july 30, 2020. "squawk box" begins right now. >> good morning. welcome to "squawk box." i'm becky quick with andrew ross sorkin with wilford frost. >> good morning. i haven't been here in a while i'm delighted to be here today >> the morning shift great to see you we are really glad to have you with us. thank you. an important day for earnings

giving a lot of insight we'll be bringing you results apple, amazon, alphabet and facebook all report their earnings coincidence those four companies make up about 16% of the s&p 500. worth about $5 trillion combined and come a day after the heated antitrust hearing. wolf, this is a good read in for you. >> for sure. there was meant to be three of those. facebook got moved from yesterday to today after that hearing. after the close, we are waiting for two economic reports it is thursday, that means weekly jobless claims. another 1.4 million filed for

the first time last week the first read on second quarter gdp. the economy likely contracted by 34.7%. both jobless and gdp due at 8:30 eastern time >> you look at those numbers down 34.7% from the estimate we know it, we've been hearing from companies and what has been happening. that's a lot of news to digest ahead of all of these reports. you are watching futures under a little pressure. let's look at where things stand now. dow down 206 points, s&p down by 25 and nasdaq off by 73. yesterday was an update for the markets across the board nasdaq up 1.4% even though you had all four of those big tech ceos really getting grilled.

let's take a look at what has been happening with treasury yields you were watching the hearing that is still the case this comes as the fed told us that it is going to be hanging in there and continue to support the economy to continue the treasury and buy back. they do think there are some real pressure points on the economy. we'll hear about that in a moment too >> we'll go back in time first all answering questions about whether the companies are too

powerful a video conference that lasted more than six hours >> new companies are created all the time around the world. if we don't keep innovating, somebody will replace every company here today >> we have a policy to use seller-specific data to aid our private label business i can't guarantee that policy has never been violated. >> we have open and transparent rules. it is a rigorous process because we care so deeply about privacy, quality, we do look at every app before it goes on. those rules apply evenly to everyone >> we rely on the trust for users to come back to google ever day in fact, a vast majority of google, we don't show ads at all. >> talking more about the big

issues and what washington might do next throughout the morning i don't know how much of it you guys watched i thought some of it was fascinating. some good answers, some not. i didn't think it was a major take away that washington was going to come down hardy thought the most challenging thing we saw yesterday was instagram and facebook and e-mails back and forth. if you really dug in to the e-mails, you would have a hard case to make >> even lawmakers going after the topic of the measures and

the companies they've taken over like whatsapp and likewise that they had tried copy some of the particular tools other rivals whether they bought them or not they use like the stories feature on chat. we conclude from yesterday that significant action is eminent even if we got a sweep the market takes series highs during the hearing that goods to the question of how much we should watch we had one side of stocks pressuring the other side we are not even thinking about thinking about thinking about raising rates.

rising at a sharp close. >> the idea that anyone would buy a competitor watching this yesterday was complete theater like it often is at the beginning, they were asking questions and not even letting them answer. giving congress people their time to talk i didn't feel like i learned a lot. i couldn't take my eyes off of it it was theater >> we had that classic, you are take up my time from lawmakers >> compared to 2018, they were better prepared. even if it was them making arguments rather than letting them answer, they brought up

more facts whether amazon was using more as apple was misusing the margins that it takes. they were getting at the crux. it didn't spell eminent danger at the tech stocks because of that >> one note issue you were discussing was an interesting one. being eamon oply on it self-isn't illegal everybody wants to buy a competitor interestingly, fur deemed eamon oply, it is not illegal. if you go back and read e-mails of mark zuckerberg, he doubled

back because i think he realized that given that power, that he had to almost rewrite the email later to suggest, no, no i'm not trying to do that. he was thinking about this in 2010 can you see how he's tracking in his mind the way he was thinking about it yes, everybody always wants to buy a competitor but the size and scale these guys are at now, it is hard to do that. >> his answer was that the ftc had all the same information at that time and they approved it >> that's going to be the other interesting element in this. will the government or would the government be willing to go back and effectively unapprove.

there has been cases where the government has approved a transaction and relooked at deals they approved years ago. it does happen >> not impossible. >> as somebody who lives in a family of antitrust lawyers, this is what we talk about all the time >> jim cramer has it right on this he was talking about it. this is really one area america 5 excels we have so many other places we've fallen behind. this is the place we dominant and we are great at. hopefully we can come up with some way to regulate without squashingthese i agree with that. talking about other big stock movers there qualcomm shares are trading at a record high breaking triple

digits for the first time. first quarter results beating forecast thanks to a settlement with huawei that licensing deal will add $1.8 billion to what we they are owed and a new long-term settlement shares of qorvo are jumping. helped by strong 5g sales. that stock is up over 7% this morning. abi bef which topped estimates as well as bars and restaurants began to reopen. shares rising on that news that stock is up just crossing the tape, ups shares are on the rise after earnings doubled revenues beat expectations

ups up 36%, $131 >> some pretty soft earnings reports coming out in europe the likes of groups there. the german dax down about 2% still to come. what investors should know about jay powell's next move breaking out with the pre-market winners and losers some companies still have hr stuck between employees and their data.

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welcome back fed chairman jay powell says the surge on coronavirus cases is weighing on recovery steve liesman joins us with more on that story and a look ahead this was a big story yesterday kind of torn between the tech hearings and what jay powell had to say too a lot to take out of both. >> nobody did it better than cnbc covering two stories. the street looking for a 35%

decline in second quarter gdp. it overstates it joe biden expected it to fall that much. it will be the biggest quarterly decline as the coronavirus shutdown ground the economy halt consumers stopped spending, businesses stopped investing the rebound could not overcome the stan still in april. estimated to rise at annual 17% first quarter our estimate is about minus 6% they weren't so much concerned about this plunge of new virus from the rebound the fed kept this unchanged and said it would maintain that range until the economy would

weather those changes. suggesting the recent outbreak and reclosings we've seen in businesses were weighing on the recovery >> indeed, we have seen some signs that the increase in virus cases and renewed measures to control it for example, some measures have moved down since late june recent labor market indicators point to a slowing in job growth especially among slower businesses a slow recovery are unlikely because it is safe to engage the statement added that the state of the economy in the course of the virus in considerable return. in the 3k sho:00 question

back jn back in june, he said we are not even thinking about. yesterday, he said we are not even thinking about thinking about thinking about raising rates. he added another thinking about. >> a trifecta of we are not thinking about it. we just played an outlook. one would say that was not particularly new at the margin, we are not thinking about it, was interpreted as more committed. way did see rise to all of that, the dollar weaken and the dovish margin we would expect >> i'm not sure how much additional information that adds showing that market that the fed

will be on hold to august 2022 when i look out to fed futures, i forget when. well out as far as we can see, there is no rate hike built in the fed has succeeded it will be convincing the market it will below for some time. affecting the spread and maybe the hard target or hard forward guidance about when it will raise rates relative to inflation. that will come in the fall the market can put the fed and dovishness in the back pocket for more than a year hard to think the fed would add any new information unless it did launch a formal qe program

willia william sprigs >> i think it was an attempt, as you were saying, to cement in people's minds that the fed understands the situation. i think the fed was really talking to public officials that have been receiticent and by assuring them that they don't need to fear interest rate hikes in the face of these deficits. i think this message is really intended for them. there are a lot of clips we face if we don't see a fiscal response immediately the most important one being the loss of $600 a week to

unemployed workers the second in dramatic drop we'll see in state and local expenditures if the heroes act doesn't get its way through the senate >> to what extent does that affect your outlook of growth in the second part of the year. if there is a two-week to a month delay. is that game changing? >> it is game changing right now. when you look at on time payment of rents in july after we recovered for may and june, they became de-lynn kwent at the same rate we had seen in april without the $600 the argument we have about $600 is really silly.

these are a bunch of republican millionaires standing on the edge of the titanic arguing that the people are better off in life boats the only group of consumers we have been able to stabilize are the people at the bottom buying the necessary things paying rent and buying food. that's the only group we've been able to stabilize. at the higher end until we get the virus under control and have greater certainty. >> in terms of the outlook as it relates to the latest outlook, we have seen some improvement and the death rates and numbers pick up a bit in the last couple of days. which is the most important in

terms of the economy is there some lag in the death rate that should follow in the course that we've seen it? >> that's what the data suggests just thinking about this this morning. what the optimists do is point out when the cases surged, they said the death rate is low they are pointing out that cases are rising and going down. the way they've looked at all of this information they've ht ability to really ignore the flattening that powell has talked about and we talked about several weeks ago the same data the fed has been looking at because there is so much liquidity around it and the believe we are going to get past

this recent surge and some of the data in the south and west looks to be flattening and the death rate, even though it is climbing remains lower than it had been if i could talk to bill spriggs. it was 10 or 15 years ago you and i met in jackson hole. could you imagine a more stark change in monetary policy that powell is now openly saying that the goal of the fed is to get back to 3% unemployment rate it's an aggressive change in policy, whether they follow through with that and look through a possible increase of inflation, it is a stark change and one worth noting >> i absolutely agree with you you will recall when we met, it was over getting comfortable with getting to this point and

