components that reported this morning added up you see dow futures up by 67, s&p futures up by 17 but the real story has to be the nasdaq up by 200 points thanks to all the strong reports from facebook, apple, amazon and alphabet last night. we continue to hear more about that when "squawk on the street" comes up in just a moment, wilf, i want to thank you for being us this week. we will tune into closing bell today to see you andrew, i will see you back here on monday. >> see you on monday have a great weekend. >> it's time for "squawk on the street." good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. final day of july and futures are green as we got three out of four blowouts on mega cap tech last night the impasse continues in congress on that extension of benefits, earnings from cat x on merck. gold hits 2005 this morning headed for its best month since 2012 jim, nasdaq will open above its

record close and we know why. >> i have to tell you this was just a parade of both american ingenuity and strength there was a time when i was listening to brian -- i shouldn't just limit it to amazon every conference call last night with the exception of google was incredible the power of these companies is extraordinary and i don't think that we can actually -- brian ol staff ski when he talks he is the cfo of amazon, when he talks about the idea that basically we didn't know we were going to make billions of dollars more than we did. not tens of millions, not hundreds of millions, but builds what a juggernaut. most impressive of last night. david, i have a lot of good things to say about the others and good things to say about google, but amazon thankly is a company that basically has no idea how much money it can make. i've never seen a company like this there's never been a company like this. >> well, and the market agrees

with you and investors have for a long time, jim, but they have delivered on that hope, i guess. i mean, speaking to a couple investors this morning this is basically what they say is one of the best quarters they have ever seen. >> ever. >> that sounds like hyperbole but in some ways i guess it's true. >> it is. >> certainly for a technology company, one of the best quarters they have ever seen obviously we've talked a great deal about the retail business, the incredible tailwind it has, but aws even where the bogie was, what, for 27%, i think they were up 29%. and, you know, guys, what also is just incredible, think about this, they added 175,000 employees in a quarter in a quarter >> the army can't do that. you're right i mean, carl, when i look at the things that they did, they spent $4 billion, $4 billion on covid-19-related expenses and they still blew the number out they told you it was almost

impossible to be able to do that when you add all those people, i don't want to -- don't get this wrong, but when you are in these situations those people are considered dead weight until they're trained because, remember, this he don't bring in any money and yet there they are doing amazing things, amazon taking care of them, i know there are issues, david, because you have talked about the company and the way they treat people, i think they've gotten better, but this is -- >> they have they've gotten better and raised the wage, it's now 15 bucks minimum an hour and there is some health care as well they've definitely improved. even to the extent remember when bernie sanders gave them a pat on the back at some point along the way, jim. >> yes. >> they've definitely improved now they are the second largest employer in the country after walmart. >> i have to tell you that they rediscovered -- america discovered that they don't need to leave their house, there is a thing called amazon. that includes for food and, carl, i just -- sometimes you

just have to marcel at what companies can do and this company may be -- i know apple survival -- one of the finest companies we have ever seen. amazon web 43 billion run rate we have to stop thinking about the reason why a stock is that price. it's because jay powell is making easy money. it is not. it's because jeff bezos creating a company that is the envy of the world. >> yeah, jim, i heard you talk about that with decky and andrew a moment ago we can try to distill the influence of the fed, but look at income and spending this morning. income down, spending up i know you don't believe that apple would have sold as many phones or amazon would have sold as much merchandise had it not been for government support, some of that fed driven. >> i guess i look at it the other way. we could be in a horrible recession and yet these guys still made the numbers how is that possible

why did alphabet not make the numbers? because they had a lot of travel and leisure advertising that walked away. small and medium sized businesses you're absolutely right a lot are kept alive by what mnuchin and congress is doing and that really helped facebook's numbers amazon is -- has become as integral to people's lives as -- more integral to people's lives than anything i have ever seen other than food. >> yeah. >> right. >> the results are amazing and deutsch this morning calls them humongous. the whole quarter is layered in tragedy because the company was built for a pandemic like this one, we now have -- i think five targets with a four handle including deutsche at 4,000 which would imply a $2 trillion valuation, amazon dominates two of the biggest secular trends of our lifetime they say, jim, obviously that's going to be online retail and cloud. >> i'm thinking it's an experian

tragedy, apple is an experian history and facebook is a shakespearian comedy it really does work when you think about it. >> does that mean facebook has a happy ending >> the last line is zuckerberg talking about small business right there. small business it was terrific. when when all these big companies pulled out but zuckerberg had it. the arc of that call was definitely shake peerian i liked it the barred has game still. >> always. >> always. >> always, right >> even if it was a bunch of chimpanzees just typing randomly yes, always. why not fuel the con spear cysts out there. talking about facebook, jim, as we are taking a look at the results they did not suffer from a boycott from advertisers, the top 100 advertisers i think went from 20% of total revenues to 16%, they clearly have a long tail there they've got an endlessly replenished supply of

advertisers that it would appear the guidance of the revenue trends as well i mean, may and june were very strong after april which of course was not particularly strong and yet they guided to july as being a deceleration implied from their guidance. a lot of people don't buy it given may and june would have been like this, you would have july decelerating given what they're talking about for second half guidance. not clear how that's going to be taken, and they continue to -- you know, they took down some of the expense guide as well, jim overall a very strong -- it's selling advertising as we know is an incredibly high margin business. >> yes, and the shops was a brilliant idea because they finally realized that their best ally are small and medium sized businesses, stopped going after consumer packaged goods. pinterest had a big gain in the number of users, now we think they can convert, otherwise the stock wouldn't be up 9 the facebook call when i say a

comedy, what it basically is is saying, listen, america really does love us maybe the politicians don't but america does and the world does and the people have spoken, they like to go there and they like to shop and the return on investment, which they should have covered, i was surprised they didn't cover the return on investment of when you place an ad is extraordinary. of course, we are leaving out apple way too much because apple was i would say one of those quarters that was supposed to be a nothing quarter and it's turned into just a fantastic quarter because of service, because of wearables these are things that america has discovered are also indispensable. think about these companies, they are in our lives. most companies are never in your life ibm -- how is ibm in your life i mean, ford has been in your life, a $6 stock carl, these companies have managed to be able to ingratiate -- how do you put it? you don't -- you get up and

they're in your face and you like them. you like their face. they're unbelievable i struggle to talk about how great that apple call was. tim cook, top of game. >> yes. >> remember those guys who said that the best days are behind them he should take a truck and run over them. i mean, this thing is unbelievable what a quarter. >> in some ways the conference call did exactly that. here is what cook said last night. >> i found revenue grew 2% this quarter. in april we expected year over year performance to worsen, but we saw better than expected demand in may and june we attribute this increase in demand to several interactive causes, including a strong iphone se launch, continued economic stimulus, and potentially some benefit from shelter in place restrictions lifting around the world

