about 39 andrew, i will see you back here tomorrow, hopefully scott will be back with us at that point. >> see you tomorrow. >> see you tomorrow. folks, right now it's time for "squawk on the street. ♪ good tuesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber futures are just south of flat as stimulus talks on the hill show few signs of progress getting some breaking news right now on ford and for that we will head to phil lebeau. >> there is a shakeup at the top of ford motor company, jim hackett who has been ceo and president of the company since may of 2017 is retiring october 1st taking over on october 1st will be jim farley who is the coo of the company this is a move that had been widely expected. the timing is a business of a surprise, nobody was quite sure when this would happen, but it's not a surprise that jim farley is taking over for jim hackett this is a company that under hackett has not been able to turn itself around

hackett was brought in, he was a board member, previously he had done a great job at steel case the office furniture company in michigan and when he came in and he said, look, we are going to transform ford, get it ready for the future for autonomous vehicles, for electric vehicles. that hasn't happened ford has been mired in really not being -- making the move that it's needed to make since 2017 they are starting to change that a little bit some of that because of the moves that jim farley has made as coo, he becomes the ceo effective october 1st and the marching orders are pretty clear. transform this company, get ready for a future with electric vehicles, autonomous vehicles at some point, not immediately, but at some point, but, guys, this is the most interesting stat that i can find. if you go back over the last, what, 20 years, 19 years, only one ceo at ford, alan malaly posted a positive gain in ford shares there you see hackett's performance since may of 2017,

down 38%, similar to fields. when bill ford ran the company they were down 50% we will hear from hackett and farley on a conference call in just a little bit. this is not a surprise that ford is finally pulling the trigger and saying, okay, it's time for jim farley to see what he can do to transform ford. >> phil, i have to tell you i think this is a welcome move one of the things that i look about farley is he looks at the stock price, i have found the ours say i don't want to pay attention. you have to pay attention when your stock is down this much he and his wife personally bought $1 million worth of ford in june. he seems he is motivated by the stock price which is something -- it hasn't seemed like the other ceos have been since alan. >> he is not only motivated by the stock price, jim, but he is also somebody who is very familiar with what has to happen within the auto industry the knock on jim hackett when he

came in is, okay, well, he was on the ford board, it's not like he didn't understand some of the auto business but there was never a business you would talk with executives within ford, they would say you would go to meetings, he would tell you a story, let me tell you what's going to happen and the company has been largely drifting over the last two or three years. it would not be uncommon on a conference call with analysts that you would hear an analyst say what's the story what's the game plan when you have analysts openly saying that, look, we all know people say that, but they were openly questioning him on some of these conference calls. this is a company that has been way too slow to transform itself and that's going to be, you know, a challenge for jim farley it's not like he comes in and they are, you know, really cooking right now. they've got some nice momentum, especially they have the mustang mach-e coming, the bronco will be a hit and the f series is the best selling vehicle in the world for 37 straight years.

it's not like they have nothing in the stable. we will have to build off of that >> phil, i was going to ask you to pass judgment on the hackett years but you just did that in many ways. it's amazing to me it's been almost over three years since they made that change but i wonder, you talk about a lack of vision, i mean, they got rid of mark fields who is now a cnbc contributor and we wondered at the time about that move perhaps i don't know what ford would have been like if fields would have been able to continue fulfilling his vision. i'm curious to see your thoughts. >> i think they were drifting -- they were starting to really drift under mark fields. you had tension within the executive ranks, tension between him and former coo joe hinricks along with other executives. it was time for them to make a change when they replaced mark fields whether or not jim hackett was the right choice, it was certainly not a conventional choice, but he is very close to

bill ford and at the end of the day, guys, this is the ford family's company yeah, it's publicly traded and, yes, there are executives that they bring in, it's not like the ford family aside from bill ford is super active, there are some members of the family who are active within the company, but bill ford this company still marches to his drum beat and he was close to jim hackett, he believes in jim hackett's vision for further transforming this company and on paper when you listen to hackett a lot of what he said made sense, sure, you have to get ready for autonomous, you have to get ready for electric but it just never happened, they were way too slow, certainly much slower than their competitors across the street at general motors now, with farley, farley understands the urgency of the moment and he has been pushing not just with in terms of bronco as well as the mustang mach-e, he realizes ford has to move much faster. it cannot be the same company it's been over the last ten years. >> phil, you did mention that bill ford and jim hackett shared

the same vision. i've got to know what is bill ford's vision? because to me when i look at the vision i've got to get new contacts i mean, the vision seems to be a losing stock price and that just can't be any family's vision. >> well, his vision is he understands that ford has to change, the knock on bill ford as the chairman of the company, as really the man who runs the company overall, he is the patriar patriarch, the knock on him within the company is he has set people in place but there are still fifedoms within that company. he helped alan knock knows down. it would not be uncommon that people would say i've been here for x number of years and so-and-so says that's okay that changed under alan and you really started to think that ford was a company that was going to be much quicker when it came to rolling out products, rolling out technology, but then it stopped under mark fields

the big challenge for ford has been and remains how do you take this company that's been around for more than 100 years and has these fifedoms within a huge company that has been there for decades, how do you break those down at the end of the day that's going to be the real challenge for jim farley, too. he's been there since 2007, you are with a company for that long you understand where those fifedoms are at. >> phil, thank you for that. top of the hour news on ford, we will continue to monitor it. phil lebeau in chicago. jim, that's three ceo changes in the last 48 hours. >> yes pretty amazing i have to tell you i like farley because when you talk of farley my wife likes the bronco and is saying i'm glad they brought thaem back he said what does she think of the 150. the guy talks cars i know you have to talk electric cars but at least he knows his

own lineup carl, i don't know, my wife is a real car guy, she's got a '94 defender she thinks that farley -- that this is the future and i'm glad that they have a guy who wants to talk cars and not like steel case, you know, cabinets and stuff. >> right right. meantime for a second day now microsoft, tiktok continues to be a big story of course, the president's comments yesterday about what he called key money today, jim, it's an op-ed in china daily saying that china will by no means accept the theft of a chinese technology company and has plenty of ways to respond if the administration carries out its planned smash and grab i heard you talking with becky about this a few moments ago. >> hysterical. look at the micron lawsuit they create these bogus -- the chinese communist party create bogus entities that steal all of our intellectual property and all the president is trying to do is fight back a little bit.

david, come on, you know that those joint ventures are bogus and set up to take information and give it to the chi-com army. >> yeah, there is definitely you need to be careful you know, you would go down this road a lot, but you also, by the way, jim, are happy to applaud the success of the business that starbucks has in china or apple has in china or qualcomm has in chooen so let's not forget that but, yes, you do need to be extraordinarily careful. it was years ago we first reported right here on chinese cyber espionage of u.s. corporations, it quieted down for a while, it has picked back up in an extraordinary way from everything i hear, eamon javers reports on this as well. yeah, there is no doubt there is a lot of stealing going on that said, you know, jim, do you have any idea what the president was referring to yesterday -- and i'm sure we have the bite and we can take a listen and try to parse it in some fashion, but

what in the world he was talking about with this key money? this key money idea? let's listen and then we can sort of see if there's any semblance of competence we can figure out from this thing >> whether it's microsoft or somebody else or it was the chinese, what the price is, the united states could -- should get a very large percentage of that price because we're making it possible. without us, you know, i use the expression it's like the landlord and the tenant and without the lease the tenant doesn't have the value well, we are sort of in a certain way the lease. we make it possible to have this great success. tiktok is a tremendous success, but a big portion of it's in this country. >> listen, if you are microsoft you're still trying to figure out exactly what that means. you are continuing to try to negotiate, guys, to figure out a value that you want to pay for the tiktok business. there is a lot of regulatory things around it still going to need an antitrust review, though you would expect