the commitment to stay on course to consider employment in the way that they are doing now is a huge sea change and very welcome. >> steve, can i ask you quickly, yesterday, we talked about the holes of any of these plans. the idea of giving more money to an area seeing a higher unemployment rate doesn't seem fair to me the idea of the fed doesn't seem fair to me either. saying it will reward the states and i can't think of anything that seems particularly fair in this situation >> there is none the 70% thing is regressive. people who make more get more. people who make less, get less

the other problem is if you were to do a flat number. that is a different number than in new york or california. >> i know. because of the cost of living. >> there is a good number. go ahead, bill >> people overblow the iss blow living it is very expensive to be poor in alabama the idea that costs are low. no state transportation. there are a host of things that make it poor in alabama. if you are a high-income person, you are looking at the cost of housing. if you are a poor person, you are looking at the lack of access to transportation and

health care. >> an unemployment can't fix all of these issues. >> the issue of the $600 is that many of these workers are going to face permanent job loss for them, this is the same as a plant closing. they have very specific, firm skills >> then we need to be thinking about retraining >> no. this isn't just retraining if i work three years at a greek restaurant and it closes, that doesn't translate at an ethiopian restaurant i have to be retrained >> what is your recommendation i don't know how to fix for something like that. >> yes, you do

that's what the $600 is for. that is our makeup for the fact that people are facing permanent job less when you lose permanent jobs -- >> you don't just want to give $600 out we help them give another job. are you talking about permanently paying out $600 a week >> no. we have to anticipate when they get back that we are going to need people to have been made closer to whole. this is not a regular recession for those workers we have deman and you have to think about

workers for whom the $600 was intended >> bill, we have to go i agree the problem of the $600 and the incentive might provide people to stay home is not an important problem in the next several months over time as the mark elt gets better, you do have an incentive problem. do you agree there is a problem over time and if you do agree, how do you solve it? >> oh, this is when people are talking about triggers of when you might ease back but to cut it off now creates huge problems >> so what's the trigger, bill >> when we actually can be confident that the economy will recover. those workers are looking at long-term unemployment now they are looking at how do i

stretch my dollar the farjest. you cut it off now, their consumption will be dramatic that's the only income group for which consumption has been stabilized yes, when we are at 5% unemployment, it would be silly to say you need $600 but at this moment, it is equally silly to say the opposite of that >> gentlemen, thank you for the conversation an important one we'll continue. we'd love to have you back steve, thank you also. when we come back on the other side of the break, the race for the covid vaccine. bringing us the story of the u.s. army's fos.efrt stay tuned for that here on cnbc [indistinct radio chatter]

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still to come this morning, tech under fire. we'll talk about the big issues at the congressional hearing stay tuned to "squawk box" here on cnbc. as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers...

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welcome back lawmakers came out swinging at the historic antitrust hearing called emperors of the online economy. sparking a few intense comments. we have more now >> good morning. bezos didn't even get a question until nearly two hours into the hearing apparently due to a tech glitch the pressure was on. the representative with some of the most pointed asking if amazon accesses or uses

third-party seller data to make decisions. he said he couldn't make a statement that has never been violated they also talked about undercutting and if alexa favors amazon products. >> i don't remember that at all. >> i think we followed diapers.com from 11 years ago. we offer to get you information. i'll get it to your office for you. i read that article. i don't remember the piece i don't remember the specifics of that. i'd be happy to get back to your office with more information about that >> even if he didn't say much, he did strike a steady tone in his first appearance before congress the questions were all over the place.

they did manage to strike at the heart of the antitrust issues that have been building regarding merchant data and counterfeits >> a lot of issues there i am not surprised that bezos wouldn't recall details from 11 years earlier. watching through, who did you think got the toughest i thought pichai was hard hit with things alphabet is doing. >> i agree i think they all got tough questions. certain certainly p certainly patch -- there is a

lot of back and forth yesterday but now we have the documents we can go through a lot have been made public. we can see email ex changes between bezos and others like the acquisition of ring and others bezos has stepped away in recent years but there is a lot to weigh in on. it is a good first step. >> thank you great to see you this morning. joining us now is annis chopra, current president of care journey, health care analytics firm thank you for being here >> thank you for having me again. >> i'll put the same question to you. after watching what happened yesterday, which one of these four companies and ceos is in the most pearl is position

>> it depends on the nature of the intervention in my opinion, there may be a broader policy move in washington to revisit some key assumptions. if those change, it might affect the industry as a whole. namely, this concept of a consumer harm standard what you've heard are individual case examples. i've heard cases of how they did surface new information to the public that gives people a window to how these are made part of a broader fabric because the price of a service is fre free on a retail platform that would create problems for tech

as a whole >> amazon or bezos wrapped himself in the idea that consumers love amazon. there have been so many people trapped at home relying on amazon, you are saying that might not be enough. >> true. kind of the fundamental debate is to visit the statute. prices have been the historic point of view. to what degrees do these companies stifle the point and reduce the quality of service we get. we may pay nothing and pay less than ideal service is there a way by which we revisit some of those more core assumptions. there is a bipartisan interest

and bias discussion. you heard members on the right and left say, when you regulate this there is an a potential. secondly, the active investigations at the state attorney general, ftc and attorney justice whether or not they have the authority today to revisit some of these definitions of harm. >> andrew and i were having a conversation earlier i'm not sure if you heard it but just digging into the idea of facebook's acquisition of instagram. questions that have been raised about that and whether they were too big and whether they were pressuring them into agreeing to an acquisition andrew brings up a good point

that, look, just because the ftc doesn't mean they'll approve what they didbefore. how likely do you see that >> i don't see it as considerably likely but that they'll enable conditions that would enable more competition. when you think about the challenges of the internet economy, the pressure to keep in your network if i could take my profile with me across competing platforms, i might more easily be able to shop conditions. increasing the competition just an unbelievable investment company of $17 million people. in hind sight, they are thinking

what a smart move. at the time, it was seeb as what a smart business it was easy to look backwards. some of the e-mails were part of the docket that suggests perhaps the old style rules about how you play fair in the industry do apply even if the service is technically free maybe that is new to the public. for the public, getting some of that in the board room feel did create some public awareness that they'd be digging the areas on a tougher policy. >> i want to ask you, what the government is trying to do is to

engineer an outcome. that is happening here believing that government knows how to engineer an outcome or doesn't. in terms of pricing or apple as a platform if you were to tell amazon you can't make white label batteries or you told apple, you have to have a separate app store or let other apps compete immediately likely, you'll pay more on the batteries. you'll pay more to buy an iphone because it won't be subsidized how much do you think that is thought through in the minds of lawmakers? >> right now, lawmakers are

trying to make sure there are rules on the books to make sure they have the tools they need to answer very specific questions they are asking. i don't believe congress is intended to micromanage outcomes when you say manage, you are inferring tools on the books such that if there was evidence of harm. the price we pay to get cheaper batteries is the squashing of information we should maybe not use in that at the timing. the big debate is the likely

outcome is maybe a revisiting. the privacy policy is a bit of undertoe a bit of favorable ability would be a kr addressed i do believe regulatory action would look like that >> thank you for your time today. >> thanks for having me. went down almost a full percent in the futures market. the german dax down 2.5% eli lily down. the company's cfo will join us

now. stay tuned

coming up when we return, thomas fanning on southern company's progress on cnbc. all of these are face masks. this looks like a bottle of vodka. but when we first got these, we were like whoa!

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welcome back to "squawk box. southern company just out with the results 78 cents per share compared to 67 cents revenue didn't miss. it's impacted by covid-19 and joining us is tom spanek, chairman of southern company

i need to ask you how you're feeling. 20 days ago we made it public that you had contracted could he individual want to make sure you're okay. you look good. >> hey, thanks, andrew it's always great to be with you again. no, i feel great i'm one of those cases, i was completely asymptomatic the entire time. the reason i even went and got tested was my wife started feeling poorly and so i went and did the test sure enough, i was all positive. all good. >> and she's okay? >> oh, yeah, know, look, she's doing great. she's doing fabulous >> so let's talk about these earnings that's good news, but let's talk about these earnings because there's some good news in here and there's a little bit of mixed news in here i want to understand in certain cases you seem to do better than even i think you were expecting. >> oh, yeah. >> a couple of months ago. also, what's that going to look

like for the rest of the year? >> absolutely. andrew, i want to get to a point that's really interesting compared to kind of what chairman powell was saying yesterday, too here it is certainly during the second quarter is our big covid, and we were trying to figure out what the effect would be. well, in fact, we saw like a 10 bee10 reduction m sales at its highest level, which we kind of predicted. but the revenue impacts were not as severe. we immediately, actually early on, went into some pretty strong cost management practices and so the bottom line was really pretty positive compared to our expectation, the street, everybody else i mean, i think it served very well but here'swhat's interesting during the first phase of the covid impact and the shutdown we certainly had a very different response by the public than what

we're seeing right now we think in the southeast we're in a second wave of covid but the customer response is much less dramatic where we had seen reductions nearly 10%. lately we've been seeing reductions in 1 to 2%. in recent weeks almost flat compared to normal so you get this very interesting kind of question, is the public and the consumption in the economy adapting to living with the coronavirus as opposed to shutting down? as chairman powell says with all the uncertainty going forward, what does that mean for the rest of the year? it's a fascinating question. >> well, what do you think the answer is? and also just speak to this, i know at one point with georgia power cutting 2,000 workers, there was an issue of absenteeism. is that an issue -- >> yeah. >> -- that you're seeing right now? >> that was all at our nuclear

plant that we're building, the first nuclear plant, the generation of americans. it was a direct response to covid. we had about 9,000 people on the site and in order to do appropriate social distancing, they wanted to reduce the density of personnel on the site so we reduced down from about, i don't know, 9,000 to about 7,000. also, as the first wave hit we saw a lot of absenteeism now during the second wave we're seeing much less of that kind of behavior people are learning to live with covid. life goes on. >> tom spanning, i hope to have you back it's a much longer conversation. given your role with the fed down there, i'd love to hear more from you. let's do that and we'll do it soon thank you, tom appreciate it.