>> hard to figure out -- >> jim, so -- >> you know, carl, there were mixed messages there i mean, did it do well because of stay in place did it do well because of the pandemic i think what it really did was a quarter that shouldn't have happened, it should not without so many stores, without a brand-new product and what it says is they're finally there. it's a service revenue company that has an unbelievable platform which is the phone and i know this word is overused, but it actually in this case works, it's an ecosystem with a flywheel, david. i will throw in the flywheel. >> throw in the flywheel listen, that last sign, services, remember when we were talking about the seasoned growth of services it is now as you see 50% of overall revenues during a quarter at least compared to the iphone that's very significant. that continues to grow at a rapid pace as we know, jim, we've talked about it a great deal, of course, investors willing to pay a higher multiple

for recurring revenues which is part of that $13 billion you are talking about for that quarter you know, backing up a bit, jim. >> okay. >> as we look at the broader market and the struggle that value investors have had, i mean, this just reinforces the bias to growth yet again if you are a value investor it's going to continue to be a tough road. >> ford -- >> although you will argue that apple could be a value stock. >> not anymore apple is proctor. >> okay. >> it finally did happen they don't necessarily -- they are focused on how great the mac s which is terrific, on the acceptance of the phone on the highest quality. i'm focused on the idea that now you have this platform last night i paid i don't know how much to m a. every day i pay a little bit to apple because i use the card, i pay for all the different services it's interesting because their bill that i pay usually comes up between 2:30 and 3:30 in the morning. what they don't realize is i'm up and i see t most americans don't see it

>> they can't fool you by the time of day. >> no, they can do it -- i mean, there is a window, although that storm last night, i was up since 12:30, i don't know people in the east, but it was like fourth of july last night i just think that when i look at it they are so humble. the humility of this company is staggering they could come out and just say, look, we know we've changed everybody's view and when i talked to tim cook he was talking about greyhound. i have not seen it anybody see it did you guys see it? did you see some of the stuff on apple? hello? crickets >> morning show. >> i haven't no i haven't seen it. >> people lose each other all the time -- i thought i lost you. tim cook -- that's a joke. tim cook is so proud, carl, of his productions. when you ask him what was he excited about when josh and i spoke with him the productions, the awards and how you've got to get on the case and watch these

carl, this is where his heart is and i think -- >> yeah. >> -- it's going to surprise us. >> i mean, we are coming off a week, jim, where netflix set the record for the most emmy nominations ever and hbo behind, but that's apple's style is to come in second and then show everybody up. >> yes, they start small and see what people want and then boom do you know what i'm most proud of last night? he likes the democracy that i think we bring to the business he likes the people who watch us he knows that the people who watch us feel that they can't afford an individual share of a stock that's valued at such a high price we all know that 400 is the same as 10 or 100, whatever, but he knows psychologically that the regular viewer doesn't want to buy apple or can't buy apple because of a $400 price tag so he does the split. i know it is just chi mare cal, but it's going to make people love his stock

bezos doesn't care if you love the stock, i don't know what google cares about, maybe spending a lot of money, but he really genuinely cares about it. i suggest that facebook, it's time for them, too i know -- look, i grew up in an era where when a stock got to 100, when pepsico or coca-cola got to 100, now coca-cola can't get to 50, they would split it and bring more people in we went away from that and people are doing individual fractions, i don't mind that, that's great, i like acorn, too. but the idea that he wants more people in his stock is refreshing it's refreshing. he doesn't play to the hedge funds. he plays to the people who buy the product and have 99% satisfaction rate. that's who he plays to. >> don't forget who is his largest investor i think his name is buffett, right? >> yeah. >> isn't that likely >> i think that's buffett's winner buffett's rested performance is being -- apple -- no, he bought some more bank of america. sold. >> yes, he did a lot more

he owns over 11% of that. >> maybe one day he will own 100% of it. >> 11.8. >> guys, do we have time to quickly hit alphabet which of the four we haven't hit? it is going to be up this morning as we pointed out of course -- >> up? >> unlike the other three companies and jim has said this, much more levered to the reopening of the economy and therefore it was a down revenue quarter for the company. at the same time, jim, you know, there are bright spots they didn't buy back a lot of stock, the rate was only about 3%, i think there's some unhappiness amongst some investors, perhaps they could have bought more, but the cloud business which you've been focused on is worth a mention. $3 billion in the quarter, 43% year over year, a big backlog. they're becoming more competitive. still nowhere near the levels in terms of market share of aws or microsoft's azure, but it is becoming a more competitive offering overall you can see the stock is going to look a bit lower as we see revenues were down 2% year

offer year. >> that is thomas curran who has put in for cloud, an incredibly competitive figure it's what google needs, alphabet needs. they need to be better at youtube. i hate to keep saying -- bring somebody in who has the experience to make that very -- operation into a big moneymaker. they did say that each month was a little bit better and i know that given all the travel and leisure they have you actually need -- it's not southwest air, but you need to see that cohort, that silo of ads come back and ruth gave you the hope that it would. that's why a good part of the conference call was that but, david, one of the things we have to separate from 2020 from 1999, the cash positions of these companies are extraordinary versus the debt positions in 1999.

>> yes extraordinary. apple of course net out debt they still have $81 billion in cash their total cash is $194 billion. google as well the numbers are enormous as you point out. >> facebook has more than 50 billion sooin cash. that's what gets me mad when people say they're too big do you want them to trade through cash >> this was the discussion earlier in the week, jim credit suisse, we talked to john chambers about this earlier in the week, the market caps are big for a reason, whether it's margin or cash or relative debt load that's why the rotation of value i assume you agree if it ever comes is going to have to be because of inn equivocally good news or public health or economic recovery. >> bingo, exactly right, and i don't see it. >> a lot more to get to, guys. we will do exxon, cat, under armour, merck, gilead.

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though, in the mad dash, another company reporting numbers. >> david, there was a time if caterpillar had orders, resource orders, down 35%, total orders down 24% then what you would have is a hideous loss, but no what you have literally is a company that was able through cost control to have an okay number now, will caterpillar be up big? no but the fact that they have what i call blow out cost control and this company is not the old caterpillar. we were talking about what happens if things get good in value. this stock is going to be the one that people reach for. i used to think it was going to be emerson and i still like emerson and mr. farr is going to be stepping down, but, david, this company, caterpillar, is going to make a huge amount of money if resource ever comes back you might say that cutting back and cutting back because it won't come back. if you want value, there, i give you that one i will give you that that's value >> all right ing with, i mean, commodities

are moving higher to a certain extent stuff people dig for. >> that's what i thought when you've got elon musk talking about nickel, right, you need cat to bring out nickel when you go to a gold mine all you see are caterpillar -- caterpillar trucks so i think this company, i think they are doing a very good job and i do think if you want value go with that one i don't want value to me i want facebook. i want faang i wouldn't have created faang if i didn't want it i had to just brag for a second. >> all right carl, we're going to get in another break, i think, before we get that opening bell of course, so many other things to focus on this morning, by the way. jim, we have merck i want to get to as well >> newell, remember that >> sure. of course i remember them. how could i forget >> i was supposed to be off today. >> yeah, merck is worth touching

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s&p gainers for the month to date, sort of tell an interesting story. there's outliers in there like l brands but chips with amd, materials, weyerhaeuser and housing obviously pulte greece group holding on to margins within well the double digits.