the u.s. government would say yes on that front, too yet again, shouldn't necessarily be connected dealing with the chinese government this is not an easy road made even more difficult because they're trying to figure out what the president meant,too, jim. >> i think the president recognizes that facebook can't buy them, google, apple, amazon can't buy them, they are all under fire the president think that it's a done deal for microsoft and i think he feels like, wait a second, i just gave microsoft the sweetest deal in the world let's have a little kickback to the treasury i don't know if that's so strange. i don't. come on, david, it's a sweetheart deal? in the history of the united states has that ever occurred that you are aware of? >> in the history of united states have we ever had a president like trump honestly what are you going to talk about lincoln next like madison >> well, i can talk about typically the fact that even both parties have stayed away interest corporate decisions to a certain extent, now, we can get into a long debate about it, jim, because obviously there

have been times when the u.s. government is deeply involved in the economy and to a large extent in some of these kinds of things, particularly when it comes to banking but i can't remember anything like this, can you? even the idea. by the way, it's not going to happen. >> no. >> it's probably illegal and it's not going to happen, but i think it's interesting that you're going to defend it. >> when bush said 75 to 80 percent chance this gets done. >> i think it gets done. i think it is a sweetheart deal. the president thinks differently thanl us i think he's good on this landlord/tenant stuff because he's been a landlord. >> sure. >> a good back and forth there. >> then you've got the journal this morning, if it's deemed legal, the key money aspect would set a dangerous precedent for the seizure of foreign businesses, open the door for u.s. firms to suffer the same treatment in other countries you are not worried about that >> because i think that the country that he's referring to steals from us constantly and this is the way they do business and it's embarrassing. when you look at the different

joint ventures they come up with, most of the companies are made up and all they do is steal our stuff. look, this is factual. i mean, again, i'm referring to the micron lawsuit which i think is definitive. i think the president was -- i don't think he spoke the way he might have ent am. i think he might just say, look, there should be -- there should be an understanding that the united states is giving microsoft this gem, but, david, you know when constellation brands got the gem of corona from the justice department they didn't write a check to the justice department i admit it's a little wild, but i am urging you to open your mind to the fact that this is a president like none other. >> listen, he's been president now for three and a half years, i'm well aware of that and yet these kinds of -- listen, again, i don't think it's going to happen you could have gone down the road that says we'd love them to make a commitment to keep jobs in the u.s. or to add jobs, which is a line that he has gone down many times in terms of at least trying to get companies to

commit to that you know as well that he's talked often about the tariffs on chinese goods going to the treasury i mean, maybe things are getting conflated in some way in his own mind, but, jim, yeah, i never cease to be surprised. my point is is it makes it more difficult if you are microsoft trying to negotiate this deal, this being an added layer of complexity is not good for certainty. let's just say that. >> the key to this thing is make smur microsoft really operates it and there's no remaining connections to bytedance in china. that's what you need to have and that's what he should be after that's what he should be focusing on. hiring a lot of people here and have no intellectual ties to bytedance. look, he's probably watching the show, he might be watching another network right now, but, mr. president, there, you just got the whole game plan. the key money thing, no. >> you've been arguing, jim,

that this is not the time to go to war with china because of our own economic fragility, but it sounds like you're slowly getting dragged in. >> i am. i don't want to cold war, i want a trade war, but the idea that the chinese are saying to us, hey, we're going to do this if you do it. they've been doing it for years. the prc -- >> you're more hawkish than you've ever been, jim. >> this is an insult into. >> what is the ultimate vision here, then two completely separate economies, two largest in the world, we are still well larger than china but that's it two separate systems >> level playing field that's all i want. level playing field. we are not getting that. >> right. >> all right so i'm a bigger hawk than navarro. what can i do? >> we're not done talking about it by a long shot, guys. we will come back, talk about the market day ahead a little bit of chop involved as we saw futures swirling around overnight. dollar a little lower today reflecting maybe some of the stickiness in these

congressional stimulus talks back in a minute

this is a five alarm emergency in which i believe and i think the 100 ceos who signed this letter in support of the restart act believes that all roads should lead to small business relief and any stimulus package that congress approves

howard schultz in the last hour talking about the progress of the talks on capitol hill jim, in this case relief for business "politico" is saying this morning that while mnuchin is trying to work out a deal it's meadows who is getting tired of this and will give it another 24 hours "politico" says before pivoting to unilateral actiones. >> i think that's what i hear, too. i thought howard was heart felt but empirical about what is happening around the country you can't make a difference with social distancing. you just can't you can't have half of the revenue but all of the cost being the same t just didn't work in the end almost everybody goes under to doesn't have a huge balance sheet. ralph lauren reported today, they have a huge balance sheet to they can handle the decline any other men's or women's support toss independent --

david, anyone who is a boutique that you have to wait in line to go to a store. i have three tables instead of 12 tables at a restaurant. it doesn't work, david, mathematically. >> no. no we said this for months. any business that requires somebody to come in to do something has suffered, period and it's different levels of how bad it is. you're right, that continues to be the case. we haven't talked as often about the virus of late in terms of states where things are still raging and other states that are bringing mention under control, but where we are right now at the early days of august is certainly not where we had hoped to be let's call it back in june when we were first coming out of this thing and those businesses continue to suffer greatly. >> i do think, carl, that the game plan had been that it would diminish in the summer, we had a lot of people who talked about that, things would go back a little bit to normal

now you are all scrambling three tables in front of the capital grill on 42nd street but 50 tables inside, maybe more so, carl, i just think that the clock as howard correctly said we are on the clock and you can't restart thighs businesses they are just going to go. >> just a day after that incredible "times" piece about the number of small businesses in new york that are already on their way toward going away forever. pretty discouraging. take another break get ready for the market day ahead. quk t see iba"sawonhetrt"s ck in a moment. don't go anywhere.

(music) anncr: give customers access to precisely what they want, when they need it the most. with adyen, the payments platform that delivers convenience for all.

adyen. business. not boundaries. a lot of google news this morning. there was that six-part dead offer yesterday at some of the lowest rates ever. the eu delaying its deal forfeit bit, asking for some remedies by december pixel rollout. new partnership with google cloud and best buy we will get to all of that when we come back

my name is janelle hendrickson,

and i'm an area manager here at amazon. when you walk into an amazon fulfillment center, it's like walking into the chocolate factory and you won a golden ticket. it's an amazing feeling. my three-year-old, when we get a box delivered, he gets excited. he screams, "mommy's work!" when the pandemic started, we started shipping out all the safety stuff that would keep the associates safe to all the other amazons. all of these are face masks, we've sent well over 10 million gloves. and this may look like a bottle of vodka. when we first got these, we were like whoa! [laughing] with this pandemic, safety is even more important because they're going home to babies, they're going home to grandparents. so, our responsibility is to make sure that they go home safe every single day.

>> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. let's get to a mad dash as we count you down to opening bell about three and a half minutes from now jim, interestingly, you are doing a name that i was focused on this morning as well. so glad you are going to at least deal with bp in the next three minutes or so. not just the lack of, or the cut in the dividend, but this pivot

they're making to trying to be carbon neutral is pretty extraordina extraordinary. >> they are an oil company and want to be carbon neutral. i get that one time exxon owned a tech company. david, get this, because the market never ceases to amaze me in how stupid it is, february 4th of this year bob dudley on his way out boosted the dividend 2.4% to 10.5, 10.5 cents, that's february 4th of this year and the stock went up 4.5% look at this david, they cut the dividend in half and the stock goes up 4.9% will you please explain that to me please, david. >> i can't >> is that any different from the key money thing that i couldn't explain with the president key money. >> back to that. >> key money was when my mom gave it to me so i could buy a del monte fruit cocktail how can stock go up on a

dividend boost and cut the answer is because they don't know what they're doing. >> is the they the investors or bp >> the oil company i'm sorry the carbon neutral company. what are they going to do? what is their plan >> they have a plan. >> they do >> they have a plan. by 2030 they want to be well advanced on what they're calling their five aims. >> five aims. >> they set out in february to underpin their ambition to be net zero by 2050 or sooner. >> why don't they shut down? they can be net zero today. >> -- on aim one and which is absolutely reductions in operational emissions. they spend $500 million year now $5 billion in investments in low carbon by 2030 a ten-fold increase jim, they're trying to pivot, trying to attract all those investors who won't invest in a fossil fuel company. maybe it's generating some enthusiasm. >> could be solar, might be beyond meat for all i know

this company is kind of lost its way entirely now, look, i'm not talking about -- i didn't mention maconda, but this is a rather extraordinary thing and it shows me dudley felt that the business was really great so he raised the dividend, now they think it's great so they cut the dividend i understand if microsoft wants to be carbon neutral but they are in the end an oil company. maybe you flare less but there is a basic oxymoron nick approach which is that they could shut down right now and be carbon positive. >> maybe by 2050, jim, they won't be an oil company anymore, they will be an energy company but not an oil company. >> how about they distribute all their properties they close and then at that point they are, you know -- they can reverse everything that they've done to the oil environment.

