids and jobs we need to get kids back to school safely. they had $100 billion in their

heroes act we increased that to 105 billion. some of that will be back open i think we have the enhanced unemployment insurance that's expiring next week we need to respond to that as we've said before, we're not going to continue it in its current form because we're not going to pay people more money to stay at home than work, but we want to make sure that the people that are out there that can't find jobs doing get a wage replacement. and we'll have tax credits to incentive advise companies to hire people. finally let me say, you know there's a lot of bipartisan support forex tending the ppp. i've had many conversations and we want to have second checks for companies whose revenues are down 50 perfection percent or

more and need more money, small businesses to get people back to work 16 billion for new testing the white house is okay with that >> there's 25 billion available. and we're going to make sure that all the states that need to test people, particularly nursing homes, schools, other things where people feel comfortable with lots of testing, we're going to make sure we have that. >> we hear again and again and again that there's remaining residual tension between the white house and the president and senate republicans on the payroll tax provision, tax cuts. where is that? >> let me be clear we think the tax cut is a pro growth policy. the president's focus is he wants to get money into people's pockets now because we need to reopen the economy one of the issues i think you know about the payroll tax cut is, people get that money over

time so the president's preference is to make sure we send out direct payments quickly so in august people get more money. there's no question this worked before year over year it was up 1%. people spent that in small businesses and it's having a big impact now it's all about getting money for kids and jobs. >> it's not in the base bill. >> this is c.a.r.e.s. 4.0. there could be c.a.r.e.s. 5.0. >> there's news that came out separately from some of the things you were talking about. is mitch mcconnell on board with this maybe four, five, six or something? is that the way it's going to progress >> the process is there are individual bills for all of these individual programs. mark meadows and i were working late with mitch and his staff.

we'll be speaking to them as soon as i get off the show this morning. we need to make sure we see all of the final agreements. as you know, there's a lot of text that goes back and forth. >> we're at a trillion are we above a trillion? we'll end up above a trillion. that's too much for some republicans even at that point and way too little for a lot of democrats. >> let me just put this in perspective. we are where we are because congress, the senate, the house reacted quickly and clearly saved major parts of our economy that would have been devastated otherwise. we have $3 trillion. we only put about 1.6 trillion in we have a lot of money to go we are focused to putting another trillion in and we'll have more if needed.

the president is focused on the american workers and the public and he wants to reopen the economy safely. >> how much for states can you go into the liability? what's the language going to be? what's it going to look like exactly? >> the layman's language is you can't have frivolous lawsuits. i think ordinary people understand that. so, you know, this isn't about funding the trial lawyers. you know, without me going through all the technical language, which is complicated is if someone acts inappropriately, that's a different situation. you shouldn't have frivolous lawsuits you can't have universities not open because they're afraid of being sued that hurts our students. >> the other part of the question really wasn't necessarily related but it's something to talk about. where is it going to be for states is that going to satisfy democrats and what they're looking for? >> i think you know the

democrats want 900 billion and if we gave them 900 billion they'll probably ask for more. the president is not going to bail out chicago, new york, other states that prior to the coronavirus were mismanaged. i think you know we allocated $150,000 they needed money for lost revenue. i think the republicans feel like it.

melissa? >> mr. secretary, the cares act. when do we start thinking about that >> in that process it's a fair process. they closed and the federal government told them to close. they should be hell bent

we're going to make sure we have a bipartisan look at it. the ppp forex ample and it will be targeted and the ppp. >> mr. secretary, a chance to comment on it. any other ideas. >> it's a very different

we are about it. a pro economic recovery. we are not in favor of socialism. the government can't afford to spend another $10 trillion to give everything away and create a socialist economy. >> andrew once said that i couldn't help laughing inside that we don't like socialism as we care about c.a.r.e.s. act 9, 12, 14, 19 that we're getting ready to do along with the fed i guess it just depends on what you call socialism. >> let me be clear we're not focused on c.a.r.e.s. 9, we're focused on c.a.r.e.s. 4.0. >> it's -- >> we are but it's worked. people thought we would have 30 or 40 million people unemployed because of the policies the president put in place working with congress. we never got there we're safely reopening yes, there are areas of the