>> love to thank you, guys. >> becky thanks, tom. when we come back top executives from eli lily,roer pct & gamble, international paper and chubb. stay tuned for "squawk" on cnbc. at leaf blowers. you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated.

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good morning and welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick joe kernen is out today. we are joined by the one and only wilfred frost thanks for joining us this morning. >> pleasure. >> so much going on. a parade of earnings we'll show you u.s. equity futures. we're going to get to some of the numbers impacting u.s. equity futures this morning. down 250 points. nasdaq off 23 points and s&p 500 off 34 points. i want to get over to becky with important numbers. becky? >> andrew, that's right. cnbc parent company comcast just out with its quarterly earnings. it's in at adjusted 69 cents a share and that compares to the street's consensus estimate of 55 cents a share just about every measure was exceeded here. let's pull out a few of the highlights here. cable once again leading the way with no net. wall street has been talking

about that these numbers confirming that. the company saying they had the best second quarter in 13 years. that does not include the 600,000 additional high risk or free internet essentials customers who are receiving the service. they're stepping in and continuing to add for the high speed internet the cable itself, there were 217 net customer relationship ads. they say since second quarter of 2019 they've added nearly 1.3 million customer relationships nbc universal and sky, the comcast says continue to face pressures that are unique to some of those businesses the parks that were shut down for so long, theaters that aren't showing movies, productions that can't get out they do say they have the successful launch of peacock to have tv and flex customers in april and then you had the nationwide launch that took place just recently, just this

month. they say they've already exceeded their high expectations and they have 10 million signups to date for peacock. that tells you a little bit about how they would be doing there. sky successfully retangd 99% of the total customers since the covid-19 began and 19% of their sports customers. there are no sports out there for the issues the company beat expectations and when it came to consolidated ebit ebitda, nbc universal ebi da and cable ebitda hit it when it came to cable, modem losses take a look at the stock, down 1 1/4 percent. they say they are continuing to offer 60-day free internet essentials through covid for the end of this year and keeping 100

xfinity wi-fi hot spots open for free for the remainder of the year a lot more to dig through with the numbers. those are the quick headline. >> the beat as you pointed out, the top impressive 323,000 new added versus 200,000. the other one is broadcast television that was about 400 million ahead of expectation of course, expectation lowered because of lower advertising revenue. it wasn't as bad as possible, 2.4 billion versus 2 billion the sky point, on the surface it sounds extraordinarily impressive that they retained 99% of the sports customers. last quarter they announced they were allowing people to pause what are pretty expensive and key factors for the broad came package in the u.k., sky sport subscriptions. a lot of people took that up they didn't pay at all until

sports came up sports in europe has come back, german soccer, italian soccer, english soccer a lot of people have unpaused that i don't think all of them have unpaused it. the fact that no one has cans trillion dollars is pretty encouraging it it didn't trigger a broader way of cord cutting and just, instead, saw a couple of months where they didn't get the revenues i'm wondering if there was a read and espn and another broad subscription. >> i don't know if you noticed this, whiffle, but the other piece in the united states, it had moved up initially on the news the cable revenue was a miss on the estimate but would have been a beat but for, they're calling it a one-time issue, the rsn, which is these fees that go for local sports in cities that weren't playing sports and they were crediting that money back

in the united states as well to customers. so that's something to look at of course, by the way, the other piece that people are going to focus on, i imagine, for the longer term issue around the tv/cable business, it's very profitable to just have a high speed connection the question is going to be the video subs they lost 477,000 video subs there will be a long-term question about the unbundling question longer term and whether we're at that moment where it's going to start to pick up or not. they've actually held in, i think, a little bit better than people had imagined given what people were expecting happened in the economy looks like good news looks like the market is taking a positive. >> on the share price reaction, up 1.6% yesterday. up a couple percent premarket before the numbers hit >> right. >> kind of one minute, two minutes immediately after their hit. it's definitely a positive

reaction to the tune of 2.8% but having been down a couple of a percent. where the market definitely welcoming these numbers. >> guys, let's also talk about another company that's out, procter & gamble, the dow component. fourth quarter results crossing the wire p&g came in with earnings of $1.60 better than the street was expecting. revenue is higher than expected. john muller is vice chairman, chief operating officer and it's great to have you this morning >> it's great to be here, becky. >> better than expected numbers. what happened? what was the street not anticipating where did you outperform >> really across the board this completes a really strong year with organic sales growth up 6%. up 17% on a currency neutral

basis. we returned $15.2 billion in cash to shareholders and built market share the fourth quarter looked very similar to the balance of the year very strong. progress, very broad based progre progress nine out of ten categories grew share and market share is accelerated past 12, 6, 3 mon s months. >> just looking through. the only place i didn't see where you didn't see organic sales growth would be in grooming segment grooming down 1% because of a year ago is that because nobody's shaving when they are working from home. >> there is a reduction of shaving since people are working from ome we've all seen it on zoom and web ex interactions. grooming, we're building share in grooming. that continues to be a very attractive business on a global

basis. very cash driven business and it's one we're investing behind. >> i mean, some of these numbers are incredible fabric and home care segment organic sales up by 14%. what's happening people are staying home so they're spending more money on, i don't know, stuff around the house? making sure they're doing laundry? why are you seeing growth when so many people are worried about income, lost jobs, been laid off. why do you think you have such incredible staying power at the moment >> well, this really builds -- this is a momentum story if you go back two year stacked sales in fiscal '17 and '18 were 3% and '18-'19 they were 6% and this year they were 11%. that happened. so that fabric and home care segment was growing very nicely

pre-covid. there is some covid impact certainly as people spend more time at home, more time with families, more dishes to clean, more surfaces to clean, washing clothes more frequently typically after one use. there's definitely a benefit there. again, it builds on the strength of our brands and the relevance of our strategy well before covid. >> let me ask you. i think everybody is trying to figure out what comes next we're watching congress kind of debate they're going to be willing to spend in the next package. wondering how long people won't be able to do some of these jobs, how long you'll have service industry really feeling pressure on things like this in a typical recession you'll see people trade down. maybe they don't go for the top of the line pam percent. they trade down. that can happen across the way how when you're issuing this guidance do you take all of that into account it seems like an impossible time to really know what's going to

happen with the economy, consumer, sales, all of these things. >> it's difficult, you're absolutely right but i'll tell you. what we've seen so far, private label shares, which are a proxy for trade down are actually down in the united states over the past three months. they're flad in europe so we haven't seen significant trade down i think part of that is a real reliance and dependence on a product that i know and trust that's going to do the job for me and my family there are also broad areas of consumer's budgets that aren't being spent. what they were spending on travel or a meal at a restaurant, et cetera, is now available for these very important products, again, to protect themselves and their families >> that's an excellent point. >> going forward there's an interesting combination of

opportunities and risks. clearly a society that's more deliberately focused on health, hygiene, and a clean home is not to minimize any degree of human suffering is a good thing for the procter & gamble company i mentioned the migration towards known, trusted brands. there's a shift towards ecommerce which benefits us as well on the other hand, you rightly point to many of the risks in terms of employment, government stimulus, regulation, the obvious health risks and we're just going to have to continue to be resilient and agile in responding to the challenges that will come at us as we've done very effectively for the last four months >> yeah. it has been incredibly impressive john, right now procter & gamble says you all say your current outlook is looking for a 300 million after tax head wind from

foreign exchange we did hear from the foreign reserve. they're going to bekeeping rates low forever basically at this point and that is putting some pressure on the dollar. i assume you took all of that in account in coming one this >> yeah. i mean, that's a variable, as is something like commodities that changes on a daily basis we're all over it. the guidance reflects current spot rates in both of those markets. >> you're talking about what you're doing in terms of paying out dividends and repurchasing shares you expect to pay out $8 billion of dividends and 6 to $8 billion in shares in 2021. that's a big commitment. you feel pretty strongly about how this is going to continue? >> we feel we have a very bright future again, with the noted risks that we've been discussing.

we have a very strongly cash generative business. we have $15.1 billion in free cash we see no reason that shouldn't continue we have a strong belief and have forever that that cash is not ours, it's our share owners and it needs to get back to them, we do that through that combination of dividends and repurchase. we had increased our dividend 6% we've paid a dividend for 130 consecutive years. ever since we were incorporated as a company we've increased dividend for 64 consecutive years. capital allocation spending is a clear priority of ours. >> john, congratulations great to see you the stock is up 2.5% strong results we appreciate your time in coming on with us this morning. >> likewise. thank you, becky >> thank you coming up when we return, a lot more on "squawk. the cfo of eli lilly on the company's quarter and the race

for a vaccine on covid-19. before we head to break, let's get you a check on the markets show you where things stand. dow up 230 points. we'll talk about tt wl haasel when "squawk" returns after this (vo) since our beginning, our business has been people. and their financial well-being. it's evident in good times, with decisions focused on the long-term. and crucial when circumstances become difficult.