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is brought to you by nuveen. a leader in income, alternatives and responsible investing. we continue to look at mega cap tech this morning, apple included, jim. it was not just about the conference call, not just about tim cook's appearance on the hill this week, virtually, but also your conversation with him about m&a. >> very interesting because he was reacting directly to what other companies said on the hill about anticompetitive acquisitions i think you should listen to it, it was pretty interesting. i think what tim cook was saying is that you basically don't want to -- you want to develop in-house and he was very cognizant that facebook bought

instagram and congress just didn't like that now, there was a congress person who called -- talked about systrom, there is a belief, i think, david, on the hill, frankly, that when you make an acquisition you're doing it to squelch competition. maybe it's better to not buy anyone. >> it's hard to imagine given the trouble google is having right now or alphabet in buying fit bit, it's hard to imagine any of these companies going able to pursue a large acquisition, full stop. >> that's just so true i think tim cook got the message a lot earlier. look, amazon is all homegrown, they used to be, right, remember they bought zappos, whole foods but those are not meant to be anti-competitive you can argue whole foods will be able to dominate the food industry and shouldn't have been allowed in, but that's not a great rigorous case. what i liked about what tim cook was talking about is, hey, look,

people presented ideas but we're going to develop it ourselves. i think that's work. i remember when i tried to sell them on netflix, to get him to buy netflix, he was like, oh, jim, then i told him there are a lot of oh jim's. i get a lot of oh jim's. it's okay. >> oh, jim. >> oh, jim david, what are you hearing? >> for a while -- >> i'm sorry, carl. >> we had to be satisfied with nerms of apple m amp a with beats, $3 billion. a look at the s&p heat map at the nyc churchill capital corp. a spac, another ipo, vasta platform speaking of ooips ipos, david, i'm sure you say reuters arguing that bite dance is considering listings in hong kong or shanghai. >> yeah, i did you know, i've been doing a good amount of reporting on this, specific really to tiktok and the future of that service in

the united states. guys, listen, it's unclear where things exactly stand in terms of that but i can tell you it's certainly the subject of back and forth between the u.s. government as you might imagine and the management of bite dance which is the et owner of tiktok and tiktok run by kevin mayor, the former disney executive. it's going to be fascinating to see where this ends up and how and what the u.s. government is willing to allow tiktok to do or whether they would move to say no more. do you have to become a full u.s. company that's separate from what you're referring to, carl, which is bite dance potentially listing in shanghai or long conga korgd to reuters again, though, bite dance about $130 billion company, a lot of activity they have is centered in china, but they own tiktok, which could be as much as a 50, 60, who knows, $70 billion asset. if you had to divest it how exactly do you go about doing

that and a making it a u.s. company will become somewhat complex. we're watching that closely. by the way, we keep an eye on all the capital markets, speaking of huge ipos don't forget ann financial it's not going to be listed in the united states. one of the largest technology companies in the world, fintech, over a $200 billion value, could be the largest ipo ever, by the way, no the going to have a presence here in the united states, jim. i guess you're happy about that. >> yes, i am i talked about that with leader mccarthy the other day, why do they come to our capital markets, tend to hurt a lot of people when they do come in. yes, it's true, there's been an alibaba, but we know that's basically kind of an american-looking company, but, yeah, it's time -- you know i think it's time to stop this stuff. it is -- >> but don't you think, jim, don't you think you have more -- in some way you have more control when they list and raise money here in our capital markets over those companies to

some extent? their governance, other things, rather than having ann financial be this giant around the world conceivably in the financial services industry but have no presence here and no leverage whatsoever that we have in terms of their business? >> i think that when we're fully allowed to do everything we want in their country they can come and do what we can when they say mastercard and visa, the world is your oyster, then i'm fine with it but they don't, they don't play fair. these companies as we know tend to in the end be controlled by the chinese communist party which the last time i looked is not the pajama party. >> which plays in, carl, to exactly why the u.s. government is so focused on tiktok. we will see where that ends up come back around to where you started us. >> savior for facebook we are not the biggest i thought that mark did a good job. these people -- >> in his testimony. >> it's tim, it's -- only -- is

there any one of these guys -- yeah, google no wonder google is not even up. know don't have a share. ruth. >> you mentioned -- you talked about expenses over at cat and google, jim, i mean, in any other ordinary quarter we probably would have zeroed in more on expenses up 7 instead of 12 last quarter or capx down 12. disciplined in terms of spending at google has been a ster for the ages. >> yes they still, i think-- they don't -- they can't come to grips with what it looks like themselves youtube, how could they not be making a fortune in youtube and how can the other bets continue to be other bets the spending for other bets was down and i liked that. but when facebook does something they intend ultimately to monetize it, when alphabet does it they intend to ultimately keep ultimately. health care, why can't they make a lot of money on health care.

they have two separate health care divisions tell me that that's right. two. they are not even a health care company. honestly i would go in there with a sickle. i really would like levin from -- never mind, it's tolstoy they have discipline but it's really just to me eye candy discipline they have to come in and say this is not working. we have to get out of this we can't have two health care companies, we are not merck for heavens sake which is up 2 on a decent number. i just think that they have to become -- they have to figure out what the hell they are and they still haven't done that david, while i've got you on the phone here. >> yes, sir. >> what do you think, nvidia going to buy arn >> i don't know. i did make some calls on that. you do have bankers actively involved sof tank i thitbank is the inter of the story i don't know if we have it, but take a look at what's happened to that stock.

so much for massa's son not being in a good position anymore. the vision fund is still troubled but they have been selling assets, we know $22 billion worth roughly almost of t-mobile and arn is another company that owe pension talley they are looking to monetize, jim. i don't know arm, a lot of its revenue is from selling ip to what would be competitors of nvidia. i'm not quite sure how that would work wherein individual i can't to actually own arm, whether they could step up and pay the price that massa and softbank and rajiv would want for the asset given they paid $32 billion for it let's wait and see over the next few weeks this will likely play out, but it was an interesting report you're referencing from bloomberg saying nvidia is the one most focused on buying arm potentially in the near term. >> and it's hurting nvidia stock. i think that's wrong because what would happen if they got it and paid a decent price it would be a princer move against the

hobbled pit flee helpless giant intel. intel's lack of -- >> yeah. >> i do feel that they do feel north korea like i don't know what the hell happened there i mean -- >> intel you are talking about. >> yeah, what the hell happened? that was ann embarrassment and then they got rid of the engineer. >> i don't know. >> they have to get some engineers there. they have to go down to harvey mud or something or stanford, get some new people. >> it's funny, we asked bob swan last week about whether or not his background in finance instead of engineering, jim, was a liability and he said that he had engineers to manage what he called his blind spots and then 24 hours later the engineering chief was gone >> yeah, look, we all know intel is being an incredible company and can be an incredible company again w when i was an intel hawk and went to their plants when they hoped there were people you

didn't want to talk to because they reviewed you as someone who is stupid because you did not have a background in being able to make incredibly great chips now i feel like they are just another company. it never used to be another company, it was a dominant company in the way we speak about the amazons and facebooks now. but no longer. >> or the nvidias. >> yeah. >> you say it many times, da vinci -- >> that is correct. >> you mentioned merck and i did want to come back to it, not so much for the quarter itself, but let's get back to the pandemic thankfully new cases seemed to have plateaued but not thankfully plateauing at a very high level in the country. talked often about the efforts towards an oral anti-viral here is what roger perlmutter had to say on the conference call remember, merck licensed an oral anti-viral, had been eidd 2801 now goes by mk 4482. that's roger perlmutter, he runs

all science, all labs at merck during the second quarter we forged a partnership with ridge back bio to develop mk 4482 to disrupts the application of the sars genome. it's been studied in ascending dose protocol, been shown to be well tolerated during five day oral administration achieving drug levels we would expect that would be more sufficient to block viral replication, compound currently under study in three different phase two programs in outpatients as well as inpatients here in the u.s. and in the uk. based partially on the results of these studies merck says it does expect to initiate two large pivotal trials one in outpatients and the second in hospitalized covid patients beginning in september this is important. this could be maybe even a game changer should you actually be able to take a five-day course of an oral anti-viral if you've been exposed to the virus or if you show any symptoms and have it -- stop it. >> you combine that with what sorento did today, which is