country that have had hot spots, but look at places like new york which were a major disaster beforehand you know, the virus is completely under control there >> andrew? >> mr. secretary, the question i'd have, it relates to debt and it's a republican issue, democratic issue, across the board, which is what's the upper limit in your mind of what the national debt can be is there a line at which we can't cross? >> well, i think there's two ways you have to look at the debt one is a percentage of gdp and the other is debt service. so obviously if you have interest rates that are 50 basis points versus interest rates at 5%, you can afford to carry a lot more debt. now let me be clear, i'm not interested in loading up the government with trillions of dollars, but we spent trillions of dollars on a failed war in the middle east and we didn't stop halfway through and say, well, we don't have enough money

to finish it i think this virus is like a war and we have to make the investment now to make sure that american workers and american businesses can survive but i am locking up a lot of money at very, very low rates so i've got a lot of money at 20, 30 years so we have plenty of time to pay back a lot of this extra debt. >> mr. secretary -- mr. secretary -- >> mr. secretary -- >> go ahead, andrew. then i have one more. >> mr. secretary, let me just ask one question in war times or post war times corporations have been asked and wealthier individuals have been asked to pay higher taxes. that's something vice president biden has talked about doing if he were to win if there -- if the trump administration has a second term, do you imagine raising taxes on corporations and individuals in the same way or at all >> we have no intention of raising the corporate tax rate the corporate tax rate spurred the greatest economic recovery

we had an incredible economic success. i think the president wants to make sure that on the individual side there are fair taxes. we cut taxes for middle income people so we had massive tax cuts for people and that's what we're focused on we're focused on economic growth the american people want to get back to work we're going to get back to the greatest economy we had and tax and spend is not the way to restore american workers. >> mr. secretary, march 23rd, pretty scary pretty dicey the market has come back like gangbusters. just watching it on a daily basis, sometimes it even -- you know, it's hard to explain and a lot of people talked about the fed and central bankers and things like that what have your thoughts been as you've seen not only the comeback but the series of new highs in the nasdaq and things like tesla and maybe some of the -- i mean, you were --

you've watched this for years and years. have you been surprised by some of the developments in recent months >> let me just -- you know, i've always said -- i can't determine it there are individual stocks, valuations, i'm not going to mention their names, one has to question when you look at the overall market, it does make sense let me say what the trends are first of all, there's nowhere else to invest in the united states people don't want to invest in the euro they don't want to invest in the rmb. there's a lot of dollars coming to the united states when you look at the u.s., and people think there's going to be interest rates for a very -- low for a long period of time, obviously the returns on stocks should come down so that increases the valuations on stocks. and when you look at the overall market, there are sectors like retail and energy that are down

a lot and you're right, there are sec torsion like technology that's down. this is great for technology companies. some of the tech companies are people that want to pretend they're tech companies, it may look a little different. >> would you be disappointed if i didn't ask you about the dollar because it's been weak lately. you know that's a thing we have together, mr. secretary. >> it is, and i'm now very practiced on this. >> it's been weak. is it welcome by -- the president probably, you know, isn't sure whether -- strong dollar is great. certainly we get good exports with a weaker dollar do you have a feeling for it >> we want a stable dollar that's what we like, we like a stable dollar. the dollar reflects lots of money coming into the united states i'm not going to make any short-term comments on the dollar over the long term the dollar is the greatest place to be all over the world

it's the reserve currency and we're going to protect that. >> you knew that was coming. mr. secretary, thank you for your time. >> thank you. >> we went a little bit long we appreciate your time. thanks >> andrew? >> thanks. meantime, initial jobless claims just out right now i want to get to rick santelli standing by at the cme in chicago with those numbers, rick >> well, andrew, we broke our streak we are not going to be able to say 16 weeks in a row of lower initial claims because this week is higher. 1.416 million. so 1,416,000, that is definitely a bit higher than a slightly revised 1,307,000 from last week so our streak of 15, well, that's where it ends not 16 but continuing claims did post an eightth week of drops the number there is -- i'm sorry, 16.197 million. so 16,197,000. that follows a slightly revised

17,304,000 eight weeks in a row on continuing claims. we can debate how much the initial claims rise will mean, but many have expected it. certain areas of the country that reopened had to settle back down due to the spikes and some of that is make being the waters a little muddy the initial claims may be a little bit more sticky, but there is not a huge response in the market although stocks are pre-opening and many are going to see how much is translated into that. but various parts of the world continue to feel the covid effects. south korea moved into the recession with the second gdp and we'll continue to monitor all of the data in the states to see how our gdp is fairing with the resurgence into the openings that seem to have run into some obstacles.

