good morning, s&p again tested all-time highs yesterday. stock futures this morning pointing to a pull back. epic battle over app stores. the maker of fortnite is challenging apple and google over what it calls anti-competitive practices no relief in sight, congress adjourns and no reaching of a deal "squawk box" begins right now. good morning welcome to "squawk box" here i'm andrew ross sorkin and joe kernen and melissa lee with us

becky is off we have a lot to get to. the s&p 500 flirting with the new record high. closing seven points lower futures pointing to a pull back the dow looks like it is off nasdaq off about nine points showing you stocks in europe also under pressure talking about why this would be. closer to 2% in britain. and treasury yields look at the note looking at .696. we are starting to see in covid cases pick back up in europe, which may impact here. we'll try to talk to dr. scott

gottlieb about that. fortnite maker epic games taking on apple and google over what it calls anti-competitive behavior giving users a discount and cutting out the e map services which cuts out the ability to take a 30% cut from sales. new users will not be able to download the game and existing users won't be able to download any updates. google followed the lead and removed the game from the app store and was also hit with a lawsuit. the feature was not reviewed they did it with the express intent of violating the

guidelines epic says it is not looking for compensation but looking to get apple to change the par di that ad dropped within moments of news of that lawsuit. it was a month ago tim cook spent about six hours defending the app store and practices there. >> go ahead, joe >> no, no. i was going to do some social commentary you are probably going to do something relevant remember the simpsons in like 2004 president trump ran and won. they said 2020 was going to be

1984 lucky that didn't happen we are living in or wellian times. so many days i wake up and read something or see something and i'm like, wow, it came true. >> i view the commercial as the masses and developers mindlessly handing over 30% of their revenues >> cancel culture.

if you dare to go against something. if you are not supporting, you might get canceled little did he know here we are. i'm not a fortnite guy do your kids play? >> we don't allow our kids to play one comment about the thoughtless developers this is a publicity event. they had their lawsuits ready to

go i always thought if you were a developer, you are making a conscious choice those stores, you take up shelf space or they take a cut of the deal epic knew what the deal was. i have a lot of questions or issues when apple starts copying the program and creates the apple version and advances that over somebody else's version we have a debate of creating an app that tries to match or better somebody else's app that is a fair argument or debate it is a crazy debate to somehow

say apple is not entitled to take some kind of share having built this platform or device. users buy the device knowing what the deal is it was said all of these app developers that are so thrilled or so many want these apps for free who is the ultimate loser in this the consumer ultimately you you are going to pay more for this. if you are for breaking up apple or the app store, the cost will be to you because you'll pay more from the foephone.

>> i understand all of the points >> you are suggesting that government should regulate >> no. no but the developer has the power here think about the tent calls around fortnite. it's owned by tencent. they own riot games. if they banned together, there could be a backlash among hard core gamers and they won't buy the iphone anymore >> ultimately apple has to keep developer and customers happy. what is happening here is that epic will try not to negotiate in the public space and with the

government and hope that government would come in to do something. i think epic is the loser in the short term, not long perm. most people who play fortnite do it on a computer or console. >> do you listen to yourself business is doing well i sat here -- i didn't have to say anything i was getting a little teary i was like, what happened, who are you? did you sleep okay >> there is nothing ideological about my approach to life. i try to call the balls and the strikes. you are doing well no one could complain. we are not going to do my story

about congress leaving they are exhausted they've accomplished so much wait a minute. they didn't. they didn't do diddly. but they are tired >> we should tell you and this is not the best news here. testing crucial but availability varying so widely depending on where you are in the united states some testing numbers have gone down and not up. we'll have more after the break. yesterday, amc's plan to begin opening theaters investors rallying around the plan and driving up the share price as much as 17% yesterday that stock up now 5.50

we are back after the break. co. infinite "what ifs?" and contingency plans. creating funds that help target gaps in client portfolios. tap untapped potential. and strengthen confidence in you. flexshares. powered by over a century of investment expertise before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

for a prospectus containing this information. 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.

nationwide, using testing to track the spread some places have long turnaround time and excess. meg joins usnow.

we partners the survey to collect the data they surveyed all 50 states to get a sense of where testing is in the country what they found is maybe 25% get their results same day or next 35% within two to three days anything more than three days is essentially useless. you really want under two days to quarantine. still 60% are getting useless testresults.

what it means in terms of strategy in the u.s. >> do i think it would be helpful to have a testing strategy, i do >> i don't think having each 50 sta states figure out their own approach >> some states like massachusetts may have excess capacity >> i will tell you i got tested yesterday because i'm going on

vacation of sorts with our 97-year-old grandmother in-law we all decided to get tested it costed us a small fortune $150 a percent done by a company called vault it is a spit test. you do it over zoom. they watch you do it pop it in this envelop and send it out and supposedly i'll get it later today. >> andrew, i'll tell you you are totally right. i did a story about vault a couple of weeks ago. it is a high-quality test. i took it this week as well for a vacation next week with family it did take me longer this week than a few weeks ago to get my results and that zoom

appointment. send those in quickly, you'll get the results back within two to three days. >> thank you i think you were the one when i first mentioned it >> our next talking with our cnbc contributor, talking testing. you are seeing some of those numbers climb. are you surprise we are seeing germany and other places that had been so good for so long starting to get along by other numbers. kaurlt you a >> caller: you are going to see a resurgence in the fall the challenge of having to

differentiate covid from ordinary flu will present a challenge. it is a little early i would have expected the up tick later on. looking backing to 2009 h 1 n 1, it didn't tick up sharply until september. you did see a slightup tick in august what is happening now in europe is outbreaks of these countries. they are probably in the worst case in europe seeing slight increases in

germany and united kingdom the other place where you are seeing a resurgence you have to be concerned japan is only showing about 1,000 cases a day right now. that is a big difference from the last wave where they peaked at 750 cases >> in terms of people having to quarantine coming this fall the question is if kids go back to school and if kids get quarantined and then parents need to be quarantined >> you'll see rolling quarantines. mostly, it will be voluntary

quarantines with respect to the schools. your students and families those orders for self-isolation and other countries to control it you exhaust the ability do that. that is what happened during the new york especially deputyic and across the sun belt in places like florida and texas and using self-isolation and tracking and tracing as an effective tool to control the spread >> we talked about progress and

i made a point that we successfully used mono clonals for auto immune. we have seen that it works was it very effective against ebola? how long will it take and is there a problem? you wouldn't need a vaccine as quickly? is it hard to make those in large quantities where you could satisfy demand >> it was pretty effective against ebola. more effective when used post exposure once used later in the course of the disease, it wasn't as effective.

you couldn't mop it up, if you will these are best if used early think of the drug you would hang in the emergency room if someone comes in who has covid or comorbidities also an optimal drug for a patient who is high-risk. for those high-risk. think nursing home or health care workers, i don't think we'll have a supply this year to use the drug in that way look at the companies and supply you'll have on hand. you'll probably have a higher risk of treatment. with a little more planning, three or four months ago, with

we could have had these quantities we are not going to have those quantities available that would have enabled us from talking over biopharmaceuticals and we didn't do that. >> back to testing, one of the things we are hearing from investors who are getting pitched, they don't want to make this investment. they don't know. and if it comes too soon, the investment in testing, the view is that it is not a great investment do you think there will be testing for years to come and it will be a good investment for the private sector to make

>> you are going to need to test the covid and potentially test those into the flu even if we have a vaccine. you'll always have people who have a baddout come. when i talk in the big labs, what they tell me is that they are trying to get as much equipment as they can. they are making the capital investment they are trying to spur the new defendants, home care tests. i'm seeing things all the time there certainly seems to be a lot of capital coming into this space. >> in terms of capital, cure vac is going public in new york. a lot of big time investors are

backing this using the messenger rna approach to a vaccine. are there a lot of these other companies that have been so focused on these are there other players out there that may have a solution would that contribute to a pressure in pricing and seen the price of $5 a dose and moderna at $15 a dose. would that put pressure on the pricing? >> i think you'll see skd and third generation vaccines. the first generation will not be a final word this may be something you schedule against annually. when others come on the market maybe one dose or delivered

orally the companies coming out with the first wave are also working on next generation vaccines. there will be competition in this space and focused on being optimized. you don't need that second boost of dose. delivering that second dose to get people back to the doctor's office a lot of people will drop off, probably >> always great to see you thank you once again melissa. coming up, a couple interesting stock stories you including a legal defeat for amazon and more about the netflix of china and fan attics brings valuation to more than $6

million. stay tuned at cdw we get you're always looking to modernize. yeah. i'm just not sure office drones were the way to do it. [ laughing ] drone voice: l-o-l. our market share looks good, but... drone voice: where are the bagels? well, cdw can help you modernize your company the right way,

with a scalable infrastructure from hpe, making you more efficient and secure. great. oh. [ drones buzz angrily ] let's find a different room. for transformation that works, you need hewlett packard enterprise and it orchestration by cdw. people who get it.

welcome back to "squawk box. this is our socially distanced version of chairs this morning california court of appeal ruling amazon can be held liable for defective goods sold on its marketplace. at issue, a defective laptop battery that caught fire and gave a woman third degree burns. amazon fended off the suit for years. third party sales makes up 60% of amazon sales. who is liable? >> it seems like it is opening up a can of worms. it would imply it would have to review every single product and stand by the safety, which is a huge undertaking >> i don't know.