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welcome back eli lilly out while raising the four year guidance by 50 cents they are updating us on the covid treatment. they have an antibody program. the stock is down 2.5% josh smiley of eli lilly, thank you for joining us. >> thank you we're pleased with our performance in the second quarter financially. we had earnings per share grow at 24% and sales declined by 2%. that's in line with what we expected we saw reversal of customer buying patterns from the first quarter of $250 million. new prescriptions were impacted in the second quarter as anticipated by another 250 million. i think if we put that together for the first half we saw sales growth of cost and percent which is more representative of what we would see in the second half. we were able to confirm our sales guidance that we had given back in september of last year

and raise eps given the beat we had. >> we'll get to, josh, some of those slight revenue misses on existing drugs and perhaps the reasons behind that, but wanted to start, if we can, on an update on those therapeutics you're working on for covid. just remind us exactly what you're working on there. therapeutics instead of vaccines and what stage are you at? >> three different approaches for covid. most importantly is our antibody approach we have two antibodies in clinical development we're looking at opportunities to help reduce the burden of the disease if you've been hospitalized to try to prevent the disease from having a significant effect if you have been newly diagnosed and then temporarily act as a prophylactic agent so patients in nursing homes, front line workers we're pursuing clinical development around all three of those and look to start registrational studies in the

next few weeks around those areas. >> am i right in saying you're partnered with quite a few rival companies in this regard is that something you expect one off or is there a changing sentiment that could apply to all other areas and drugs to the long term? >> i think you see the industry is focused intensely on bringing therapies that can help for covid. in this case one of the constraints is on the manufacturing side we are working to provide as much capacity as possible. certainly from the lilly perspective, we are reconfiguring our plans around the world in the hope that we'll have positive data on the antibodies and our goal is to be able to bring somewhere in the range of 100,000 doses to patients even this year if we have positive data we're investing all on our own to try to make this happen i think a collaboration from a capacity perspective will be in

the works. >> it didn't look like it was any one drug in particular it looked like it was spread across most of the individual lines. is there a slight risk that people are taking their focus off the typical drugs and diseases they focus on normally because of this pressure on covid? >> we did see around the world, certainly in the u.s. patients weren't going to the doctor. as a function of not going to the doctor, for us anywhere between 5 and 10% on a monthly basis, new prescriptions if patients aren't going to doctors they're not getting diagnosed or new treatments. what we're encouraged about, that happened in the second quarter. the pronounced effect was in april and may. starting to see patients go back to the doctor in june and july it's different across different specialties. we're back to somewhere between

80 anded -- and 90% covid patients are there and they're prioritizing getting to the doctors for the diseases we treat, diabetes, oncology, immunology, patients need to be treated. people are actually i think even more focused on ensuring that they're staying healthy and adhering to their treatment regimen. we're not that concerned for the second half and you made an announcement you're investigating humans growing resistance to antibiotics and that's the next big test in terms of health scares around the world. >> the industry announced a billion dollar fund to invest around antibiotic initiative.

the incentives are difficult a good approach is to bring together venture capital from pharmaceutical companies, invest in promising companies and look to make sure that in the future we've got good therapies for infectious disease. >> josh, thanks so much for joining us >> thank you i appreciate it. when we return, congress grilling tech ceos on a wide range of issues yesterday. we will talk about that hearing and the future of social media with the ceo of parlor in the meantime, the futures continue to be under pressure. the dow down by 221 points that's in spite of the fact that you saw dow component procter & gamble reporting better than expected earnings and helping out. that's incredible. we will continue to watch all of this after "squawk box" has a quick break.

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welcome back to "squawk box" this morning during the house antitrust committee hearing, a number of republican lawmakers accused google and facebook's ceo mark zuckerberg of anticonservative bias listen to what happened. >> big tech's out to get conservatives. >> is there an ideological diversity amongst the content moderators >> congressmen, i don't think we choose to hire them on the basis of ideology. there's diversity where we hire them certainly we don't want to have any bias in what we do and we

wouldn't tolerate it if we discovered that. >> can you give us two assurances, one, you're not going to try to tailor your features, configure your platform in a way to help joe biden and second that you're not going to use your search engine to silence consumers. >> they have more access than others. >> conservatives are consumers too and they need the protection of the antitrust laws. >> joining us right now is parlor founder and ceo john mace parlor is described as a nonbiased free speech platform since we last spoke, almost a month ago now, the platform has increased its user base by 1 million. predominantly we should say conservative users good morning, john appreciate you joining us. you watched the hearing yesterday. i'm curious before we get into it, do you think that facebook given its size and scale and given you're a competitor to it

is stifling competition just on the antitrust question >> good morning. thank you for having me. i think -- well, i don't think we're actually a competitor of facebook more a competitor of twitter in terms of feature set i don't know i mean, really facebook is in an awkward position i parlayed about this last nice. twitter's being asked to sen sentencsens sentences censor more and they're trying to make both sides happy. they're really making everybody angry. they're taking it out on them in these hearings you could see that yesterday when both -- it was pretty bipartisan, actually, going after them >> the reason i asked about the size antitrust question beyond an antitrust hearing is even when you get into the issues of free speech, censorship and whatnot, the real issue is if

facebook is such a juggernaut and it's effectively a monopoly, therefore, then you don't get lots of different voices but if you decide it's not a monopoly and there are lots of different platforms and ways to get access to information, then it becomes a different conversation. >> well, facebook is in a difficult position they have to get all of their new mergers and acquisitions approved by the government at this point to facebook's defense, everything they've done up to this point has been approved since acquiring instagram, whatsapp, acquiring these companies. however, it is kind of an insurmountable task competing with facebook. with the amount of billions of users they have and the amount of market share they hold, the ability to acquire any competitor they'd like or just rebuild their features and scale up faster. those are all points made at the hearing yesterday. so those were valid points

>> john, one of the more contentious moments that took place during the hearing yesterday with mark zuckerberg was over the issue of taking down, and it was true also of twitter, comments made by people when they say that there was a proven case about a specific drug, in this case high droe chloroquine. if i were to make a video and say hydro clear quinn is a proven way to get covid or to, you know -- that's a proven drug that works, facebook and twitter and others might take it down. would you? >> no. in this case we believe in the people's ability to have a conversation, debate about this in a fashion that we don't think we should weigh in on, especially if medical professionals are the ones giving the advice. they are liable for the action and advice there's such a thing as

malpractice in their field of work we don't think it's our job. we provide the forum for people to have that debate. i think you'll find that when you allow people to have those discussions, they take it a little bit more seriously because they want to come to a resolution because they want genuinely to find out what's best for them. right now you see a lot of people who are angry being told what they have to think. >> so, john, let's just use the hydro chloroquine as our example for a moment because it might be a microcosm of all of these issues my understanding is facebook or twitter allows this debate to hatch. if they think that's okay. that speech is fine but if you were to say not just emphatically to say you think it, but to say it is it, that it absolutely works there's still a potential for

harm insofar as people might read that, adopting a study that's proving this works. go take it, have an adverse event and therefore not just that the doctor is going to be held liable, this is the other large question, whether the social media platform should be held liable. >> well, a few points. this is, like you said, a minutia microcosm topic. there are probably millions of topics like this out in the world that people could be debating i think it's a bit ambitious to ask the social media to completely regulate all of this kind of speech level and to my point that we like to do, we like to give it to people to decide they can have the conversation i don't want to have to differentiate between somebody potentially giving advice or potentially saying there's a solution it's really a finite argument.

that was brought up at the hearing yesterday as well, different congressmen and congress women were asking mark zuckerberg about this. and it's just a little too precise. i think that people have the ability to solve this on their own without our oversight, and that's generally our philosophy. >> john, that said, clearly there's a big gray area on thi at the moment and facebook's example, as you mentioned at the top of the interview, highlights that do you think section 230 of the communications decency act needs to be changed and reformed do you think that is likely or do you think that's pretty low on the list of likely outcomes from lawmakers >> section 230 is sticky, right? i mean, in one hand it's very good for people like us. we're small. we're entering the field we like section 230 because without it we could not compete against facebook we couldn't compete against twitter. we couldn't do that without

section 230. at the same time it provides them an over reach like they can behave like a publication, tell people what's right and wrong and fact check people which is pretty politically motivating. facebook said they have two firms that rubber stamp all of the 70 companies that work with them for fact checking these two firms will help different factions section 230 gives them an awkward amount of power to be a publisher and platform and i don't think that's right is it possible to come to a resolution possibly but i think it would be very difficult to do it in a way that doesn't hurt competition >> tom, let me ask you finally a question if somebody were to say take a

drug or insight violence, let's meet at this corner and do x and let's say x is a very, very, very bad thing -- >> it's like violence is strictly -- oh, sorry. you said held liable no on one hand there are a -- we wouldn't allow any incitement of violence, we don't the antidefamation league came out with a report and said twitter and facebook are the most hateful places to be on the internet parlor didn't make the list. so really we believe people should be having discussion and conversation they shouldn't describe fisticuffs and we shouldn't encourage it either. obviously there's something going on in the social media space that's leading to a lot of

hate and violence. our solution and our solution to the problem is just to give more power to the people but also limit people's accounts so this person's account isn't there >> we appreciate thank you very much. >> futures are down sharply for the dow largely because europe's markets are so soft this morning. german dax are down 2.7% german gdp and down 9% from soft earnings volkswagen on the market the euro stocks 50 down over 2%. coming up with cities facing budget cree strants, muni bonds are an increasingly worrying trend. and mark sutton joining us to