andrew, back to you. >> hey, rick thank you for that meantime, want to go over to steve liesman to get his analysis on what these numbers mean steve? >> you know, andrew, i don't take the opposite side of what rick says reflexively, but i want to agree with rick -- well, not totally agree but here's the thing, we had a lot of complications in these numbers, and i'll explain normally on this week the seasonal adjustments expect a return of a lot of workers from an auto sector shutdown. that didn't happen the auto sector didn't shut down you have this' been ramping up for a projection the nonseasonally decline reflects the number rick has been touting there's a tremendous amount of churn and hiring and lack of hiring and firing in this particular pandemic affected jobs market. let me talk about two things here first you still have a higher

level of claims when you look at it seasonally adjusted or unadjusted 1.3 million is still a multiple of the worst weeks we've had so that's still a problem. there appears to be some hiring going on and now you have this question, how the recent flairup in the virus is affecting the job market right now we don't see it necessarily. i see a lot of negatives across the board by state it's hard for me to say that places like arizona, which let me just take a quick look at that, had a 6,000 decline. it's hard to say that you're seeing that flare-up there is other high frequency data i want to talk very quickly about one other program. pandemic unemployment assistance this is a program available to people who are contractors, gig workers, $600 payments to people who never really in previous downturns were eligible for unemployment insurance this is a very large number and it's in addition to the 16 million getting continuing claims there's another 13 million, at least as of july 4th, who are

receiving this one so the actual total number when you want to understand how many americans are receiving assistance for their unemployment, it's closer to 30 million than it is the 16 million. a lot of pain in the work force. a lot, long way to go. what do the flairups have on the jobs coming up in the next month in the sunbelt andrew >> thanks, steve appreciate it. we could get a fight going, but i don't think we're going to do it right now thanks, guys. >> melissa -- >> no, we agree. >> we should know that we paired our gains on the futures right now and we've also seen a slide bit for bonds with the 10-year yield dipping to .58% less than. coming up, we have two more, yes, two more big interviews for you. house majority leader steny

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it will be based on approximately 70% wage replacement, and we're also going to have a lot of tax credits to incentive advise companies to hire people then finally let me just say, you know there's a lot of bipartisan support forex tending the ppp. i've had conversations with carden and rubio we want to have second checks for companies whose revenues are down 50% or more and need more money. small businesses to get people back to work >> that was treasury secretary stev steven new chun on "squawk box" with us. joining us is congressman steny hoyer of maryland. mr. leader, thank you very much for joining us we appreciate it. >> good morning. thank you very much. >> what is your reaction to what secretary mnuchin had to say

about the enhanced unemployment benefit which has been such a contentious issue in the republican party but of course across the aisle >> well, we passed a bill over two months ago to respond to the needs that we saw in america for a lot of different sectors of our country, including state and local governments, tribal governments and territories including hospital, testing and tracing so we could get a handle on this virus and payments to individuals, individual families and businesses that has been ignored for essentially two months now at the last minute as the unemployment insurance is about to laps at the end of this month the administration is now coming forward, mcconnell is now coming forward, senator mcconnell, the leader in the senate said let the states go bankrupt the problem is, the states hire many of the essential personnel that are confronting this virus

and trying to keep our economy going. my governor, a republican governor, and governor cuomo have said the states need $500 billion to meet the money that they've lost and as a result of hemorrhaging my response to mnuchin is you're late to the table we're glad you're at the table, but it is time to make a deal and get something moving if the senate doesn't agree with the hero's bill that we passed two months ago, which we think met all -- not all of the needs but melt tt the needs that were critically important, come up with your own alternative. they have no alternative now they are coming up with ideas. 1.4 million new people going on unemployment i think this is the 17th or 18th week in a row of over 1 million

people going on unemployment this is a crisis and the senate and republicans are reacting as if it's a long-term decision they may or may not make at some time in the future >> sure. >> i'm glad the negotiations have begun, but we need to get them done quickly and we need to get them done not just on unemployment, as some have suggested. that is critically important, but it is also critically important to have the kind of ppe and medical testing capability to get at this disease and stop this disease, we're going to continue to hemorrhage in our country. >> sure. >> we need a broad-based bill, not an hour bill. >> leader hoyer. you're exactly right it's the 18th straight week where jobless claims would be over a million this is a profound crisis that the country is facing, but specifically on what republicans could put forth when they sit at that table with you, secretary mnuchin specifically said the

