list of richest people "squawk box," september 1, 2020 begins now good morning, everybody. welcome to "squawk box" here i'm becky quick with brian sullivan and willford frost. >> thank you for being here. we'll look at the markets this morning. the dow climbed 7.6% that's the best move it has seen in 16 years. go back to august 1984 similar story for the s&p. best gains it had seen in 14 years back to 1986 the stories

continuing to be all about tech. surging since the best monthly performance since 2000 u.s. equity futures, you'll see at this point you are looking at some green arrows across the board. nasdaq indicated up. dow is up, so is the s&p 500 we'll talk about zoom. it is those technology stocks leading the way. looking here to date, they are up more than expected. looking at the treasury market, it looks like the 10-year is yielding around the same amount of 0.726%. zoom, huge news. >> right now, top single stock of the day is zoom

the stock is on fire that may be the least impressive thing. jumped over 300% year over year. free cash flow up 2,000% year over year. new customer subscriptions delivered 81% of the revenue growth and less customer churn than expected. kelly will join us to dig through the quarter at 8:30 eastern time stock up 80% right now how would you like to be in a business where your free cash flow was up 2,000% it sounds like a kid's lemonade stand. that's what has happened to zoom

it is incredibly >> it is insane. yesterday wrks he said the big test was how it would prefer in this covid era it is accelerating new account adds the question is how much is this bringing forward demand for future years originally, it jumped 3% or 4% by 5:00 p.m. to 6:00 p.m we have that cfo interview at 8:30 >> it doesn't surprise me. it surprises me how strong they continue to grow you look at your own life, i don't think i ever used zoom until the beginning of march we use it every single day here.

i'm not just talking me, the kids everybody is using zoom or something like it. google or something. zoom has become the new vern 5:0 u all-star when i say i'm doing something, whether it is something else, i say i'm doing a zoom call. they've won on the naming rights >> they've become a verb i'm going to xerox that or kleenex that >> i didn't mention the name >> you got to wait at least three minutes. we have a new betting partnership on nbc universal i tell you where i'm long. i said if we could own stocks, i would belong luxotica. we are all going to need glasses. >> two of our kids already do.

>> spectacles or a monocle over the next few years >> a degree the zoom has become the verb and is the market leader i still don't get why it is better than web ex or teams and yet it is clearly the leader we don't know how well microsoft teams is doing i bet it is doing pretty well. i use every one of those >> you click on the one someone has decided to use and you are

not loyal to the other my question is whether all of these different apps or services will talk to each other when you see the share price as it stands, you hope it will be the winner takes all if it doesn't the valuation may not add up will we get to the point where i missage has to talk to an android phone. i could imagine. >> is your text green or blue? >> i don't know if it is a winner take all market i find i use different apps for different occasions. zoom tends to be the friendlier one i use with friends or family

i end up using microsoft teams and google for the kid's school because they use that and teams, i tend to use for more corporate things >> to wolf's point, you'll have to use what your company order you to use it microsoft teams part of your office sweet, that's what your company uses, you'll use that. the big loser in all of this is skype owned by microsoft skype should have owned this market everyone has this device for a decade plus. if you know somebody around the world and you want to make inexpensive video calls skype is a name we have not discussed

you wonder does microsoft get their bankers and start picking around zoom. >> i want to put a shout out for the tradition nam phone call it is wonderful to see you why do we always have to be on a video call >> i made just three or four phone calls. >> what's your number? >> tell me your personal cell phone number >> i got becky's number here >> in the conversation on zoom the cfo will join us later in the show mcdonalds facing a new lawsuit by black former franchise owners accusing the giant of denying them the same opportunities of white counterparts and say mcdonalds directed them to

economically depressed areas where they were guaranteed failure. and claims averaging $4 million to $5 million per store. mcdonalds stock down 3% pre-market this morning. 867-5309 >> jenny >> very good tesla shares surging after the five for one split took effect we all knew this was coming. trading was heavier than normal on the session tesla shares changed hands 115.6 million times. well above the average of 73 million. the stock rose by about 12.5% during yesterday's session today's move, stock is sitting at a position of annual gains

more than 530% the market cap crossing $464 billion passing visa with that stock move, elon musk becomes the third richest person in the world at least on paper check that out >> jeff bezos, bill gates, elon musk then zuckerberg >> the crazy thing is, in terms of year to date, 80% now with this morning's 6.5% gain or 79% since they announced the stock split on august 11 unbelievable the big difference is anyone critical has been proven wrong it rallied stronger yesterday.