they're taking a columbia university product from saliva, give you an instant test about whether you have it. then you take the merck drug and we would be having nfl -- i mean, even the marlins would be playing if we got this thing it's very important, david, quick testing, nationwide testing and then that. i'm willing to wait for a vaccine if we can get that because that's what -- this is actually better than a vaccine because there's so many anti-vaxxers in this country now, so many people who just -- >> right. >> you can't count on people to take it. >> yeah. there's that, jim, and there's a piece in the news this morning which i'm sure you've already read basically arguing that the pressure that fda regulators will be under increases, as ken frazier has pointed out, is going to increase the risk that you either put something out that's dangerous or ineffective, people go out again and then transmission goes through the roof. >> look, j & j is taking the opposite approach. they're saying you have to give

them the vaccine, you also have to give other people the placebo and then you have to send them out into the public. when you are moderna, are they going to go into hot spots you might not be able to find out whether the placebo is better than a vaccine, that's why you need 30,000 people the idea they're going to get this done by october is just crazy. i mean, johnson & johnson i tried to say, guys, can you get this done? can you get this done? they're like even enrolling this thing is going to take a month to do if not more. remember they outsourced the enrollment trying to get in the thing is a nightmare don't even try, guys >> yeah. we're going to watch this, continue to watch it go ahead, carl sorry. >> sorry, david. i was just going to say we haven't really touched on the impasse in congress, the senate is adjourned for the week, i mean, negotiations are continuing, jim, but as we said yesterday, these benefits expire tonight and is a skinny deal

possible before we get into the weekend? >> i think we have a skinny deal, i don't think it's going to happen before we get into the weekend, i think they're going to work around the clock i think what they're really after, the republicans and steve mnuchin, secretary mnuchin, they are not going to go for the trillion dollar grand plan, but i do believe that when we come in on monday, call here, that the rental eviction issue will be on the table and the enhanced unemployment, a give by the republicans, in other words, i think there will be a skinny deal i think it won't be completed until sunday night, but i think we will get it and once again, the people who don't think that stocks do nothing but go up, david, are -- i meant -- that's a different david, i think that people are going to say that, wow, they got a deal and i think that secretary mnuchin is determined, i think that he feels that the people who are going to lose those benefits are going to be angry and upset as they should be and this rental eviction, we don't talk about that enough. this is for when you have a government mortgage, but, i mean, i have tenants in my place. people are not paying.

carl, i'm sorry, i took too long >> and the "washington post" today says the white house may be willing to break with mcconnell and forego liability protection which would be interesting. >> agreed. >> let's get to bob pisani here this morning on this friday and see what's moving. hey, bob. >> good morning, carl. happy friday, everybody. this is not a particularly good open i know the s&p is up but it's up because of a couple of big tech names here look at the sectors and you can see what i call the two economies here, tech is up because apple is up today, consumer discretionary is up because amazon is up, a lot of the other stuff in the sectors are not up there is the other half of the u.s. economy, industrials, energies and banks they are not doing anything at all today. we're halfway through earnings the good news is earnings have been better than expected, notably better than expected we do this a lot normally 80%, 70% of the companies beat estimates, this time 80, but what's really important is the extend to which they're beating. yesterday they were beating by about 13%, the average company,

that's amazing because normally the average beat is about 3% if you put up that next full screen and it's going to be even higher today when you factor in what apple and amazon had to do these are very bill beats and the analysts have been clueless, haven't had a lot of guidance help and they've been conservative and underestimating how the earnings are coming out here the big story is tech keeps winging, not just apple but everybody in general the s&p 500 is down 38%, tech is down 2% for their earnings for the year here. online buying is exploding, the paypal ceo dan schulman i mentioned this yesterday was ecstatic on the conference call, he said we've tipped into a digital first economy, there's two economies out there, that's the story, not a split between main street and wall street, a digital economy that's the big tech names and then the hands on economy, everybody else services and travel and leisure and industrials and real estate. you want to see everybody else look at chevron today in you will hear this a lot from these companies, financial results may continue to be depressed into the third quarter of 2020.

that's the other economy that's the one that's a little bit worrisome. no guidance from a lot of this other economy companies this week, you notice this? caterpillar and colgate, chevron, exxon, they are not providing any guidance, this is the other half of the economy. when i say the other half of the economy you can see it in the sector analysis. wall street knows there's two economies they are out there take a look at this, technology up 6% and everything else is basically down since the highs on june 8th. that's two economies carl, back to you. >> all right bob, thanks. we're getting a chicago pmi for the month, let's get to rick santelli hey, rick? >> a shockingly strong read for our julychicago pmi. we were expecting a number around 44, zoom, zoom, zoom, 51.9 51.9 that's the best read since may of 2019 when it was at 52.8. definitely surprising especially considering what it was a couple months ago, may read at 32.3 was

the worst read in 38 years going back to 1982 now, let's get to the charts of course, last trading day of july, let's look at month to date charts, month to date of two year note yields of course, computerized scaling masks the fact we closed at 15, we are currently 11, only 4 basis points but maybe the best way to get a handle on exactly how big a move that is for two year is to consider it's down 27%. so i don't like to use percentages on yields, but we really are in a very compressed state especially on short maturities move down the curve and look at a month to date chart at tens. closed at 66 basis points, we are basically at 55 down 11. we can see that's not as big a move but every bit as important as long maturities, of course, have been giving it up, flattening the curve doesn't help the banking stocks we all know if you look at stocks in europe, the banking industry as a whole

is getting designated. negative interest rates in europe aren't helping. month to date of the dollar index down 4.5% for the month. not a good month carl, jim, david, back to you. >> rick, we will see you in a little bit rick santelli in chicago we will take a break here. dow is roughly flat, even as apple is adding about 150 points to the average we will check in with patrick frisk of under armour later on this morning on their earnings and pretty good results. back in a minute

guys, couldn't end a week without taking look back at the incredible moves in eastman kodak. of course, the one-time giant in photography refashioning itself now it would seem as a of chemicals for the generic drug industry. we watched the stock reach over $50 a share. it began the week as about $150 million market cap company it edged up closer to 2 billion. why? well, it's a stranger series of events piecing it together is an interesting puzzle it starts with something called the international development finance corp., and its mission originally was to invest in developing countries, and supplemented by an executive order from the president on may 14th in that executive order, signed

may 14th, it said the chief executive officer of the international development finance corp. may use the authority as he deems appropriate for the domestic production of strategic resources needed to strengthen any relevant domestic supply chains that resulted in a loan of $765 million to kodak for the development of a business that would provide chemicals and bring them here to the united states in terms of the supply chain for the drug industry. earlier this week "squawk box" talked to the man who runs the dfc about how all of this happened take a listen. about two months ago the president signed an executive order to allow dfc to innest in the united states to reshore critical industries, things we need if there's ever going to be another pandemic so we're not caught in the same place

so kodak was referred to us because we found somebody that wanting to place an advanced order for pharmaceuticals in kodak, and kodak had been considering usin using pharmaceuticals. >> unclear how that came about how did kodak a company we know, of course, as a photography company, get to the point where it decided it wanted to produce chemicals and then communicated that and got a $765 million loan of 25 years which was multiples of the company's market value certainly at the time of the loan now, this did send the shares higher they're retreating today we talked about speculation in the market the presence of traders for the likes of robin hood. it's an interesting one, and we also spoke, i should say "squawk box" spoke to kodak's executive chairman he's the ceo of another company. here's what he said as to how they're going about using the