enhancing unemployment benefits would not exist in the current form going forward he suggested 70% wage replacement. are you saying that is not going to be -- not going to be, you know, okay with you? that that is a deal breaker? >> no. i don't think that's the policy we ought to pursue if we're going to rachet that down, it ought to be over time as we try to get this economy moving again, but, no ksz my point is put on the table what you think is necessary. >> that's what he thinks is necessary. >> well, then he's wrong if that's all he thinks is necessary, he is absolutely wrong. very frankly, he was wrong when he asked for 250 billion and we said no, the hospitals need more money, testing and tracing need more money, and very frankly, some weeks later the senate

agreed to exactly the figures that we suggested less $14 billion, a smaller, much smaller sum than they originally were objecting to, the $250 billion so that's what he's saying now if it's a knnegotiating weeks a and he didn't. the administration didn't. the senate didn't. mcconnell said let the states go bankrupt which was an absurd recommendation which would have had extraordinary adverse impact on our economy and our people. so that the unemployment insurance is absolutely essential. he's right on that and if he wants to negotiate some alternative figures, fine put them on the table. let's talk about them. but don't keep twiddling your thumbs while the american people are burning from a virus and a tanking economy. apparently i didn't hear it, but he talked about the president

doesn't want to give money to the states and localities because they've been mismanaged. the most mismanaged government in america today is the federal government under the trump administration, period >> so, leader hoyer, there appears to be profound differences at least right now between the democrats and the republican plan as it stands and presented by secretary mnuchin on the enhanced unemployment benefit, on giving money to states and in terms of testing, the secretary talked about $16 billion in testing which is well short of what republicans -- >> it's certainly -- >> a negotiation to happen -- >> we're -- nancy pelosi -- >> are we at risk -- are we at risk of not having a stimulus plan are we at risk of not passing this next c.a.r.e.s. act >> we need a stimulus package. we need the hero's bill to pass,

and if it's not exactly the way we passed it, so be it, that's the legislative process. but they have for two months, december, for two months delayed, for two months created this crisis that we are now confronting at the end of this month, and it's time to get this done our speaker is at the table. schumer is at the table but, very frankly, it was very late coming in. it's late but it's never too late to do the right thing we are prepared to move ahead with serious negotiations. yes, we'll have to compromise? why? because the senate and presidency are controlled by republicans, we control the house. so they'll have to compromise. that's what happened in the fourth phase of our response to the coronavirus. where they initially ask to increase the ppp and we ended up making a deal at $484 billion.

we asked for 5 yes, we compromised. it was a marginal compromise why? because the administration and the senate ultimately decided we were right, the expenditures we were proposing were necessary. that's the case now. you ask the governors. ask the republican governors they will say they are hemorrhaging revenues. they're going to have to layoff teachers, police, fire, emergency medical response teams, sanitation workers. people who make our society safer and it is very frustrating that this administration has been so lax and so late in coming forward we are prepared. we are at the table prepared -- >> the bottom line, leader the bottom line. do you think you will have a bill signed by the deadline? do you believe a bill be signed? not should a bill be signed? yes, a bill should be signed will a bill be signed? >> i have no idea what the president of the united states is going to do. >> okay. >> i think he's totally

irresponsible and so whether he's going to sign a bill or not, i don't know. i believe there are the votes in the united states senate to make a deal which we can agree with whether the president agrees with it, we'll have to see. >> leader hoyer, we appreciate your time. thank you. >> thank you. comingup, twitter's cfo ne sel ins gajous first on "squawk box" to talk about the company's second quarter results stay tuned "squawk box" will be right back. ♪ come on in, we're open. ♪

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revenues that were in line profits on revenues in line with estimates. at&t felt negative effects due to the covid-19 pandemic across a lot of businesses including a drop in phone subscribers, delayed movie releases and less advertising spending twitter stock up around 5%, 3.5 million shares of premarket volume there was some question about the comparability of earnings to analysts estimates vef noose fell short of expectations but a key metric of user growth came in above estimates, monetizable daily active users grew 34% year offer year we're going to end on shares of unilever higher in the european trade and u.s. listed trades up 8%, 10,000 shares of volume. behind everything from tof shampoo and vaseline skin care to hell man's mayonnaise