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welcome back to "squawk box. futures have been under pressure we have headlines from earnings that have not really affected where we've been nasdaq off by 85 some other headlines steve cohen's point72 is closing to new money it has raised $72 billion.

andrew >> thanks. other big issue with city budge gets being crunched and crushed, municipal bond defaults are rising that's putting pressure on washington to act. seema mody is joining us. >> reporter: andrew, defaults could be a wake-up call for investors who have allocated $20 billion in municipal debt since march. a low risk way to generate tax free income. in the past two months there's a concerning trend that has emerged. two retirement centers in florida. cancer therapy clinic in tennessee and the whole city of bearfield, alabama, has defaulted on the municipal bonds. bringing the total number of delinquencies at 50. that's the highest since 2011. up 40% for the same period from a year ago as cities and states across the nation face a massive budget short fall. so far this year florida is where the most defaults have occurred as tourism revenue has

dried up it's the same challenge that face economies that rely on travel and hospitality market analytics sees another growing risk education. students housing, smaller colleges could get hit hard. that's why pressure is really building on washington to provide that additional funding for local municipalities andrew >> what's your handicap right now of whether there's going to be stimulus, if you will, that's going to help some of these municipalities we talked to senator rick scott of florida where a lot of these defaults are happening he's concerned about effectively helping frankly blue states that have -- that were in the hole before this began and so how do you see that playing itself out? >> reporter: well, the municipal debt market, andrew, has been an

important part of the destination to find big infrastructure projects for the san francisco b.a.r.t. or new york port authority but with the center of gravity shifting from cities to suburbs, the states are collecting less tax revenue. that raises the risk of municipalities unable to have their debt payment i think as the risk rises that puts more pressure on the lawmakers in washington to provide that fund. so that's what will be a key question in a couple of days >> okay. seema, thank you appreciate it. still to come this morning, the cardboard economic indicator. international paper ceo will join us to talk about quarterly results and what he's hearing from customers about the economy. they make something like one out of every three boxes in a lot of arenas they can tell us what they're seeing in terms of demand, too also, check out some early movers this morning. comcast reporting an adjusted 69

cents a share. procter & gamble an adjusted $1.16 a share. ups reporting an adjusted profit of $2.13 a share all three are higher comcast up by 2.5% procter & gamble up by 1.9% and ups up more than 10% dunkin' brands a penny above adjusted earnings of 49 cents a e.ar that stock is down by about 1% we'll be right back. save hundreds on your wireless bill

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welcome back, everybody. international paper expecting better than expected earnings. shares are up 2.6% that's a gain of 95 cents to $37.70 joining us on the phone is mark sutton he is it the chairman and ceo of international paper. these numbers are better than the street was expecting obviously you all have been dealt with a lot as we've gone through coronavirus. you are a very good indicator of what's happening in the global economy. thungs don't move without using some of your products.

>> our results were better than expected >> you mentioned our box business that's about 70% of our company and most segments remain strong. we ran well as a company we've got a great customer list. in the u.s. market the processed food is stable prote protein. some meat actually recovering from the early issues they had in the factory doing very well. ecommerce. multiples of normal growth orders of magnitude, double digit growth that's not a new story through the pandemic we're seeing some improvement in durable goods. slow, steady improvement

a lot of resiliency so far in the corrugated box business. >> i think you had pointed out truck transit times. what you watched for with the rail transit times, truck transit times. what are you seeing and what does that tell you about what's happening in the broader economy? >> that is a great question. that is an indicator that we move so much material in our plants and factories our products out to customers. and as it was very loose in the beginning of the shutdowns and just a few months ago as we ended the second quarter, things have tightened up. we've seen trucking times and rail times return to a little bit -- not normal, little bit tighter and little bit normal dwell time the rail lines are bringing back crude which is an indicator of business all that have is a good thing.

we're cisit set up to operate t supply chain again, lots of uncertainty a number of indicators downstream indicators and things like you asked about supply chain appear to be moving in a positive direction >> mark, when you look at demand for container board, how does that match up with the united states versus what you're seeing maybe globally in asia, europe and other places >> is this kind of a rolling recovery that's taking place or are there areas that are recovering much better than others >> well, i think it's rolling. asia started to open up here we're shut down or restricted sooner we did see some demand for container board. that's what we sell in asia, container board. we don't make the boxes anymore in the asian countries but we make materials that go into those. europe, i would say they're

behind the u.s. but some of the markets tended to be in the south of europe where they were hard hit they're managing setbacks and all of that. it is a phased opening you mentioned our results were slightly lower than this time last year so that's -- when you put it all together, there are some great segments, some really great geographies. they have not recovered yet. it flattens out into a year over year just about the same or slightly down. >> industrial packaging is your biggest segment. you have two other businesses, too. one is printing papers and the other is global cellulose fibers we talk a little bit about those. printing papers i'm assuming is the printed paper you put in the copying machine or that you use

in a printer am i correct in thinking that? is it down because we don't have people working in the office as much that's exactly right that's what it is. primarily papers used in offices. it includes things like labels, medical directions, lots of specialty types, regulatory uses we've seen a pretty big hit globally, upwards of 30% demand decline pre-covid. it's strictly because people aren't in offices and they don't assume as much and schools are also out we're watching that closely. every time we have a major disruption, a big recession or some other major event, there seems to be a little bit of demand destruction that occurs so we're watching that this is a declining segment by and large anyway 2 or 3% per year globally. so this just puts an extra hit

on it. our employees have done a really great job taking care of the demand we do have and adjusted it with our factories. that's the one area where revenue's actually been hit for us in addition to unit buy in. >> so thinking through, this is a declining area because people are using less and less paper? we're a certain amount of paperless society. every year you see a decline because we print out less things >> it's been a steady secular decline, we call it since around the year 2000. it's not anything new. it's the number of causes. the automation in manufacturing industries and the way we conserve it, we did more electronic

communication than before. it's a number of causes but very manageable decline the u.s. has a few segments that the rest of the world isn't very big on, like direct mail solicitations. for us, for the benchmark, it's always been a really, really large part of our economy. other parts of the world don't have some uses that we have here we're seeing that come down slowly over time for i.t. it's less than 20% of our company now. packaging is 17% paper and balance. >> mark, thanks for your time today. always appreciate talking to you. >> thank you, becky. have a great day >> you too still to come, over 200 points down by 0.8%. senator mark warner joins us to talk about yesterday's big tech hearing and later, we'll get the latest read on jobless claims,

economic growth. as i mentioned, futures pointing down the german dax still down over 2% the lows of the session down 2.3% we'll be down in a couple of minutes.

good morning futures at a drop on the busiest day of earnings season america's tech giants. speaking of tech, could new industry regulations be in the cards after yesterday's antitrust hearing in congress? we'll bring you up to speed on the fireworks. we'll speak with virginia senator mark warner who's been a vocal participant in the tech

regulation debate. our first look at second quarter gdp due in 30 minutes in time. it's expected to be off. the final hour of "squawk box" starts right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick with andrew ross sorkin and wilfred frost who's in for joe who's out today u.s. equities are down not at the worst levels of the day. down go 192 points actually seeing things down less that's happened in the last three or four hours. s&p futures down by 22 the nasdaq indicated down by 67.

the treasury market is continuing to show pressure on yields the 10-year was 0.561% wilf, the day before it was hong kong down 9% the estimates for here are down 34.7%. that's right, never in my life have i seen a double digit decrease in gdp numbers, but this time around we're looking for a decrease of 34.7%. >> that's obviously seasonally adjusted for an annual number. >> right. >> as it were. it's not comparable to those german and hong kong numbers in fact, adjusted for one quarter on quarter number, it's down 7% which i think is interesting anyway given the fact that germany is a country where developed nations handled

the virus best of all. it was expected to be down 9, it came down 10.1 in that sense, u.s. if it does come in based on expectations down 7%. kind of not too bad though in absolute terms clearly still shockingly bad >> meantime, we're going to switch gears we should talk about it a little bit first, if there ever was a big week for america's tech industry, this is it tonight we'll get quarterly results. we'll hear from apple, amazon, facebook and amazon. this is a day after the four companies got grilled at the hearing in washington, d.c., just yesterday, guys one of the things we'll get to talk to senator warren in all of this in a minute, but one of the things i'm not sure has come out, maybe it's overnight that more people are starting to see some of t a lot of the document production it's one thing to watch the

hearing yesterday. there's another thing to really read through so many of the emails and really try to understand the power dynamic we talked about the facebook/instagram situation, but i think one of the more interesting back and forths was actually between jeff bezos and apple. eddie cue and whether the prime service could appear on the apple tv and historically, as you know, apple takes 30% of any subscription digitally, that's why if you ever try to use your kindle device and try to buy a book on kindle or the amazon app, you can amazon doesn't want to pay the 30% to apple that's to everybody. if you read the emails you'll see what really happened was because amazon also had some leverage over them, amazon wasn't selling apple tvs and other things on amazon as a way