money. >> we're using buildings we own. that deducts costs and through continuous manufacturing and innovation we feel we could become very competitive. the business park is 1200 acres, has its own power, steam, waste recovery, rail system. the infrastructure is there. i'm not paying for that. those are huge costs that come out of this entity, and that gives us a very competitive advantage. >> well, you know, we're not going to know if anybody sold continenza we'll end with the overall ownership. car funkls, the biggest single owners of kodak, i think we have that for you there's his stock options and there's the largest owners it's been a great week for anyone who owned kodak at levels prior to this week >> i know, david

peter navarro can say we need the vital ingredients out of china. look at the building it's up and running and thought it could be turned >> it's a good look at that incredible week co-back has had. we'll be back in a moment. so i'm gonna hold on promoting you this quarter. cool? drop the taco. get in the car. does this sentra feel like a compromise to you? wait, what...? the handling is good, right? no compromise there. nope! watch this... umm... b-brie...brie brie! rear automatic braking. so if this nissan sentra isn't gonna compromise, why should you? you're right! atta girl. the all-new nissan sentra. with more standard safety features than any other car in its class. with more standard safety features apps except work.rywhere... why is that?

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four days of gains for all three major indeindices. amazon and facebook hit l-mealti highs at the open. more "squawk on the street" in a moment

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>> i like fuel oil executives but no fan of the stocks chevron, the beacon in the group laid an egg, one of the worst losses in three decades, and frankly, citing the glut and the co-vid, but what it says to me is well, why would you ever want to own something that is completely hostage to those when you can own a facebook, up 8 % or amazon, up 4 % or napa up 6 %. the chevron, it's just disappointing. and i think they have a good executive, but it's a bad business in a bad group of stocks >> even some of the charts out

of exxon's call for a little discouraging >> borrowing too much money. >> ebb joy the weekend >> i'm going to be gardening i've got to get on the better side of my wife. >> watch which seeds you plant, jim. we'll see you monday mad money 6 p.m. eastern time. good morning welcome to "squawk on the street." i'm carl quintanilla with david faber and sara eisen is with us this hour. let's get to rick santelli >> this is the final july read for university of michigan sentiment. in the mid month was 73.2. that's the benchmark it didn't improve. 72.5 ultimately replaces the mid month read, and if you look at the full month prior to that, it was 78 .1. that was a solid read. nowhere near that level. so we do confidence has been

impacted with a slightly negative read. we saw that in consumer confidence number from the conference board as well let's go through the conditions, current conditions 8 2.8. that's down from 84.2 mid month. and if we look at inflation expectations, the one-year inflation is 3 .0. that's a bit less than the 3.1 it was prior and five to ten-year inflation, a tenth lower at 2.6 these numbers are a little bit soft on the inflation read, nothing shocking we were talking about inflation earlier. you have ahole in the tire and until you patch the hole, you're not going to really inflate any inflation into this and we dug ourselves into a pretty big hole carl, back to you. >> yeah. we could use a pretty good patch. thanks the fig four tech names will drive trading and chatter for the fist part. happy friday good to see you.

>> mark, let's start at 30,000 feet the discussion of whether or not these market caps were unjustifiably high did last night's results and conference calls do anything to put that aside for now >> no, absolutely not. if anything, it did the opposite where we're more confident in not only the defensibility but an understanding that fundamental shifts are taking place where we'll rely on their services more and more and they're essentially becoming engrained. the way we'll do business going forward. >> so and then the immediate follow then is coming off of the hill hearing earlier in the week, why are they not subject to greater scrutiny? there's a big debate about whether the utilities need to be others point to the slow degradation of anti-trust in this country, and they argue that's part of the reason why the companies got so big >> yeah. you know, i think they all say they welcome scrutiny.

right? i think jeff bezos in his opening statement said they welcome up, but scrutiny doesn't mean anti-trust behavior is going on being big on its own does not make you anti-competitive or exhibiting anti-trust behavior so i think we should definitely pursue that and if there is wrong doing, absolutely follow through on it. but for the most part, from what we've seen so far, you know, and if anything consumer sentiment with a lot of names is improved during the co-vid crisis as we rely on them more and more and consumer sentiment only improves with the feeling toward the big names. >> apple is getting more than a 6% boost it's huge on top of the size apple already is what's the outlook what did you get from the call as far as the next upgrade cycle, how much demand and what kind of product we're looking at coming out of apple. >> apple's results and outlook

show that all their products and services are selling very well from the range of the iphone to the apple watch to the air pods to the max and pcs things are selling now, what's interesting is they did mention a few week delay in their new iphone launch, which will be 5g we expect it to be available for purchase in the month of october. when we look at forward-looking even though the stock is up today, we see several reasons why the stock can trade higher notably, a new and exciting product launch in the second half of the year and many people might think do people have enough economic disposable income to purchase these new products and the recent results from this quarter were they materially beat sales and earnings show that people are allocating their discretionary income to things like computing and technology, and we believe that there is more room to grow here for the

stock price. >> i want to hear about the potential for share gains i think that you say that apple can get here as a result of huawei where's the overlap? >> yeah. so it's interesting to note. in the united states we don't see huawei phones much but in asia and other parts of the world they're very common. now, there is a u.s./china trade war going on with technology, specifically in a semi conductor chip where some of the competitors against apple won't be able to get the latest technology, so if you're buying a new phone, you typically want it to have a lot of horse power. a lot of compute power a great connection and the concern is that apple will be able to get that and yet others won't and therefore, we believe that apple will be gaining share as these trade wars continue to take some traction

>> as for facebook, we went around and around the block trying to figure out if the ad boycott would have any impact on the quarter. some believe it's a july story i don't think it's thrown, you're outperforming the question >> it hasn't i think the one thing that facebook reiterated on the call is it it is a platform for small to medium wizes. they announced they grew the number of businesses advertising on the platform from 8 million to the million that's a significant number and significant increase i think you can't exclude the boycott and the advertiser boycott. if anything, i think driving toward objectives we care about and we want to see healthier platforms. look agent the pinterest earning this morning, they saw a bump from advertisers coming to their platform it remains to be seen as we bleed into august. i think a lot of the issues that

the campaign raised, some have been issues. some are still outstanding and it remains to be seen what advertisers will do as we're heading into august. >> as for amazon, you take it to 3400 which is a little more than $1,000 below the street high target i wonder, just in terms of dealing, looking with the rest of the sell side is arguing, what gives you i guess a little more measured response given that we have almost half a dozen targets with a four handle >> yeah. this is no commentary on amazon. they're doing a phenomenal job to solidify their strength i think the question i raised is was q2 the peak? as the economy opens up, what happens with pent up demand?

there's also head winds on cloud. we've seen the cloud group between them, microsoft and google all slow down or decelerate this quarter. how competitive does that market get as we go forward there's clearly enough green chutes as we look at the name and a lot of opportunity ahead of itself. it's fairly valued despite the story that i think they're sharing. >> we appreciate it. there's so much to get to. i wish we had more time. we'll see you soon enjoy the weekend. >> thank you so much good to see you. >> well, expedia group reporting a loss in the second quarter business significantly impacted by the coronavirus let's get to seema with the company's ceo. >> thank you i'd like to welcome the ceo of expedia on "squawk on the street." thank you for joining us today >> good morning. happy to be here