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welcome back to "squawk box. twitter reporting second quarter results a short time ago, missing analysts estimates for revenue and reporting an overall loss due to a one-time item but the key metric off monetizable daily active users shot up 34% compared to a year ago the stock up over 5%

joining us right now on first on cnbc is ned siegel, twitter's cfo. congratulations on the growth piece of this in terms of the user growth, the question is going to be "on the money" size going forward. speak to it. >> well, first, we were thrilled to deliver 34% mdau growth this quarter, that's over 45 million new people using twitter today than last year product improvements and all the things going on in the world right now bringing people to twitter. on the revenue side we have work to do on our revenue products, that's why they are the number one company objective. we made real progress this quarter, improving measurement for advertisers, doing a pilot of our map product, improving prediction and add ranking models and finishing the work on our ad server debt has been long awaited and will allow us to move faster. we have more work in front of us because in a more constrained economic environment like the one we are in today we need to deliver direct response advertising as well as brand

advertising for our biggest advertising partners >> the user growth piece, how sustainable do you think that is do you think we're going to see quarters like that in the future was this some pull forward how should investors think about that >> we were really pleased that the big surge that we saw in march was able to hold all through the second quarter meaning people continued to come to twitter to find out what was happening in the world and what people were talking about, whether it's it was around covid-19 where we had 150 million people come to our covid-19 resources or to do a virtual watch party for the last dance or to talk about trolls or another new movie or something else that came out where they weren't able to talk about it with their friends this person so they did it from their sofas on twitter we feel like there's lots more of that for us to be able to help people with as economies hopefully come back. i know baseball tonight and basketball next week and then

those are big opportunities for us as well we feel we are well-positioned when things do come back. >> lots of speculation that there is a pay subscription service in the offing or making that we don't know about yet true not true what's going to happen >> i think what you do know is that we did a job posting which people got excited about a few weeks ago where we mentioned that we were looking for a subscription-related engineer. if we have products to announce, you will hear about them from us, not through a job posting, but you will see them on the service. with err going to be testing and learning around lots of new non-ad related revenue opportunities. today we have data and enterprise solutions business but we know that there are other opportunities for us as well, subscriptions, commerce and other things will be areas that we will explore. we have to build the teams, we have to test and learn and this isn't something where you should expect revenue in 2020 but they are big opportunities for us over time. >> okay. so it sounds like something may be in the offing what is the cost going to be of

securing your network and what is the economic and maybe broader impact of what took place last week with so many named members of twitter being hacked in such a public way? >> well, we did have a security incident last week and we take these things really seriously. we try to be transparent in sharing with the world what happened, what we're doing to fix it and what we're doing to make sure something like this doesn't happen again it's important that the people who use the service, those that are affected, our content parte partne partners, advertisers hear from us and we are accountable for fixing it and making sure it doesn't happen again privacy and data protection have been a priority for us in an area we have -- >> ned, how much more money are you going to have to spend on this and is there going to be any liability issues, for example, we heard yesterday that some of those people we just showed on the screen had their dms meaning their private

messages exposed to hackers. >> we're still working through the details, andrew. as we do we will continue to share them but from an investing perspective this is an area where we have long invested. when something like this comes up it doesn't necessarily mean a lot more investment but it does sometimes mean that we ask people for whom they work on a number of things to really drop everything and focus on this so that we can fix it, we can remediate it, we can make sure it's not going to happen again and so we can communicate clearly about everything that did happen. >> and then finally jack dorsey is being called to washington. is he going? >> i'm not sure if jack will be going or not but as you can imagine our relationships with the legislators, policymakers and regulators all over the world are really important to us and so whether it's in a particular discussion or a different one, talking to them so that they understand how we think about the world, our policies that they understand we

are the first -- and political advertising that we remove qanon earlier this week, it's important to our work. >> ned, i want to say thank you. appreciate t by the way, i saw you got a haircut, is everything looking good we saw your hair online the other day? we have that shot. >> i can't see the shot. >> we have to run. we are all doing the quarantine haircut. join us tomorrow, everybody. melissa, thank you for a great week all together. "squawk on the street" begins right now. ♪ >> good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber what a morning futures are steady but the news flow is fierce between earnings, microsoft, tesla, airlines, mnuchin on squawk as c.a.r.e.s. 4.0 takes shape, china and jobless claims up for the first time since march we will talk to th