should online stores be different. if it was a store, like a lululemon. you hurt yourself, hard to hurt yourself with such stretchy pants. you know what i mean >> joe probably knows what you mean >> i don't like anything that emboldens the torque bar >> all of those magnetic business cards going after the ambulance, right >> we have lawyers watching us most of them hate me i don't know why we have a lot here a son of a lawyer and also a son of a you know what

we found that out late in life i was fixated on chairs again. i'm afraid to touch the background you are comfortable changing the wiring >> what else can you change it to >> hold on i can get you this chair you know this chair. we've talked about this before >> i don't want to put you on the spotandrew

we are going to new jersey having a little family reunion, gathering all together in new jersey >> i was wondering does it involve flying, which could involve net jets >> hope. driving. we night might have to pay some tolls. >> you know why i'm holed up here i made a mistake of going to one of the 48 states that you are not allowed to come back to any place in the world it is a 14-day quarantine if i

go there >> i think i'm okay. i'll probably come back to the quarantine >> going to new jersey is not a risk i do it every day. not for the sorkin family reunion, no. >> i hope you change your negative view of new jersey. you've talked about the factories on the turn pike you've made some comments. parts of the highway you have to hold your noses. >> maybe you should drive by the kernen compound and wave

>> he's been here. there is room for you. they are moving us on now. could mean anything. >> shares of chinese streaming giant igiyi plummeting accusing the chinese company of fraud and inflating its numbers. saying the company inflated revenue, user numbers and revenues it is using its own advisors from the geel. deal spun off of search giant baidu also reported earnings yesterday better than expected but the outlook was more of what was expected with ad sales we are -- i don't know

we are running late. we have to go. you took you too long to read that it wasn't our fault. coming up, what markets are saying about the economic recovery pointing to a faster bounce back in the s&p recent days, we head to break, we look at yesterday's winners and losers experience the joy of a bigger world and a highly connected lexus vehicle at the golden opportunity sales event, lease the 2020 es 350 for $359 a month for 36 months. experience amazing at your lexus dealer.

good morning u.s. equity futures this hour indicated lower. if things don't change, down 137 points now or so on the dow. the s&p, which tested those new highs again yesterday are down 12 so it gave back the gain it was up six yesterday. it closed down six so we are about 25 points away the economic data as we all have seen has been mixed recently economically sensitive sectors have risen over the past week in a minirotation industrials, financials and materials all outperforming the tech sector. here to discuss the best places for your money, nickelsokevin n.

your title is fixed income but you do equities as well. after a couple of years, you probably said, hey, give me something else to do here. i just can't do fixed income give me something more interesting. we are going to use your expertise on both of those issues do you think the stock market is not just responding to stimulus and free money maybe there are some green chutes or a faster snap back than people think? >> i definitely think so one of the things people often misunderstood is that they look at the economy and the market in the same light you really can't do that the economy is backwards looking. so we are looking at data that is several months old. the market is actually forward looking. what the market is ascertaining

right now, we are looking at a pick up of earnings. if the market can really glean out the fact that these companies can be more efficient, even though we still have unemployment at a pretty high level. you can still see a run here >> you almost feel, as we watch this, kevin, you almost feel guilty embracing the market moving up when so many people are still hurting and unemployed and waiting for checks it causes people to say the stock market is not helping the man on the street. do you think that is fair? sooner or later, a good stock market seems to be reflecting better economic times for

everybody. >> you are right as you go along, that means companies are make money and employing people right now, we are looking at and trying to see those small businesses we really need to see those people going back to work. small and medium size businesses employ about 50% of employees of the workforce. we want to see those companies start to hire. we want to see them feel good about the economy. this past week, the nfib, small business survey fell a bit but it is still at levels higher or right at the pre covid level there is green chutes that would lead me to believe this market or this economy would turn around fairly soon >> you are bullish

you are tempered you say grind higher better than people saying grind lowers at the lows you remain bullish but there is some cautious, tempered enthusiasm >> that is correct we have been putting in trailing stocks we'll allow the market to continue to run and not take our chips off the table but if we get slight pull backs, we'll talk some of the money off we set several of these stock levels in place so we are not getting back the gains this is a technical driven market the fed is a backstop. as we say in finance, don't fight the fed. you have a strong trend here in

the u.s. so you are riding this momentum. and we are not getting investors that optimistic. we are in that neutral zone over the last couple of months. we've touched extreme optimism at the moment but not to the point we are worried we'll have a pull back. >> they are wrapping me, kevin one more question here could something in november -- could the election change your outlook if it became clear we are going to be less business friendly, if the senate went democrat and the white house went democrat, would you be less optimistic >> definitely. that's why we have put these stops in place and why on the fixed income side, we have used a barbell approach and put credit on the front end and treasuries in the long end so that we are positioning to be

able to cushion or portfolio that's why i take the approach that we are cautiously optimistic >> all right, kevin. thank you. we appreciate it river front manager. we appreciate you coming on. you can get back to analyzing your bond and yield curves i think you like stocks. i'll see you it. >> i agree i do >> all right okay when we come back on the other side of this break, the google of investment startup looking to change the way investment research and don't miss our interview with new jersegorny veor and the latest on his state's reopening plans.

our retirement plan with voya gives us confidence. yeah, they help us with achievable steps along the way... ...so we can spend a bit now, knowing we're prepared for the future. surprise! we renovated the guest room, so you can live with us. oooh, well... i'm good at my condo. oh. i love her condo. nana throws the best parties. well planned, well invested, well protected. voya. be confident to and through retirement.

time now for our executive edge applied material shares rising for top forecast the company offering fourth quarter outlook above analyst expectations and farfetch shares posting a smaller than expected loss that stock up whoping 10% free market coming up, you will not want to miss the next segment. were a talking to a startup founder who has fixed that problem. stay tuned to "squawk box" on cnbc as business moves forward, we're all changing the way things get done. like how we redefine collaboration...

how we come up with new ways to serve our customers... and deliver our products. but no matter how things change, one thing never will... you can rely on the people and the network of at&t... to help keep your business connected.

a search engine for investors that's what's been created potentially changing the way you invest you go to funds when the market falls and magnifi scans the data

while people are searching, driverless cars, robotics, streaming, bitcoin joining us now is vanay myer a former wharton professor thank you for being with us. >> thank you a pleasure to be here. >> you use natural language search an average person can type in and invest in x, y, z. then what? does the site enable you to make that purchase once you come up with the results >> yes, it does. essentially think of it really as simplifying the entire process of discovery and action. action depends on who the user is >> how do they get listed? how are you making money on this and how do i as an investor know

that the results i get are unbiased and that they're not paying for placement in that search >> magnifi is a one stop shop. brand-new, different type of marketplace for investments and what makes it really different is this combination of language intelligence, natural language intelligence with investment intelligence the entire objective here is to provide high quality answers to investment questions what our vision really here is, the language of finance as you know is not simple it's complicated cr, esoteric it is much more accessible magnifi allows you to go in, ask simple questions like you said

funds that do well when the markets fall and new things that the engine is learning for example, we had separate searches about how do you invest in ventilators which of course was not envisioned when we launched so all of this allows front end usage. we provide premium subscription to some users to do things such as purchase and we also have asset managers sponsor one result on top that allows this marketplace to get found >> okay. so you take advertising for mutual funds, which may turn up in the search results. i want to talk about some of the trends you're seeing what are the most popular trends you see investors searching for and hitting the buy button on? >> so it's been fascinating. it's been launched since earlier

this year and you've had about 800% growth in search volume as well as assets behind the users using them there is about $200 billion in assets behind the folks using the platform 1/3 of it essentially, think of it as finance professionals. advisers, wealth managers, portfolio managers they are searching from the self-directed and investors are looking for. so in answering your question, maybe i'll just touch upon that a bit. the self-directed end investors we find are pretty active. think clean energy, planet change we saw a big increase, about six times increase, 624% increase in searches around that post covid. we also saw increase in trends

such as lgbt during the pride month. >> right. >> so there were flavors of the month, there were flavors of the day. faang stocks shot up when the big tech ceos were providing testimony and it's also the flavor of the times. climate change relatively stable through this period. >> okay. vinay, we've got to leave it there. thank you. interesting product. vinay nair, magnifi. new jersey governor phil murphy called into the show after he heard andrew was coming he wants to welcome him personally, apparently he's going to be on -- he was already coming on. i'm sure he'll be very happy anyway, the state seeing an uptick in new covid cases. before that michael rubin is with us. his ecommerce powerhouse

fanatics has increased the valuation to more than $6 billion in the latest round. young doing so well. as we head to break, here are our futures at this hour ♪ ♪ [ engines revving ] ♪ ♪ it's amazing to see them in the wild like th-- shhh. for those who were born to ride, there's progressive. for as little as $5, now anyone can own companies in the s&p 500,

even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership. schwab. own your tomorrow.

schwab. (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.

the s&p moving up. what to watch at the open straight ahead. big tech battle royale the maker of the popular game fortnite is challenging apple and google over what it case aunt-competitive practices. your money and your vote is the market putting your money before the election outcome? we'll debate that as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin and joe kernen and melissa lee is with us once again. becky is off today futures we are in the red after we've been briefly flirting, flirting with the all-time highs.

we get turned around dow looking like it would open off 18 points. s&p 500 off 9 points the nasdaq looking a little higher right now up about 13 points european markets are lower at this hour. part of that could be coronavirus. germany adding the most new cases since may while the head of france's health ministry said the situation is worsening that has some folks concerned about what it means for the economy there. melissa? >> a story market investors are watching closely the stalemate over another pandemic relief bill is likely to remain until september. lawmakers won't return unless they strike an agreement larry kudlow said the democrats have asked for too much money. house speaker nancy pelosi described them as miles apart in values the market chugged higher, joe