>> worst quarter in travel history. those were the words you used on the earnings call, peter what level of confidence do you have that bookings improve here on out when we're starting to see or continue to see a rise in co-vid cases in hot spots like florida and texas? >> i think what we saw in the trough after april was consistent growth out of the trough and it reflected the fact that people really want to travel and when they have the chance to and when they're allowed to and when they feel safe doing it, they'll do it and we essentially saw a wide-ranging growth out of the bottom that was across the globe. it was stronger in some places than others depending on restrictions we saw more local travel, more domestic travel. but on balance we saw a huge interest in traveling. so while it's impossible to predict the course of the virus and certainly there is every

evidence that we will see some blips up and it will be a bumpy recovery, i think people really want to travel, and when they can, they will, and we're confident that that will mean good things for the travel industry in the future in the meantime, we all have to do the best we can to get through it as i emphasized yesterday, we're very internally focussed on working on a bunch of opportunities to help the customer help our suppliers. that is where our energy is going, and we're focussed on being much, much stronger and more profitable when things normalize on the other side of the virus. >> one bright spot has been vacation rentals the market is trying to understand whether this is a temporary or permanent shift away from hotels the airbnb ceo saying this is a permanent shift. he's going to say that do you agree with him? >> no, i don't he said a few things i don't

agree with, but i respect him and the company very much. i would say what we've seen is people going -- travel is like the water. it finds its way if people can't go domestic, they go international. or if they can't fly, they drive. the alternative accommodation is attractive to people, especially at vrbo where we focus on the whole home experience. people feel comfortable renting a home for their family or extended family and have a longer than usual holiday or move their family for a month to a new location so that's been a great leader for us and frankly, a very strong business. notwithstanding the virus. but i don't think there's anything to suggest we're seeing a permanent change in travel behavior even now we're seeing hotels continue to tick up. it's been slower i think people are trying to get comfortable and people in different parts of the world are comfortable to different

extents, but there's absolutely nothing we've seen that suggests that there is a long-term change in how people will travel or their behavior, and frankly, i think the best thing that's happened for us is people have gotten a lot of exposure of our vrbo brand and seen the appeal of the whole home experience i think more people will avail themselves of it but i don't think it's because one is better than the other they're all good solutions depending on what your use case is so we think it's been great for vrbo, but i'm not a believer anything has changed long-term >> anything else you didn't agree with and do you think that means airbnb's path to an ipo will be somewhat complicated >> no, no. i think they'll be totally fine. i was told he said something about cities being less popular

about travel destinations and people are discovering national parks and going to lesser populated places i think everyone is still going to go to paris and roam and new york people said after 9/11 that nobody would travel and new york was ruined forever of course, it had the biggest 20 -year real estate boom and travel grew consistently i'm avoiding making any long-term prognostications i think travel will be fine. i think people will go back to the places they love and if people discovered new places, that's awesome it's better for everybody and better for the travel experience if we spread the travelers out across the globe but i don't think -- i'm not worried for new york or rome or paris or pick your favorite city >> good to hear. peter, it's sara eisen question on pricing in the second half of the year. what are your expectations on promotions and whether that will be a driver of whether people decide to book vacations

>> you know what thanks, sara i think what we've seen is where there is very high demand like in the alternative accommodation space, pricing has been quite strong and people have been able to push price. suppliers have been able to push price in locations where demand is high. hotels and airlines have had a tougher go of it and we've seen more promotional pricing it's just a supply and demand question, and i think for the foreseeable future we'll have less demand an we are accustomed to and we'll see promotional pricing but probably pricing is not the difference maker right now. i don't think somebody is deciding their safe because they can save $10 or not. they're deciding if they're comfortable traveling and if they are, they will. we've seen a huge desire from

people to travel so i think pricing won't be the difference-maker and i think it will be a question of competing for fewer -- lesser demand and therefore, there will be promotion pricing. but i think that that again will come back as demand comes back >> and you mentioned paris and rome, peter. but clearly, the growth in travel in europe still has not rebounded even though the co-vid case count is lower in europe than it is in the u.s. why do you think that is and is it potentially because of the travel ban that still excludes americans from going over to europe >> i think it certainly is partly the travel ban. i think it's somewhat just local behavior it's only just recently that the uk opened up they were much later than some of our other -- than the u.s. and some of the other eu countries. so i think it's just been a

slower steadier thing. i think it's behavioral and probably cultural. i don't think it's a real statement about the future we're about to hit august where normally europe is on vacation and i think we will see that continued upward trend in that, but americans were just much more ready to go run out and go somewhere, and i think europe will follow, and we'll see asia is more open than apec is generally more open than the west, and we're seeing people back at work there and we're seeing some business travel start there again. so i think it's just we're going to watch almost exactly what we all expect, i think, which is every time a place opens, every time it's safer, every time people feel comfortable, they'll travel, and i think europe is just a little more complicated because there's a lot more boarders and countries involved in deciding who can go where and how and it's been more complex

of a chess game for the eu to work out >> it's been 100 days since you became ceo, peter, of expedia. our predecessor has been vocal about google's anti-competitive threats and the tech ceo at hearing, saying in travel google faces strong competition in search queries what's your reaction and how much of your tenure do you think will be based on what the doj does or doesn't do with google >> i certainly hope my success is not governed by what the governments do about google and our company's success. i think we have a lot of opportunity regardless, but we believe that google at least in travel has an inequitable option going on that favors their own products we've said that. our chairman has been extremely outspoken about that, and we

continue to believe that's true, and everything that's happened even during the virus suggests that that continues to be true and if anything, it will only get worse if left unchecked. but our job is not to regulate google we'll leave that to the regulators and the doj and the eu commission. and local igs, et cetera but our job is to do the best we can. i will say we probably haven't done the best we could of on pte miezing things in other areas. it's something as we've reorganized the companies, put our brands together and for the first time are working on o optimizing our brands as a group. we have a chance to be better in performance marketing and we'll focus on that because we can't control google but we're encouraged to see that their practices are being looked into >> got it.

peter, always a pleasure to have you on the show. thank you for joining us and discussing expedia's earnings. and the growth in vacation rentals is interesting to see, peter. thanks for joining us today. >> thank you happy to be here everyone stay safe >> carl, back to you all right. when we come back, ford this morning with an earnings beat. we'll talk to cfo tim stone about cash levels, they extended credit, and of crs t fd oue,heor bronco, when we return for just $25 bucks a line. with access to america's largest 5g included. that's right. unlimited and nationwide 5g for the whole family for just $25 bucks a line. only at t-mobile. pampers the #1 pediatrician recommended brand, helps keep baby skin dry & healthy so every touch is as comforting as the first pampers. the #1 pediatrician recommended brand

welcome back ford motor company reporting the second company results beating estimates and said it expects to have sufficient cash on hand for the remainder of 2020. we turn to phil with ford's cfo, tim stone. >> thank you let's bring in tim stone, cfo of the ford motor company you posted numbers that i think caught some people by surprise smaller than expected loss for the second quarter you ended the quarter with $39 billion in cash on hand. paid down some of your credit lines. how confident are you that you will not have to raise any more capital this year? >> well, phil, good to be here, and before you start i want to say how proud i am of the team at ford for not only what we've been doing to keep our team safe but also our community safe. and how we've been operating from on operational execution

