and president trump draws battle lines over the future of this country. it is august 28, 2020. "squawk box" begins now. >> good morning. welcome to "squawk box." i'm melissa lee with andrew ross sorkin and mike santoli. these gains holding on higher. the dow is looking to add 169 points the nasdaq looking higher by about 23 points. the focus again on the 10-year yield. we hit the highest level since june 10.

7.44%. as you noted before the yield curve. steepening and a rally in the financials >> you mentioned that june 10 was the high that was the day where the markets had their maximum enthusiasm about the strength of the recovery and how fast it would be that was the peak where the come back of value and cyclical sectors. that seems to be the dynamic and the push for which stocks were preferred and the market seven days in a row of records is not to be dismissed guys >> the intraday record high in this session and we'll have to see if this continues? >> yesterday's high is around 3,500. >> coming up, we'll talk about

the abrupt halt to the sport's world. we ha we have fed presidents and the interim ceo of tiktok. >> what a story it has been and a soap opera all week long we are learning more in the details in the sale of tiktok after walmart confirmed it has teamed up with microsoft sources tell us that walmart ineshlly wanted to be the lead buyer together with what was alphabet and soft bank coo and ran wework walmart wanted to be the exclusive e commerce and payments provider but the government wanted the lead buyer to be a tech company because that would be a better rational

for the security a bid confirmed yesterday. in a statement, walmart said it was confident that they would meet expectations with tiktok users and concerns of u.s. regulators that's the back drop on regulators of the day. we'll talk to theinterim ceo vanessa pappas after an abrupt step down of the ceo. we have a lot of questions this is a business story, a tech story, geopolitical story. there are so many elements to it julia will be joining us with that as well anybody who says they are in

the bidding for tiktok are in the rating microsoft already rallying for this bid walmart is an interesting one as they move from a transaction-based model to more subscription-based model going after amazon prime in a subscription model, a captive audience is worth something and what more captive than the audience on tiktok. >> bytedance already does this in china so could create competition and change the dynamic of the conversation you could argue that walmart there for becomes a more meaningful competitor in the space when it

comes to the search. it may create its own set of nightmares or challenges because the more walmart gets into that space. the more it ends up competing with the small businesses we get on our platform and seen around the debate with amazon fascinating to watch in the transaction over the next several days possibly could happen on monday. we should note oracle is still out there as a stocking horse. i don't know if there is a stocking horse bidder but we keep saying they are the lead bidders. other views that oracle is a lead bidder. >> at the beginning of this, why microsoft wants or needs a partner. financial, not an issue. technology, not an issue is there a sense the leadership of microsoft is doing this because this company needs some

kind of rescue >> that's a great question the answer is, at least initially. the element of this for microsoft, when they first started talking, they weren't talking about buying the company. talking about going from tiktok using google cloud as the host and using microsoft azure which would have made tiktok one of the biggest clients overnight and put microsoft in the video consumer base that was the strategy part of it. aws and google plot have taken the video piece of the world

they could use tiktok. initially, there was an anxiety in large part because of the politics around it and all of the attention to not loose focus on enterprise. that's where we started when the trump administration stepped in and talks went from being a minor interest to control interest and that's how this all seemed to happen let's get an update on the devastation from hurricane laura with jay gray in louisiana

>> reporter: it is overwhelming here take a look where we are you can see the sheer and twisted metal. part of what was a gas station you see an empty spot. this pump pulled from the ground and tossed to somewhere. we haven't been able to find it at this point. evidence of how powerful this storm was. seeing this play out across the region communities are shattered by the wind a real concern as they work through this rubble, that number could go up. talking about those where they are trying to clean up

this area they are used to the resolve will be very difficult there will be spots where it will be years before they come back >> thank you breaking overnight, the prime minister abe with a report he is resigning for health reasons he suffers from a chronic disease that forced him to step down in 2007 following a flare up abe said he was not confident he would be able to make decisions confidently with his health conditions >> coming up, we'll tell you what president trump said about the progress of the vaccine development and get reaction

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life-saving therapies and will produce a vaccine before the end of the year or maybe even sooner we will defeat the virus and the pandemic and emerge stronger than ever before >> that was president trump last night at the republican national convention joining us with more, dr. scott gottlieb, former fda commissioner and on the board of pfizer and illumina let's fact check this as we do with all speeches these days will we have a vaccine before the end of the year? >> the question is, right, will we have it approved.

probably sometime in october is likely if they are effective, you could have a vaccine available, i believe under an emergency use authorization for select populations before the end of the year you could see the fda authorize use for let's say front-line health care workers or nursing homeworkers. in terms of having a vaccine license. most people can go get it as accessible that is a 2021 event that is a first quarter of 2021. that is probably the case where it is effective, you could get them licensed for use in the first quarter of 2021. >> you take a look at the time

line of authorizations are you concerned that this process of the fda is getting politicized. is that even the possibility that white house puts pressure on the fda to speed it up. the timing of the abbott labs test given on wednesday. the day before president trump announced the purchase of a massive amount of tests of the republican convention during his keynote? >> we'll have to look back after this event and make sure we have the right guidance and guidelines around that process this is the first time we've used this process at the time of scale. we've seen hundreds under the market as they have preparedness act to have a lower standard to get a promising treatment to patients

more quickly that has been used in that way. it is a lower standard not that it is safe and effective but demonstrated to be safe we need to make sure we have proper guidelines around it. that process doesn't go through the same status. it is important the fda get in place a good framework around this congress will come back and change this process and make sure we have tighter controls over how these things go forward. not to say we haven't been appropriate to date but it is less transparent and rigorous, if you will, than a traditional review process >> are you concerned about these standards. the thinking that this rapid test would open the door to the

reopening whether it be restaurants, concerts. we saw the reaction in stocks. we are saying these tests were put through a less rigorous process. is your optimism surrounding what these tests could do for the economy, is that dampedened in any way >> i don't think so. if you look at the validation work abbott did, it is like a full clearance, if you will, by the fda. they put it through a pretty rigorous process here. this affords them more certain sis of getting it reviewed and on the market than putting it through a standard 5 k process in terms of the validation would

have done. they'll come back with issue i'm confident that has come through in the process i'm confident a company like abbott does the full evaluation work >> one of the things we have not heard yet. maybe you'll have insider knowledge about this are we going to see the airlines decide to buy lots of these abbott tests and every time you go to the airport, you would use it or sports stadiums or places where life hasn't been able to go on like you wanted it to. i don't know if that can happen, whether cost makes sense showing up at the airport, you already have to be there two or three hours before, maybe

showing up 30 minutes before and would people subject themselves to these tests i imagine you could hire doctors and nurses and the like to conduct these, no? there might not be a supply to procure them there are other manufacturers that could come on the scene as well i expect to see more behind it this allows the testing to get into a different kind of setting and move it into the work place.

you'll see tests marketed directly to consumers to test yourself at home they've said as long as the tests are reliable and accurate and they would have to report those as a way to keep the product off the market saying the product can't come to the market the ability to test yourself at home and get a positive result, there has to be some reporting of that result >> i assume they could do that electronically if the results were blue toothed to a phone, you could force to have everybody press a button to say you would report that back we used to talk about this back

in march and april, we talked about how we thought there would be apps, tracing apps. that hasn't really happened. >> you are right about the technology it is doable it is not interpretable until you flash your phone and get the answer there are work arounds here. those costs go from a $5 test to a $15 test you might first see some manufacturers come to the market in the technologies. that will get more testing into

the hands of the consumer which isn't a bad thing. we want as many people to get tested as possible to get a result to know that they are positive and take the proper steps. >> dr. gottlieb, thank you as always more coming up this morning. stocks to watch. we'll tell you how the boom in face coverings is helping one company's bottom line. and a look at the biggest pre-market movers in the s&p 500. more after this. 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.

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retailer gap's total sales fell about 18% from a year ago struggling with the closure of stores the company pivoted early to making face masks. that move is paying off. they brought in $130 million in face mask sales to individuals and bulk to stores and governments. >> dom chu with highlights

>> 50% of cfos saytechnology will be the fastest growing sector as they continue to develop work from home and e commerce hoping e commerce will get a boost. covid-19 will negatively or very negatively impact. some say it is the same or easier to find talent for their company. you are seeing developing themes there. when it comes to personnel decisions, more than half of global cfos say they expect their company's head count to decrease maybe not good news there on the employment front 20% say they expect an increase.

remote working has become a new normal in the pandemic 35% say half to three quarters of the work force work from home will es than a quarter believe they'll see the same level of that remote working. this notion you could see positivity and negative i havity overall, it comes down to a prevailing theme for companies and businesses around the world. >> thank you coming up, stocks are pointed for more gains a day after fed chair powell reported interest rates are here to stay and bring you interviews from the cleveland fed president. and interim ceo of tiktok and we'll look at yesterday's

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fernandez promoted to co-ceo here is more last night from mad money. squoo what we've learned through the pandemic that our applications are mission critical we do have visibility into what the rest of the year looks like. >> workday shares are up 47% this follows a string of earnings for the company >> i keep saying it is the strongest part of the strongest part of the strongest part of the market no signs that the appetite is abating just yet for those names. a check on the market where we'll push into record territory. due to be up about 10 points the dow up and nasdaq would be the underperformer

set the scene with a three-year chart. it captures several times in the few hundred months that was not long before you did roll over again. less severe and more mild after your record and there was a little correction in the rolling pattern. this is the covid crash. right here, look at that angle looking very steep and stretched in the short term. we'll see if that matters and comes into play. how about big movers here? apple and tesla. relative to nasdaq that is up 12%. that has done even better.

let's talk more about whether that makes sense >> that strategy great to talk to you this morning. if we could start with the stock split dynamic, one of the more practical applications as opposed to being psychological or cosmetic, it makes options more attractive. how does that filter through into the trading dynamics and what has it meant for the overall market at this point >> good morning. yeah, it is absolutely true. i was looking at tesla yesterday and one contract was $13,000 a retailer, b that is nothing to

sneeze at. the stock is going to make that less expensive we already see -- fractional shares trading in names like tesla and apple and this will have the same impact in options. since march, one impact we've seen take off is the ex ub rans in these names that has pretty much up ended in these names as well as these momentum names >> you see retail side buying a lot. what do you take away from that? is it just a new kind of energy we have to adapt to and trade against? >> there is a certain buyer beware here and an upside.

one thing you look at carefully -- volatile startup. when stocks go up, volatility should go down there should be a relationship that holds through this has changed in names like tesla. over the last two years -- it has this relationship as tesla goes up, option prices go up more that is impacting the way hedging works for dealers. you can see greater swings up during expirations as people buy more >> there is an accelerating. pretty rare to have the market be at record highs and vo the index that much higher clearly the firm bidding out

there maybe around the election. what do you think that means for the direction of markets >> you know, it is interesting in the short term that has come in a lot there is a little concern, the longer termite be a little overpriced where we've seen that pretty big that time frame will capture when the vaccine comes out i think the hedges have shown in and around the election that concern stays there. a lot of people are very concerned about the mechanics of the election people are saying i'm not just worried about who p will become president but worried about the

path to get there. mail in or getting in line in the middle of a pandemic we don't know what that will look like. we think that the longer terms should be will be lower with positive vaccine news that will make it something likely >> we'll see that for the markets to allow thank you very much for your time coming up, we'll talk to the u.s. tennis association ceo about how restartup will start amid covid don't miss the interview with patrick harker at 8:30 a.m. eastern time we'll be right back.