>> i was thinking about that normally we don't want them to do much, you know what i mean? leave, go ahead. this is a time where it's not a normal time. maybe they actually should have been actually doing something, but not too much not too much today marks the busiest day of the week for economic numbers if you didn't know it 8:30 a.m. eastern july retail sales, second quarter productivity figures are being released consensus forecasts have a 2.3% increase following a 7.5% jump in june. there is a 4.4% annual increase. 9:15 industrial production data is out then at 10 a.m. eastern the university of michigan is out with its preliminary august

consumer sentiment index it's expected to fall slightly from 17 to a final reading in july of 72.5 andrew couple stocks to watch, joe, as well. apple, i should say, and alphabet's google are being sued big, crazy story, by epic games. the developer of the popular video game fortnite. this after they removed that fortnite was a removed app from both of their stores both claim epic violated guidelines to try to avoid the fees apple and google charges when you do that we're going to have a lot more on the story in a bit. it is a wild one and has huge implications it has huge antitrust and regulatory implications. applied materials, those shares rising following third quarter result the top forecast, company also offering a third quarter outlook

above analyst expectations ba baidu. their video streaming service iq is subject to an sec investigation. this is dating to the beginning of 2018 as well as documents relating to acquisitions and investments. you're looking at that stock off close to 6% right now. joe? >> andrew, thanks. tesla on the move this morning, upgraded. i need some details on this, melissa. i don't know whether you know. upgraded by morgan stan ley to equal weight analyst adam jonas under on growing and electric vehicle battery supply business. i need to know how long he's been under weight. do you know, melissa >> not offhand

>> we need to know that. >> the stock is $300 higher than the 12-month price target. news you can use in that he had been in under weight or sell for the entire run. >> that sounds like it wasn't that long. no, only 300 would put it at 1300 i'm thinking he might have been under weight at 500 and now going to equal weight, which is like -- you know, adam, i may not take what you're saying. i don't know if i'm going to take that to the bank. speaking of banks, bank of america also upgrading tesla they had it as a neutral they had it as an underperform and they're going to neutral the old price target was 800 now what's great is when the analyst is on tv now, you are going to say, what's your price target he's going to say 1750 my work, my work, 1750. that's why do you listen to any

of this stuff, melissa, really do you on "fast money"? do you raise an eyebrow? >> right i mean, of course you always raise eyebrows as we do on this program, we always raise eyebrows the fundamental analysis is interesting to read, educational. price targets you take with a grain of salt. tesla has no business being where it is now some people say. >> right if your sell side stock analyst bases everything on fundamentals, there are going to be times where you look really, really bad you have to have a pretty thick skin, i think. i haven't heard from the teslackers >> i'm sure they will. >> i love tweaking them. they're like crazy anyway -- >> they're ready to pounce

ready to pounce. all right. >> they are. >> more on the markets. >> do they realize it's just twitter. i can turn it off. do they realize that go ahead yesterday was the 100th trading day since the s&p 500 hit the pandemic closing low on march 23rd up 50% since then which would be the biggest 100 day rise since 1933 mike santoli joins us with what to watch mike, we flirted with the record close level a couple of times and we haven't done it we haven't clinched that yet. >> which is why i think the main thing to watch, melissa, is what we've been watching which is the level on the s&p 500 plenty else going on we have the fiscal cliff story happening. you realize up 3%. you've gone up to that historic high from february and i like the one year low in part because this index is up 19% on a

12-month basis 18.7% i think it is. if you remember, melissa, i know you do last august 15th was the summertime low we worried about the flat yield curve. we have a correction in august and september. now we're up 19% so it seems as if both the fact we're near the record high, hesitating in front of that. you're digesting some bigger gains, 100 day, 50% move is not nothing. i don't think any hesitation is not surprising it's not done anything to impact what this trend is so it's not okay not for the fact we were on a precipice. market's pausing because it's up 3% month to date look at the treasury yield another story line, significant. you saw a pop higher year to date ten-year yield. it's low levels. dramatic move in the levels of coming off the lows. one of the big narratives of the past few weeks is negative real yield. bond yields on an inflated

adjusted basis is down negative 2. negative 1%. that was supporting gold, growth stocks this is a little bit of interruption of that process maybe it's part of why the market is sort of having its gears slipping as it's getting near the high. >> all right, mike $112 million >> ain't it the truth. >> melissa, that's the key if the yields are going up for heavy supply, that's not an economic messages of a reflationary story. >> as for the markets, we're digesting this rotation. we've seen it over the course of days for the week, the moves are pretty dramatic. financials up 1% you have a stall in tech, the biggest growth it's amazing we're going to sort of churn right here very close to these record highs. >> yes which makes you think that it's

kind of -- people are trading the indexes. it's on a day-to-day basis whether it's apple and microsoft trying to take us there or if this rotation which is the heavier lift of the smaller groups trying to make it work. i think a lot of people would prefer to have the cyclical rotation even if it means the s&p gets stalled out or pulled back from the highs. >> mike, good to see you thanks mike santoli >> waiting and waiting i need a cue from you because i talked over you twice. it's hard. it's hard to do that melissa, why don't you have a screen i was just thinking about that looking at your shot or is that a screen why don't you have one of these? >> maybe i just clicked on a library shot in the back >> that's what i'm saying. that's what i think. >> now you're wondering. >> can you switch plants can you smoke that what is that back there?

maybe not. >> coming up, michael rubin's fanatics now valued at $6.2 billion. after its latest round of funding. he joins us after the break to discuss the ecommerce landscape and the reopening of sports and later the ring is closing on apple, google, and fortnite developer epic games after apple kicked the game out of the app store for payment policy nsolatio we'll discuss what it means for both sides "squawk box" coming right back (announcer) carvana's had a lot of firsts.

100% online car buying. car vending machines. and now, putting you in control of your financing. at carvana, get personalized terms, browse for cars that fit your budget, then customize your down payment and monthly payment. and these aren't made-up numbers. it's what you'll really pay, right down to the penny. whether you're shopping or just looking. it only takes a few seconds, and it won't affect your credit score. finally! a totally different way to finance your ride. only from carvana. the new way to buy a car.

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.

fanatics has closed the series funding joining us on the announcement and ecommerce and sports season, michael rubin. our buddy. executive chairman of fanatics he's partner of the philadelphia 76ers and the new jersey devils. very close, new jersey and pennsylvania how much what does it do for you? what are you going to use it for? >> yeah. we actually went out to raise $250 million but raised $350

million as there was tremendous demand to participate in the offering it's really our last round of financing prior to going public. we're going to use the money to accelerate the acquisition of rights to build our vertical ecommerce business as i think you know for fanatics, most of what we sell, it's vertical. we design, develop and make that or it's exclusive. we're going to use the capital to accelerate, pick up the pace of bringing rights on as we globalize the business >> i always forget the history of it. i don't like reliving it because you've been so incredibly successful i'm still sitting here this was a stub. wasn't fanatics a stub how much was it worth when you started? you sold the other stuff for

billions. >> yeah. >> what was -- >> ebay bought gsi commerce for $2.4 billion we bought back fanatics for $300 billion. it was a less than $300 million business it was a zappos selling other people's merchandise it will be more than $3 billion in revenue it has one of the most unique ecommerce models to be honest with you, i feel like we're just getting started in the business. >> so 300 million to 6.2 billion. if you are doing something else, you'll let us know, right? give us an idea. not on this form, let me know. >> i'll go to andrew, not you.

>> thanks. i mean, sports, if you had your entire business dependent on sports, the last six months you look at a fox or network that's dependent on sports revenue, you would think that there's basically -- it was almost a waste land but i don't think that's really happened, has it, with fanatics? will the pent-up demand because we all want sports so bad will that get back what you may have lost in the last six months? >> yeah. two parts to that question let me start with fanatics first. fanatics is 82% of our business is direct to consumer and 90% of that is ecommerce. our business year to date through yesterday, ecommerce business is up 30% so without having sports for 5 months we're still up 30%. the other small part of our business where we operate venues in 50 stadiums for the

merchandise stores, wholesale business, that business was severely impacted by the pandemic but the good thing for fanatics, we're 82% direct to consumer and 90% is ecommerce our business has been strong through the pandemic i think that shows how much sports fans really missed their teams and they really want to be involved we also sell comfortable clothes which is great for the pandemic. since sports have come back business has been spectacular. since the nba started we're up 100% the nhl is 2u7 00% the nfl year to date is up 80% since january 1st. we've seen tremendous growth what everyone is thinking about, how do you get the right combination keeping our players and fans safe and providing the entertainment with sports. you see what's happening with college today. it's tricky. i think from a fanatics

perspective, having this unique business that most people don't have access to makes our business very strong during any period of time the most exciting thing, again, we're just getting started fanatics, what we have 10x since we bought it back in 2011, we are really just getting started and have so much growth ahead for us. >> michael, we've seen some leagues open to i don't know whether i would call it criticism but definitely concern and anxiety. college football is going through the same thing do you think it's rushed should money be -- let's say for colleges, it is important. should the risk be taken and you should go ahead and play or should you just err on the side of caution how do you think we're doing >> yeah. i think obviously huge kudos to our commissioner and the nba and adam silver who came up with

this bubble concept and who literally has not had, knock on wood, a positive covid test since they started the bubble. hockey is having incredible success. mls incredible success they make an easier way to do it within a bubble. that said i think there is a careful balance between health and safety and wanting to provide the entertainment in sports for fans interested and dying for the teams to play. i think it is a sport-by-sport basis. no question the biggest success is within the bubble i think the bubble is the safest to be. i'm excited to be in the bubble. they're taking more precautions to keep corona out of it than any place in the world. >> i'd ask you about the phillies cramer said they have no bullpen. they have no bullpen i have the orioles with the under and naturally they had to keep piling on