stand to navigate the crisis there's a lot of uncertainty ahead. we're well positioned. as you said, we had a strong quarter. the team operated really well bringing production back to near full production by the end of the quarter. and delivered for customers. and we ended the quarter be a bolstered sheet throughout the quarter with $39 billion in cash and $49 billion in liquidity we feel confident as we look into the future. as a result of that we -- this week, we repaid half of the lines of credit that we drew down in march at the beginning aft crisis we paid about $8 billion we're well positioned to deliver for customers as we deliver into the back half of the year. >> when you read the comments from analysts after you guys posted the results, they're mixed at best. garrett nelson says you guys

remain in the midst of a restructuring. what do you need to convince wall street and investors that the prestructuring is taking hod and you're turning the corner? >> we are transforming ford motor company. we're enhancing our products and services to delight customers. we have a great launch coming up with the f-150 the fourth quarter and the mach-e, and we just introduced the new bronco brand, new bronco family the bronco sport will be launching the fourth quarter and then bronco two-door and four-door the second half of last year. we're driving redesign of the entire company as we restructure and have made great progress in that regard. optimistic as we look out into the future >> we've showing video of the

bronco which you'll roll out in the fourth quarter you said yesterday that you guys have at least 150,000 reservations people have said i'll give you $100 i want to be in line to buy one of these will you be increasing your plans for production based on the early response >> well, we're pleased with customer response to the new bronco and bronco family over 150,000 reservations. we need to convert those to orders from customers. we're confident based on the recent activity and the features and functions it has that we're going to be seeing a strong response we have the highest ground clearance. we have a safari roof environment with no cross bars, and the response from customers has been beyond our most optimistic expectations. and so we are exactly as you said, working hard with our supply base and our manufacturing teams to increase our production capability for customers. >> and that would be adding

another shift at michigan assembly plant where the bronco will be built? >> we're going to look at any and all opportunities to build more quickly for customers and that's something we'll look into as an alternative. >> tim, let me ask you about another vehicle coming out in the fourth quarter a lot of people are excited about, the mustang mache. all electric yesterday there was a question to jim hackett and the point was brought up that you guys are not building your own batteries as tesla is doing with panasonic and ge will do and jim hackett says there's plenty of supply we don't need to do this this has gotten a lot of reaction on social media people saying if you were smart, you'd build your own batteries what do you say to those critics? >> as you said, we have a fantastic product with the mustang coming out the fourth quarter for customers. a fully battery electric vehicle, 300 plus model range. as we look at our electrify kags

of the name plates, we think there are a number of great companies out there to partner with that are driving great innovation for customers with electric batteries that's the approach we're taking that's the right one for customers. the fourth quarter we expect to have 15 name plates available and represent about 10% of our total sales. >> it's sara, a general economy question an ugly gdp report and consumer spending as fallen off a cliff but autos are strong is what we hear people are buying cars, whether new or used. what do you see as the main driver you have the low interest rates, the stimulus, the lack of public transportation, and just how sustainable is it? >> we're providing great value for customers with our products. i think that's what you see in the customer demand as we

navigate the uncertain times our ford credit business is providing fantastic financing alternatives for our customers and the products we're introducing as we're transforming our products and services for customers are resonating well and a lot of enthusiasm for the upcoming f-150 but even in the u.s. where the f-150 is about to be upgraded to a new model, we've gained share this quarter. we have over 33% of the u.s. market with our f-series, and the f-150 is america's best-selling vehicle for 38 years. >> tim, one last question from me are you seeing any pushback or resistance as you prepare to roll out the new f-150 pickup prices are about $50,000, the average. do you see any pushback in terms of the pricing >> customers are responding

well we've gained share in the quarter. we have the best-selling vehicle, best-selling truck for 43 years best-selling vehicle in america. we provide great value for our customers. the price increase reflect the mix of alternatives and feature sets, they value this is content we're adding to the vehicles they appreciate for example, the new f-150 that's coming out of a hybrid that allows for the power boost alternative where you can essentially on board generator for customers as well as seats that recline 180 degrees and a work space that can be innovation that we designed for customers to be able to work in their cab. so we're going to continue to drive execution for customers and provide great value. >> tim stone, cfo of the ford motor company. thank you for joining us when the features are put into the vehicles and we see it with ford and auto makers, the price

points continue to move higher and they're finding the buyers >> people want them. i know, like, six people right now that are shopping for a car. phil, thank you. >> you bet our thanks to tim as well. shares of under armour down despite better than expected results. don't miss our interview with patrick frisk in just a few minutes. "squawk on the street" will be right back

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missing after a training accident that killed one marine. 16 were on board a vehicle that took on water during an exercise last night seven marines and one sailor for rescued. one of the marines died. carrie lam is delaying elections blaming the increase in covid-19 cases there. but it follows the disqualification of 12 pro democracy candidates in part because they oppose the national security law imposed by china's government and while some alcohol sales have increased during the pandemic, champagne is suffering, believe it or not well, with weddings and other large celebrations on hold, demand is way down producers in france say they expect to have 10 0 million unsold bottles in their cellars by the end of the year carl, i think we need to do something about that i think it's our patriotic duty to help our allies out and buy

champagne. >> let's do it, sue. let's start tonight. >> 2020 isn't anything to toast about. worst year ever. >> that's right. bring on new year's eve. >> do it now >> thanks, sue when we come back, we'll check in with the head of under armour $0.31 was narrower than the $0.42 loss we were looking for back in a moment experience the adventure of a bigger world in a highly capable lexus suv at the golden opportunity sales event. lease the 2020 nx 300 for $339 a month for 36 months. experience amazing at your lexus dealer.

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>> under armor with results this morning. initially the stock went up. it reported a 40% drop from a year ago, but it was better than expected thanks to strong online sales and better margins the stock is down more than 40 % for the year joining us in an exclusive interview is the ceo, patrick frisk. thank you for being on with us just off that conference call.

>> thank you very much >> so what i'm hearing is that the stock turned around after you talked a lot on the call about excess inventory and having to unload it in the back half of the year which gets people thinking about promotions at a time where you're trying to revitalize the brand what are you telling investors about that >> i think in general we're taking a more conservative outlook on the back half of the year we think there's a lot of uncertainty in terms of how the consumer is going to navigate this near-term period of the end of 2020. so i think that is really how things have evolved so far is we've seen this pandemic roll across the world, and consequently we think that as we look into the future right now, we feel that it's the right thing to do is to take the conservative approach. >> so when you just talk to us through the strategy when it comes to promotions and how you're thinking about the

brands once you unload that inventory in the back half, how are you positioning under armour into this positioning? >> i think one of the things we've seen as we entered this year with our new brand platform through this together is a strong relationship the our consumer we want to get ready for 2021 and beyond so as we don't know how the consumer will be navigating the back half of this year, how back to school is going to play out and ultimately for us, it is the setup for the future so thinking through how we then navigate the back half of the year, through activation, i think it's really hard to predict the promotion cadence of what it will be. we know for certain there will be some promotion going on, and we're taking the conservative approach having said that, we're going to continue to spend on the brand

we believe that the brand is going to be important. we feel that we're now in a situation with our brand where we can do that, and so we're going to also be spending on this campaign that we have that through this campaign for the remainder of the year as well. >> so i know most of the stores were closed through a good portion of the quarter now that they're reopened, what are the early signals telling you about traffic and consumer's willingness to spend >> consumers is there. they're coming back, but they're nowhere near preco-vid levels. most of our stores are open around the world we see similar trends across the world in terms of what's happening. the consumer is out there shopping and when they do shop, conversion is better, but the traffic is still depressed compared to preco-vid levels the question becomes what happens next and we think that that kind of tentative approach from the consumer is going to stay it's