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time now for an executive edge update. house speaker pelosi and chief of staff meadows failed to reach negotiations when they spoke they held a 25-minute phone call when asked about the call, pelosi had this to say about the chief of staff >> not even the lead negotiator, that would be mnuchin would consider whatever his name, what is his name? meadows? staffing mr. mnuchin if they are willing to meet us in the middle, we can sit down and talk you called me, i'm returning your call, are you ready to bring much more money to the

table sfl. >> talks collapse after the last relief package expired in july over disagreement over unemployment aid, state and federal lead and school funding. del shares seeing robust demand for computers amid remote work michael dell will be on to discuss results. nba players decide to resume playoffs on wednesday in protest of the shooting of jacob blake by a police officer. the nba is working to resume games today or tomorrow. nhl postponed games yesterday

and today and will look to resume games on saturday baseball games have been canceled on a team by team basis. michael jordan has played a key role he owns the charlotte hornets. the only black team owner. saying listening is better than talking right now but i can tell you from many of my own reporting, there has been a lot of back and forth, guys, about how far some of the players want to push. some of them were on the brink of trying to end the season completely others being told maybe to try to bring it back that the public is with you but might not be with you if the season were to end. a lot of dynamics, a lot of economics.

the nba pushing behind this. sponsors and a lot of discussion about the implications of the future >> on the other side of this break, we'll not continue this part of the conversation the u.s. open set to start on monday we'll talk to the head of the u.s. tennis association about how the tournament will look this year without fans and the interview with tennis ic icon billie jean king. >> champions adjust. that's what it is about. one ball at a time as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers...

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welcome back we'll bring you more of the interview with billie jean king later today. the u.s. open is resuming today after matches were paused on thursday as athletes across the

sports world took a stand on racial equality and injustice. joining us now to talk about this decision and what is ahead for the u.s. open in the pandemic good morning to you, michael this is typically my favorite time of the year and i love going out to flushing. it is one of the great moments you are there now. i wish there was and in-person audience before we get to that, let's talk about the unique moment of time and this past 48 hours in terms of athletes taking a stand. this relates to blm and the shooting how are you thinking about that and what do you think are the larger implications for the sporting world the reason i ask, we talked yesterday, typically when there is a work stoppage or protest, it is usually to protest their

employer because they are doing something they are unhappy with. this is about much larger social issues >> andrew, thanks for having me. great question it is interesting you talk players and employers. in this case, everyone was aligned. we had quick conversations and we need immediately to take the support and pause on thursday. and clesktively together on this global stage i'm standing at the billie jean king stadium as a collective group, it was a real easy decision to make >> you guys did it collectively.

the nba did not start collectively they started with a team doing it moments before the game and to some degree or a large degree, forced the issue there is concern inside the nba from players and teams effectivy created a moment which i think is what the goal was in terms of actually creating tension on this issue, and also created, dare i say, lots of headaches and economic headaches for all of the people who are involved in trying to produce that game >> yeah, i think an interesting part of this and one of the silver linings maybe of the pandemic, when the pandemic started in march, we had to immediately start engaging the players on a daily basis we were having calls already to see if we could pull off the grand slam the built the trust and relationship between the players and us with that dialogue, when incidents happened, we were

already having those conversations. we have to recognize naomi osaka for taking great leadership in this as she came out with her statement, we were having those same conversations how as a sport what position we could take >> right i see behind you what looks like a little bit of a different setup for the stadium. i see those big l.e.d. screens what's the experience going to be like for those of us watching on tv who wish they could be there in person? >> it's definitely going to be different, as you can see. we have now fans in sight, but it doesn't mean we have fans around the world watching the sport. everyone has been starved to see world-class tennis again ultimately, where we're very fortunate, we have 30 days of the best players in the world playing. what originally was a crazy idea of moving cincinnati to new york ultimately happened, and that allowed us to pull this off in a safe and healthy way and ultimately, it was good for

our sport to take 30 days, put everyone in a bubble, get them here at this great facility and showcase our sport around the world. >> and michael, speak to the sponsorship issue. and just curious about the economics of this, because there are a lot of companies that pay dare i say a small sporfortune b associated with your sport and with this specific event one of the benefits they have historically gotten is bringing clients and such to the event in person and the like that's not happening this year are they paying the same fees? what's happened. >> i will tell you, our partners have been unwavering in this it goes back to the communication strategy i was talking about with our players we were also having conversations with our partners starting back in march jpmorgan, chase, emirates airlines, they have been extremely helpful and beneficial to us, working through this. i think you know our revenue is going to be down 80% this year

without fans having said that, we're still able to tap into our reserves. it's not a longterm sustainable model, but we can tap into our reserves keep the prize money almost exactly what it was last year, and still donate, and our mission is to promote and grow the sport of tennis. it's important to do that. >> i know you're an advanced planner. what do you think is going to happen to next year's open >> it's speculation. we are doing different scenarios, but we're cautiously optimistic we'll have fans back in the stadium next year our sport is doing well. it's one of the outliers during the pandemic people have realized tennis is the perfect social distancing sport. when people were quarantining, it became obvious we needed physical exercise and stimulation, and tennis is doing

that and we're seeing great numbers in our sport statistics we saw yesterday, tennis who played tennis last year were 6% of the country, this year, it's 10% who have already played tennis. that's a big jump for us >> michael, we'll have the ceo of draftkings on later what's your feeling about gambling and the game of tennis? >> right now, as a collective group, the grand slam board along with ourselves said let's take a pause on gambling and not participate in this at this point. we'll ultimately make a decision, but we're going through that process right now >> just walk us through the way you are personally thinking about it right now i know there has been a pause, and that's why i asked the question >> at this point, again, as a collective group, we decided not to pursue that we're a nonprofit and our main focus is growing the sport of tennis if we don't see a direct connection to gambling and growing the sport of tennis at this point >> okay.

michael, we wish you a lot of luck over the next couple days we're praying for the bubble to work we're praying for great tennis it's very exciting, and good luck and i hope you're right about next year. it would be nice for all of us to have an opportunity to get out to flushing. so good luck >> thank you i would love to see you here >> you bet mike >> would be nice >> as we head to a break, check out shares of xpeng, it debuted yesterday and shares popped. up more than 40% up another 7% in premarket this morning. and coming up on the show, we have a huge lineup of grea guests covering you and your money, including two fed presidents weighing in on the current environment and a huge interview with vanessa pappas. you're watching "squawk box" on cnbc

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reaction to last night's speech is straight ahead. >> the markets push further into record territory continues after jerome powell says low interest rate are here to stay. cleveland fed president loretta master joins us for a live interview. >> the sports world according to draftkings the ceo joins us for a candid interview to discuss the recent boycotts and the impact on his business as the second hour of "squawk box" begins right now. good morning welcome to "squawk box" right here on cnbc. i'm andrew, along with melissa and mike joe and becky are off. take a look at futures after the fed made an announcement we'll talk about the announcement in a bit, but right now, things still looking up dow about 130 points higher.

nasdaq looking to open up about 13 points higher, and s&p 500 about 11 1/2 points higher we have a huge lineup of guests to tell you about. we'll hear from cleveland fed president loretta master later, jason robins is going to join us, plus joe catches up with billie jean king, and the 8:00 hour, more fed speak from philly fed president patrick harker, and then a big interview with tiktok's interim ceo, vanessa pappas, and on that, we have more details that mike's got. >> yeah, it's a busy start for her, for sure, and for us. we're learning more about the soap opera surrounding that effort to buy tiktok's u.s. operations after walmart confirmed it's teamed up with microsoft on a bid sources tell cnbc walmart initially wanted to be the lead buyer for tiktok in a consortium that included alphabet

walmart wanted to be the exclusive e-commerce and payments provider for tiktok, but sources said the u.s. government wanted the lead buyer to be a tech company because it would better fit with its national security rationale for forcing the chinese company to divest in tiktok, and that's when they walmart teamed up with microsoft. walmart said it was confident a partnership with microsoft would satisfy concerns of u.s. regulators so that is the backdrop for a squawk newsmaker of the day. vanessa pappas will join us live at 8:45 a.m. eastern time. andrew >> and now to the aftermath of hurricane laura. at least six people are dead after that storm slammed into louisiana. this morning, hundreds of thousands are without power. countless homes and businesses in ruins, and entire communities under water. damage also reported in texas and arkansas the storm has diminished to a

tropical storm or depression president trump announced he would visit the region this weekend to tour the damage >> the jackson hole virtual fed summit is getting ready to wrap, but not before some big interviews steve liesman joins us with a special guest. good morning, steve. >> morning, mike yes, we're pleased to have with us this morning loretta mester, president of the cleveland fed good morning, president mester i'm sorry you're not in jackson hole >> hi, steve thanks for having me on. great to keep this tradition going, even if we're not both in jackson hole this year >> yeah. i think we have done this interview about this time on the friday of the jackson hole summit for just about ever now >> exactly >> let me start, i was hoping you could help me out here i'm looking at the high frequency data i'm looking at the data reported by the government, and i really can't get a feel yet is this recovery strengthening is it weakening? is it flat what's your read of what's going