why not? i don't know, man. we have so many companies doing stupid things, i'm trying to get my arms around it, although i am pro environment. >> yeah, but you say it's uninvest i believe, the sector is uninvest i believe, at the same time you criticize them for making themselves investable. >> what would make them investable is profit growth look, i don't want -- i don't want a tuna with good taste, i want good tasting tuna, charlie. >> carl -- >> here is the opening bell, guys the s&p 500 being led this morning by a couple different names. boeing is up 1%, jim interesting booking holdings announcing plans to lay off about a quarter of its 17,000 workers. even as tsa traffic, jim, on sunday was a post covid high, almost 800,000 people flying

way above the low back in april which was 87,000. >> i had -- they got a deal with united airlines that makes me feel like i would fly united, it's about dis infecting i have no fear of flying right now, none. i think anyone who does does not realize the combination of mass and disinfectant have made it so that you are afraid to fly i think that you don't recognize that it's -- i find it safer than going into any elevator in a high-rise in this whole country. i think it's going to come back, it's just that it needs to be more things to go to that's the problem things to do when you get to where you have to go, but these airlines have done so many right things remember there are 2 million people who work indirectly with boeing, you don't want to lose that industry. we are losing the small business i have tremendous faith in the airlines with mask enforcement i would fly on any one of these.

my daughter just flew from spain. no fear. everyone had a mask on that's what needs to happen. it's game on airlines no one >> the point is the right one, jim. where are you going is the question the only other thing is you're going to face delays while they escort people off the plane who refuse to wear a mask. >> united arab emirates there is a flight to milan where they will be testing you, a five-night flight, but of course americans can't go we have off limits in all the british virgin islands right now, off limits in the caribbean in a lot of places we are not welcome so that hurts flying if you are not welcome. carl, there is a big -- we can't go anywhere. >> no. vegas running into troubles as we know and then, jim, tonight

with disney maybe we will get some guidance on how at least they view the progress of reopening parks. >> i hope so i mean, we know one thing that if you want to be covid-free you do what adam silver did with the nba. i think it's remarkable. if you watch the nba it's almost as if there has never been covid. you have to take those -- you have to take those precautions and it's really terrific that we can see what happens what it could be like if we beat this i think this disney i think is saddled with a lot of things that are really right in the cross-hairs maybe they can tell a good story. i don't know how they're going to do it >> listen, we will also be interested to see what they have to say, again, we've been following the delay of any key theatrical releases from the company, obviously by far the largest single producer of movies. >> right >> is disney with the fox studio part of it as well now

we want to see what they have to say about espn, to your point and sports programming overall and the health of some of their networks and of course we're going to be focused clearly on direct to consumer, disney plus which thus far has been exceeding expectations by a great deal and certainly seen as a positive, but still consumes a lot of capital, guys. it's still in the investment mode right now and that's why the company has had, what is it, about $17 billion in debt over these last few months as it dealt with of course the current conditions that it's facing. unprecedented conditions, by the way, for a company like disney that it's befr seen as has been the case for so many companies as well. >> i think if you want to know what entertainment works and what's fantastic on your screen, it's what take two produces, grand theft auto, red day redemption, look at the numbers there. they have life like figures, the nba players love themselves. that's a chart of a company that

has entertainment brought right to your home that is wildly in favor and i think that that's where you go i mean, grand theft auto is the greatest selling entertainment individual piece of all time and, carl, i don't know whether you're a gamer, my nephew who writes the show with me is a gamer and the red dead redemption a lot of people feel was the greatest single artistic work ever. >> people talk about it like that now of course, take two did raise their full year guide, jim it reminds me of this call out of jefferies today regarding amd. they argue that intel's trouble engineering-wise are systemic and that's going to accelerate amd share gains. they go to 95, upside 135. >> i think that's right. amd is the big winner along with nvidia i find that when i look at what happened with intel it feels -- it's very ford-like. they own -- the best thing that

they own is a company that does autonomous driving i find that intel this is an engineering business and they are not engineering well, at least -- m.i.t. trained engineering worked with rick nell who sold novelus and has a tremendous background. they are just crushing it and a lot is because intel has fallen off a cliff. this he couldn't do the 7 nano it was the greatest engineering company of our lives when it was run by andy gross. no question about it carl, it's really an american story. >> you would put ford, intel, ibm, i mean, what else ge, other clients that have been lapped by younger competitors? >> yes, and it's been done i mean, i know dave cody and his winning now, winning later book which is great for honeywell talked about the need you have

to blow up your stuff constantly you have to constantly reinvent but you also have to cut and get rid of divisions that looked really good at the time. i don't think any of the companies you mentioned are really capable of doing that mobile eye was a brilliant acquisition by intel, but where is the beef? they should -- it is very, very -- i'm not saying they're bp where david seems to think that it's a good pivot into trees and whatever, i don't know what they're doing, but intel is a tragedy. intel -- when i went to the opening of the plant in ireland, oh, my, it was one of the greatest days of my life it was so beautiful. i went to the israeli plant an they had nobody working on the sabbath. these places were wonders of the world. now they can't do the 7 nano i don't know, carl they're not who they used to be. that's who they are. they're not who they used to be.

it's sad >> you still keep going after bp i don't know, you know -- >> they raised the dividend -- >> i thought you were mr. cashin neutral. >> not for an oil company. >> i thought you were a trillion tree guy. >> i am. 3 trillion trees and we bring the world back to where -- we even get -- why don't they go clean the plastic in the pacific if that's what they want to do i don't know bp is an oil company and they were very -- they were celebrating oil in february and now they're trashing oil you can't switch like that you can't. >> somebody -- somebody is going to have to make the pivot in that industry at some point somebody and be potentially rewarded for t i come back to the fact that you talk about this industry as being uninvestable. >> and that's been about as right as rain. >> i don't understand what changes your viewpoint because you seem to be saying it based on the fact that so few -- there is a growing group of institutions who will not invest in this business. >> why does it have to be an

industry if you get -- you get a six hour -- honeywell has a nine-hour battery they're developing if you get a nine-hour battery from elon musk who is right now in chargeof the world, bp is absolutely right to pivot. it's just that, i don't know, maybe they should pivot to something entirely else. i don't know, like fast food or something. speedway david, you love that speedway. >> by the way -- yeah. you know, that marathon came back yesterday again, it was up -- we were talk being it wasn't moving at all, then it moved up, then it didn't end the day up very high i guess there's some concern on antitrust. look at it today, it's going to take a while, that 7-eleven will have to divest a certain number of locations not what people had anticipated, jim, given they got a number there, $21 billion that i think was unexpected it may have been very much above the cover bid from what i understand as well they did great in the auction. >> the company is at $24 billion

market cap, yields 6.23, it's got this tremendous deal with 7-eleven i just think it's one -- remember, it's refining so i don't hate it like the hate the oil companies, refining can be a good business, cyclical. i think the stock is mispriced i know on twitter i'm wrong and people have told me i'm wrong and there are a lot of sages portnoy has not criticized me. >> as he shouldn't because you are his greatest promoter one would expect that he would be very thankful to you. >> you're very critical of me today. >> come on you know, listen, nobody -- i mean, just so people know, because i think we need to remind them, we are the dearest of friends and i have the greatest respect for you, but it doesn't mean i'm not going to disagree with you. >> that's true. >> yes, i am disagreeing with you this morning. >> carl, i have to tell you i'm glad you're with us because i think the disagreements could turn into a thriller in ma nil