to get leverage on them. apple ultimately capitulated and said we'll do a special deal for you at 15% so it shows sort of the pressures. that's when you have big companies involved so i think the larger point is if it's a big company, it's one thing. the smaller companies really don't have that leverage at all and this raises the larger power dynamic antitrust issues that we've all been talking about these past couple of days. >> we certainly didn't see anything definitive, an acknowledgment of that from tim cook he did try and make the point that they've never increased the fee from 30%. >> right. >> repeatedly stops you from increasing the fee from where it is to which he just kept saying, we've never done that once as a way to say it was already so high the other one that really stood

out. why the questions on whether or not amazon misuses its position because it has smaller third party sellers on its platform? there was absolutely no admission or acknowledgment from jeff bezos there was any wrongdoing but he wasn't as resounding and confident that it had ever happened i felt on some of those questions as he could have been. quite a few of those occasions are saying, yes, we'll get back to you on that i'm certainly not aware of it. it wasn't an unequivocal response i do think, andrew, perhaps this is what you were eluding to. the scope for investigation and followup, whether that's from the comments we heard yesterday or the documents that was fascinating >> it's fascinating. we're going to dig into it, i know. >> there we go we are going to dig in with

senator mark warner shortly though not imminently. as you can see, the stocks are trading lower. they rallied perhaps because of what we were hearing from jay powell he remains dovish and they have a big test tonight on "squawk box" we'll be right back and we'll dig into one of the most contentious issues for business arising out of the coronavirus crisis, insurance. the ceo of industry giant chubb will join us procter & gamble, the dow beating up 2.25% ever since we've gone mobile on the now platform,

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welcome back to "squawk box. futures trading low but off the lows we're still down 200 points. 0.8 to 0.9 strong day yesterday, the s&p up over 1%. 1.2% or so another thing to point out this morning, other than the big declines across europe german dax down 2.5% gold is soft this morning, as is silver first time we've seen that gold down 4% both still higher for the weekend and much higher for the month. >> okay. meantime, we just talked a little bit about it but now we're going to talk about it with a senator tonight we'll be getting quarterly results from apple,

amazon, fall bet and facebook. lawmakers accused the executives of being so powerful that they've squashed the competition. the ceos fired back saying that is not the case. >> competition leads to better products lower choices and more choices for everyone. >> customers have a lot of choices. companies like samsung, lg, huawei, google have built successful businesses with different approaches we're okay with that. >> i recognize there are concerns about the size and power of tech companies. our services are about connection and our business model is advertising we face an intense competition in both. >> for more on what we heard from the big tech ceos, new challenges to the industry, what they could be facing, bring in our guest, virginia senator mark warner he's spearheading, of course, a

number of efforts to regulate big tech senator, you watched the hearings yesterday was there a big take away for you in terms of what you think may change as a result of those hearings >> well, first of all, we're doing a tech segment, the fact that i couldn't get my computer fully this morning and doing it by the phone. >> just happy to have you. >> little bit of an invitation these four companies have enormous power i could argue that these four companies rival standard oil and some of the trusts that took place at the beginning of the country. some of our viewers might call if we looked at just the fact that 50% of the new jobs created in the last 30 years have come from startups in our country yet

venture fields are down about 40% since 2015, i know many of my friends in the venture business say there's no way to go to scale anymore. your only exit is not going public, your exit is selling to one of these big platforms and i think they're finding a bit of complication it's a complicated world in a world where data is king and oil is king. if you don't aggregate enough, it's tough to get to scale some of the testimony was a little bit self-serving. >> senator, my question is to the degree it sounds like you're in the camp of breaking them up. the question is, how would you do it? if you were to do it, what do you think the result would be? if i were to say that, the reason is if you were to break up amazon, ostensibly one of the things we talked about is consumer prices would come down.

all of the products that these types of companies offer how much more do you think the price is going to -- it's not about whether the price goes up, it's how much the price goes down do you think that would actually happen >> i think, first of all, american antitrust has been about price to consumer only i'm not sure whether that is the only gauge which we judge anything on. there are concepts like monoscopy, overall control of the markets that europeans have. i'm not in a break 'em up category yet because these are all global companies and, frankly, to have them replaced by alibaba, tencent, chinese companies may not be the better alternative. what i would rather start with, using breakup as a reserve option, what can we do to add more competition i was a telecom guy.

there used to be a great deal of concentration in telecom until, one, the government action in terms of breaking up at&t. two, the whole idea of number portability. in fact, in the '90s it used to be hard to move from one telco or another, you should easily move your data from another platform and still have it interoperable and have it used with your friends who remain on facebook i think there ought to be more transparency you ought to know what it's worth on a monthly or quarterly basis so we get rid of this mishome in mmi misnomer that these are free they take your data and monetize it and we ought to know as consumers how much that data is worth. i think we ought to recognize that there are a series of practices, deceptive practices,

frankly, using dark patterns and other technology tools, that these companies use to get our data, oftentimes unknowingly, there ought to be more transparency i think there are a series of pro competition rules of the road that i would much rather use first before idea fault to the breakup cam. >> where do you stand on the amazon and apple issue as a platform for third party sellers insofar as the idea amazon can say what's selling well, we see batteries are selling well, we'll do white label batteries if apple sees this app is doing well, we should built an app like this into our service it's not that different than when walmart or any other store sees a product is workingor not

and decides top manufacture it ourselves. >> it's like the old vertical integration. if you can produce products, take them to the marketplace and you can throw a vast number of eye balls, you really want to have that level of control within one company so where i would start, you know, some of my colleagues, obviously a lot of competitive ventures, portability, inoperability, banning, prohibiting some of the deceptive practices like dark patterns that companies use to unknowingly solicit data i think we need privacy legislation. if there was an idea, no matter how many times a company sends

you a legalese document where your immediate default is clicking, i agree, we all the to introduce the concept of bringing in a third party that i would grant them the ability to kind of monitor my data or at least help guide me with these extraordinarily large platforms who have way too much disproportionate power. >> senator, we always appreciate your time. next time we'll get to you by video. >> next time we'll try to get our technology to work so that i can -- >> it is a larger conversation to be had. >> the last point though is the other thing we didn't do with yesterday, which is we still need to grapple with the issue of outside interference in ee

lick lekion. >> another part of the conversation appreciate it, senator appreciate it. thanks, andrew all of wall street is going to be watching. we get the second quarter read on gdp stay tuned "squawk box" will be right back. how we come up with new ways to serve our customers... and deliver our products. but no matter how things change, one thing never will... you can rely on the people and the network of at&t... to help keep your business connected.

welcome back we hear a lot about the vaccines in the lead from covid-19 from companies like moderna, pfizer and astrazeneca. there are more than 100 others in development behind them meg tirrell has a look at what could come next. >> reporter: when you think about how vaccines are made, the army may not be the first thing that comes to mind, but its scientists at the walter reed army institute have played a major role in their development. >> our institution has been at

the forefront of addressing emerging outbreaks for over 100 years. >> reporter: it's contributed to about half of the vaccines approved today in the u.s. for viruses like rubella and flu. >> the idea is that the work that we do to protect our military, especially in the space of infectious diseases and emerging infectious diseases is applicable to protecting our civilians and the global population as well >> reporter: now it's hard at work on sars cov2. the approach is different than others it uses a protein called pheratin it disposes the immune system to the coronavirus spike. >> by taking this protein away from the virus and putting it on to a stable protein, we can actually generate an immune response without any of the illness associated and so it has a very safe molecule.

>> the team aims to boost the immune response with what's known as an adjuvant their goal is to start trials by the end of summer or early fall. >> our vaccine is part of operation warp speed and our institution is part of operation warp speed we're not in the group of the first prioritized vaccines which can manufacture hundreds of millions of doses on a very short time line. our vaccine is in that second tier that is looking towards the long term approach. >> it hasn't even brought her potential. >> long term after we get this into humans and make sure that it's safe and looks to be effective just for sars cov2, we can then pivot this platform to become a universal vaccine. >> reporter: you guys, what a pan coronavirus vaccine migh

mean is it could protect against sars, mers, covid-19 and even other corona viruses we haven't detected but potentially some of the common colds. >> that's fantastic. it's a huge reason for hope on this front and, meg, thank you we really appreciate it. great to see you all right, folks, whether and to what degree insurance companies cover business losses from the coronavirus crisis has emerged as a flash point in the recovery now industry insurance giant chubb has a plan evan greenberg is joining us, chairman and ceo of chubb. this is an incredibly difficult topic. let's just set the stage first so people who haven't been following closely understand insurance companies for the most

part do not cover pan dem mix. lawmakers both at the state and local level have threatened to take that clause out and make insurers pay anyway. that would be devastating in terms of the losses that insurers would be required to pay. it would invalidate all of the claims out there but that leaves us in a pretty difficult position of trying to figure out what to do in the future, correct? >> it does, becky. good morning nice to hear you and thank you for having me on >> thanks. >> pan dem mix, just to get back to the basic principle, is unlike any other catastrophe it has no time limit and it has no geographic bound just for