on right now in the economy? >> yeah, so our high frequency data we look at are actually showing that activity is slowing down a bit from where it was earlier. with the virus case increase now, those virus cases are coming back down, so it remains to be seen how that will play out, but there definitely was sort of at least in the fourth district and i would say across different regions where the virus cases began to pick up at the end of june. we saw sort of a tempering of activity and so that's kind of where we are. and that kind of what you would expect, right? there's fits and starts here it's definitely true that when the economy started to reopen, you saw better data on both hiring, you saw those numbers go up and you saw activity increase. but i think the virus is sort of driving things where you see the virus going up, you see activity tempered. >> and i kind of got that and

saw that in the data but just recently, it lookslik there's been a bit of an uptick again. i'm just not sure, overall, your sense, president mester, of what's going on in the job market right now it looks like the gains we had can be expected to slow when we get those numbers next week. what's your take on that >> so at least in our district, we have seen a tempering off of hiring, and firms are re-evaluating the number of new hires they want to bring back onboard, because they don't know what the outcome is going to be in terms of whether they're going to have to slow down their activity because of the increase in virus cases i would say even in cases where there aren't official shutdowns and reversals of some of the openings, consumer behavior and people and do they want to engage in activity, that's tempered by looking out and seeing an increase in cases. if we could get the cases under control, then i think we'll see a pickup in activity again right now, according to our

contacts, what they're seeing is there has been this tempering, including on hiring. >> let me switch gears a little bit and talk about the big announcement yesterday from the federal reserve, which you obviously was a part of in terms of the unanimous decision by the committee to go to an average inflation targeting regime could you put that in simple words for investors? people listening this morning, what does that mean for rate policy >> yeah, so the reason we did the framework review is because the structural part of the economy has changed in recent years and we expect it to be a low-interest rate environment, and that has implications for monetary policy. when you think about why we did the review, it's that there are these changes. one is the fact that the general level of interest rates is going to be low. one of them is that resource utilization and inflation aren't as correlated as they used to be putting those together, it means that we're going to be -- the

interest rate we use will be lower, right and how do you then meet your goals of inflation, price stability, inflation at 2%, and maximum employment so our goal is still to 2% inflation, but what's the best strategy for reaching that if you have downward pressures on inflation and employment because of being proximate to the zero lower bound more often, you need to counteract that. what do you do well, after time periods i inflation has been running low, you want inflation to be a bit higher for some time after that so you can meet this overall 2% inflation goal over time and so it's a change in sort of how we go about hitting that goal >> i want to ask you your sort of tolerance for higher inflation. if it is below 2%, you want it to average out to 2%, which means it has to run above 2%

how much above 2% would you be comfortable with >> it depends on circumstances, right? one of the things that was important that the chair did in his speech yesterday is say that this isn't really tied to a formula. i'm a math major when i think of an average, i want to go to formula right away the way to think about this is not that way the way to think about this is after periods where we have run low, we need to do something to bring inflation back up above 2% in order to make sure that over time, inflation expectations stay at 2%, and inflation itself stays at 2%. there really isn't a mathematical formula and it's going to depend on other things going on in the economy at the time inflation expectations are a key comopponent of hitting the inflation target at 2% we would want to make sure we don't allow inflation to go too high because that would destabilize inflation expectations on the up side. on the other hand, in a low

interest rate environment, there's downward pressure on theflation think about this as stabilizing inflation expectations to be consistent with a 2% inflation goal you can't really say we're going to average, you know, five years ago and five years hence it's really going to depend on what's going on in the economy and how stable your inflation expectations are in that economy. >> andrew. >> ms. mester, i'm curious what you think about the inflation, if you could call it that, that's happened in the stock market and whether -- in the public stock market, that is, during this period. if you told me we would have 10% unemployment and the market would be where it is today, i probably would not have believed you just five months ago, and i think there's a real concern about that but if you talk to people like ray dalio or marc benioff and others, they're talking about inflation other places like the markets, like housing and the like, and the inequality that

may come with that >> as the prices are something we look at in terms of financial conditions we don't think about that in terms of inflation, per se, when we're thinking about inflation, we're thinking about goods and service price inflation. >> of course >> but one of the things that the new statement does say is that when we're doing, you know, trying to set monetary policy to look at -- to hit our two goals of price stability and maximum employment, we do take into account financial stability because financial conditions are stable, financial markets are stable, we can then hit our goals and vice versa there's a linkage there. so risk, you know, we routinely look at risk in the financial markets. yeah, stock prices are high, and it does look like they're being driven by where investors think the economy is going remember, this is not a typical downturn it's being driven by things

exogenous to sort of the economy per se it's the virus and the underlying fundamentals of the economy were very strong before going into this pandemic period investors are making their decisions based on some of the underlying conditions of the economy, which is one of the things that the fed actions are intended to do, to make sure we can get back to that good economy that we had in february before the pandemic struck and similarly with fiscal policy, that's their goal, too, to make sure we can get over this pandemic period to the better economy we had in the past and i think that the stock market is reflecting some of that interpretation of what's going on now in the economy. >> president mester, where the stock market is and seems to be going, may be a prediction of where investors think it's going, but it's all about the

fed. and all the liquidity on the market, so basically, so many investors are saying you're investing with the fed, don't fight the fed. with so much liquidity, you have to be in the markets it's a swift path higher is there any concern on the part of the fed thatthere is an asset bubble forming in the stock market that is being fueled by fed policy that's a perception that the markets have >> yeah, i understand the concern. and it's certainly something that we're very aware of which we're setting policy, that we have to look at financial stability risks including what's happening in the stock market and across markets i don't feel right now that we are engendering an asset bubble. i do feel that we're supporting the economy and doing what we can to make sure that financial markets continue to function and that credit continues to flow to both households and businesses we're going to be looking at financial stability issues as we do monetary policy going forward. yes, stock prices are elevated,

and you're right to point that out, but again, overall, i think our policy is well suited for where the economy is now and where it's going >> president mester, you guys unexpectedly released the long-term strategy statement yesterday. i thought that's what i was going to be doing in september, reporting on that. do i need to take off the rest of september or is additional policy forthcoming from the federal reserve? >> well, you know, we go into every meeting and look at what's happening in the economy and our forecast for what we think is going to be coming into the economy, and we set our monetary policy that way. so nothing has changed i mean, we release a statement because we had gotten it done. you know, as chair powell said yesterday, we want -- we encourage transparency we want to communicate so we released the statement because it was done, and jackson hole was a good place for him to, you know, expound on sort

of -- it was a nice place for him to have a longer speech and actually talk. >> sure. but let me ask the question -- >> we're going to evaluate what's going on in the economy, as we always do, and we'll come out of that meeting with what we think is appropriate policy at that time. >> i get that. let me ask the question more seriously, i'm sorry do you feel at this point the federal reserve needs to do more to support the economy than it's doing right now? >> right i do believe that the recovery is going to be a slow one. i think right now, we're in the reopening phase. some of those growth rates are going to look really good in the third quarter. but i do think that, you know, there's more pain out there that we are going to have to support the economy through. and what that looks like, we're going to have to take our time to evaluate that over time but i think accommodating monetary policy is going to be very important throughout this

recovery i do believe that fiscal policy is going to need to be at the table too in order to support the economy going forward. >> okay, president mester, thanks very much for joining us. and maybe the next time we do this, we'll have a chance to do it in jackson hole, but thanks very much. president mester, cleveland federal reserve president. i don't know if i throw it back to mike, to andrew >> coming back to me, steve. steve, thank you for bringing us that interview, and thank you, president mester, for the insight and perspective this morning. >> when we come back after this break, a wrap-up of the republican national convention and the message from the gop we're going to talk about it before we head to the break, let's check on shares of coca-cola, the company realigning its 17 business units into a 9-unit structure and planning to offer buy-out packages to 4,000 workers. this gets to some of the employment issues that may be confronting and challenging the

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plus, get $400 off when you buy the new samsung galaxy note20 ultra 5g. breaking overnight, prime minister shinzo abe confirmed reports he's resigning for health reasons he suffers from a chronic inflammatory bowel disease calledulseerates colitis in a news conference early this

morning, he said he wasn't confident he could make decisions properly given his health problems. he will stay in office until his successor is chosen. heterm was not due to end until next year. andrew >> thanks. meantime, the republican national convention wrapping up its final night. here's president trump speaking on his view of vice president biden's contribution to the u.s. economy. >> biden voted for the nafta disaster the single worst trade deal ever enacted. he supported china's entry into the world trade organization, one of the greatest economic disasters of all time. after thosen calamities, the united states lost 1 in 4 manufacturing jobs we laid off workers in michigan, ohio, new hampshire, pennsylvania, and many other states they didn't want to hear biden's

hollow words of empathy. they wanted their jobs back. >> and joining us right now to talk about it all is frank, a political strategist and pollster frank, good morning to you thanks for joining us, as always your takeaway, last night, was that a winning speech? >> well, it was certainly a long speech and i was there in the white house to watch every minute of it it was an opportunity for the president, no sports last night, and so sports fans were probably tuned in he's going to be hoping for big ratings. people watching him. and it was interesting because he spoke about anarchy and an arkism versus socialism, and that's really the first time that i have heard him try to define biden with a word and language that's different from what he's been saying in the past i thought his best line was, how can the democrat party lead our country when they spend so much time tearing down our country?