going the back end of the year, we've taking legally all the precautions to navigate that landscape. >> how do you fix online i know that was a bright spot for you in the quarter we just got blowout results last night from apple and amazon. and it makes you wonder, do we even need stores right now as everybody has gone online for shopping? >> it's a great question i think the way we think about things is about being consumer centric. about how the consumer chooses to engage with us. how they prefer to experience the brand. we think there's an omni channel. we're excited about the launch of our new e-commerce platform we went live two weeks ago it's working incredibly well, and we think that in combination, a stronger

e-commerce base, a platform together with select full price store offerings around the world is the way for us to provide the consumer with the right experience from the brand going forward. >> it's a transition going into the pandemic you're taking advantage now to right size the business and set expectations just as far as the product, with nike and adidas and lululemon, all doing well and resonant with consumers right now, how do you make under armour sexy again how do you make it something the kids want and that gets in the resale stores and all those things propelling people to pay premium prices for this kind of product? >> i believe we're on our way. we started this year as i said with our new campaign. we see higher engagement with our consumer happening right now. we talked on our call today around the fact that we just launched in the beginning of this year our most expensive

running footwear ever at $150. it's been a great seller for us. that's not the only thing that's selling. we also have the run apparel working well together with the shoe as well as the activation, the engagement we've more than doubled the activation of the run app and the connected footwear that comes with it has increased about 150% year over year. engagement is up connectivity is up product is resonating with the consumer and what's really encouraging for us right now is how we see the women's apparel connect with consumer, training apparel for women through our infinity bras and our leggings, for example. so we're not letting down on our innovation, our product launches here for the back half of the year leading into 2021 and we're seeing now the consumer start to resonate much more with under armour if n those areas than we have in the last couple years. so this engagement with the consumer is incredibly important

for us the kdigitizing is important fo us and we're starting to see things come together for the brand. >> need to ask about a topic an investor's mind. you disclosed a wells notice from the sec you disagree with any disappropriate action relating to pulling forward revenue from a few years ago. kevin plank was named. how should investors weigh this risk what are your expectations here that you'll settle with the sec and pay a fine >> i think we lay that out i think that's really all i can say about that at this point >> all right let's talk about some other things in the news you've pulled out of the deal with ucla earlier in the quarter. it might be a good decision because college basketball looks to be a tough thing to get going right now. are we going to see more

sponsorships from you getting pulled as you long to retrench a little >> ultimately for us, it's all about the brand and the consumer, and being focussed on the consumer so for us it's about having the asset base that we can activate against that actually matters for our consumer and ultimately makes our brand stronger and as we talked about previously, as part of the restructuring we've been going through, the transformation, we're going to make sure we have the right assets to be able to activate one thing that's really important is when you do have an asset or an athlete, you need to be able to spend sufficiently against that asset, to be able to activate it and make it matter and that's really what you're seeing with under armour is making sure we have the right assets that we can activate against to make our brand stronger and resonate better with consumers >> what about selling my fitness pal app? can you confirm that's part of the strategy >> can't confirm anything at

this point i'm sorry. >> what about the major athletes you have is there any -- is that being discussed as another place to save and right size the business you have some big names and contracts there. are any of them on the chopping block? >> i think we're incredibly happy with the relationships we have with our athletes in this pandemic, it's incredibly difficult for the athletes they've been training hard just think about all the olympians out there, and we have many that were looking forward to being in the olympics all the major sports that are now either on hold or delayed or -- it's a moment of unknown for all of these athletes. so the first thing we think about today is really trying to support our teams and our athletes the best we can at this moment in time and that is really the number one priority we have right now as we go into the back half of

this year. >> how do you think about how much it takes off sales to have sports in such disarray right now? even the nba, steph curry is not in the bubble. how impactful is that for the business >> it's a great question i think one of the reasons we're conservative is we're uncertain of when things are going to happen and how they're going to be activated in the back half of the year because it's so much uncertainty around that, it's hard for us to predict what it means in terms of engagement from the consumer. i think for us right now the job number one is to make sure that we stay the course with what we've laid out, and we plan appropriately in terms of being conservative we try to support our athletes, our teams, and our relationships out there to the best of our ability, and i think that one of the things we tried to lay out during the call was how we

thought about that as it relates to inventory how it relates to the deactivation, trying to stay the course, or trying to bring fresh innovations to the marketplace at the same time, a bit of cautiousness as it relates to how the consumer will react out there. because the reality is we really don't know right? it's a very, very much a very much a variable at this point in time >> yeah. like a lot of companies out there. patrick, we appreciate you taking the time to talk us through it >> thank you appreciate it. >> dow is down about 180 here. we're seeing dow take a tumble down a little bit. meadows and pelosi are expected to brief reporters in the next 're minutes. wewatching the tape. we're back in a minute ike i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter,

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with stocks stuck below record highs one technician is looking to the high yield market for evidence of the next breakout find out more onrang tdi nation. more "squawk on the street" coming up.

in our etf spotlight today we're looking at xle down more than 40% for the year. the group's two biggest holdings are chevron and exxon. they have significantly impacted

the results, chevron down almost 5% by the way oil prices are flat to down. stay with husere on "squawk on the street."

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ever seen the likes of facebook so strong and alphabet as well. not quite there. other things incredible as well. 175,000 employees added by am zon azon in the quarter. also mark zuckerberg on the conference call talking about the future of remote work. he can see half of facebook's employees working remotely in the next five to ten years what does that mean? it means you bet verter have a good broadband connection. the stock is up almost 4%. that is $130 billion market value for charter now. but the big number of broadband subscribers, they added 850,000 internet customers they are including people that

may not be paying any more, but they're keeping them, but huge numbers and free cash flow just through the roof charter again another strong performer. perhaps should be included in that club of companies that has benefitted from this pandemic. >> especially on a day when the headlines continue to suggest that we might be working from home for longer than we think. you have seen cards likely postponed. the new york city mayor saying the schools may be closed. florida, another day sara of record deaths. but the pandemic benefits a very powerful circle of american companies. >> right, in the meantime the stay at home and work from home theme continues to dominant the market not quite helping lift everything right now in terms of

the major averages that has been the story with the four, the have and the have notes. the have, no question about it, the work from home plays we're seeing the positivity rate of the number of those testing positive and the total tests start to decline after reaching a plateau. hopefully we're moving in the right direction and it is a national number. we know the death rate that is going up is a lagging indicator. that is clearly one of the key metrics to watch going into the fall as well as whether or not we can get the treatments coming along especially on the antibody front. it is all reflected in the dow's month to date winners. proctor, coke, mcdonald's would follow that list if we took it further. we're back in a minute, don't go anywhere

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lawmakers are still seeks provisions one is raising some eyebrows >> good morning, this is an example of high end tax benefits that find their way into the bills. it allows owners to deduct the costs of their business meals. companies would now be allowed to deduct 100% of the costs. they say it gives needed help to the restaurant industry. they call it a subsidy of the three martini lunch. it could cost the government $2

billion to $3 billion per year the president has been calling for this change since april after a call with celebrity chefs. the president wants business meals and entertainment to be fully deductible. >> that is one thing we're seeing right now, we will say on top of that with our help. good morning, three out of four