business law, the loss is in infinite terms limited. unless we have a public/private partnership of some kind in the future where the government takes the -- what we would call tail risk and limits the amount of liability that the insurance industry would take. and in that case insurers could play a broader role in assuming coverage in the future should we have future pan dem mix. >> that makes perfect sense to me, however, the proposal that you've laid out, i think some people might look at it and say, okay, this is a very limited amount of risk that insurers would be taking on if i understand this correctly, i know there are three different baskets, for small businesses,

mid and large-sized businesses it sounds to me that you're suggesting that insurers would go in and say that they would provide maybe the first 6% of the claims that come in on the first dollars for those. 6% of what you get in the initial claims but they would be limited to $15 billion i look at what businesses are taking right now and that $15 billion would disappear pretty quickly. you would take a charge of $1.2 billion of what you're anticipating your covid risk is without offering business interruption insurance for that. >> you know, becky, fundamentally to manage the health care crisis we've shut down the economy in a future pandemic we're going to have to have a better health care response than the notion of shutting down an economy to mapping a pandemic the private sector is incapable

of assuming a broad economic shutdown if you assume we would have a better health care response and would be more limited, then the kind of percentage you're talking about would go up significantly, number one. number two, across the program we start with 30 billion that the insurance industry would assume 15 billion for small businesses, another 15 billion for mid-sized and large. and then that number grows from 30 billion to 60 billion over time fundamentally -- >> over 20 years. >> interruption to a loss that's very close to hurricane katrina from what the insurance industry paid out in total. this is through the business interruption we still have workers' compensation, all kinds of liability protections and all kinds of other insurance exposures that will be incurred.

putting business interruption aside, the industry is likely to pay out in pandemic so we keep it in perspective somewhere in the range of $100 billion globally >> wow wow. you pointed out yourself in your earnings this week that that charge that you're taking after taxes is 1/4 of your annual profits that you're paying out for this even without business interruption insurance being paid out where do buy stand with lawmakers, states, the plan that you've put together will that be palatable from all sides what have you heard from state and federal regulators >> well, it's very early days. right now, rightfully so, regulators and the political establishment is more focused on

managing the current pandemic than what is the solution to the future but so far we're getting a pretty good reception inside congress and that's where the dialogue has been taking place and with those inside the administration that we've had -- that we've had dialogue with but, again, it's very early days this will be many months unfolding and we have an election season in front of us i don't expect this is something that's going to ripen -- what we're doing is simply help the debate >> right. >> and -- >> -- help spark ideas i'm sure what will come out in the end will look different. >> evan, thank you very much for starting this conversation we'd love to have you back as

the debate continues we have big numbers due right now. it's great talking to you and we appreciate your time. >> nice talking to you, becky. keep safe. >> thanks, evan. you, too. as becky just mentioned just seconds away now from the first look at second quarter gdp and initial jobless claims the all important number want to get over to rick santelli standing by at the cme in chicago rick, the numbers. >> yes this is definitely one of th most awaited numbers now let's start out with what's coming out first on my service initial jobless claims is 1.434 million. 1.43 million this is higher than our last look last look was 1.416. continuing claims, 17,018,000. that is definitely, definitely breaking the streak.

we broke the streak last week with initial claims unless you looked at nonseasonally adju adjustment because they follow 16.151 million now if we look at big e, minus 32.9 that is quarter over quarter annualized it is not as bad as the minus 34 1/2ish to the minus 35% we were looking for if we look at consumption, wow, the consumption was routed that's minus 34.6. we look at the price index whiff of deflation minus 1.8. personal expenditure quarter over quarter, minus .1 just to put a face on this, the first quarter of 1958 was our

record and the first year was 1958, the year chevy introduced the impala the only double digit drop today. this is a factor of 3 plus what's interesting, we looked at germany today. germany was down 10.1% their previous record was down 4.7 which was in 2009 and that particular quarter the u.s. was only down 4.4. so we see that it seems as though at least for the moment that parts of europe, particularly germany and their manufacturing juggernaut, might be weathering some of the coronavirus's effect better than the u.s. and that is a big deal. all maturities treasuries outside of 30 year bonds could be challenging their all-time ever low yield closes we've seen 3s, 5s, 7s yesterday fs.

.54, a little bit more than half a percent which was the all time low yield close of this year andrew, back to you. >> wow wow, wow, wow, rick. stay exactly where you are because we want to have you be part of this all over again. want to bring in cnbc senior market commentator mike santoli and steve liesman. we're going to you first, steve, for your reaction. >> so the big decline was in consumption, 34.6 and that translated into a real sort of tale of two worlds down 11 on the goods purchases but down 43% on services investment declining by 49%. that number jumps off of the page

interesting question, make mike santoli takes it, maybe you have a great big pent-up demand in business investment. declining by 49% bigger concern are the jobless rates. the de-openings or re-closings are having an impact i didn't get to look at the total number what people need to know is there are two different programs out there. one is for contractors, freelancers and at least 30 million people are receiving some form of jobless benefit out there. the result of all of this is the crazy idea that personal income actually rose and that's largely i have to think in part because of the massive government transfers. personal income up 1.4 trillion on the quarter from the bea number and that's because so many folks have been receiving some form of government aid.

i will get you that total number of claims that's out there, which is the two different programs together, andrew. >> steve, thank you. want to get over to mike santoli. futures haven't moved too much. >> no. the gdp number was roughly in the zone that we were looking for. the real low point in activity was probably mid april, late april. it's definitely the market has kind of known this was going to be a brutal number the claims does show something more about the more recent trend. that shows more softening at least in initial claims, the market in a general sense has been positioned for this type of environment. rick mentioned treasury yields have been very close to their lows. the dollar is weakening. it's not as if the market has necessarily been pricing in a rapid acceleration what it's meant for the stock market is not so much whether it goes up and down

people are saying it's low and stock prices are off it tells you which type of stocks have been off the market. when yields have been low and sticky, there's growth stocks like tech that have been the best definitely raises the stakes we're seeing for the debate over the fiscal support package washington is going to hone the focus on that. >> let me ask you that how do you think it changes the debate >> i don't know that it changes it. >> not directionally -- >> it just seems to point up the fact that the market craves something that feels like a decent, sufficient, further support for consumers and businesses i don't think it's necessarily changing investor stance, just more underscores that there's a sense out there that we need, you know, a few more lengths on this bridge to the point where the economy is going to be, you

know, kind of accelerating in a much more steady way. >> rick, i was going to mention in terms of the bond market move, the futures haven't moved too much off of the data the bond market hasn't moved too much it has moved in the last two or three hours with the german gdp data back in the middle of the .five ha the .five .5 handle. >> yes as a matter of fact, wilf, we briefly were down on the 10-year yields .5 it's hovering right below .55. sitting on the all time yield close. interday lows were much lower. we were down 31 basis points interday on a 10 the 30 is at 120

it's .995 rounded out to basically 1% the issue here really is that much of the buying that's coming into treasuries and much of the better than expected performance of the equity markets all lead to jay powell and company, whether it's the quantitative easing, lower for longer all of the programs they've implemented. the fact that between the c.a.r.e.s., federal reserve, we have a good chunk of our 20, $21 trillion gdp underpinned by the agencies and government. this goes a long way ultimately it's a game of chicken with how much comfort the underpinning of the money in the fed gives us while the coronavirus uncertainty and the spikes, of course, takes some of that confidence away. >> mike santoli, i'm interested to see today we are seeing gold and silver pause from their recent rally, significantly higher on the week

and the month. given this is such a risk off, quite interesting to see that the dollar hasn't rallied. we've been debating this for a while. the dollar has been sliding of late the question is if we see a big pull back, will we see that reversed the dollar standing firm to the down side. >> yeah. as much as people are observing that the dollar index looks like it's pretty stretched, trader positioning seems very aggressive and bearish towards the dollar it seems like it might be ready to firm up it did at times briefly during jay powell's testimony during the press conference, i don't think we would have anything like you would characterize from an overall risk off environment. stocks are down about up what they were yesterday. it's not showing you that across all markets we're re-evaluating the outlook here

stocks remain more or less at the high end that might be to come and it might be that gold and silver, also sort of stretched the outburst of what's going on with the dollar you're not seeing those trends reverse in any dramatic way just yet. >> rick, add some comments on that >> yes you know, we're very dollar centered, of course. we're in the us of a a lot of story of the dollar weakening is the euro contract they have now agreed on shared debt even though they haven't necessarily agreed how they want to split all of the monies up for next year. that is a huge issue that i don't think many have completely let sink in and the fact that they've ramped things up and christine lagarde seemed to have corralled some of the cats

don't under estimate the power of the euro on the negative impact of the dollar. >> there was a lot of political risk priced in to the euro as it continues to be for the british pound. steve, definitely come to you. the other thing i would point out, on the euro, the german data was bad this morning, worse than expected which wasn't analyzed which is why the u.s. looks worse. more of the euro numbers to come in the next couple of days judging by the german data, that could follow suit and be worse than expected. the euro is worse for once sorry, steve. >> i was just going to say, i would add to that performance relative to the virus. i mean, right here in the united states we're having a major resurgence i know some of the numbers are up perhaps in western europe but not as bad as the united states. those outcomes might lead to

different expectations of growth while the second quarter is going to end up being awash for all of the developed can you be tris and non-developed countries. it's a question of the third quarter rebound and strength a quarter million new claims in california we are still at a very elevated level. i think the market has to start thinking about, i guess it's next week, july jobs number not showing the kind of strength that we had in may and june and i really have been interested. i think the market had an expectation that we were going to come back and come back strongly that's not been the case i guess what's happened is rather than selling off the market simply said, you know what, i'm just taking my expectations for this rebound and i'm going to put it a few more months down the road.