la or rumble in the jungle into i don't think we are in any danger of fisticuffs at this point. >> is that going to be like lloyd jones and tyson? that will be great. >> ralph lauren. >> ralph lauren is moving around pivoting as hard as it can direct to consumer, the actual stores they have they are not closing are doing well, they have a fantastic balance sheet, 1.7 billion in cash. a lot to like but at the same time they missed patrice has a strategy to pivot to personalization and online but it takes heart it's hard to be omni channel in a heartbeat. they do have a lot of clothes that are a little too formal these days they've got a whole line of clothes that i think don't work for people who just sit at home and pick their toes. i do think in the end patrice is the right man, $4.7 billion seems low for the most iconic

name in apparel other than nike. but the dogs won't eat it. they're crushing it. i didn't think it was that bad. >> yeah. >> i really didn't. >> obviously a tale to a large degree of physical retail which reminds me, david, facebook closing the lease of 700,000 square feet at the farley building in manhattan, terms not disclosed, but kind of curious that facebook would go ahead and close on this when the situation at hand would suggest they may not use all of that space. >> yeah. i mean, given the comments from mark zuckerberg on the conference call last week that he sees as many as 50% of facebook's employees working remotely within five to ten years, i think i'm quoting him correctly, you would expect perhaps they would be looking to decrease their footprint very interesting and certainly being talked about a lot in commercial real estate circles this morning and at least a sign of some confidence for new york city which is just getting

crushed in so many different ways young people want to still be together, you can't create a culture without people being in the office >> what? >> people can't advance -- people can't advance without being together in some way. >> what are you some business psychiatrist young people like to be together what are you talk being? >> yeah. you don't think they drv yeah. you don't remember being in your 20s because it's -- >> it was a -- it was -- >> it was so long ago. >> i work with jim stewart every day and i get it, we did like to be with each other, it's fn, but that's not what it's about, david, it's about profit >> okay. well, then, facebook must think that it benefits from having some people in the office because they are spending the money to lease the 700,000 square feet the yet to be fully built, that's the farley post office they for the one across the

street down, that disgusting building called madison square garden, that was also beautiful once, that was the old penn station. not to go too deep into architecture, that is going to be a new building, beautiful and that is where facebook will be housed. >> they have a presence in media, you have to be in new york for presence of media, maybe this is a signal they're moving in another direction, too. i don't know i mean, look, it's not like bp going into business and making trees, facebook can pivot and do more media right? >> they're growing, still growing very quickly and they have a growing employee base and, again, not everybody is that excited about working out of their parents' basement or working from house somewhere certainly when you are in your 20s and trying to get ahead and trying to meet people and socialize, how many people met their spouse at cnbc how many people? i think i'm the only one that didn't. >> lisa was in real estate

facebook wants -- i think that facebook wants to help small business this is the capital of small business with he forget that. this is not silicon valley you want to help small business, you do it right here, you plant the flag, small business, and that is where they're going. and that is the right thing to do they're not going consumer product, obviously they do have a boycott. if you're going to do small business and you listen to what howard schultz said today i think it makes all the sense in the world to take the farley building david, for ten, farley, who is -- >> what about farley >> it's a jeopardy -- >> who is? >> oh, i don't know, the new ceo of ford. >> no. no he was an fdr guy. do you know what a bronco is i mean, don't say horse. >> i'm the judge i'm going to rule david's answer was correct because it was. >> oh, carl, you threw it to him because you know that he feels

bad about young people liking each other, the psychiatric explanation and then liking bp's pivot to, i don't know, tyson foods. they're going to buy tyson foods. make it a complete swing >> i don't think it's me this morning, my friend, i think it's you. >> uh-huh. >> okay. >> guys, let's get to rick santelli this morning as we're watching the dollar and yields and tips rick, good morning >> good morning, carl. yes, there's actually a lot of movement the issue with treasuries is most of the movement globally is in one direction, yields down, price up look at one week of tens about an hour ago we were back up 54, 55 basis points, we have drained back down to what is currently the all time low yield close around 52 bases points as you see on that one week chart if we shift gears and aim across the pond we see that the boons in the euro zone are hovering around 54 basis points open that

chart up to may 1st, hovering at a three month low. if we look at what's going on in italian yields that are at 96 basis points on their ten year they're hovering at 5.5 month lows as that chart starts february 1st so we see that this global push of course really central banks to try to react to, control, nullify some of the aspects of the economic negatives of the coronavirus of course are bringing along a host of other issues along with it debt and low yields. and yesterday as we discussed alphabet their multi-tranche issuance of debt, well, $10 billion and it was at the all time lowest yields for each tenor, each maturity, whether you are looking at the 40 year, 30 year, every one of those was the lowest yield ever for a corporate security of that maturity unbelievable and if we stick with the theme of high yield and investment

grade here is a barkley spread chart of both of those year to date not quite at the levels we were at the end of last year but we are getting quite close to historic narrow with regard to especially that investment grade aspect, but high yield, under 500 basis points, a victory by any standard and finally foreign exchange, carl mentioned the dollar index, here is a chart going back the last few days in july july ended with a 4% drop in the dollar index, but august has been a bit kinder although the bounce is small in comparison to the move of july carl, jim, david, back to you. >> all right rick, thanks rick santelli. take a break here. obviously a couple -- a little bit of chop here to start the session although financials are one of the worst performing sectors down .6. back in just a moment. 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. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today.

closed 10% sales growth, which, by the way, is highest organic sales growth we have had in modern his tremendous, all four segments grew at double digits seeing broad-based strength. it certainly is in part a function of the fact that our products and brands are serving so many more consumers today in the face of the pandemic, and people staying at home. >> and with jim last night we know your admiration how he positioned clorox for the future. >> incredible and seems the

pandemic, of course, the only way you can kill, really, covid, most definitively is with bleach every one of these divisions is up extraordinary. hidden valley ranch or kingsford. he'll have to do outside dining. s senteva trash bags one. greatest quarters ever created gli ed guidance, flat tn people aren't buying it. his last quarter i think a woman with great natural experience what they need managed to avoid being acquired and became in 107 years, i think, that maybe the most organized, maybe the most exciting consumer package good company there is. >> yeah. and to your point. they resisted any of that, and have, it terms of selling outside and capping a stock price that kwould have been far

lower than where it is now. >> exactly right. >> sorry to see him go what a titan. >> yeah. guys, free market didn't look so strong but you got alphabet, amazon and apple in the green. one reason nasdaq is up. back in a moment. apps are used everywhere... except work. why is that? is it because people love filling out forms? maybe they like checking with their supervisor to see how much vacation time they have. or sending corporate their expense reports.

i'll let you in on a little secret. they don't. by empowering employees to manage their own tasks, paycom frees you to focus on the business of business. to learn more, visit paycom.com simon pagenaud takes the lead at the indy 500! coming to the green flag, racing at daytona. they're off... in the kentucky derby. rory mcllroy is a two time champion at east lake. he scores! stanley cup champions! touchdown! only mahomes. the big events are back and xfinity is your home for the return of live sports.

seeing activity here. travel-related names look at carnival up 5. royal caribbean up 4 tsa traffic sunday, almost 800,000 people flew this past weekend. a post-covid high for traffic and airlines reflecting thats a well. we're back in just a moment. .

how long will this last? am i prepared for this? are we prepared for this? with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations, with access to tax-smart investment strategies designed to help you keep more of what you've earned so you'll know you're doing what you can for your family and your future. that's the clarity you get with fidelity wealth management.

and stock trading. >> quandary. perhaps one of the best beats ever online books incredibly important for college and it was a beaten raise, raise, raise, raise. the stock down six quite mistaken and could end up off. how big the quarter was. i don't recognize what the hell happened there, but shouldn't be down. >> hey, guys still remember rosenswits on the show at 3. what a story. >> he try cried. said he would do better and did. buy on his -- only person ever cried on the show -- since your man. friend of -- friend of herself. >> emotional kwoequotient.