i ended up losing. the phillies lost 9-2 or something to the orioles >> take the opposite of whatever i bet. if i were to bet on sports which i don't. >> really? i had the dodgers, too i had the dodgers too in the over plus i got $10 -- >> more about the losers than what you did get right >> my parlays have been -- i'm up i'm up big, rubin. i'm not telling you what you do. >> i see it coming it will be the joe kernen sports index fund operating i've got big aspirations for you. >> i have never watched so much baseball in my -- i watched three or four games yesterday. i'm loving it. >> that's the great thing now. we're seeing it in our baseball business, up 50% people are so excited. >> me, too god, the yankees are just too good our producer's a big yankees fan. it kills me. thank you, michael rubin and

we'll see you again soon we'll try and work our way through this we miss sports thanks, man. >> look forward to being in the studio soon enough thanks thanks, joe. thanks, michael. appreciate it. when we come back on the other side of this, we'll talk about the big corporate story of the morning. the maker of fortnite accusing apple of illegal practices what this means. take a look at the futures right now. we are in the red on the dow and s&p. dow up 112 points. nasdaq looking to power higher up 30 points back after this. time now for today's aflac trivia question. what fast food chain is named for its founders forest and leroy raffel the answer when cnbc "squawk box" continues ance. and this is the aflac duck who helped me cover it.

aflac. these are all the cab rides to my physical therapy. and aflac paid me directly to help. aflac. what he said. and this unexpected bill is from... the two-thousand-dollar specialist. thanks. aflac. when you're sick or injured, aflac is there. we can help with expenses health insurance doesn't cover. get to know us at (aflac!) dot com. 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.

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. ♪ i see a new kitchen with a grill and ask, "why not?" i really need to start adding "less to cart" and "more to savings." sitting on this couch so long made me want to make some changes...starting with this couch. yeah, i need a house with a different view. and this is the bank that will help you do it all. because at u.s. bank, our people are dedicated to turning your new inspiration into your next pursuit.

now the answer to today's aflac trivia question. what fast food chain is named for its founders forest and leroy raffel the answer, ashby's. the name was based on the rb initials for the raffel brothers welcome back to "squawk box. both apple and google removing popular game fortnite from their app store. this comes after epic games released an update allowing users to by pass systems for in app purchases and pay the company directly epic responding to the ban by

announcing legal action against apple and broadcasting a video taking a spin on apple's iconic 1984 commercial. >> the anniversary of a platform unification. for years they have given us their labor and their dreams in exchange they are taking our profits, our control this power is ours and ours alone. we shall prevail >> joining us right now to talk all about this is alex kantowicz. alex, what do you make of this to me there's a lot of real underlying issues here, but there's also a spectacle, publicity element to it. epic does this doing it knowingly against the guidelines of the policy, knowing they're going to get taken off the

platform they have their lawsuit ready, they have their ad video ready how does this play out >> that's right. i don't think it's any accident that epic went right after apple's brand which apple has worked very hard to cultivate. what epic is doing is trying to make this a battle for do you want 30% of our revenue in the app store? now you have to go from a company that everybody looks up to to a company that owns what it does which is rent collects on the app store and takes 30% of the revenue that's why epic has had this public relations campaign to go. that's why it spoke about apple's history in the lawsuit this was so planted one move after the other to show the public this is actually what apple is if apple is going to take our money, they better own what they're doing. >> alex, it sounds like you may be on the side of epic here.

>> well, look, i ask myself what does apple -- what do developers get from 30% that they pay apple in terms of the revenue that they hand over to stay on the app store. so they get the right to exist, that's one thing they get quick payments, that's another. then i'm like going through the list what else are they getting and is that amount of money actually worth it? would they be paying anybody else that amount of money unless, you know, that other person had a monopoly. i don't think it is worth it i think 30% is egregious feels like protection money for me maybe we get into a 10 to 15% range for a developer to provide to apple the number is totally out of whack and it exists because apple has a monopoly it's good we're seeing somebody challenge what apple is doing. >> alex, let me ask you a question, which is you build the store from scratch you build a complete industry

from scratch epic and everybody else decides they want to create product to sell in that store they know what the pricing scheme is at that store and mind you, by the way, if you sell a product at walmart or at a supermarket, in some cases you pay for shelf space. you pay some percentage of sales. that's the business. in many cases, as you know, apps on apple don't even charge anything, in which case apple gets nothing for it and spends an enormous amount of money curating it, approving each iteration of it. i get your argument, but i also see another side which i think is actually pretty persuasive. >> here's the counter argument, right? you have -- apple is the only show in town, right?

you don't like what's going on inside of walmart, go to your neighborhood store you don't like what's going on inside the apple app store where are you going to go? google is doing the same exact thing. >> alex, build your game on the web. build your game on the web the web is completely open season you could build your game as a -- right there on the internet fire up safari, free to everybody. the experience isn't as good, i accept that. but part of what you're paying for as a developer is the experience of what you get >> right i think that -- i think that apple should definitely charge developers for what they're getting, but the question is like do developers have any wiggle room? do they have an opportunity to negotiate with a company like apple and what epic is showing is not the case. you want to have the ability for

the supplier and the demander to actually figure out a price that makes sense versus the supply set the price and you're sort of out of the market otherwise. >> why should apple back down, alex i mean, they can just say, go over to google play. they can exist on google play. google's already kicked them off so what is there -- what impetus is there for apple to say, we'll sit down at the bargaining table for you and bring down that nice 30% cut that we've been getting all of these years >> apple should back down because rent collecting is bad for its business long term you have to say do you want to make your money milking your asset or innovating. right now apple has decided it wants to be a rent collector it's worked out fine under tim cook, i won't deny that. does it want to build a culture where its business is taking a

fee off of other people's businesses or does it want to force itself to invent its way into the future? if i'm apple and i'm thinking long term, i want to have a more inventive culture, not a more asset milking culture. as long as they continue to rely on other people's money to make the bottom line, it will turn it slow and bureaucratic. i think it will fall apart if i'm he apple, the case here to back down is thinking where i'm going in the future. it should be inventive not rent seeking way. >> we have to run. one final question do you think they should negotiate with every -- >> i think the best way is for apple to drop their fee from 30% to maybe 20% it will make a short-term hit but i think in the long run it would be better for apple as a company. >> okay. alex, great to see you always great to get your

perspective. love to engage and debate with you. thanks so much have a great weekend >> you too. >> melissa. still to come on "squawk box," is the market putting the cart before the horse when it comes to the economic recovery we'll discuss with blackrock's rick rieder and kevin o'leary here to discuss.

♪ born to be wild ♪ moves like these need pampers cruisers 360 fit with an ultra-stretchy waistband and 360 fit that adapts to every wild move plus up to 12 hours of pampers protection so anything your wild child does cruisers can too our best ever fit is

pampers cruisers 360 fit

stocks rebound sharply but the economic bounce back has not been as strong steve liesman takes a look at whether the market is ahead of fundamentals just a hypothetical question if the market moves based on what was obvious to every person watching it, how could it possibly do things to confound the majority of people so that they're notin it or they're ou of it? is it a coincident matter? >> no, that's right, it couldn't possibly work. it's funny -- not funny,

interesting. any day now the stock market could recover the all-time highs. that would be months after the recession began raises that question that you asked, whether it's too far and too fast ahead of the economic fundamentals we went back and we looked at 1973 looked at how stocks behaved in previous recessions. it's the time it takes to recover the pre-recession level in the dow jones usually measured in years averaging 2.7 years to get even or recover the prior level it ranges from 0.9 years as much as 5.3 in the '07 recession. this economy will be measured in months or weeks if you want. markets face another surge in the virus. uncertainty over new government aid. there could be some reasons for the quick rebound. this time the fed and congress are providing unprecedented relief in the economy. they have outperformed expectations even while virus containment seems to have underperformed level of stock indices, plenty

of reason for it take a look at the value it's a rule. stocks tend to have a consistent bid on earnings and the economy bouncing back usually helped by the fed keeping rates low and offering little return or yield to the bond investors. this rebound so far is more expensive than average you can see it's ten points above where they started lots of ups and downs. for decades stocks and earnings have recovered from recessions for several millennia. humans have recovered from pan dem mix. >> i'll take it, steve it sounds like the answer to the question is no, stocks haven't run too far. >> not in the level but perhaps in the valuation, melissa. if you call that pe chart back

up just note, we're using trailing pe earnings and there's a lot of what do you want to call it, call it opacity in future earnings some companies providing guidance some of that is no good. there's a bit of a flyer being taken on future valuations here. >> stick around with us, steve joining us now, rick rieder, blackrock. >> thanks, melissa thanks for having me. >> i will put that question to you and after steve's extensive report and all of those charts, do you think the stock market is discounting too much by way of recovery >> no, i don't so pe ratio's a pretty good indicator. it is i would argue a pretty superficial indicator because we are going through something that we've never seen in history. we've got a federal reserve that is going to keep interest rates down, not that interest rates are down, they're going to stay down for an extended period of

time you take the two year two year forward on interest rates. where are interest rates two years hens where does the marketplace think they'll be at 33 basis points still at zero. if you look at other metrics, look at the earnings yield of the equity market, where is that relative to what could be four years of zero interest rates that earnings yield is pretty active companies are operating much more efficiently the free cash flow yield which is a number i prefer to use more than anything else, the free cash flow is 5%. a lot of that is technology. that is making real money. that free cash flow number of 5%, would you rather buy the 10-year note at 70 basis points or would you rather take the free cash flow i think the equity market, every time we come on we say it's frustrating it keeps grinding

higher with the liquidity and where this is, i think we're going to see this again the investors bidding for gold, is that technical? investors are loving tips these days are these signals they're just out there because of technical reasons and not because of a fundamental belief that perhaps inflation is on the horizon or we risk stagflation in the future >> no. they're real points. gold is unbelievably volatile but there is clearly a belief, you built the debt and you need a bit more inflation because the currency, the dollar moderates pretty lower and we like gold. i think people got overdone. inflation is trending higher inflation market is still not pricing in the fed's target.