>> let's keep the conversation going and bring in -- >> actually, thank you i thought andrew was going to wrap everybody up. guys, thank you very much for this conversation for running through all of these things. we appreciate your panel's time. joining us to talk about all of this data is charmine romani. she is at gold man sax she's goldman's chief investment officer for wealth management. thanks for being here today. we're looking at the market's reaction to these numbers. not a huge reaction, first of all because the numbers were in line with what was anticipated second of all, they were backward looking numbers you point out we need to see what's coming next that's a tall order. what is it >> the gdp number comes out

32.9% is not that relevant this happens to be the second quarter. we're already entering august. as you say, we have to be looking at forward earnings, forward interest rates, forward policy and when we look at now and our colleagues look at and emphasize, one needs to look at higher frequency data. if you are looking at mobility trackers, open table restaurant reservations, the fact that claims deteriorated somewhat is in line with the fact that all of that data has stalled we saw a very nice recovery bottoming in april but now when you look at the high frequency practically daily data, you can see that has stalled that's in line with what we have seen with the surges in places like california, texas, florida, arizona, et cetera the question becomes looking forward what is the right horizon for investors and what should they be looking at?

earnings have surprised to the up side. they're surprising when we look at what the s&p has done, we have over 40% of the companies reporting with basically average surprises, let's say 70% plus have surprised with over 30 percent, 50% consensus. that's a good backdrop generally the market's expecting that we're going to come out with a number around 1.5 trillion as a base case that's what our colleagues in washington, d.c., is expecting i think the market's looking through all of this and looking beyond to 2021 and 2022 at this point. >> i think probably the biggest question is what's going to happen this week and next with congress at this point the unemployment benefits have run out. if there's not a deal reached in congress by tomorrow, then you're going to have your first

week where people who are unemployed, in the millions, are not going to be getting an extra $600 a week in the unemployment check. that's a huge question no matter what you hear from companies. they can't give you guidance on that how do you put that into your metrics of what you anticipate for stock prices as a result >> our most important advice to our clients is to recognize that we are at a time, a moment of tremendous uncertainly and this is across the board on many factors and what happens with the exact details of the stimulus package and the exact timing is an uncertain factor. nobody can exactly predict when it will be i think the question is what is the probability that they will come to a resolution so do we have another week of uncertainty. will that mean daily uncertainty? daily volatility our recommendation is that we need to look past that

there are some things that are unknowable and we don't want to come across as having a lot of certainty about things we cannot be certain about our view is base case. it means uncertainty and effects from a human perspective, people who may not be receiving their checks is that a one-week issue is that a two-week issue the base case says they will come to an issue because neither the democrats or republicans can be seen as their own politicking affecting basically the livelihood of people. >> the other question we have to understand the answer to is how much damage has been done underneath things are kind of supporting us at this point. the federal money that's been spent, the federal reserve and what we don't know is how many of these businesses that have closed are not going to reopen how many of those jobs are gone for good >> there's no doubt that that's

one of the biggest questions facing economists, how will this group of people who have been whether temporarily laid off or sort of permanent bely employed from a particular job come back to the labor force and that's why the expectation is that while we might see some improvement in the unemployment rate through the end of the year, further progress will take a lot longer and so we're looking at numbers getting down to let's say 5% unemployment rate by 2023 nothing in the near future we require retraining of people in the labor force new jobs are created so that transition will be somewhat difficult when you're looking at the returns, our base kiss is mid single digit returns relative to zero in cash and marginally negative numbers in bonds if the

economy actually is on a stronger footing in 2021, 2022. >> the best case scenario is equities. >> what position does gold have? >> that's an interesting question since gold is such a hot topic. we have two factors that we focus on first, strategically do we believe gold has a role in the portfolio? we do not. we don't think gold generates income gold is not tied to economic growth and earnings. it's not great for deflation from a strategic asset allocation, we don't think gold has a role then the question becomes tactically what is the role of gold our view is that gold is only appropriate if you have a very strong view that the u.s. dollar is going to be de-based. we don't have that view. we think the dollar maintains the status as the reserve currency the dollar can cheapen a little

bit because it's moderately over val 50ud bued but it doesn't mes going to be de-based equity market is up 45, 46%. gold is up 26%. the trough of tl financial crisis, equities are up 500%, gold is up only 100 so all this excitement and brouhaha about gold is not something we buy into, in fact, at one point we think people should look at the reverse and think theres a downgrade to gold. >> you disagree with your own colleague jeff curry different part of the bank but he put a note out this week with the polar opposite view you might say. that's a discussion for another day. thanks so much for joining us. still to come, top stocks on the move ahead of the opening bell on the busiest day for earnings season. here is one to get you started, eli lilly, the company beat treatment estimates on the

bottom line for the last quarter, revenue missed expectations, stock is down about 2% i'm pro athlete stylist calyann barnett and i'm here with nicole and miles and we're out to find the top looks for day one back to school at dick's sporting goods and so we want to find something that's going to grab everyone's attention the variety and selection is crazy bucket hat bucket hat this would be a fire first day fit. definitely making a statement with that. go dick's. whether you're going back to school online or in-person, get the brands that make a statement. day one starts here.

still to come this morning we will get jim cramer's first take on the training day ahead you are watching "squawk box" right here on cnbc

i want to get over to cnbc headquarters, jim cramer joins us now jim, we've only got a minute but we can talk about the faang stocks all over the bell, what to expect and how to trade it or maybe we talk about some of these jobs numbers and what do you think it means. >> was tim cook the straw man? i thought tim was up there to make everybody else look bad

they loved him there is no antitrust other than this amazon nonsense that you bring up and the 30% versus the others i thought that they treated various degrees of respect and they treated tim with the most respect. >> and as a result nothing comes of it? >> kind of kind of nothing. didn't they do it? i mean, didn't they do their job? they made people look bad. then they go back to their jobs and we try to figure outhow it works. >> the theater has been done, the show is over. >> yeah. it was like, i don't know, but it wasn't "fiddler on the roof" it was more like "the producers. >> we have to run, but do the faangs outperform this afternoon with the numbers or no >> no. they're up too much. too many negative people will come on. you know, say negative things. >> okay. >> because they're jealous of those four guys. i like bezos' hair >> we will see you on "squawk on

the street" and then we will see all of your analysis of it on "mad money" later today, jim. >> you are too kind. >> appreciate it. >> we will be watching closer bell to actually see the numbers break themselves until 4:00 p.m., until 4:30 p.m. let's talk what to expect from all of those tech earnings that come as i mentioned live during closing bell. senior research analyst at newburgher berman. dan, why don't we start with apple. do you think iphone sales could disappoint is this is it the key metric this quarter as it always is or is it something else more important? >> good morning. great to be with you as always i thought it's certainly going to be a he can to us but of course remember it's a seasonally weaker quarter and it's been impacted by the recession and the pandemic i think the market is looking out to the 5g iphone cycle over the next 6 to 12 months. part of the bigger story is this broadening of the revenue drivers. you have a services business which is around $50 billion, you

have a wearables business which is allowing them to penetrate newer markets like health care so the story one of reinvention, broadening of the revenue drivers. so we continue to like apple here. >> so you think they beat this quarter? >> i think the quarter is likely to come in line with expectations given that it's a seasonally weaker quarter i think the market will look for signals and what we are going to be looking for is how the company is navigating what's been a tricky period really globally and we can see that even with apple stores, they opened many of them up, had to close some of them, so the situation is very fluid, it's obviously dynamic, but what we are looking for with apple and other companies is their ability to respond ultimately to innovate and frankly delight their customers. that is what is key to creating shareholder value over the medium term. >> dan, i hate to break inbut do want to bring you a tweet that just came from president

trump that i think may be responsible forthe dip we've seen in the futures. he tweets this morning with universal mail in voting not absentee voting which is good 2020 will be the most inaccurate and fraudulent election in history. it will be a great embarrassment to the u.s.a delay the election until people can properly, securely and safely vote? if you take a look at what happened with the futures, very quickly after that, just the president raising the question about whether the election should actually be delayed, did put some additional future -- pressure on the futures. the dow futures indicated down about 323 points dan, a quick comment on that. >> sure. bec becky, i think that the country is demonstrating and really a lot of countries around the world that even in this difficult environment we can begin to get back to some aspects of our normal lives. i think elections to our democracy are critical i do think it's important that they are held this year. clearly they're going to have to

be adjustments, there could be more absentee ballots. i think what's important for our country and really the broader globe is trying to pull together, navigate through some of these issues and really do the best we can. >> right right. dan, thank you for your time today. we appreciate it guys, we will see you back here tomorrow andrew and wilf. thank you everybody for your time today right now it's time for "squawk on the street. good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. futures are weak as the bulls have some headwinds today. a historic collapse in q2 gdp, initial claims up for the second consecutive week, the white house says a deal on stimulus nowhere close. ten-year yield is close to a post-covid low, 54 basis points as the president, jim, on twitter, becky just mentioning this, floating the idea of delaying the electio