very distinct, very sharp lines. but there were times during the speech when she went too far, a he often does. the idea that he's been the best president for african-americans since abraham lincoln. i guess he's forgetting lyndon johnson and all of the work of the 1960s, or this is the most important election there has ever been in america, and again, i think he's forgetting about lincoln and forgetting about 1932 that said, he made a very strong case, as did his daughter, ivanka, for all the things that have happened over the last four years. i think it was well articulated. i think it was well delivered, with the white house as a backdrop we can argue over whether or not that is legal. but in terms of show, in terms of content, in terms of language, it demonstrated what the republican party is about and why trump and biden, there really should not be any

undecided voters right now because there's no similarliy between the two for president. >> when it goes to the swing states, and you have studied them very well, and those quote/unquote in the middle or on the fence, if they watched the democratic national convention or watched the republican national convention, now that they're over, how do you think it does swing? >> i think it swings at this point, it's a biden election there is no doubt, no matter how much you want to argue about the accuracy of the polls, which donald trump does, which i think is a mistake, biden does emerge as of labor day with a very clear six or seven-point lead. but, and i say this emphatically, this election is way too close to call. the debates are going to matter. we're going to have record viewership, and among the key swing voters it's 6% of america, and because

there are only 11 states that can go back and forth that represents 2.4% of the country we are about to spend billions of dollars on 2.4% of america. trump did what he needed to do to be back in the race biden a week ago did what he needed to do to keep the lead as we approach labor day. >> right frank, you know, one of the things that was so unique about the republican national convention and last night's speech rel toov what we saw with the democrats is there was an audience, and there was an audience, frankly, without masks. and you could see it we were just showing images. not to demonstrate that there were so few masks, but for those who are focused on that, it's noticeable and i wonder how you think that plays across the country does that play to the president's advantage because, you know, you look at that and there's a sense of normalcy, which is maybe what he's trying

to demonstrate i don't know if it's right, and we'll see obviously in two or three weeks from now whether that was a mistake or not. it was outdoors so hopefully that will temper any type of outbreak, if there was anybody there with covid but there's others that may look at that and question the responsibility >> well, i was there and i'll acknowledge that a couple times i felt uncomfortable. for most of the evening, i wore a mask it was very hot, and it was crowded. particularly after the speech, as everybody rushed to the front, as they rushed to the stage. and as they watched the fireworks. i think that republicans will look at that and say, that's what i want. democrats will look and say, that's dangerous the idea that we have turned wearing masks into a partisan issue, andrew, shows us just how divided we are and i'm convinced that after seeing the democratic convention and the republican convention,

donald trump made a strong case for why joe biden's policies are dangerous for the country. joe biden made a strong case for why donald trump isn't qualified any more to lead the country they both did an excellent job at disqualifying the other i'm not convinced that either did a sufficient job at defending themselves that's american politics today why the other side is wrong and why the other side does not deserve to be president. that tells me that just as the economy and the markets go up and down, our polling is going to go up and down. our politics are going to go up and down, and we're going to need to temper it -- >> frank, we want to thank you for your perspective, as always. there's going to be the debates, and we're going to continue debating it with you and others we look forward to talking to you again very soon. thanks again >> in the meantime, i'm going to send it over to mike >> all right, thanks, andrew

>> coming up, the eviction and foreclosure moratorium officially extended. diana olick joins us with the latest numbers of mortgage bailouts kn and later, draftkings saw a drain its steak price after the nba boycott. we'll speak to jason robins in just a bit "squawk box" will be right back. >> time now for today's aflac trivia question. what petrol fuel company was founded in pittsburgh infer the name "people's natural gas company" the answer when "squawk box" continues. 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

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aflac trivia question. what petrol fuel company was founded in pittsburgh under the name people's natural gas company? the answer, sunoco today, the company distributes fuel to 5,000 gas stations in more than 30 states. new numbers just out on the covid-19 mortgage bailout program. diana olick joins us now with those. hi, diana. >> hi. good morning the numbers had been coming down pretty swiftly over the past month, but now the mortgage bailout appears to have hit a flatline 3.9 million homeowners are in active forbearance, representing 7.4% of all active mortgages that's unchanged from last week and the week before was unchanged as well. that all according to black night. according to three quarters of

those in forbearance have had their terms extended the mortgage bailout allows borrowers to delay payments for up to a year banks and private label securities have allowed about six months of forbearance, but it's unclear how much longer they're going. breaking it down, a reduction of 23,000 borrowers in fannie and freddie borrowers was almost setoff by bank held and private label loans. over the past 30 days, angtdive forbearances have declined by 171,000 with the strongest improvement in fannie and freddie loans. more modest improvements have been seen in fha, va forbearances and portfolio loans. borrowers were using payments to make their monthly payments, andrew >> diana, thank you. it's unbelievable what's going on in the homeowner world.

i know loretta mester doesn't look at inflation necessarily in housing, but there is inflation happening. something is happening anyway, thank you so very much we'll talk to you in a bit >> still to come on "squawk on the street," rick rieder is going to join us, and then draftkings ceo jason robins is here to talk about the sports shakeup and the boycotts and later, a big interview with the interim ceo of tiktok after kevin mayer stepped down before a big transaction with microsoft and waarlmt. you don't want to miss that. "squawk box" returns after this.

earlier this hour, cleveland fed president loretta mester had this to say about the economy. >> stock prices are high, and it does look like they're being driven by where investors think the economy is going remember, this is not a typical downturn it's being driven by things exogenous to sort of the economy per se it's the virus and the underlying fundamentals of the economy were very strong before going into this pandemic period so investors are making their decisions based on some of the underlying conditions of the economy. >> for more on the fed's role in the markets and whether it's too much, enough, we're joined by rick rieder, head of the global

allocation team at blackrock rick, great to see you this morning. give us your sense of does president mester have it right the market is sort of pricing in this early cycle recovery dynamic along with the backdrop of a super accommodative fed that was accentuated yesterday does the market have it right here >> so, yeah, so yes, i think it's right i think the market has it right, but i think people underestimate what the markets respond to is when you bring the discount rate down, you keep it down for four years, you increase the multiple on equities, particularly when you crowd out all the other investment, when treasury rates going to zero, and you bring investing rate credit down, and people say where do i get my income, and it flows into the market i would also argue what's happening in the equity market today, you talk about it all the time on your show, technology and a change in commerce you're putting a low discount rate on high cash flowing assets

in technology, and that's primarily -- because if you strip out, as you talked about, if you strip out the big technology businesses and the change in commerce, the equity market is just doing okay and it's rightly reflecting where the economy is >> just maybe more specific on jay powell's speech yesterday, a lot of it expected in terms of this stance, articulating exactly how they're thinking about inflation. does it change the equation much for you at all >> so i think -- i don't think there was a tremendous amount of new information. by the way, i think you have to give jay powell and the fed an a-plus rating for they're very clear, very consistent, and you have to mark down yesterday's speech as historic the fed has transitioned from more of an academic orientation from philip's curve, from traditional metrics recognizing inflation is not going to come from increasing the monetary base it's not coming from wages as it has historically

technology is what influences inflation. so what the fed has done, and it's historic, has said we're going to recognize that. our biggest goal is let's get employment back to full employment, which is what the fed needs to do, and they're putting out the welcome mat for more fiscal stimulus which is really what will get jobs moving >> the instant kind of reflex reaction there with longer term treasury yields going up a bit, so we're steepening the yield curve, is that pretty much in tune with what the fed said, and can that go too far for the fed's comfort, do you think? >> mike, a big point, that is for the next year or maybe longer than that, one of the things the markets are going to be keyed in on is the long end of the yield curve when you let inflation, and not only you let it, but you are encouraging inflation to be above target for a period of time, and the fed has a lot of tools to bring it down, but what will happen is the markets are going to probably cause interest

rates to move higher because the treasury has to issue so much debt i think what it's going to cause the fed to do is increase the size of their asset purchase program. ultimately, may go to yield curve control, but i think what they'll do is increase the size, because you have to keep the long yields down today, they're benefitting from tremendous international demand, but you can't count on that. >> do you thing that's a near term thing or they're just going to have to be flexible and see how the markets reprice? >> i think the -- you think about what this fed has done, targeted different asset class, approperate in when they need to increase the size or decrease the size, but they have to keep an eye on it, and i think there are implicit levels that they'll probably look to come in and do something and increase the asset purchase size. i think when you ask people at the fed, as you have on your

shows, are they willing to do more, the fed is willing to do more i think they are going to keep that, as i said, that welcome mat for fiscal policy there, and similarly to what the ecb has done for years and try to encourage fiscal to come in and keep borrowing rates incredibly low alongside of it. >> seems as if jay powell has implicitly promised no more tantrums, no more rate hikes thank you very much for your time this morning. >> thanks a lot. coming up, a check on what is moving in the premarket and then draftkings ceo jason robins joins us the stock took a hit in light of ore boycotts in professional spts we'll discuss that and much more "squawk box" will be right back.

welcome back to "squawk box" this morning take a look at u.s. futures right now. we have been talking about the fed's move or the fed's decision yesterday. you're looking at stocks up again this morning dow up about 140 points. s&p 500 up about 13 points and nasdaq looking to open about 37 points higher. mike >> yeah, dell technology shares are rising this morning. the company reported a smaller than expected drop in quarterly ref new, so robust demand for its notebooks. ceo michael dell will be on squawk on the street to break down the results this morning. melissa. >> shares of alta beauty soared by more than 200%. earnings of 14 cents a share more than doubled, but analysts expected that stock is up 14% right now, mike. >> coming up, the nba says it will resume playoff games

tomorrow after a brief shutdown by players protesting the recent shooting in kenosha of jacob blake. we'll speak to draftkings ceo jason robins about the recent developments and the onlinet sports betting business. and patrick harker joins us as the virtual symposium wraps up pampers the #1 pediatrician recommended brand, helps keep baby skin dry & healthy so every touch is as comforting as the first

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and it gets rated #1 for customer satisfaction. but don't just take our word for it. take theirs. it's your wireless. your rules. only with xfinity mobile. call, click or visit a store today. there were tsunamis fourtin the world. and once they happened, we were in a major hurry to get to those regions to provide aid and support. it was very humbling to be able to help out all those people. it's my dream now to go into clean energy and whatever the next new fuel source is, that's where i want to be. i want to be on the front lines of implementation. yesterday to resume the league's playoffs they were abruptly halted

wednesday in protest of the shooting in wisconsin of a black man, jacob blake, by a police officer. the latest statement from the nba said it is working to resume games either today or tomorrow the wnba is planning to resume games today. the nhl will look to resume on saturday baseball games have been canceled on a team-by-team basis. multiple reports say michael jordan has played a key role as a go-between for the players and the team owners. jordan owned the charlotte hornets. he's the only black majority owner in the league and also the chairman of the nba labor relations committee. espn says jordan told team owners that listening is better than talking right now >> for more on all of this, joining us now, an exclusive interview with draftkings ceo jason robins here this morning with an announcement good morning great to have you with us. what's the announcement? >> great to be here. we decided we're going to contribute 100% of the revenues

we make from the first day back of both nba and wnba games to charities and other initiatives that support combatting racism and promoting racial justice and social justice in the united states >> and that would be a minimum of $100,000 in donations jason, in terms of the protests, how did that impact business what did you see on your side or not see, i should say? we did see the stock take an immediate hit on the announcement of the protests, and it's not clear as to what the schedule will actually be for not just the nba, for other sports as well >> you know, first, while we have guaranteed a minimum of $100,000 i expect we'll be closer to $500,000 or more in the end. it will depend on how many people play, but we hope people will come out and support this and we'll contribute 100%. this is not a new thing for us we have been doing this for years. we have supported veterans for

years and contributed over $100 million to support veterans through initiatives like vets in tech we contributed over a million in breast cancer, disaster relief, this is a cause we're very passionate about so we're much more focused on that than day-to-day impact on the business we would love to see the games resume, and that's something that's important to us, but i think there's a larger issue at stake here, and this is an important time for us to be talking about that, and our team is very passionate about being able to use our platform to play a role in supporting these issues >> totally understand, jason obviously, this is a very important cause. at the same time, the stock is taking a hit investors sort of want to know, they want to know what the impact actually is do you think the stock decline that we have seen in response to the protests and the response to canceled games on which betters cannot bet on when they're canceled, is it commensurate with what you have lost in business or is it overdone?