i still think the inflation market has rooms and tips out room to the up side. that doesn't mean -- think about this last week interest rates went higher, 10-year note went up 15, 20 basis points inflation went higher. real rates, real cost of borrowing net of inflation didn't do much at all. again, why you get this significant discounting factor that's still there >> when you take a look at it at the next sort of shoes to drop in the economy, rick, what concerns you the most? is it perhaps a new wave of bankruptcies which could solve a lot of solvency issues another wave of layoffs at the state worker level what are some things that could derail the on tow megs stick fo -

optimistic forecast. >> the hollywood drama back and forth do you get a deal, do you not get a deal they need more stimulus. funding state and local, funding around health care there's corporate immunity dye namm make it has to be worked there. if we don't get a stimulus deal, markets will have a hard time. listen, if the fed were to back off, i think they have to buy more assets and more treasuries. if and the assumption is you get another stimulus deal, the amount of borrowing will require more treasury issuance which i think will require more fed purchases. that is out there. obviously the china dynamics are not going away the u.s. china dynamics are not going away we have an eye on that those are the big factors. i'm confident in the u.s. economy. the stimulus that's gone in, and you look across the board, housing, consumption, auto sales, i think the u.s. economy

is going to be in pretty good way. you can't take out i also found that the market as interpreted, you have an economy that can operate virtually reasonably well. >> rick, great to speak with you. rick rieder and steve liesman. >> thanks. >> joe >> thanks, melissa. coming up, the political event of the year just moments away, months away. how will the outcome affect the markets? we're going to discuss with "shark tank's" kevin o'leary. then house minority leader kevin mccarthy joins us. "squawk box" coming right back hike!

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.

welcome back to "squawk box" this morning with the democratic national convention, it shows joe biden's chances to win over president trump is greater although it's narrowing. joining us to discuss what the market is saying about the election, kevin o'leary, chairman of oshares etf and co-host of "shark tank." i don't know if it's too early to bet the market doesn't bet until

after labor day but given the characters and who's on stage here, i thought we should have a conversation about whether you think the market has already made that bet. >> i think the market knows now, gone through the last election and certainly the one that i focused on with many others and put huge bets on brexit, if you recall that. the polls are predictive of nothing. so if you ask institutional investors, even individual ones, would you make bets or change asset allocations based on polls, they would say no it doesn't reflect the outcome in any way i'm not against pollsters or anything but they've been wrong pretty well all the time, if you were trying to hedge your bets based on prediction and calls, it is. i understand it's useful for the circus of cable television and watch the various channels at night around these polls, it's

fun, it's entertaining, but it's irrelevant to the investor >> but let me ask you though, you look at the polls may be one thing. people actually making bets predicted and the like may be another thing or no? >> well, i think there's a 50% chance they're going to be wrong. if you're an investor, let's say last night i was talking with a sovereign investor in ua&e, are you going to change to the weighting? based on the election. they said, it's irrelevant who cares. what matters to the investor, andrew, is the policy. there's a lot of rhetoric and there will be a lot more about biden versus trump on policy trump wins, it's more of the same you may not like him and i get all that stuff, but the policy's been very accommodative for investors, not just domestically, globally

there's so much capital coming to the united states because of a more, you know, accommodative fed and deregulated environment around energy. tomorrow morning if biden wins in early november, he inherits unemployment somewhere between 9 and 11%. his number one mandate is going to get those people back to work is he likely to raise taxes significantly in corporations? no is he going to start regulating the economy immediately and put millions of people out of work no is he really going to implement the green deal no this is what the market's telling you. they don't believe any of that stuff and they're probably right not to it's just noise because his mandate's going to be to get america back to work just like trump has to and the fed's going to remain basically, you know, removing price discovery from bonds. you just heard that.

so everything points to just more focus every sovereign out there is going to continue to allocate to the s&p. it won't really matter it doesn't matter who wins the elections. nothing's going to change for at least the short to mid term. that's why the market just couldn't give a damn and why nobody even watches it anymore. it's a great circus. very entertaining but irrelevant to investors >> kevin, back to the polls for just a minute and, anandrew, you probably saw this. you remember jeff gunlack, double line capital. 148 billion. in 2016 he went against all the polls and the odds and predicted trump would win. only reason i bring it up now is he's predicting a trump win again but he explains why he thinks the polls are wrong will joe biden beat donald trump in november? just a couple of days ago. i don't think so, he said. in this highly toxic political environment the polls are very,

very squishy, in his words so i remember last time, andrew, remember i said you watch what's hitting you. you watch what's hitting you the day before the election and you have this feeling, but then the people actually go and have a vote once every four years everything that's been hitting you, that's every four years, every two years, people actually go to the polls. you see what the actual feeling in the country is. i don't think we know until they go do you agree with had a? >> you know, joe, last week you had a manager on that said if you could talk to the ceos, almost all of them say they're voting for biden i know that that is completely incorrect. that is not even factual, even close to the truth i talk -- when you talk about ceos, you can't just talk about the s&p 500. you have to talk about the

millions of men and women that run businesses in america, the small and mid-sized businesses that represent 68% of our gdp and our economy. i speak to them every day. hundreds of them over the last few months and i always try, i love policy. i'm a policy wonk. the only thing i did well in in high school was history, and i remember my history professor telling me once something i've never forgotten, successful politicians are incredible story tellers. from gangas khan, a titilla theu and if you want to be successful, you have to tell stories. he doesn't sit around the fire, he wants to go on twitter. if you want to beat trump, you better learn how to tell a story. i'm not pro or con my view of the outcome. you saw what happened the last

election hillary clinton bored people to death. you've seen her be much more interesting in interviews with howard stern, et cetera. had she shown some of that, she might have won you have to be a story teller and suck the media out of people at the end of the day though it's not going to change much, you know, in terms of what happens in the investor's focus. as far as ceos in america, 1/3 won't talk about it and the other 2/3 that do, it's 5050 so anybody that tells you that the s&p ceos want one side or the other doesn't know what they're talking about. >> kevin o'leary, always with a provocative insight and opinion and we appreciate seeing you have a fabulous weekend and hope to see you again very, very soon >> take care joe? >> a lot of letters on that.

i'm trying to decodes all of that stuff behind o'leary. i don't know what the hell it means. coming up, house minority leader kevin mccarthy joins us to talk about the stimulus, the stalemate as congress leaves washington for weeks without a deal they will be missed. not. later, don't miss our interview with new jersey governor phil murphy with the latest out of his atste where andrew will be visiting for vacation. vacation in new jersey "squawk box" will be right back. some companies still have hr stuck between employees and their data. entering data. changing data. more and more sensitive, personal data. and it doesn't just drag hr down. it drags the entire business down -- with inefficiency, errors and waste.

it's ridiculous. so ridiculous. with paycom, employees enter and manage their own data in a single, easy to use software. visit paycom.com, and schedule your demo today.

good morning futures are mixed.

washington's failed stimulus talks. we'll speak with house minority leader kevin mccarthy about what's standing in the way of a deal inside the back to school debate one of the nation's very first coronavirus hot spots. new jersey governor phil murphy is going to lay out education plans in the garden state even as it hits an august high for new infections and an epic battle with huge ramifications for a couple of tech titans. maker of fortnite suing apple and google seeking permanent changes to their market dominating app stores. the final hour of "squawk box" begins right now.

good morning and welcome i am where andrew wants to be. that's the first time i've been able to say that melissa lee is with us and becky is off today in the garden state, andrew. to the shore i don't want to get too specific. >> to the shore. we're going to the water i will come back with a full report card on my new jersey experience i will be coming to your great state. >> yes, you will. >> hopefully spending money there and enjoying the benefits of -- >> coming back with a tan and some ink i would imagine here or here. >> i might. >> you can't go to the shore -- i would get a cnbc -- what about

a "squawk box" -- no, don't get a "squawk box. that's too permanent no, you can. i have one u.s. equity futures -- but i can't show you i can't show you. >> we don't want to see. >> ask me and i might do it. let me -- no anyway we're down about 76 points now on the dow that's better than some of the levels we had been seeing. s&p, who knows today i think it needs about 12 points to hit an all-time high. needed six yesterday and it was down six i think that's about right treasury yields this morning, you can see the 10-year note at about .7%. melissa? >> a big tech story we're following for you this morning they're suing them for removing them from the app store.