it will rally today. if you use google finance. that didn't incorporate the stock split. some people on twitter getting worried that think thought tesla share prices collapsed some people having fun on twitter because of that. worried that their recent investment collapsed not realizing that their stocks would take a hold. >> they should be watching cnbc. they use the app, which is free to download. whenever you have a stock split. whenever you have a split if you have a stock shorted, that is a problem if you put that in some special financing plan

when you announce the split, it can throw things hey wire. so this guy was spending all day yesterday trying to redo deals i'm talking share companies trying to short it that might be if you are long. that won't call it short covering the redoing deals. it is an expensive stock to short believe it or not because nobody wants to get in front of a moving freight train >> right also shares of apple getting a boost on the day as well apple is pointing to gains this morning and pointed to above

average sessions this morning. apple up as well and has a little more time since late july up 30% the other just if i indication is the day it announced the stock split, it had great earnings as well impressive news to those stock splitters. still to come, we expect news today from the tiktok parent company and what we know in the latest chapter of who may or may not buy the u.s. operations of that company looking at year to date gains of the best performers in the nasdaq 100 two companies in the top percent. up about a percent in the futures. we are back in a couple minutes.

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everything i do is for him. when i moved to this apartment after six months, we need to connect with the world. i use the internet to keep him in the language, because that's the way to connect to my family's traditions. he has to know where he comes from. we need internet essentials. there's no excuse to not get connected. welcome back and good morning. the great news anchor ron burgundy quote, walmart just took it up a notch $12.95 a month and gives you unlimited free delivery as long as you spend $35, one big

difference two others, first, you can use the scan and go oop to check out in stores and customers get discounts of gasoline at super centers. shares are moving lower this morning. up about 1.5%. still they are taking it up. they want that delivery and that prime customer a lot of walmart customers in rural areas. they use gasoline. maybe amazon buys exxon at some is point walmart has a video program too. >> what was the ron burgundy quote there? >> kick it up a notch. >> that goes down as a famous quote? there are so many you could have used >> you killed a man with a trident.

>> that's the one i wanted if you could have worked that in >> my love lamp. >> there you go. on the latest bid to buy tiktok, learning that bytedance is working with exclusively as soon as today joining us now, general manager of we transfer and microsoft pioneer studios. thank you for joining us the expectation is that the front runner here is microsoft partners with walmart. does that make sense for you for microsoft? >> it makes a ton of sense it is not like microsoft hasn't taken a bite of that apple partnering with walmart makes a

lot of sense for them to have a go at it >> are they going to pull out of all of the earnings. will they be allowed to do that based on the terms of the sale >> i think microsoft will be able to leverage this substantially. walmart as well. they've done deals with nokia, which was the heart of a nation, nokia. they've shown they could manage and lead big corporations like with linkedin.

we are building around the unique model here. >> in terms of what microsoft and walmart will be able to do around this. initially, we thought it would be facebook. is it now amazon if this partnership takes hold >> i would argue facebook, google, a lot of the media companies, i would include disney and netflix at some point have a lot to fear we are dealing with a fundamentally new model of media creation it will put pressure on amazon what they have the potential to gain is this huge new set of

real estate. they are a foot trafficker so having this view is very, very interesting. >> given the potential avenues to go down, is 20 million or 30 million, if they are crowned jewels, if they'll be used in all sorts of other areas should they be looking at a hire price? should they be willing to write that off as a whole, if necessary? >> this is interesting i'm starting to reason that 20 billion or 30 billion is a reasonable price we are dealing with an unperfect model right now.