>> you know, yesterday, the stock was up so we haven't really seen a huge impact yet it was down shortly when there were rumors of a longer term cancellations. then it went back up when there were rumors of talks to resume the season you know, we don't get too caught up in the day-to-day. i think the nba is here to stay, major league baseball is here to stay it's been a strange year you know, i wouldn't have guessed a few weeks ago there could be seasons in jeopardy that would have nothing to do with covid that's certainly something we didn't see coming and nobody did. but in the end, it doesn't really matter. we're very focused on building for the long term. we think there's an exciting opportunity in front of us and we're really proud to be supporting an important cause that goes beyond what we do day to day in our business >> andrew, you have a question >> jason, i do have a question it's somewhat philosophical and maybe it's a complicated question given where we are in this country, given where the black lives matter movement lies

in this country, and how i know you're well intentioned to support the cause. i wonder ultimately though how political this may get you know, sports players for the most part have historically not donated to political parties, to elected officials, and the like. and yet this is, i wish i could say it's a fully bipartisan issue. i don't think it has been, at least historically, it's been considered rather a relatively democratic or liberal issue in large part especially when there's conversations about defunding the police and the like. and i just wonder how far you think companies, even like yours, who say you want to support these issues, will support them if it becomes quote/unquote political, even though it shouldn't be there are clearly going to be political candidates who are going to do more or less on this issue. >> well, you're right.

it has become to some extent political, which to me is very unfortunate. you know, covid should never have been a political issue, but it became one. and i think that, you know, the right thing always for our country is for everyone to come together and come up with solutions. what i love about our country is america is a land built on values that promote freedom, equal justice under the law for all, the opportunity for everyone to create a great life, a life for themselves and their family those are things we all share. just like every human being in this country, we're not always going to get it right. not everyone is perfect. our country isn't perfect. having an open dialogue about how we can be better, particularly on issues for many years have been sort of brushed under the rug or neglected, that's really important. we felt the same way about veterans we felt veterans were neglected for many years in our country. some would argue it has more support on one side of the aisle, and it was never that way to us, and this isn't either we're passionate about it. if others wants to make it

political, that's fine we don't consider our positions political. we're just trying to do the right thing and create a great wave of support for issues that are important to the community >> in terms of the elections, jason, you know, an important part of draftkings' growth story is how is it looking in terms of various states and whether or not online gambling will be legal? >> there's been a ton of momentum over the last year or two, and we're hoping that continues, rightfully so state legislatures, state policymakers are focused on figuring out how to get their economies reopen, how to make sure there's not a new public health crisis that emerges, and how to safely resume activities we all would like to get back to day-to-day after that, when the budgets start to get looked at and figuring out where sources of revenue are going to come from, our hope is there is some

acceleration in the momentum behind sports betting legislation. that's not really in our cloel we're trying to do the things we can to create a great experience for consumers and hopefully over time, those trends will continue, and you know, it might be possible that this even accelerates them a bit >> jason, your stock prices we have been talking about, has been very sensitive to how many games and the timing of things like that, understandably. if we can just suppose as a premise that next year we have pretty much full seasons, and you have all that you would noe normally have to work with, what do you actually have to achieve in terms of total addressable market how much of it do you think you can capture. what do your take rates have to be for this business to actually be profitable in a way you think it can be? because there's a lot of questions about exactly how big the overall market is, how much of it you might be able to get, and really, how much you make off the activity >> well, a big factor as we

talked about earlier is where the final kind of count lies with states that decide to legalize these activities. and i think that more than anything will affect things. we believe the united states can be over a $40 billion market if every state were to legalize so huge opportunity out there. and hopefully we're going to see more momentum behind that, and what we think, you know, we need to do is just continue to create the best product, the best experience for customers, and back that with the strongest technology, the strongest data science and analytics, and those are things we think are core capabilities where we're differentiated today and we'll continue to put distance between ourselves and the competition. >> $40 billion would be the gross betting volume, right? >> that would be revenue >> revenue for all takers of bets understood >> yeah, for the operators >> so michael, in terms of what we're expecting in terms of the sports schedule, is it perhaps

difficult to forecast now? does this throw sort of a wrench in your forecasting because the pace of games and the schedule of games is up in the air once again? before, it was covid now it's these protests. >> you know, it certainly creates a lot of headaches because teams have to scramble to adjust. but you know, we have over $1.2 billion of capital on the balance sheet, no debt we're pretty well positioned to weather any storm, and we're looking at the future, and we believe that investors who are interested in our stock -- it always amazes me when a headline drives something day-to-day, because we have been out here talking about it's not tomorrow or the next day but many years down the road, what we believe is achievable. and at least internally, that's what we continue to focus on if others day-to-day want to trade the stock based on headlines, that's not much we can do, but it doesn't have an affect on our business in the long term.

>> jason robins, ceo of draftkings coming up, a big hour of "squawk box" still ahead we will hear from former pro tennis player billie jean king on tennis, social justice, and much more. and later, tiktok naming a new interim ceo. she'll join us in an exclusive interview. "squawk box" will be right back. . . oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪

good morning we're looking at more potential records for stocks one day after the fed changed their tone on inflation. the tiktok plot thickens before the microsoft/walmart bidding team soludified, we learned they were part of another group of suitors including soft bank and

alphabet after kevin mayer quit, we'll speak exclusively with the company's new interim ceo. we'll speak with mohamed el-erian, and billie jean king, synonymous with equality in the sports world she'll weigh in on the protests on and off the court the final hour of "squawk box" begins right now good morning welcome back to "squawk box" on cnbc on this friday morning. i'm andrew ross sorkin along with melissa lee and michael let's show you where u.s. equities stand right now, they stand in the green. dow up about 173 points. s&p 500 up about 17 points the nasdaq up about 51 points.

all buoyed by some of the comments we heard from chairman of the fed, jay powell, yesterday. let's show you treasury yields as well right now. right now you're looking at the ten-year note, and mike has news i'm going to send it over to mike santoli >> absolutely. news out of coca-cola. the company realigning its 17 business units into a 9-unit structure, and planning to offer buy-out packages to 4,000 workers. sara eisen is spoking with the company's ceo and she'll join us with more details in a few minutes. >> in the meantime, another big morning for breaking news with those futures pointing higher, as we showed you the dow looking to add to its gains from yesterday when fed chair jerome powell laid out a new stance on inflation. he said the fed will now be willing to let inflation run hotter than normal in order to support the labor market and broader economy. also, japanese prime minister shinzo abe said he will resign due to worsening health once a new leader is appointed.

the nikkei closing lower initially on the news. >> a chinese company that owns tiktok has told employees to make contingency plans for shutting down the app in the united states. this as sources tell cnbc before walmart decided to partner with microsoft, the retailer was part of another group including softbank and alphabet considering a bid. we'll hear much more about the story in just a moment >> and a hurricane laura is now a tropical depression, but the tennessee valley could see possible tornadoes and drenching rain as the storm makes its way east laura is being blamed for at least six deaths in louisiana and texas. >> and president trump accepting the 2020 gop nomination while painting an optimistic vision of america's future and teasing a coronavirus vaccine by the end of the year. the president spoke on the south lawn of the white house last night to a tightly packed crowd of supporters, most of whom did not wear masks mike >> as promised, let's talk tiktok the deal talk is heating up

ahead of a potential forced shutdown in the united states. good morning >> good morning to you while deal talks are progressing, tiktok is making contingency plans should a deal not happen and should it need to shut down its u.s. operations. telling us it's quote simultaneously developing plans to insure that our u.s. employees continue to get paid in any outcome this comes after walmart confirmed yesterday that it's teaming up with microsoft to bid for tiktok, as the government forces a sale by tiktok's chinese parent walmart telling us, quote, we believe a potential relationship with tiktok u.s. in partnership with microsoft could add this key functionality and provide walmart an important for us to reach and serve omni channel customers as well as grow our third party marketplace. on this news, walmart and microsoft shares rose to all-time highs walmart up about 3%. rbc capital markets telling us

for microsoft, quote, it makes strategic sense to include a close trusted partner like walmart in the bid, saying the combination would enable social commerce and, quote, microsoft appears to be an appealing strategic partner for walmart. walmart does use azure as both companies battle amazon on multiple fronts. this puts microsoft into competition with facebook over those social ad dollars. make sure to tune in at 8:45 we'll be talking to vanessa pappas, now the interim head of tiktok andrew, back over to you >> we're looking forward to that, julia, and excited to have that conversation with her and thank you for bringing it. we'll see you with her in just a little bit joining us right now to talk more about the tiktok drama is adam, the founder and ceo of b

tabula, and our friend rich greenfield is here as well, founding partner at lightshed partners good morning to both of you. you have watched this soap opera play out i'm going to go to you first, adam, because you live in the advertising world. how does this change the game? and how does it change the game of walmart is involved >> i think this is a fantastic opportunity for walmart. i mean, to bring e commerce into one of the largest tension economy opportunities in the u.s. and perhaps later in the world, so from our perspective, this is a match made in heaven kind of redoing perhaps amazon's acquisition of twitch back in the day. so from my perspective, this is following the same playbook, and you have to remember walmart has less than 10% of e-commerce revenue, so this is a big opportunity for them >> rich, you look at this