it allowed players to buy in game weapons and paying epic directly normally gamers who use that have to pay through the apple store. in apple's case they get a 15 to 30% cut of those shares. epic said the company has become what it once railed against, the bohemoth seeking to control markets, block competition and stifle innovation. they started a social media campaign with #freefortnite with the 1984 fight the power ad which was aimed at the computing giant ibm. apple said the app store guidelines create a level playing field. google says it welcomes discussions to get fortnite back on the app store joe? >> thanks, melissa the senate has left the building

adjourning through labor day and joining the house out of town as lawmakers were unable to strike a deal on the next round of coronavirus relief democrats and republicans have described themselves as hopelessly far apart in talks. i guess joining us to talk about the next moves in congress, house minority leader, kevin mccarthy we've seen this movie before we know the two sides are -- don't agree on a lot of things guys and gals, republicans saying there's too much stuff in the democrat $3 trillion too much weird stuff they say we need it for the states and the stock market doesn't represent main street and people are still hurting what about a million -- what about a trillion and a half, what about 1.8 trillion. what about something like that is that doable >> i think a lot is doable

let's look at the pattern of behavior from the first bill the democrats held it up we wanted liability protection from 3m. the next bill pelosi came in and held it up for a week and then when we had the ppp, the funding for the small businesses for the employees, she held it up in front of a refrigeratorefrigerar every time the speaker has been willing to hold it up. let me give you an option to solve this the speaker starts with how much she needs, not what she needs it for. it's like a credit maybe you have a credit on an airline. why don't we utilize that to find the common ground that is money. that is money that's already appropriated save the taxpayer from spending more but also achieve what you're looking to do you have more than 100 billion sitting there for states

you have more than 100 billion sitting there for small businesses that may need the ppp. we have liability protection to protect the schools. we have not only the schools being protected but funding for the schools to provide the security they need so they can open safely for the children and the teachers so i believe we can find common ground let's just take the politics, the number of days before the election out of this and let's just get in the room and get it done >> what do you make of what the president did last weekend in terms of executive orders? are they -- is he able to do that is it helpful? there's criticism from some republicans. >> people would rather have the legislative body work. it's not going to work if they hold it up does he want to continue the -- to be unemployed, not get resources? think for one moment, nancy pelosi as speaker saying that the $15 an hour extra that the federal government is going to pay that will probably get you

up on average $24 an hour unemployment where her number two steny hoyer says, no, that's no red line. the republicans have an argument about it she makes that a red line. is she holding it up because she doesn't want it to go forward? if the president is put into a box, it's smart of him to pick the public over politics it's smart of him to put the people ahead of games in washington it's not something he wants to do, but think of the position that he is in. he made a tough decision, but i think he made the right decision picking the people over a political process. >> leader, question to you about perhaps games being played in washington. >> sure. >> the president made a comment yesterday that he did not support the stimulus that the democrats had proposed in large part because he didn't want to fund the u.s. postal service in part because he is against

mail-in ballots. what's your reaction to that >> let's be clear what the president is saying. he did not put a veto threat out for it he is supportive of making sure the postal service needs to have funding. he needs to clarify the difference between mail-in ballots and absentee absentee is where a person applies to vote by mail so you have a check you know that is the actual person we know there is a lot of fraud if you mail out balance lots to everybody on the rows. you had four people recently arrested based on this process as well inside los angeles and other areas. we see this time and again you see in new york where 1/3 of them don't count you want an accuracy in an election what i believe even when you watch what the democrats offered in their first bill that that $3 trillion, it mentioned pot more

than it ever mentioned researcher jobs. if this is a covid bill, the jobs for public safety. >> you do recognize it appears at least -- go ahead, joe. >> no. you want to finish up. we're running out of time. go ahead >> no. i was going to suggest that, you know, at least from appearances on the outside it appears as if politics are being played with this covid bill in different ways but also specifically with this postal issue because it does potentially limit people from being able to vote and we can debate the distinction between a mail in vote and absentee vote. that's a worthy debate >> yeah. >> i don't know about withholding money.

>> you're not hearing anything on our side about withholding money. the president's making a case about the mail-in but the president has not put a veto threat in. i think when you're talking about negotiations and others, the postal service will have the funding that it needs and we'll make sure of that. we want to make sure that we have an accurate election. i think any republican that gets their ballot in the mail should vote that and make sure that their vote is counted, trace it. make sure that is the person voting that's an importance that we have and we'll make sure that funding is there >> it's been made -- the point's been made again and again, leader, that if the stock market wasn't doing so well there might have been urgency in the house, senate, people remember the time back in the financial crisis where the market was plunging after they didn't pass it the first time and got back quickly and got religion quickly is that happening again, do you think? i made the point that we would

like to not spend another $10 trillion if possible we've added a lot already. if the market is indicating that the economy is on firmer ground, maybe we don't want to throw as much money on stimulus 4, 5, 6, 7, wherever it is. there are people disconnected from the stock market that need the money. it's a quandary. >> let's think about this. if we went forward with what the democrats asked for in that 3 trillion, i believe the market would drop hard. it would put greater debt on all taxpayers. more importantly, it would not achieve what we need to achieve in the process pot would probably go up in the process because that mentions more than it mentions job. i think what the market is looking for is surgical. you have 9.3 million new jobs in the last three months. that shows what the president is doing is good. vaccines, you have six of them

the advanced purchases so we have the dosages you have 600,000 therapeutics coming online next month in their study. how do we put that bridge. did the market drop hard and react when nancy pelosi said they would not give up their paycheck to their employee what about when nancy pelosi held it up the first time, the c.a.r.e.s. act the only thing we got was more money for the kennedy center i think the market reacted there as well. they don't want to see those same mistakes. we know that, yes, we're 80 days away before an election and democrats believe there is a benefit to not having to go forward. i think the democrats are saying that they almost hurt the economy because they dislike the president so much. that's why the president took action and a lot of people, it's something that we would not want to do. he wants to make sure that the people are not hurt.

it is incumbent on us to get back in the room do you have to start with it has to spend this much money think of an analogy. we both know where we have to get. we both know we're going to have to fly pelosi is saying you have to pay $2,000 for the ticket instead of 1,000. what if you already have a credit and you can get to the 2 trillion wouldn't that be an answer instead of harming the public one more time? >> yeah. leader, thank you. >> thank you >> leave it there. you know, if you feel good about taking all of this time off, go for it let's have some. we'll see you in september, right? see you in september all right. thank you. andrew coming up on the other side of this break, why did it just get harder to get a mortgage

we'll tell you about three key events that just took place and stay tuned for our special interview with new jersey governor phil murphy on the state hitting an august high for new coronavirus cases and what it means to school openings and quk"etnsig aer "saw rur rhtft this ♪ ♪ i keep working my way back to you, babe ♪ ♪ with a happiness that died ♪ i let it get away servicenow. the smarter way to workflow.

lookentertainmentour experience: xfinity x1. it's the easiest way to watch live tv and all your favorite streaming apps. plus, x1 also includes peacock premium at no extra cost. this baby is the total package. it streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. yup, the best really did get better. magnificent. xfinity x1 just got even better, with peacock premium included at no additional cost. no strings attached.

a confluence of events is making it harder to refinance your mortgage. diana olick joins us now with more on this diana? >> yeah, a number of changes that are making it not only harder but more expensive to refinance your home loan first is rising mortgage rates the headline has been record low after record low rates are lower than where they

were a year ago. in the last week we've gone from solidly under 3% on the 30 year fix to solidly over it that's according to mortgage news daily part of it is rising treasury yields rates move even higher yesterday after fannie may and freddie mack hiked the fees. that amounts to $1500 on a $300,000 mortgage. lenders don't have to but they will likely pass that on to borrowers. the market reacted quickly with rates moving higher and finally credit scores. the median fico credit score for mortgages originated in q2 jumped to 784. that is the highest since the fed began tracking this. all of this makes it harder and more expensive for borrowers to refinance the mortgages which had been a bright spot in the tough economic times

back to you. >> meantime, want to keep an eye on the bank sector some of them are up 6% or more joining us is director of bank advisory and strategic services at vining sparks the banks have moved higher. should they be moving higher how do you think of all of the loan loss reserves and they take in the expectation that things may get worse. i've been trying to make sense of this this past week. >> well, we have, andrew, that's going to be the historical difference in this cycle versus anything we've seen before we had accounting change, which is very technical. that accounting change forces these banks to provide for their loans at a much quicker pace before they see the losses

we're pushing off the losses because we're deferring payments we're getting six or even more months of respite for some of these pressure points on households, which is helping the system work better what we're going to see is the losses won't come in until 202 and the reserving is going to happen in 2020 so it's going to be the balance between those two things the timing is going to be very different than what we've seen before because of this >> if you were to own one bank right now, which bank would it be >> well, right now what you're looking at is can these banks preserve their capital as they're going through the process and can they sustain their dividends, those are the banks you want to look for right now it's more on the success factor than the loss factor we've only had one capitulate on the dividend only two or three that would be in trouble when we look at it, the group as a whole is in good shape doing the things they need to do to get into the cycle. we think once we need to get through 2021 and get through the

first half we'll see how much we've been able to reserve there are several banks out there that are well positioned to be able to take advantage of the system once we get past it. >> do you like a big money center bank like a jpm or bank of america or are you more partial to a goldman sachs because you think there's going to be a lot of trading revenue around what's happening? how are you thinking of the distinction between those types of institutions? >> what you're looking at with the money centers, goldman sachs and morgan stanley, that's been the popular trade and right trade. what you're seeing with investment banking is there. that's the trade for the first six months of the recession. the trade deal we're looking at now is the super regional banks still discounted but are going to be able to accomplish what we just talked about. sustain the dividend, preserve capital and get the reserving in front of them as we go through that process so if you look at the general --