>> certainly delivered tonight, oh, my. b & g foods like the clorox and somebody in better shape than david favre. a man who looks half his age >> sellnik, right? his stock. >> i knew it >> and had a shot of his abs. >> and not kidding greatest entertainment bob barker would tell you that never anything in entertainment as great and "grand theft auto" in terms of gross. biggest entertainment of all-time it is. >> should have a workout program where faber and martin franklin and strauss compete in olympic event. >> frank was like, listen, i just did the cross sahara run and the adobe desert, but negative things to say about ya. >> run 60 miles in the desert. strauss has written books about

it. >> strauss, ostrich meat. >> and maybe a pull-up. >> he has a six pack but people aren't drinking beer according to them. >> yeah. wow. diageo, rudge, jiough, jim. >> what a show take two unbelievable, b & gmp and figur for david how an oil company become as company that doesn't produce carbon working on it. haven't come up with a solution. yes, i think microsoft should pay the key money to the president t. is 30 years do it over 30 years. >> fine. okay. >> a long time. >> greg once said, a cut, just like the president okay he's head of m & a. >> jim, see ya later. >> farley building -- it's a farley day >> welcome to "squawk on the street." i'm carl quintanilla and factory orders, get to rick. >> yes factory orders month of june

expected eed up 5% a beat, 6.2% following an 8% rise prior to that, historic low minus 13.5%. an april number. go through it. ex-transportation. still up 4.4%. these numbers are pretty good in that 8%, talked about it on headline, downgraded on revision to 7.7%. for the june final read on durable goods, which means they have a mid-month read we will toss up. expecting 7.3% ended with 7.6%. 7.3% mid-month read. tossed now replaced up 7.6%, best since may, which was 15.1% followed, of course, the very ugly minus 18.3%. go through the internals strip out transportation still up 3.6% better than the 3.2% to 3.3% expected. solid number look at capital goods orders

non-defense, x aircraft proxy for capital spending is up 3.4%. that follows 3.3% mid-month and switch from orders to shipments. up 3.3%. lost 0.1%, 3.4% mid-month read better than expected all the way around but continue to see pressure on yields federal reserve continues to monitor these markets closely, and corporate securities, whether invest grade or high yield continue to be on fire with respect to demand carl back to you. >> yeah. google story you mentioned earlier, rick, incredible. thanks, rick rick santelli. our next guest can cover an awful lot of ground, but we start him on big tech as apple approaches a $2 trillion market cap. of course, microsoft, tik tok in the news spencer is with us zillow co-sponsor and board member good to see you, spencer. >> great to be here.

>> you made a great call at least on facebook the last time we had you on. you argued the ad boycott wouldn't impact the quarter. clearly it did not see what july brings i wonder whether it's facebook or some of these other big valuations we're discussing, the argument's made they are large for a reason given the relative strength of those companies, and do you see it going farther >> i mean, look, big tech is quite unstoppable. saw it this week when the government called them in nfor questioning and couldn't land a punch. covid accelerated big tech more than expected. social networking, cloud, ecommerce, big beneficiaries of covid. i don't see it slowing down. only thing that slows these companies down, truth of disrupter. like tik tok and social media or kind of hard to find one in the case of ecommerce. amazon maybe chopphi more and more power occurring

for big tech and i see it continuing to grow. >> have they successfully avoided a china trap in that -- in other words, something that would have derailed their model, if, in fact, relations between china and the u.s. continue to get worse? >> yeah. i mean, most of them wish they'd had a big china business microsoft is only one with a big china business, but by avoiding a china business they've stayed. antitrust against the companies, different. interesting to see them all present together in front of the house. the issues are quite different some more serious than others. as i say, i don't think that there's -- i don't think anything will come from the government investigation into these big tech company is. the thing that's most concerning is google and amazon changing their sort order to benefit their own properties compared with market place participants, and clearly in europe google's gotten in quite a bit of trouble

changing sort order to enhance their own promise. -- own properties's if you want to disrupt the big tech companies, watch a competitor. angel investor or entrepreneur and founder and start somebody to try to disrupt them. >> yeah. well, spencer, it's david. one company you could almost call a disrupter tik tok in terms what it's done in social media. curious to get your perspective on the success of that service oh far whether it's sustainable and most importantly, whether it makes sense to be a part in your mind of microsoft? >> so, tik tok a juggernaut. only, gosh, six months ago most of us never heard of tik tok and what a six months it's been. i frankly was a little surprised that microsoft was pursuing tik tok and i was surprised, because the cloud strategy has been so successful for microsoft last couple of years, that i didn't think they would kind of revert back to this social media envy they had a number of years ago

tried to buy facebook and ended up investing in facebook if you're microsoft, the fact is you can make this acquisition. $150 billion in cash, $30 billion to $50 billion acquisition of tik tok does a couple things for you. rejuvenates the brand. makes the company much cooler. know they've had social media envy a long time another swing trying to buy a social media company third, bailing out the government like this probably helps their government contracts on some level and it -- it's something they've always wanted to try to have a consumer business so a little surprising to me, but when you look at it through that lens it makes a lot more sense. >> spencer -- >> sorry. >> oh, no. i just wanted to pivot to this conversation surround iing spec. on the board, filed confidently, in the quiet period there but used to be an m & a banker

what do you make of this phenomena? would you advice selling it back right now? >> yes i have been on the receiving end of a lot of pitches to do a stack and frankly, i've come around or stacks, to be perfectly honest i used to be skeptical a valid alternative path to an ipo. the reason, think from the seller's fer speperspective. selling giving a lot up. compare the alternative path, doing another round going public paying ipo fees leaving money on the table. average ipo i think day one p t post-ipo, up 40% then another follow-on, 6, 12, 18 months later. the delusion plus the follow-on, lockup plus lack of liquidity.

it's not all that great. i went through it. it's a difficult, painful process that doesn't provide liquidity and you leave a lot of money on the table sp this solves a lot of those problems yes, talking to an entrepreneur and just had the conversation yesterday with a founder thinking about going public through a spak and i encouraged him to think of a valid alternative path to a traditional ipo. >> hopefully wreelt se'll see w is soon enough and investor letter sent out earlier this morning where talking about what could derail the rally we've seen in tech stocks saying we believe the market group think that profitless growth stocks that trade in astronomical valuations in part the basis interest rates are low will be disrupted by rising inflation expectations even in the absence of a correspondence of increase in treasury yields. do you agree inflation could be a significant obstacle to some growth we've seen in these tech names

>> there's no question free money, the trillions of dollars the government has pumped into the economy at zero, near zero interest rates for many, many years helped the market without dispute. i would dispute probably describing the company as profit-less growth companies, it's really confusing a lot of different companies. facebook is not profitless google is not profitless those companies mint money. you know, even amazon tries to be profitless, even they can't help themselves but be incredibly profitable. so it's -- people kind of combine tack and frequently say, oh, these are high-growth companies trade valuations, but a lot are some of the most profitable companies we'vin se r seen if they ever come up, yes. that should slow market growth, but you know, you tell me when interest rates are going up? saying five years they're going

up and i think we seem to be in an almost spike, permanent rate of low interest rates, with the current recess we're stumbling into, perhaps worse, i don't see rates moving higher anytime soon. >> yeah. i mean, i think most people probably agree with you, spencer, but when you look at where our deficits are tracking. you've got fitch now putting u.s. on negative credit watch. gold tips i mean, at least on the back end, i mean, does that -- is there -- are you open to the idea that it might surprise you and come earlier than you think? >> well, i mean, somebody's going have to do something about deficits right? i don't know if the next or three administrations from now we have to cut entitlements at some point and raise margin's tax rates a lot to pay for what we've been spending over the last ten-plus years, deficit looming. but the fed so far has focused,

has prioritized employment and economic growth over inflation kept rates incredibly low and we haven't seen inflation so a lot of, i mean -- i don't see the fed increasing rates anytime soon especially if trump were re-elected. even still, as we are in recession, keeping rates low, really indefinitely and we haven't seen signs of inflation yet. i'm not an economist it's a little befuddling why we haven't seen more inflation, with the low rates >> and indeed on day where yields continue to crater and the nasdaq just set anothelater. guggenheim's jim milstein is on the other side of the break don't go anywhere. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor

with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪

visit twelcome to camp/learn tonsafun on xfinity! it's summer camp, but in your living room. learn how to draw with a minions expert... how to build an indoor obstacle course! plus... whatever she's doing. and me, jade catta-preta. the host of e's the soup! camp tonsafun. it's like summer camp, but minus the poison ivy. unless you own poison ivy. in which case, why? just say "summer camp" into your xfinity voice remote to join.