potential deal and what it means for the larger media landscape, and also for the other tech giants you know, to some degree, you know, googp obviously at some point wanted this asset, but i have to assume if you're amazon, if you're google, if you're an apple, you should probably be rooting for this transaction, because at least in the short term, it creates a very compelling argument to tell washington, stay away from us. there's not competition problem. look, microsoft and walmart are over there with this big asset that's coming right after us >> look, the other part of this, andrew, is you're taking a company that had global scale and you're basically stripping away the rest of the world i mean, we think ultimately, i'm not even sure canada, new zealand, and australia will go with this asset. it may just end up being a just-only sale so think about it. you've got google global, facebook global, obviously, they're global ex-china, all of these companies are truly global and can bring to advertisers

global reach and kind of bring to creators and the app works all over the world this app is essentially going to only be a u.s.-only asset. if i was looking at this competitively at snapchat or at youtube, et cetera, i would look at that as a huge win that they're losing global scale. obviously, some deep pocketed companies in microsoft, walmart, or oracle, but i have to believe this is considered a win versus the competitive threat that bite dance posed as the owner of tiktok >> adam, you agree with that, this idea that actually it becomes a broken asset >> well, i'm not sure i agree with that. i still think if we look at google and facebook, nearly half of their business is in the u.s. so still, when you look at companies in the u.s. that can create a real alternative for u.s. advertisers, the advertising community, in one of perhaps the most important advertising markets in the world, that's a scarce resource, a scarce asset i think if you're looking at

facebook's market cap, so what happens if tiktok becomes half of it? that it's worth $20 billion to $50 billion, perhaps more than that, so while i think it's not a global opportunity, it's still massively exciting >> i wouldn't say broken i think broken is a strong word. >> right rich, though, what do you think of oracle? you know, we all talk about walmart and microsoft, because to some degree, maybe that's the more exciting just from a brand name and what a partnership like that looks like, both because it could either work very well or terribly in the soap opera that would be unto itself, but what do you think about the prospect of oracle as a buyer >> i think the challenge that this asset poses is that you need it to be a tech company it's very clear that the trump administration made it clear that they wanted a tech company to buy this and one that had the resources not just to buy it but to invest in it and to make sure that it was safe and secure, that they could handle the

transfer of the code base over to the u.s so this really required companies that could move very quickly, that had tons of cash sitting around, that could close and execute a transaction of this scale, and honestly, i think there aren't a lot of companies beyond microsoft and oracle that had that possibility that weren't all of the regulatory issues. i think it's sort of sad that there's a lot of media companies you would have thought would have wanted this, but i just don't think that fit into what the trump administration wanted. nor do i think those companies, whether it's disney or comcast, this is just not the type of acquisition that they do i mean, if you were comcast, wouldn't you want a mobile asset, or if you were disney, wouldn't you want a mobile asset? >> rich, i'm not disagreeing with you, but why -- maybe it happened and we just haven't reported or heard. but why didn't a media company in the same way that walmart, which i think for a lot of people seemed to come out of left field, partnering with microsoft, why didn't a big

media company call up microsoft or oracle and say we'll be the front end brand, you'll be the tech partner >> i think that's part of what's shocking here, andrew. i do not believe any large media company put in a bid i think that's really what's sad, is that they had an opportunity to pivot to the future as jeff bezos likes to say, always be leaning into the future every single media company had an opportunity to be part of this, and none of them were. yes, their businesses are under pressure, the tv ad market is under pressure cord cutting is accelerating i understand the existential challenges they're all facing right now, but this was theoretically a once in a lifetime opportunity, especially if adam is right and there's a tremendous opportunity to take a large share of u.s. ad dollars over the next five years, especially tv ad dollars or traditional ad dollars it's sad when you think about the fact that none of the companies that should have wanted this, you think about the evolution from tv and linear broadcast tv to cable network

tv, this was the next evolution to mobile content. tiktok is awesome. it is fun. you'll hear vanessa in a little bit. you know, this is sort of the sunny spot of the internet you turn on tiktok and smile and laugh. there's always something that entertains you, and that was something i had to believe every media company should have wanted that type of engagement. instead, we'll see whether microsoft or oracle can execute. it's obviously consumer applications are not the wheelhouse of either of those two companies. >> rich, adam, thank you guys. tiktok is almost as compelling as "squawk box." we appreciate you guys joining us this morning. melissa. people are always laughing and smiling when they watch us, andrew coming up. much more on this story. we'll hear from the interim head of tiktok live also on the way, philadelphia fed president patrick harker, mohammed el-erian, and a special

conversation with billie jean king with loud calls from the sports wor f sldorocial change in america stay tuned you're watching "squawk box" on cnbc ♪ ♪ [ engines revving ] ♪ ♪ it's amazing to see them in the wild like th-- shhh. for those who were born to ride, there's progressive. we know that traditions matter more if they're celebrated with the ones you love. that's why we're proud to partner with the kentucky derby. ♪

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rory mcllroy is a two time champion at east lake. he scores! stanley cup champions. touchdown! only mahomes. expect anything different? the big events are back and xfinity is your home for the return of live sports. welcome back to "squawk box. a pause in professional sports like basketball and baseball hitting tennis, the tennis world, i should say, as well this week. tournament play at the western and southern open, precursors to the u.s. open that begins next week, was paused yesterday as athletes across the sports world took a stand on racial inequality and injustice the open had already been disrupted by the covid-19 pandemic starting monday, it will be played without an audience for the very first time in queens, new york, at the billie jean king national tennis center, and

joe kernen sat down with billie jean king. >> joining us now, billie jean king, former tennis pro, ranked number one in the world six times over her career. 39 grand slam titles thank you, billie, i cleared it with you already that i can call you billie jean. >> yes, please i'll call you joe. >> you can definitely call me joe. very excited about having you here we were going to talk u.s. open. we were going to talk all about covid, but given what happened yesterday with the nba, and given that you're someone that really has fought for equality for your entire career, what is your initial take on the developments of the last 24 hours with the nba >> i'm thrilled. it's not just the nba, the wnba has joined, it's been tennis has absolutely joined. we postponed our matches yesterday. we are going to continue to use our platform at the u.s. open for positive change, for

equality and justice arthur ashe was a part of that as well back in the '70s he and i were born the same year we always fought for equality for everyone black lives do matter, and we've got to keep our, you know, the pedal to the metal we can't let up now. we need to have change and we need to help each other be kind and good to each other it's just so basic it's scary. but the protests right now is really different from the '60s you are all too young, but in the '60s, i was in my 20s. and president kennedy died on my birthday in '63. he got assassinated. and in the '60s, when they had protests, like with martin luther king jr., you have to remember, we didn't have technology like we do now. and most the protests were all people of color, all black people basically now, everyone is together. and that's the change. and as far as my age group, my

hair is on fire. i'm really excited because i think this is really the moment in time that we can truly, truly change things and go forward, because the young kids, they have it right. they don't care what your color or religion, they just get along so much better i love the protests. i love what they're doing. i hope also it's going to change fls financially for people of color because they don't make as much as white people, and women also. all women don't make as much as white males. everyone has to make money and have a good living because then the world will prosper >> i want to move on and just talk about the u.s. open because that's why we were going to talk initially until some of these other things came along. more important things, but there's covid. there's no fans. some players are not going to come you know, i'm still going to watch, though, and i'm still excited about that is that okay can we pull this off

>> yes i'm very excited because it's different. and i want to know how the players are going to adapt i'm very, very interested. usually, on the big showcase courts, where they have the high seats, they really thrive on this audience, whereas the lesser ranked players aren't used to that they usually do worse. but this is a totally different ball game now. i'm excited because at least they're fortunate, first of all, to have an opportunity to compete and to make a living that's great and then the open has done a great job with the testing and the frequency and working with the health officials in new york i mean, it has been -- they have been spending months on this because i kept up with it, i talked to them, but it really gets down to personal responsibility and do they have their bubble? they have two bubbles, one for players, one for the support team they're trying to do it right. so the u.s. open has been very adaptable. i have two sayings as a coach. pressure is a privilege.

and champions adjust to adapt. when covid started in march, and we started to isolate march 17th in new york city, with lawna, my partner and me, and i just said, champions adapt. champions adjust this is what this is all about it's one ball at a time. >> that was, of course, joe speaking with billie jean king, and you can listen to the rest of that interview on our podcast, squawk pod. of course, she was the first female athlete in any sport to earn more than $100,000 in any season, and i encourage you to listen to the whole thing, and you can find about about her first contract, which she signed as a professional in women's tennis and so much more. take a listen just for one more second >> it's the 50th anniversary of the original nine. you and eight others signed for a dollar for contracts to launch a new tennis league because,

well, there was no equality in terms of pay or visibility or anything back then and it's been exactly 50 years >> 50 years since the original nine there were nine of us. we signed a $1 contract with gladys helman, the publisher of world tennis magazine. she went out and got a sponsor this was all about the future generations. they're living our dream now >> it's worth the full listen. you can do it anywhere you get your podcasts. squawk pod available on apple and spotify and the rest of them mike >> all right coming up, an exclusive interview with the new interim head of tiktok, as speculation swirls about who if anyone, what companies might be buying tiktok's u.s. operations, and check out the futures. they are still indicated to be higher at the open s&p 500 up about 15 points, bringing it up to about 3500 the dow up about 172, and nasdaq indicated higher by 40 points right now. stay tun, quk x"ilbe ght backbo wl

news out of coca-cola this morning. the company realigning itsd 17 business units into a 9-unit structure and planning to offer buy-out packages to 4,000 workers. sara eisen just spoke with coke's ceo and she joins us on the squawk news line with more details and color, sara, what did you hear what's behind this move? >> good morning, mike. i think the biggest headline from james quincey about this restructuring is it's not driven by the pandemic, he tells me it was sped up by the pandemic, but the effort is to set coca-cola up for future growth so here's what coke is announcing today so 17 business units go to 9 under four geographies they're trying to get leaner, faster in the market, and the ultimate priority here is they're trying to get better marketing. and yet, there will be layoffs as a result of these changes