the ones that you can look at, the third, regions, all of these are ones that have been able to provide for their losses, protect their net interest margin as well as possible and should be able to come out the other side as we get into 2021 better positioned. >> if you're a value player, is there an argument to be made to wells fargo? it's one of the least loved of the banks out there. i'm going to be curious to look at the 13 fs we're going to start seeing at the end of the day. warren buffet, a lot of the big investors saying whether they're in wells or not or still in wells or not what's your sense of that bank right now? >> it is a long-term play. if you're looking at the ability for management in the franchise, it's still there for them to be able to come out the other side and have a franchise that can be competitive, which they haven't been for the last five years just in the sense of what they've been able to do

financially. as they go through and they get the regulatory pressures subsided, lessened, they'd be able to be able to create from what they have on their core base and they derisk the franchise significantly through this process for a long-term basis it's a good investment. they have several quarters of dealing with some of these issues >> okay. always great to see you. have a fabulous weekend. thanks >> thanks. y'all too. >> you bet joe? coming up, breaking july retail sales data. investors watching this one pretty closely as a gauge of the environment and an interview with new jersey governor phil murphy maybe the greatest state in the country on the extensive series of schools reopening guidin tt eleshahis state just released stay tuned you're watching "squawk box" on cnbc

in new ways. to new customers. what if you could come back stronger? faster. better. at comcast business, we want to help you not just bounce back. but bounce forward. that's why we're helping you stay ahead and adapt with a network you can count on, 24/7 support and flexible solutions that work wherever you are. call or go online today. now you can trade stocks and etfs for any amount you choose instead of buying by the share. all with no commissions. stocks by the slice from fidelity. get your slice today.

welcome back to "squawk box. down 32 points s&p 500 off three. stay tuned you're watching "squawk box" on cnbc , blair. [ chuckles ] whoo. i'm gonna grow big and strong. yes, you are. i'm gonna get this place all clean. i'll give you a hand. and i'm gonna put lisa on crutches! wait, what? said she's gonna need crutches. she fell pretty hard. you might want to clean that up, girl. excuse us. when owning a small business gets real, progressive helps protect what you built with customizable coverage.

-and i'm gonna -- -eh, eh, eh. -donny, no. -oh. and their financial well-being. since our beginning, our business has been people. it's evident in good times, with decisions focused on the long-term. and crucial when circumstances become difficult. that continued emphasis on people - our advisors, associates, clients and communities gives us purpose, strength and a way forward. today. and always.

rick, this is the one we're watching very, very closely to see if these gains can hold even after the supply came off the market this week

>> absolutely. i think the 30-year bond is almost taken the place of the 10-year as being the barometer it's hovering above 140. these levels on the closing basis are the best since july 6th. indeed, 150 is what people are paying attention to. it's considered the biggest resistance only a few seconds away from retail sales this can be an important number especially after considering the high number was in may at 18.2 we've drifted a little bit but we're expecting the number to be solid. here it is up 1.2 this is not what we were expecting. i was looking at 2 to 2.5. that is a little better than half of expectations if you strip out autos, it actually improves a bit against expectations that is it's up 1.9. expectations around 1.2. if you strip out autos and gas,

it's up 1.5. it will be inputted in other data points. that's a very promising number many look at the headline number not necessarily as important, you strip off the onion levels and get to what is more important. second quarter preliminary, first glimpse at productivity. it's better than expected, indeed we're looking at 1.5 this is multiples of that. 7.3. 7.3. this is one of the better numbers that i've seen coming back i don't think we've been over 7% probably since '09 this goes a long way back. if we look at unit labor costs of course when productivity kicks in, we're expecting up 1.5 on productivity, up 7.3. almost double at 12.2. these are really powerful

numbers on productivity and outside of the retail sales headline now let's look towards the interest rate complex and see if there's any reaction there doesn't seem to be maybe we've moved a basis point higher on the 30s. the important issue is we're holding those yield gains. selling pressure and treasury remains. probably we will see industrial production pass utilization finalizing some of the big tech points of the week finally university of michigan will come later. all things considered, any yield close above 70 basis points will probably keep the pressure on yields melissa lee, back to you >> rick santelli, thanks steve liesman, how are you digesting this, steve? >> a little confused this happens from time to time the auto numbers as reported by our great colleague, phil lebeau, have been better i was looking at the july numbers. this is not in the data that you're looking at here

july auto sales, vehicle sales at an annual rate up 14.5 to 13.1 june to july. we have a decline. i'm not too worried about that showing decent strength. i don't know if joe got a new washer and dryer, i know he was getting his home together. might have had an impact there decent rebound in clothing 5.7 after falling 21%. rick is right about this other number that feeds into gdp which

is the control number. that's why it's watched so carefully. overall i think it's a good number you take out the exautos, you add that back in it raises that question for august that's where we need to focus. which is what happens. i saw a number that the government had been pumping $500 billion a month into the economy as a result of the c.a.r.e.s. act. that's down to a trickle at least according to jason ferman. what happens to retail sales in the absence of that. is the free market on its own able to come in and replace that with jobs and job hiring >> on these numbers, let's bring in matthew shay and mickey chata from moody's matt, i'll start with you and pick up exactly where steve left off. what happens in the month of

august that seems to be what you are most concerned about when consumers aren't juiced as much by stimulus. >> yeah, melissa, i think as steve said, these are all backward looking numbers so we know what we think happened in july with sales. consumers are doing a lot of different things paying rent. paying off debt. they're saving we know that the bonus unemployment payment, that $600 a month from the federal government was coming to an end. people knew that and were certainly aware that that might happen so i think the question will be as we go forward what happens. throughout the pandemic. we've seen them come back with the right support.

you see more and more. amazon and then you have a whole host of others that are just struggling in this pandemic. >> well, you know, first of all i think the numbers that came out today have been pretty good all things being considered. a great may and then follow up in june. consumers seem to be resilient but the august numbers are definitely a question mark the stimulus numbers, the stimulus programs that the fed had expired and i think that unemployment is still high consumers still stressed if you look at the categories that the sales are really coming from, it's categories that you would expect people are at home and not going to restaurants, they're not taking vacations sporting goods, building

materials, appliances. basically non-discretionary food these are big categories of sales. we're not that concerned on the sales number going forward we still think you're going to come up with either a low single digit sales increase for the year but we're more concerned about what profitability these sales are generating for retailers. so you've got a couple of things going on most of the sales mix even on the sale is basically a lower margin consumable sales that is impacting profitability. ecommerce sales are really off really, really skyrocketing. we expected 25% in ecom these are customer acquisition costs, delivery costs. retailers spending money on safety equipment, more bonuses for the employees for hazard pay, et cetera so we're expecting a 25 and 30% drop in operating profit across

retail for 2020 and those numbers are not going to come back to 2019 numbers until earliest 2022. so the default rate for non-investment grade retailers is going to skyrocket and peak sometime in september to levels that is higher than 2008 which is the peak of the financial crisis so overall we're negative on retail not primarily because of sale but it's basically a profitability issue for us >> so we're going to see a wave of bankruptcies even before the holiday shopping season is finished. >> we've had a number of bankruptcies i think you're going to see more. >> but the peak. you mentioned the peak >> yes the peak is definitely coming on a default rate basis when we look at defaults, we look at defaults in bankruptcies but we look at defaults where it has exchanges, where there are exchanges for bonds, for equity

and those kinds of issues we look at as a default because it's actually not fulfilling the promise of payment so we include that in our default rate when we calculate it yes, it's still going to continue and peak in december. as far as the default rate goes. >> matt, considering the stress and the distress that some of your members might be under, what are you at nrf asking congress to do stimulus can help consumers. is there more to be done for these retailers or is this solvency problem something that cannot be solved with more funds, with more loans, et cetera. >> yeah, i guess, melissa, a couple of observations one is we want to continue to put the consumer at the center of the relief that goes out there but also recognize retailers as mickey has said have had dramatic increases with ppe and the work they've done to provide enhanced wages, bonuses, health care benefits, all the

things they've done to support their teams and keep them safe and let those economic first responders continue to serve customers and communities. there are some things where we think, you know, the programs could have been more effective they'll continue to come back. the ppp worked very well the economic delivery loans and a lot of this worked positively. i guess the observation i'd make about the companies that are in distress, first of all, many are going to get reorganized and reemerged. they're going to be attractive brands, different structure, costs, overhead and footprint but a lot of these folks were in positions where they had taken on too much debt they couldn't service their debt they couldn't outrun those expenses and the pandemic accelerated all of that. as we've seen, last year there were maybe 25 of these now there are something in the low 40s.

these have mostly been reorganizations, not liquidations and throughout all of this i think we've seen consumers remain strong. so there's no correlation between bankruptcies and consumer behavior or bankruptcies and commerce and i think to the extent there's innovation, that will be a positive. >> sure. matt and mickey, thank you both for your thoughts. appreciate it. >> thank you >> nice to see you okay coming up when we return, we're going to be joined live by new jersey governor phil murphy. his state recorded the highest daily coronavirus case count for the month of august. of course, it's getting ready to reopen schools we have a lot to talk about with the governor stay tedun you don't want to miss it. we're back in a moment after this ♪ you should be mad they gave this guy a promotion.

you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis.