our next guest warn as spike in delinquencies and adults in consumer credit could be ahead if congress does not fast-track a stimulus bill saying a fallout in discontinuing aid program koss have contagion affects through the system and jim, a man well traveled in the world of restructuring curious to get your thoughts on the current environment. howard schultz a guest on our air this morning terminating a five-alarm fire for small and medium-sized businesses. how would you term things thus far? >> i think that's right, david the small business sector has been particularly hard-hit by the lock-in and shutdowns that

are going on sporadically in different states across the country. the estimate is that 20% of small businesses will not reopen you know, that has a permanent hit on employment. and, you know, spending, demand. right? i mean, we've got 35 million people, you know, either seeking unemployment or on unemployment rolls, and that's about 20% of the workforce. so, you know, for an economy that is driven 70% of economic activity, driven by consumer spending, to have that much of the workforce unemployed without a paycheck is going to be a significant hit to gdp so what the c.a.r.e.s. act did, with the one-time payments and with the extended unemployment, enhanced unemployment insurance benefits is basically supplement the income of those people who currently don't have a paycheck.

and obviously all of that has expired now, and that's what congress is wrestling with the ex-tense extension of again but if you don't have those, an extension, you're going to see a real hit to retail sectors, a restaurant sector. all of the sectors that depend on consumer spending that have already taken a big hit. you're going to see bigger hits going forward. >> yeah. jim, from your vantage point at googuggenheim and your long hisr of advising companies that need to restructure not to mention the u.s. government dealing with gm, for example. what is your sense of the larger corporates right now those particularly still exposed to consumers you know, we act as though, seems, or at least the market does, that much of the concern has passed do you agree >> no. i think it's a tale of two markets. you have companies that are being benefited by the changes

and how we're working. and you have the companies that are being hurt by the decline in consumer spending. associated with, you know, 10% quarter over quarter contraction and gdp. so the equity market, notwithstanding this amazing rally. the rally, as you've pointed out, narrowly concentrated in a couple of sectors, and when you look -- when you stratify the market based on credit ratings, you know, the higher rated credits are up and the lower rated credits really haven't recovered much from the big sell-off in february and march. the fed has done something quite unusual in its history, and has decided to discern the banking system and lend directly to the corporate sector mid-sized companies and main street lercnding programs and large companies that are primary corporate's credit facility and

obviously they've put a floor under the credit markets for the secondary market credit facilities they haven't done a lot, other than announce these facilities they're balance sheet in the corporate sector hasn't really expanded all that much, but the mere fact that they're there and they say that you know, they've got $2.1 trillion fire power to assist corporate credit has obviously rallied the corporate credit markets brought spreads in and made credit available to those public companies and private companies that, you know, they can actually access these markets, and, you know, we have a record issuance in the investment grade market in the second quarter record issuance in the high yield market so large corporates have access to credit generally, and relatively cheap spreads given the state of the economy. >> i want to get your thoughts, jim, on the state of, you know, borrowing in the united states, and the treasury, which said it

expects to borrow about $2 trillion in the second half of the year. as we kind of look towards more stimulative policies moving forward, even if congress does agree on some sort of supplemental unemployment insurance to get more money into the hands of folks across the united states, until there's some sort of vaccine or solution to this pandemic, are we going to continue borrowing? should the government be starting to think about how and what they could do to bring down the size of the national debt without impacting or harming the economy right now or is that just something we can kick the can down the road and think about it in 2022 >> i think that's right. i mean, you know, we're all -- said richard nixon famously in the '70s, and i think it's pretty clear even the most conservative republicans in the senate have imbibed fully the

idea the government should act as a counter weight when the private economy is contracting so we were doing this to fairly well right? we started the year with a 4.4 trillion dollar federal budget it's now $7.4 trillion we had a $1.2 trillion deficit it's now up near $4 trillion, before even this latest effort at more stimulus. so you know, the fiscal position of the federal government as a result of the pandemic and the way they responded to it is obviously significantly out of balance, but that said, you know, the fed is there to support the federal government and its borrowing needs, and the market seemed to have an unquenchable appetite for federal government securities, and at very low rates. i think the prudent course of action is to, you know, put a floor on the economy make sure that individuals don't

have paychecks have income so that they can make their rent payments and their loan payments and so that we don't trigger a financial crisis, as a result of widespread unemployment. but, you know, down the road -- whoever inherits the presidency is going to have heavy lifting to do to get the budget back in balance. >> well, jim, given the fed's balance sheet and all that deficit spending are you concerned about inflation? >> no. not in the short term. in the short term, a huge output gap, and so, you know, until you get the economy humming again, you know, i think the rick ofsk inflation is very low. but if you look at the currency markets and gold in particular, you know, i think what you're seeing with the rallying gold and the weakness of the dollar over the last, you know, six weeks, i think you're seeing

some augering of the possibility of inflation out there, for sure. >> jim, appreciate your taking some time. thank you. >> thank you for having me. all right. it's time now -- >> co-chairman of guggenheim security. >> time for etf spotlight taking a look at the victory shares usaa ticker umlv up 40% since mid-march. down about .3% today two of its larger holdings both microsoft and apple, ceo of usaa is moments away as that kcompan increases its dividend stay with us. when we started carvana, they told us

that selling cars 100% online wouldn't work. but we went to work. building an experience that lets you shop over 17,000 cars from home. creating a coast to coast network to deliver your car as soon as tomorrow. recruiting an army of customer advocates to make your experience incredible. and putting you in control of the whole thing with powerful technology. that's why we've become the nation's fastest growing retailer. because our customers love it. see for yourself, at carvana.com.

welcome back, everybody. i'm sewer hay harare your cnbc update at this hour. isaias moved from north carolina and virginia into maryland and delaware at tropical storm with sustained winds 70 miles per hour. heavy rain and tornadoes expected to continue as the storm moves up the coast in north carolina, officials say at least one person has died, several are missing and more than 360,000 people have lost power. in new york city, a holiday season tradition will not happen this year. the radio city rockettes christmas spectacular canceled because of the pandemic. radio city says more than 75 million people have seen that show since it started in 1933.

and an amazing story take a look at that, in the western pacific, three stranded sailors through a huge s.o.s. in the sand attracting attention of rescuers the plan worked. australian and u.s. aircraft found them three days after they went missing a happy ending there that is the news update this hour "squawk on the street" returns in just a minute. right now, switch to t-mobile and get four lines of unlimited 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.