4,000 jobs are eligible in north america, the u.s., puerto rico, canada, which is a sizable chunk of employees they have about 10,800 in the region, so as many as 35% eligible for layoffs here. coca-cola's ceo james quincey says they are trying to get back to growth. evolving the way they do marketing, more scaled winners how they digitize the company and data analytics flatter operations all of these things behind it. i asked him if it was about the weakness they have seen coca-cola has half of its business outside the home, so it really got slammed on the lockdowns in restaurants and stadiums closing he said he's sticks by what he said last quart, april was the bottom, and they continue to see steadily improving volume as the economy opens up quincy told me i think covid will pass, and these discussions as early as january, before the pandemic, it's just allowed them

to really focus on a key few number of brands they have more than 400. less than half of those contribute mostly to revenue that's where the focus is going to bow on marketing and on growth, so there's going to be a lot of readjustments on the way they're announcing today >> i was going to ask you, in terms of the streamlining, what does it say about the company's priorities in terms of categories, types of products they want to get more behind and what may fall by the wayside >> growth category last quarter, he told me they're looking to get rid of zombie companies. we have already seen them make some moves on that front the juice brand, no longer they're just not focusing. they're going to focus on the big drivers. the coca-colas, obviously, and some of the growth areas like topo chico, you might like to know the hard seltzer is still scheduled to come as soon as december in the u.s.

so the focus really is on growth and on brands that are working it's not necessarily on a retrenchment by coca-cola. that was the main point. it doesn't have any impact, for instance, on their plans to invest behind the brand. that's all on track. it's just a more sort of focused -- think about it like what p&g did to get rid of its materic structure, to make it a faster, quicker operating machine. these huge companies, and coca-cola has something like 80,000 employees worldwide, are just becoming more focuses and more driven during the pandemic, which has put a sharper focus on what's important for a lot of these big firms. >> we're seeing the stock up 1.2% in the premarket. sara, thanks very much talk to you later. >> thanks. coming up, three more big interviews on "squawk box. philadelphia fed president patrick harker will join us.

mohamed el-erian, and the new interim head of tiokkt, vanessa pappas stay tuned we'll be right back.

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economic data. new personal income and spending numbers are out in minutes

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welcome back to "squawk box" on cnbc. we're seconds away from new personal income and spending data in the meantime, futures are l solidly higher dow jones industrial average up about 180 at this point. ten-year note had been higher overnight, but let's see, now trading about .74, so roughly flat rick santelli standing by with nose numbers >> yes we'll start out with our advance trade balance. this is july number. minus 79.3, much bigger than expected once again, this does underscore, this is like the second worst number since december of '18 when it was just a whisker higher wholesale inventories are july preliminary datas and inventories will prove to we be key. should demand ramp up, do we

have enough stuff to sell? down one tenth much smaller drop than we were anticipating on retail inventories, the july number, up 1.2. that's an excellent number exactly 180 degrees opposite we were expecting that number with a minus sign. it's up 1.2. personal income, the moneyball number of the day, up .4 up .4. we're expecting this number to be down .2 so up .4, the best number going back to pre-corona effects when it was up .8 in february and if we look at the spending side, also much better number. up 1.9 we were expecting a number around 1.5%. on the spending side, up 1.5 boy, listen, i only came with about three months of numbers. this is better than all of them, so this is truly a surprise. let's go through the internals on spending, shall we? if we look at the deflater up month over month, these are very

close to what we expected. if we look at the deflater on a month over month basis, up .3, a bit light, which isn't a problem. year over year, almost as expected to summarize, the advanced trade balance is larger than anticipated, the inventory numbers were better. we see lower for longer seemed to be the mantra yesterday obviously, many who wrote those stories haven't looked at the entire yield curve because ten-year note yields closed at the highest level since mid-june, and other countries are moving higher as well in the boon, so we continue to monitor the steepening of u.s. yield curve. mike, back to you. >> thank you very much for all of that. this year's virtual version of the annual jackson hole economic symposium wraps up today the big news out of the conferen conference, yesterday's historic change to fed policy announced by you role powell

steve liesman is with us with another special guest. >> morning, mike i am joined by philadelphia fed president patrick harker patrick, again, apologies this is not taking place in jackson hole, but we'll do the best we can with what we've got. >> yes, we will, steve >> you have more than most on the federal reserve focused on employment i think that's a critical gauge of what's going on in the economy right now. yesterday, a million jobless claims still what is your gauge of what's going on in the job market right now and the extent to which we are indeed recovering? >> right now, you're seeing some signs of recovery, but basically, it's moving sideways. we still have 27 million who are on some form of unemployment and we won't get fully back to the kind of employment we really had this great employment

picture before the crisis for quite a while. if you think about it, it took us two years to go from 5% unemployment to 4% unemployment. it took another year and a half to go from 4% to 3.5%, where we were before the crisis it will take a while for the employment situation to heal >> listening to you over the years, patrick, you are -- have always been concerned about this idea of lasting damage to the workplace, the idea that people leave the workforce and they lose skills. to what extent do you have a concern right now that lasting damage is going to be done and it's going to be hard to get back to the magic number we had of 3.5%? >> i have a concern, but i'm always by nature an optimist so i think there's a solution to this yes, there is a concern. a lot of jobs, we're going to see a reallocation of labor. a lot of the jobs in retail and hospitality and tourism are not going to come back in exactly the same way

travel, these things are going to change. that said, some of the recent research we have done in the philly fed, we looked at jobs, what we call opportunity occupations. jobs that pay above median wages, that is get people into the middle class we look at 33 metro areas and say what do those low-skill jobs that with some training could move into higher skill jobs and get better pay about half the jobs we looked at, that's possible, with a median increase, the average increase i should say in income, annual income of $15,000 a year. now, that's where i'm optimistic that's going to take a concerted effort by federal, state, and local politicians and the private sector to come together to make that happen. >> i want to follow up on just that because we just got those income and spending numbers, and they're not too bad. the only thing that's wrong with this data is it's july data, right? so the spending numbers of

around 1.92% in july, what do you think has happened in the month of august now that most of that or a big chunk of the fiscal stimulus has run off? >> the early finds that we're seeing from data like credit card, debit card expenditures is that's going sideways. we're not seeing the increases we were seeing before. now, that may be a temporary phenome phenomena. that may bounce back if you think about it, people lost the $600 in unemployment benefits people are going back to work and then getting laid off again in the service industries, particularly hospitality and tourism. so you would expect that we're not going to see the increases we had seen before in spending, just simply because people have less money >> patrick, we have heard a lot of companies announce layoffs, and their stocks tend to go up you have this phenomenon in the market right now where earnings are up pretty strongly

revenue less so. to what extent do you think it sort of ricochets back on the economy, ricochets back on the stock market all of these things these companies are doing to push earnings up over time, does it end up hurting the economy and ultimately earnings in the stock market >> so in the short run, you understand why companies are doing that, trying to cut costs get through this period. you get that in the long run, if people don't have jobs, if people aren't getting income, they're not spending money if they're not spending money, these companies can't grow the top line if they can't grow the top line, there's only so much cost cutting you can do at some point, you run out of steam there. so you really need to grow the top line people need money to spend they need jobs >> patrick, very quickly because we are out of time yesterday, the big announcement from the fed on the new average inflation targeting. if you could just give us a short answer, how high is your tolerance for inflation? is it 2.5%, 3%

would you be okay sitting on your hands for 4% inflation? >> no, somewhere north of 2%, but to me, it's not so much the number, whether it's 2.5 or 3, it's whether it's reaching 2, creeping up to 2.5, or shooting past 2.5 it's really about the velocity of the inflation, not just the overall level. >> okay, patrick we're going to leave it there. president patrick harker of the philadelphia federal reserve i do encourage people to look at the philly fed website for all the work they're doing on unemployment melissa, back to you >> thank you let's get some instant reaction to what we heard as well as yesterday's spit in shift in tone from the fed. mohamed el-erian, always great to speak with you. i want to pick up where president harker and steve left off. that is the path to inflation, and i'm wondering what you're anticipating in terms of that path what we have seen in the markets

already is a steady bid from march in tips. we have seen a run-up in gold and we're watching the ten h-ye go to june highs what's your expectation on that path to overshoot of inflation >> so, melissa, if it were just the supply side that was dictating where inflation was going, we're going higher. but there's this uncertainty about the demand side. we heard it again from president harker things are going sideways now. so if you are involved in the economy, you're going to be pushing inflation higher the problem is there's lots of people that are not involved in the economy. there are lots of people who don't have financial assets. so if you put it together, you know, there is no inflation threat in the short term but longer term, i would keep a really close eye on this >> okay. in terms of where the 10-year yield is at right now, .74%.

at what point, and it may be far off, but in the context of where stocks are and in the context of where big cap technology is right now and how it's valued, what level of the ten-year yield starts to get you concerned that a rotation out of technology and into some of the more cyclical value oriented names may actually take hold and i'm saying concern mostly because people are in these trades they're crowded trades >> so first and foremost, you know, you've got to locate the ten-year in the broader ecosystem. compares to germany, we're now back to almost 120 basis points difference almost down to 100 compared to the two-year, almost at 60 basis points in terms of the steepness of the yield curve. the ten-year is where it is internationally, and i don't expect anything dramatic there, but the rotation trade that you are mentioning, melissa, that's all about reopening.