school districts around the country are wrestling with how to reopen safely in the midst of the pandemic this week the state of new jersey revised its guidelines to allow schools to open virtually if they're not

ready for in-person learning yesterday the state hit an august high for new coronavirus cases. for more let's welcome new jersey governor phil murphy. it's a new high but compared to earlier months hopefully it's still manageable, governor murphy what's your gut feeling about what schools should do right now? i think you have a stated opinion that it's best for everyone if we try to get these schools open for a myriad reasons, but is it going to be possible or will we have to backtrack? >> joe, good to be with you. and let me first address the fact that you're absolutely right. we had 699 positives yesterday that's the highest we've had in a while, but folks have to remember, we were over 4,000 a day in the thick of this we also have a positivity rate that's been hovering around 2% so we're watching this like a hawk i don't like that number, but the fact of the matter is, 98%

of folks getting tested are negative so please, god, it stays that way you're absolutely right. we have an express desire, assuming our principles are safely high quality education equity with all of that wrapped with flexibility you're absolutely right, our hope and desire and objective is to get safely, responsibly in person instruction the fact of the matter is, a lot of districts, in fact at the moment the majority will be able to have some form of that on day one but there are legitimate reasons why a bunch of districts will not be able too get there on day one what we announced this week is we're going to work with them. they need to present a plan as to what the gaps are how they're going to address those. we'll work with them to address them and what's a reasonable date that they can be back in some form of in person it can be, joe, very simply we have plexiglass that's on backorder or we don't have enough masks or all the way to

more complicated things like ventilation in an old school building we want in person but we want to be safe doing it. >> there are reopenings in some other states that seem to be in maybe more precarious shape than new jersey i'm talking about recently we heard about amc. i think they're opening in less than a week at 100 locations a lot of people really want some new movies to come out i know some people that are close to me waiting for tenant, the big spy thriller to come out. they want new jersey to open up the theaters when will that happen for amc in the garden state >> i honestly don't know, joe. that is complicated. so we still have not gotten to indoor dining yet. i hope we get there sooner than later and i hope that we will. i almost say i expect that we will indoor movie theaters are hard you could social distance. you can mandate face coverings but you're sedentary

you're subject to the ventilation of that particular theater. i'm as big a movie fan as there is in new jersey by the way, the movie business started in new jersey i might add so i want to get back -- i want to see "tenant" as well that's a really tough one. i can't give you a date on that. >> governor, i know that my colleague andrew ross sorkin wants to get in. if we show him a good time, he's going to vacation in new jersey next week, if we show him a good time we've got a chance of landing him out there. that's almost like getting a sports team orsomething to com to your state. >> that's huge without paying all the incentives, too. joe, you and i will work on that >> right >> governor, i am headed to your state. i got tested by the way just yesterday because we're going to have a little family reunion in your state we're looking forward to it. getting a lot of questions on twitter literally as you were speaking i imagine from people who are based in jersey asking about reopening of gyms, which of

course is another controversial topic. >> yup. >> what do you think >> that's another one, you're absolutely right, andrew we're not there yet on that either there's a lot of emotion around that overwhelmingly people have had responsible emotion. there have been a few folks who have gone off the rails, but i hope we get there under pretty significant parameters i hope just as i said about indoor dining, i hope if we can keep the numbers in check that we can get there sooner than later. it's good at many levels including physical health, mental health, blowing off some steam. we want to get there but we've got to do it safely. >> i wanted to ask about another controversial topic, maybe an even more controversial one and that is taxes. your state treasurer has indicated that she says a tax short fall

through the pandemic we have seen workers and families are more money with their jobs and can easily leave new jersey if they chose so if you raise taxes. >> yeah. i would say it's a very good question we're going to get back to fiscal well-being based on four different principles number one, the ability to borrow money, which we just were allowed to do by our supreme court. number two, to cut expenses. in some cases expenses that will hurt but we have no choice number three is look at raising revenues to raise the money to address the enormous inequities that this virus has laid bear. that's not raising revenues on working families and middle class. that's on the folks that -- >> is that a millionaire's tax >> that is -- listen, i've been for a millionaire's tax for many years and i remain so, but let

me tell you the big x factor which i have to address. the overwhelming x factor is congress needs to act. the republican leadership in the senate needs to meet on common ground the house heroes act the president needs to sign it everything from unemployment un insurance to small businesses, restaurants, hospitality and direct cash assistance to states and local entities, if that happens and it happens at significant amounts of numbers, that gives us an enormous amount of degrees of freedom that we don't have now and that's not a blue state thing, it's an american state thing >> if you get money from the government you won't raise taxes? >> no, i won't say that, but the degrees of freedom we will have if we get the appropriate amount -- not just new jersey, any american state will be light years different from where we are right now. we will separately aggressively address the inequities that have

been exposed and laid bare over the last couple of months. >> i hope that didn't ruin things with sorkin andrew, everybody will be raises revenue, i hope that's not going to be the issue, you know -- go ahead. it still won't be as bad as new york. >> you know my view, i'm happy to pay my taxes. very happy to pay my taxes i don't want to overpay my taxes, i think we have to get a balance, but i'm happy to pay the taxes, especially during this pandemic as i've said to you before i think we have all been blessed and i think we have a contribution to make and that's our contribution in this world. >> yeah. yeah yeah. >> right now. >> i know. i know >> listen, joe and andrew, i will say this -- >> hit a button -- go ahead, governor. >> we've been coming out of several decades of government is not the answer, government is the problem. when government has worked in this crisis i think it's made a

point that we have -- you know, if you are looking for silver linings in this awful tragedy and the tragedy here is over 14,000 lost lives, government when it works is worth it. >> we're all socialists in a fox hole, governor, i think that's the new expression we do appreciate it. when you need a lawyer when you are in trouble, suddenly we all love lawyers all of a sudden governor, we want to see you again soon i was going to ask you about the executive order, i know you think it's unworkable to do the payroll tax, it is tough, but, you know, when congress goes home in the middle of a crisis i don't know what else -- what else you're supposed to do, right? >> it's just -- listen, that phrase go big or go home, i can't believe it but they went home >> yeah. i know we talked about it earlier, i said, well, i hope you're sleeping well, leader. anyway, thanks a lot, governor, we appreciate it. we will see you around. >> good to see you. >> great state of new jersey,

mel sachlt you're welcome out here, too. >> i go every day, joe, every day to new jersey. coming up, what to watch ahead of friday morning open on wall street. meantime, a check on futures after that data, a little softer, s&p looking to open lower by 4, nasdaq with an open up by 23 stay tuned, you're watching "squawk box" on cnbc when it comes to parenting, you're a pro. you know your kid doesn't step around puddles. and you know cheap leaky diapers are an amateur move. you need luvs pro-level protection.

luvs. parent like a pro.

welcome back to skoks. we are just about a half an hour away from the opening bell on wall street. joining us to talk about what investors need to be watching on this friday. christian yamina it's great to see you. what are you thinking this morning? we've been flirting as you know

with a historic high, we seem to get there and then peel right back we have this washington news which osh or rather lack of news and what to make of it. >> so i think there's good reason why we are not kind of going over the top and one is the stimulus, as long as the stimulus proposal is still stuck in congress, the likelihood we make significant progress is pretty small and the second thing is the progress in the underlying economy has kind of softened since the early part of the -- >> i think we're having a bit of technical issues as i think so many of us have over these past -- past months during this pandemic zoom is usually a -- usually works in many cases, but sometimes we live with the freeze and we're having that freeze right now

we do want to take a quick check on the markets as we try to get krishna back on line dow looks like it will open down 93 points, s&p 500 off about four points. hard to gauge exactly what's moving that market obviously we have the issues in washington as we were going to talk to krishna about, at the same time we have had in europe and you saw the stocks pretty much across the board there fall in tandem in certain cases the market is off a little over 1% n certain cases 2% in britain in part because we're starting to see some of the covid numbers increasing, especially in places like france and germany. which has people concerned i think we have krishna back on the line krishna, are you with us >> yes, i am how are you, andrew? >> i'm very good we caught you midsentence. do you remember where you were >> the bottom line is i think the market to do significantly

better we have to have a resolution on the stimulus front. that's the only action that can kind of get the market higher, everything else would require the economy to continue to improve and that has happened slowly but i think eventually will >> krishna, it is very likely as we were just talking to leader mccarthy that we won't be -- we won't be seeing any real stimulus over this next month adds they go away on vacation. so play it out what does the rest of august look like? >> well, so i think if that is indeed the case the rest of august would look like the last few days, which is we wait for the stimulus but really the market doesn't do anything without -- without the stimulus. the underlying improvement in the economy is not strong enough to take the market to a different level. so i think for that either the stimulus has to happen or we hear something on the vaccine front, without that the

likelihood that we see 3400 or 3500 that's just not going to happen in my opinion. >> if there is not stimulus, though, in the next three or four weeks, there is an argument to be made that there is going to be real structural economic problems that will be created as a function of that do you agree with that or do you think that this would just be temporary? >> well, i think eventually if we don't have any stimulus things would get somewhat problematic, but recognize that the savings rate in the u.s. went up significantly. so we have that warehouse spending power at least for august and early part of september to kind of keep us going, but i think from a longer term perspective absolutely without the stimulus we will have a problem >> okay. krishna, always good to see you. we look forward to seeing you again very, very soon. have a great weekend we appreciate you spending time with us. also of course appreciate

melissa spending time with us all week, it's always been a pleasure joe, i'm off next week, i'm headed to your state, maybe i will stop by the house for a margarita on the way and have a fabulous time. >> or a dip. we've got a pool we have a pond and a pool. >> a little swim dip i will see you in a week, you will see joe and becky and the rest of the gang next week have a fabulous weekend. "squawk on the street" begins right now. ♪ and this is "squawk on the street" i'm david faber along with mike santoli and sara eisen. carl and jim had the day off let's give you a look at the markets which will open one half hour from now. we are looking for as you see there a slightly lower open although the nasdaq which has been a bit weaker at least in a couple of sessions this week than the broader market, if you want to call it the br