usaa returning additional $270 million worth of dividends to auto insurance policy holders raising payouts to over $1 billion since april. bring in usaa ceo wayne peacock to discuss more. hey, wayne. >> good morning. how you y'all doing today? >> good. thank you. can we read this as a sign people are continuing to drive less fewer accidents? what can you share with us with regard to a read on people's

quest to be outside and driving right now? >> i think you got it right but i thought before i wanted to start and say thanks to our 35,000 usaa employees who really have served excellence for our members through this global pandemic and a special shout-out to our team on duty the third hurricane. everyone up the east coast standing in the resident and dealing with isaias and our teams are serving really, really well to your question, we're seeing members are driving less no doubt about that. back at the peak in april maybe 45% less than we would have expected as we've come through june and july and the economy's begun to reopen again, let's call it, say, about a 15% less than we normally expect. because of that, our expenses are lower. as a member-owned association, it's the right thing for us to do to return those premiums back to our members this is the third dividend that

we announced, and we're announcing that this morning for all of our policyholders with us in june and july, and they'll see those in their accounts sometime in mid-august. >> can you give us any sense on the data for how frequently people are driving as the economies start to reopen and have kind of differing policies across the country are you seeing people getting more antsy and looking to get out and do road trips and be on the road more? is this kind of going to be the end of these dividend payouts to your members >> i think one of the things we've learned is there's a lot of uncertainty out there no doubt people are out and about. there's no doubt they're driving more, lots of trips that people were taking rather than being on airplanes, but we also know many companies even like usaa are asking the workers to stay at home so we saw a really sharp uptick through june and then plateaued through the june and july time

frame, and i think every day is a day for us to kind of adjust and adapt and see what this week and next week brings in the way of consumer behavior >> there's a big debate going on right now over eviction moratoriums and whether that policy should be extended. have you seen any kind of change in renters' paying their renters' insurance as a result of that moratorium expiring? >> we really haven't seen it so much from the moratoriums, but what we are expecting as colleges are doing online and many of them not opening for their campuses to be face-to-face this fall many of our young adults have renters' policies when they go off to college we're expecting to see a little impact from there, and we haven't seen it yet in our data as relates to the moratoriums. >> not sure if it directly impacts any of your own product lines but wondering where you come down on this debate of

liability protection for businesses and the degree to which insurance might have to address something for employers if, in fact, that protection is not present in a bill? >> well, carl, the way i look at this and i think the way we look at it at usaa, we have really good regulation. we're asking companies to live up to those regulations. i think it's important to give some level of protection it is extremely hard for an insurance company to underwrite or to plan for or even have the capital strength to pay for unlimited expenses related with the pandemic so we are very interested in what's happening in washington today. as both houses debate how they bring an appropriate level of protection back to businesses. >> what would you say to those lawmakers right now? especially since you have kind of a window into this data of the consumer you write loans and you have checking and savings accounts and so forth what would you advise them to do right now? >> well, i think there's a

balance. right? we need to ask, all of us, to operate under safe procedures and obviously we're doing that here at usaa and then i think you have to give companies an assurance if they do they're going to be protected in some way from liability claims that may come their way. >> all right wayne peacock, ceo of usaa thanks for joining us today. >> thank you very much and let's not miss the opportunity to say happy birthday to the coast guard. semper paratus, a great model and always great in these uncertain times. >> absolutely. thank you. >> have a great day. meantime, our next guest has a warning on the melt-up we're seeing across the board in tech. names like apple, and why you shouldn't be involved. we'll tell you why, after the break. the adventure of a bigger world in a highly capable lexus suv at the golden opportunity sales event. lease the 2020 rx 350 for $419 a month for 36 months. experience amazing at your lexus dealer.

a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management.

wall street turning more bullish on nicola, despite no profit as it attempts to challenge tesla and the electric vehicle market can it win hot debate brewing on "trading nation" check it on online more "squawk on the street" coming up.

♪ the covid-19 pandemic is creating food insecurity on a scale not seen in decades. an estimated 54 million americans will struggle with hunger. ♪ with 200 food banks and 60,000 meal programs, feeding america is the largest hunger-relief organization in the country. join morgan stanley in supporting feeding america and your local community food bank. ♪ our next guest writes beware of the tech melt-up. david katz chief investment officer and joins us to explain. david, certainly a frustrating time for a value investor i guess in ways.

why now are you concerned about some of these multiples we see on big tech names? >> you mentioned apple we think apple is actively okay. fully priced but okay. companies like tesla and netflix we think are virtually priced. look at technology, to your question, lots of companies, 30, 40, 50 times earnings. we think historically buying at those prices, bad things can happen if you look at the gap between growth and value, it's the widest its ever been the differential this year is almost about 30 percentage points the last time you had any sort of this it was late 1999, 2000, when you had the internet bubble and we think that there are things like that going on and in our discussions with investors, we think people are buying technology now simply because it's going up. nobody cares about valuation it went up 10% last month. why shouldn't you buy it that's usually a warning sign.

>> yeah. well, nobody cares about valuation, but same time it's not as though -- i mean, last week, man, david those numbers from facebook and from apple, and from amazon were astounding i mean, doesn't that sort of help the argument that says, hey, growth is worth paying for? >> it helps the argument for some of them i mentioned earlier, we think apple is absolutely fine we think microsoft is expensive. but has wonderful prospects and think that's fine. same with facebook, but when you talk about a company like netflix. five years ago netflix had no competition. right now have about ten really good aggressive competitors. whether it's amazon, apple, cbs, disney plus, all getting into their space. right now netflix sales about $225 billion market gap, viacom, cbs, sells abouts $14 billion market cap we think there's just excessive extremes netflix at 75 times earnings and

viacom at 6.5 times earnings those things typically don't last >> david, when we talk about big tech now, we have to also talk about the broader indexes, because they represent such a huge proportion of the major indexes that a lot of our viewers are invested in. so faang drove 40% in july bearish on big tech, are you bearish on major indexes and what do you aid vidvise investoo do shorting selling? >> cautious about getting more money into big tech. flip side is you're exactly right. a lot of the market which is doing well in terms of their business, has not seen their stock prices do anything we think a lot of attractive places in the market just wouldn't be filing money into the teslaing of the world rather butting it into a dell communications companies like a verizon, an at&t we think health care companies

are attractive like a cvs or gilead if you can play 12 times earnings for these companies we think you'll do very well. the flip side is, we would not put that money into 70-plus times earnings bullish on the market the next 6 to 12 months expect growth to slow down some. >> david, wonder if you think the apple splits will be more kwes consequential down the road than we currently think buying the qs to righted tail winds of mega tech, do you believe they won't split the way apple announced? >> we don't know that other companies will follow apple's lead you know, years ago when you bought a stock there was commissions you paid buying ten shares and commissions were $100, it could be significant nowadays, schwab, fidelity are not charging commissions the fact you're buying 2 shares,

10 shares, 100 shares shouldn't make a difference. the apple case psychologically get excited and bid up a bit more in that case helps that stock a little but longer term fundamentals, how they're earnings are doing and how their new life firms are coming out. >> david, listening to you make the argument value versus growth, i feel as though you could have made that same argument six months ago. even six years ago and wouldn't necessarily have been right. i applaud you for sticking to your discipline in terms of pe multiples but wonder are you not in the proper place and time anymore as an investor? >> we're actually doing okay but -- we do microsoft and apple, and bought them bought at really good prices and enjoying those moves, but there's a study that bloomberg does where they look at capitalization of the s&p 500 growth versus value. look at that

we're four standard deviations extreme. last time, 1999. i tell you in 1999 getting calls from friends, clients, basically saying, you've lost your edge. you don't know what's happening. you're the village idiot subsequently over the next decade the network basically flattened down and broader market up 6%, 7% the year. enormous differential. seems growth stocks can only go higher having done this 35-plus years paying 70 times earnings, something not good is going to happen and, again, the caveat is companies like microsoft, apple, facebook, whose businesses are pretty robust, we think will do fine but less optimistic about where microsoft stock goes answers apple stock goes in the next year or two rather than what it's done in the last year or two had a great ride thiwith them.