if we get confidence that we can reopen in a healthy manner, that rotation trade is going to come back in a big way. but you need that confidence if not, then tech names continue to dominate because of their balance sheet. they provide you an incredible amount of resilience as well as a claim in this covid period on the upside so it really is down once again to can we reopen in a sustained and healthy manner >> in addition to speaking of president harker this morning, we had the privilege of speaking to president mester of the cleveland fed as well. i asked her specifically whether she's concerned fed policy is stoking an asset bubble in the market do you think part of this is fed induces? she said no, she doesn't believe the fed policy is engendering a stock market bubble. >> look, melissa, there is no

doubt in my mind that ample and predictable fed liquidity has encouraged people to take all sorts of risks it is not just in the stock market it's about debt issuance, about specks, everywhere you look, there is excessive risk taking going on and that is because people have been conditioned to expect lots of liquidity and the statement we heard yesterday re-enforces this so we have to expect this liquidity technical, it has taken us a long way, it could take us longer but at some point, it has to be validated by fundamentals. so there's no doubt in my mind that this excessive risk taking is being fueled by a notion, by conditioning that the fed is there, and the central bank providing ample and critically predictable liquidity. >> so on that same note, when do

you think the fed needs to contend with this? i get that the economy is, you know, the first order of business at this point in getting it back on its feet and that's where the fed is where it is, why the fed is doing what it's doing, but at some point, does it have to deal with this bubble that you think is in fact driving this market? >> so i think people in the fed understand that their accommodating policy is necessary but not sufficient they believe it's necessary, but they also understand it's not sufficient so yes, you're going to have to have a hand-off in policy and you'll have to have a hand-off at this intersection between on the one hand structural and on the other hand fiscal. there are two things we have to make sure for the wellbeing not just of the marketplace but of the economy, which is even more important, is, a, higher productivity and growth, and therefore employment, and b,

lower household economic insecurity that is what has to be delivered. and unfortunately, the fed cannot deliver that directly it can just keep the game going until other policymakers step in >> we're going to leave it there. thanks so much for your time always great to speak with you, mohamed el-erian >> coming up, the interview of the morning. the new interim head of tiktok will join us live. an exclusive on "squawk box. tonight at 6:00, summer school with frank holland taking your questions on high-flying stocks and financial planning to help you with your homework profit from it tonight at 6:00 "squawk bo wl rhtacx"ilbeig bk.

welcome back to "squawk box. the tiktok saga has been captivating the news cycle for the past month and we may be close to seeing the sale of the operations yulia boorstin joins us with a very, very special guest julia. >> thanks so much, andrew. vanessa pappas joins us in a cnbc exclusive interview she's innthe interim head of tiktok thanks for joining us. >> thanks for having me. >> vanessa, i'm very curious what you see as your role right now, taking obthis role as interim head in the midst of all these deal talks and on the heels of the abrupt departure of ceo kevin mayer. >> yeah, so much to what i was doing previously, which is really focused on the operations of tiktok, making sure that we're providing this amazing experience for the millions of users that we have, certainly

here in the u.s. and then globally, where we have captured the attention of hundreds of millions around the world who really do come to tiktok every day to celebrate in this amazing community that's finding joyful moments and connectivity >> a community that certainly has drawn the attention of some major tech and retailers here. tech companies and retailers here which buyer do you think makes more sense for tiktok's assets is it a microsoft/walmart coalition or an oracle-led group? which makes more sense >> i think we have a few different options on the table, and certainly it is incredibly humbling to see the attention that we have received from buyers and again our community alike. i really am not involved in the deals personally, so i don't want to speak too much to that, but i think, you know, if you look at the various players and

the partners that we are hearing from, i think they're amazing tech companies oracle has its strengths in terms of being a leading data infrastructure company and focused on security. microsoft as well, great security and privacy platform. as well as everything they're doing with the cloud so yeah, i think amazing reputable companies, and we're certainly flattered. >> you may not be that involved in deal talks, but you're certainly involved in the company and how the company could change under any of these owners you didn't mention walmart walmart surprised a number of people what kinds of assets or advantages do you think you, tiktok, could bring to walmart as part of that microsoft bid? >> i mean, walmart certainly is interesting. for us, we have been really focused recently on rolling out some e-commerce features we have been providing that for

our creative community as another way to earn a livelihood you know, it's also something this week alone we actually launched live shopable e-commerce link. so i think there's a lot of different synergies there, but certainly right now we're really focused on providing amazing platform for all communities to come together for that creative expression. >> vanessa, i have a question about the u.s. operations versus effectively the global operations, which is to say that once it gets hived off what do you think the implications of that will be and how that changes the competitive landscape and dynamic. we talked to rich greenfield earlier this morning about so many of your current rivals have a global presence, some of course don't have a presentation in china but they can sell that global presence to sponsors and advertisers and the like and obviously market it to users

once this gets hived off how does that change this dynamic and are you concerned about brand confusion between the tiktok that may exist in europe versus the tiktok that may exist in china versus the tiktok that may exist in india versus yours? do you imagine even changing the name in the future >> all great questions so first and one of the misperceptions out there is that tiktok operates or the app operates in china, which it doesn't. so tiktok globally, you know, we've seen it really just have this phenomenon around the world and driving amazing engagement from millions -- hundreds of millions of users around the world and certainly that's something that we take to heart. that whatever we've done so far has worked and that's something that we're going to hold true in any future scenario, it's something that we are going to want to protect. so from a brand perspective,

from the global reach that a creator can have by coming on to the platform, to the diversity of content they are going to see because it is a global platform, that's something that we are really going to want to make sure that we're ensuring that continuation of the experience for our users. >> vanessa, you mentioned you are not directly involved in the deal negotiations. it sounds like perhaps the ceo of bytedance is in the driver's seat on that, but at that table does the administration have a seat and is it equal to the seat that the ceo of bytedance has? >> yeah, unfortunately i can't respond to that since i'm not in those conversations, but certainly, you know, our ceo is looking to have the best outcome for our creators, our employees, our advertisers, you know, this is something that we are really looking to protect in any future scenario that we're exploring. >> do you have any sense,

vanessa, at all of the administration's involvement in all of this, even if it's just saying, hey, do you know what, we sort of favor microsoft over an oracle or we would prefer you to have a tech partner are there phone calls to your understanding between the bytedance ceo and the administration on a fairly regular basis as this intensifies? >> yeah, unfortunately i can't respond to that, but, you know, again, we understand -- understand the concerns of the u.s. government, while we don't fully agree with those concerns, we are fully committed to providing a safe and secure platform for tiktok for our users now and going forward. >> vanessa, this is a personnel question, but relates both to you and to kevin there were a lot -- obviously it was a big surprise when kevin stepped down, a lot of people thought that perhaps there was a keyman contract that he would have had had a deal happened that he would have continued to

run the business under a new leader or would have been paid if the company got sold. i was hoping you would comment on that and now that you are in this interim role whether you anticipate joining and running the company under a new ownership structure. >> yeah, i mean, i certainly can't respond to kevin's situation and that's more for him to answer, but, look, we are really focused on the day-to-day operations and making sure we are providing this amazing experience to our users. we have such a loyal community that's coming to the app every day for those joyful moments of connectivity, we often call it the last sunny spot of the internet and it really is something that we are just inspired to wake up every day and do our jobs and i certainly fall in that bucket and that's where i drive my motivation. so i'm less focused on what's coming down the line in terms of organizational structures and

what the future looks like in that regard but more just how do we continue to provide this great amazing platform that's really resonated around the world. >> vanessa, you've said a number of times that you're preparing for various contingencies, yesterday i reported on how you're taking steps to make sure you can keep paying your employees even if the app is shut down. what do you think is going to happen right now >> you know, we're exploring multiple paths, i think we all feel really confident about the future success of tiktok and, you know, of course we want to be a responsible company and make sure that we are looking after our employees in any scenario, but we really do think that we're going to have positive resolution and hopefully that will come soon. >> so positive resolution meaning selling to one of these groups, either the microsoft, walmart or the oracle group? so it sounds like you're pretty confident that's going to happen. >> i would say we're positive that we're going to have a

successful resolution i can't say which way that's going, obviously we're exploring multiple paths, but unfortunately at this point that's as much as i can share. >> now, in terms of those paths, you know, these companies that are in talks with bytedance about buying tiktok, walmart, microsoft, oracle, these are not exactly brands that have a big audience in your demographic are you concerned that having a parent company that is a walmart to turn off your creators or users and send them to rivals like facebook's reels? >> i think as mentioned before, you know, what makes tiktok so special and so unique is something that we're all -- you know, any player is going to want to protect. so for us in particular this is something that we hold true. we understand why tiktok has really resonated, again, around

the globe in providing this unique space for creative expression, for people to come together in these joyful moments and sharing whether it's, you know, a woman telling her father that he's about to become a grand dad for the first time, to, you know, family antics now that we are all in this work from home scenario, to just, you know, like families bonding and we're seeing so much of that intergenerational connectivity so for us, again, we are really looking how do we safeguard this community? how do we make sure that we continue to provide what everyone is coming to this platform and relying on us for on a daily asis. >> vanessa, can you speak to what the growth or frankly user loss might have looked like over the past several weeks as people learned about, you know, the prospect of either this getting shut down or sold and clearly so many influencers going online and talking about other

platforms using it as a backup and the like >> yeah, so we have actually been really inspired by the outpouring of support that we've seen from our creators, our advertisers and our users. what we've actually seen is that we haven't had an impact when we are looking at our growth numbers. we are seeing the platform continue to grow, we're seeing it growing around the world and here in the u.s. and certainly that's reassuring for us >> well, vanessa, i hope you will come back and talk to us again about the platform as well as its future. thank you so much for joining us andrew, back over to you. >> thank you for having me >> thank you, julia, for bringing us that interview and thank you, vanessa, for being as candid as you very well can be in the midst of negotiations it's rare that the leader of a company comes on television in the midst of talks like this and we're very appreciative of her joining us and, julia, to you for bringing us that interview

it's going to be very interesting to see how quickly something transpires here, guys, and what it ultimately means for the industry more broadly. and, of course, the soap opera that might ensue even after a deal is ultimately reached in terms of who is going to run the future company, what a microsoft/walmart partnership would even look like or what an oracle would do with the company. then there's other companies like twitter and others who you know have tried to engage in this, do others try to come in and partner and do other things? it's going to be a very unusual time i imagine >> and i think also, you know, we are watching shares of walmart because they are basically -- investors are hoping this is going to lead to a rerating of this giant to a more amazon-like rating. even if they can close the gap by half that's a meaningful addition of market cap to shares

of walmart up 3.5% this morning. >> amazon is probably rooting for a deal like this because it could take some of the competitive pressure off of washington, take it off and the spotlight off of them a little bit. anyway, i want to thank everybody, melissa and mike, thanks for hanging out with us, make sure you join us next week. "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber and kelly evans. cramer has the morning off stocks do look to close the week out pretty strong, the s&p needs about 17 points for a fresh record high, the dow is enjoying its best august since 1986 crude oil pretty steady as producers appear to have avoided the worst of hurricane laura although nearly a million are without power. our roadmap begins with shares of dell rallying ahead of the