holding them still with they okay rather than other areas exceptionally good of the portfolio. >> got it. david, always appreciate it. thank you. >> have a great day. thanks a lot. when we come back, our next guest is the largest distributor of the first and only fda authorized saliva test for covid-19 and offering a tete stw you can take at home we'll talk to e o ouththceabt at in a moment. ♪ come on in, we're open. ♪ all we do is hand you the bag. simple. done. we adapt and we change. you know, you just figure it out. we've just been finding a way to keep on pushing. ♪

we heard last hour ceo stepping down effective october 1st. more on this change at the top for ford phil, looks like the market's

cautiously optimistic up about 2% what can you tell us about the change >> jim farley, coo becoming ceo october 1st just held a conference call with him and bill ford and farley made it clear. look, he realizes that ford needs to move faster listen to what he had to say about who he views as ford's competitors. >> we know our competition today. it's amazon. vieado, apple, tesla and others. well-financed and voracious companies, and i'm inspired by the positive momentum we're now building. >> they have momentum in the eyes of jim farley and yeah things like the mustang marquee and new bronco coming. he's facing, the last 20 years one of the previous four ceos delivered a positive return for shareholders that was alan. you see mark fields, hackett,

outgoing ceo as well as bill ford when he was ceo none of those returns are anything that investors were looking for. by the way, bill ford asked on the conference call, did you which an outsider to come in and run the company? here's what he had to say. >> our board felt we were on the right path that the kind of projects that jim and jim were working on together were exactly the kind of things that needed, we needed to propel our company into the future so at the end of the day, everyone really, really responded to the notion of jim farley becoming our next ceo, and so it wasn't, to answer your question, no, we did not do a deep dive externally >> take a look at shares of ford under the tenure of jim hackett and you hear people say, look, haven't done anything compared to tesla compare ford's performance since may of 2017 when jim hackett

tooshg ov took over to other legacy automakers they've lagged none of the stocks are anything to write home absence 2017 but ford is lagging there. jim farley has his work cut out against leg say makers, shareholder return, let alone talk about what's going on with tesla, whether they ultimately take on amazon or some of the tech companies getting into the auto space >> phil, i'll take it. very big story obviously for ford which has a bunch of macro implications phil lebeau in chicago peeking of those, the debate continues about the second half recovery and the likelihood of us still being in a recession end of the year. steve liesman joins us with a look at the long road back hey, steve. >> good morning, carl. even if the forecast of economists for that strong second half rebound pans out, the u.s. economy is still going to be in the equivalent of recession by year end. our cnbc survey finds economists

looking for 7% in the fourth quarter. unemployment forecast to decline from 11.1 now to 9.8% by december put it in context. 9.8% unemployment rate by itself makes it third highest among recessions in the post-war era it would be eclipsed only by the surge in joblessness that followed the '81 and 2008 recessions economists forecast that the unemployment rate will fall to just 7.3% by end of 2021 still almost 4 percentage points higher than the february starting point 3.5%. charge evaerybo charles evans said our outlook, mid-2022 to enjoy the level of growth we had beginning of 2019. that outlook for a slow recovery leaving substantial slack in the economy and explains why the fed

is pointing towards a long period of low rates. why it's not concerned about inflation and why it continues to look for ways to stimulate the economy, despite massive stimulus injected so far. far. talked to doug holtz-eakin, he said i've long expected a rebound. most of the forecasts do not factor in a second wave of infections or another widespread shut down. of course, economists have been and could get, be wrong and too pessimistic, the prevailing optimism could turn out to be better than the forecast right now, the forecast suggests even after a strong recovery, the economy is still going to look like it's in a recession. >> it's a dire forecast and as you mentioned, doesn't account for the potential of a second wave steve, thank you for bringing that to us. tiktok influencer zach king with the third largest follower

count on the platform follows us in the next hour don't go anywhere, we're back in just two mings -- minutes.

as colleges start planning for the fall and major sports leagues get back to playing games, as we know, testing for covid-19 is a very big deal. vault health has the first and only fda authorized saliva test for covid, monitored through telemedicine, and the ceo joins us jason feldman is the ceo of vault health welcome. >> thank you it's good to be here >> you've got distribution into some of the major sports leagues and universities can you explain to people the science between a saliva test and a swab test and if this is

just as good or better, why isn't everyone doing saliva. >> it's a good question. actually, it is just as good the reason is both are pcr tests, highly sensitive, highly specific tests proven across a massive swath of people around the world. if you're going to find stuff, in this case, the sars-cov-2 virus, these tests are the most likely to be able to do that they're looking for the genes associated with the virus. saliva started in april with the launch of the program that rutgers university launched with the fda's authorization, and we have been aggressively across the country now making it available in as many places as possible the best part was that the sports league started to go back to practice and started using saliva as a much better option than nasal swabs all day long. that ended up letting universities and businesses and the rest of the country understand that it is an option. >> right is there a difference between lab results, which i think still

take less time than a lot of the swabs versus doing something at home where you're really relying on the user to diagnose through telemedicine, but basically do it on their own? >> well, the best part about what we have been able to do with the rutgers team is that we have launched a test that is available at home. it's a physician prescribed test but we're making it massively available across all 50 states that is supervised so when you actually use this particular test, you're at home, not having to go to a local testing center, which is great by itself because we're not putting pressure on ppe being wasted on testing and not exposing people to potential risks with other practitioners who might be taking care of sick people we're doing that and helping to guide the process of doing this test asking somebody in front of a video conference, spitting in a tube, collecting a good sample and getting that back to the lab in an overnight envelope from ups, that is happening in rapid form as a result, we're able to then

turn the test results around in about 48 hours it's record time and we're doing that because we're managing the supply chain really well. we're trying to work with people who have very specific needs, that have to get results back fast, and were planning to be able to deliver those results because of the speed at which we're moving >> right how about capacity, though how many of these can you make and distribute given the level of demand? >> that's part of what was unique about this program. when we started it, we said saliva is going to be far more interesting than having that brain torture device shoved up your nose, the nasal swab, so we ended up buying a tremendous amount of capacity in the chemistry and in the tubes themselves so we're working with all of our partners to make sure there is today about 80,000 tests, seven days a week viable a available and we're going to keep pushing that as we have come to back-to-school season, k through 12, and businesses in the fortune 500 bringing back

tens of thousands of people to offices. we're going to make sure we have enough to serve them, and we look forward to something north of 100,000 tests a day. >> going back to carl's earlier question about the pervasiveness of saliva versus the swab, is cost a big factor here i saw that your product costs about $150 per kit for the average american, is there a chance, a possibility that that chance will come down and they will be able to take it more frequently? >> absolutely. that's one of the reasons why working at scale is so important because anything we can do to leverage the supply chain. anything that we can do to bring the cost down. as an example, one of the choices we made working with ups is we wanted to give people fast turn times that's almost impossible to find mostly across the country today with these 10 and 12 and 14 day returns on results it's incomprehensible how anyone can wait that long to know if they're safe we're trying to get cost down,

working aggressively, especially with the universities just because of the large numbers of people to bring the cost down lower, and the other thing that's important is the c.a.r.e.s act mandated the insurance payers pay for testing. we're putting programs into place now to help ensure they are going to get coverage when they need it. >> jason, finally, just on the integrity of testing themselves, and by the way, your background, i hope you don't do that for every zoom, that is freaky back there. looks like a wreath almost, kind of cool. >> not a pretty wreath not a pretty wreath. >> no, the integrity of the tests themselves, you hear anecdotally, i tested negative but i was positive i tested positive and i had no symptoms, i think it was wrong can we rely broadly speaking on the tests out there right now, regardless of how long it takes to get the results back. >> that is the question of questions. that's what we're all worried about, what we refer to as the false positives and false negatives. it's terrible to get a false

positive, to be told you're positive and have to quarantine and worry you're sick or making other people sick because you're sitting at home waiting for, you know, another test to know you're not sick but the false negative rates are what we're most concerned about that is the one that is letting people loose in society, infecting other people, whether they're symptomatic or asymptomatic, believing they're okay when in fact they're not. one of the challenges is the nasal swab programs, which are just as good as a genetic test, we're sticking a swab into a deep dark place near the brain if we don't get viral media on that swab or don't get enough, we don't know that you're positive the beautiful thing about saliva, we're putting a one millimeter amount of saliva in the tube, and we have a lot of virus. if you're sick, you're going to get it caught in the tube. the false negative rates are tracking 25 to 35% which means one in three are

coming back telling you you're safe when you're not with saliva, that number is less than 1%, and it's really because of the administration. you're able to put a lot of media into this tube that's what we're very concerned about in america, and i think if people are positive, we want to get retested and if people are positive one time, they might want to get another test to make sure they're not sick ongoing. this is the thing we have to keep working with each other, and we've got to find ways to get the costs of testing down. this is not sustainable if everybody doesn't have access to it. >> certainly the early days of testing in this pandemic have been checkered, so we're rooting for companies like yours jason, thanks for the information. good to see you. >> good to see you, too. thanks for the time. >> jason feldman with vault. good tuesday morning, welcome to squawk alley interesting market section, leaning on big