both governments on both sides have stepped in to the fair market i don't see that price being established here that goes both sides of the ocean. the pricing here will be an interesting pickle >> finally, what do you make of the fact that it is not just the u.s. but canada and new zealand? does that country lineup make sense? is that easy to carve those four out? >> to carve out english speaking countries. they are looking at similar purchasing behavior and spend habits and spend levels. this makes sense, when you think

about the media production and content on tiktok. language and culture plays an important role those types of countries can fit closer together than just trying to bundle, say, the rest of the world. >> feeling left out. not sure why the uk is not in there. thaurch f thank you for joining us a roundup of today's biggest pandemic stories from opening businesses and vaccine updates and an update of bankruptcy proceedings for jcpenneys. an attorney says talks to find a buyer have hit a stalemate yesterday, lawyers said the top bidder will make a credit bid to try to own the company as a stand alone entity we'll be back with more on that

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welcome back

good morning time for your executive edge astrazeneca in the final stage of its trial of corona vaccine. partenering and could reveal preliminary results as early as next month it is not for us to root for companies to win or lose as a human nature, as a culture around the world, we are all rooting for every come working on some kind of vaccine or treatment. i think that's a fair thing to say. >> absolutely. go we'll take it. we are working hard on this. new jersey movie theaters will be permitted to reopen on friday they'll have to require masks

and have social distance guidelines capacity is capped at 25%. it is not likely many theaters will be ready to reopen on friday the state was one of four that had not reopened to the public with california, new york and north carolina new jersey gyms can reopen today. masks have to be sworn at all times. many gyms are putting in reservation system gym equipment that cannot be spaced six feet apart cannot be used so guys, so friday, we are going to go to the gym shower up and then hit the movies to see tenant are you in >> i'm very close to going to the movie theaters to see

tenant >> i'm not going to the gym with you and i'm definitely not showering with you >> i'm not which i'm more offended by. >> they both apply for me as well the movie theater potentially. >> i didn't say we should shower together i said we should go to the gym and work out a bit come on, it's 6:30 in the morning. monday morning or tuesday. is monday labor day? >> monday is a holiday, labor day. i've lost all track of time and space. >> coming up, do you hate airline change fees especially these days delta and american will follow unite's big move to do anything and everything to get you back on a plane we look at yesterday's s&p 500 winners and losers

alexion pharma a big winner and phillips on the list of losers we'll be back after this as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers... and deliver our products. but no matter how things change, one thing never will... you can rely on the people and the network of at&t... to help keep your business connected. a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations.

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good morning so far, so good. u.s. equity futures are in green

across the board dow futures are up s&p up and nasdaq up 128 points. a look at the stories this morning. american airlines and delta remove change fees following the move by united a day earlier american went further to remove change fees on international flights from canada, mexico and caribbean. and amazon to test a fleet of drones parka package deliveries probably won't become usual until they are approved by the faa. >> national hockey league continued fifth straight week of play with no no, positive covid tests. the league administers tests of

all the players, of samples collected last week, none testing positive talking stocks now and your money. if you are long and strong, congratulations, we are coming off one of the best summers ever dow and s&p wrapping up the best august in nearly 30 years. nasdaq had its best august since 2000 including tesla, royal caribbean, salesforce and mgm. september has not been kind to investors. historically the worst month for investors. >> joining us, our guests this morning. victoria, let's begin with us. not only coming off the red hot summer, we have this little thing called an election coming up a lot of talk about the biggest

risks, not being covid, not being lockdowns or trade deals it's the potential for contested election what is the big deal you see for the rest of the year we had been looking for the target around 3,400, 3,500 mark already. we anticipate because of these things you've mentioned. because of covid, states reopening and states spike, the election and trade issues. all of that will cause volatility and pull backs that will allow you to go into the market and buy names i don't think it will drive the market much in a regular election year. i actually think we'll see covid drive the markets more news on the vaccine, regardless of which administration comes to

power, you'll see that positive movement related to the vaccine or positive news when we are sitting in a situation like this with covid-19 it will be hard for a biden administration to come in and raise taxes. for us, to use those opportunities to buy more staple names and build the foundation >> do you think the gains for the year will have been priced in or that we all expect the vaccine to come out or we'll naturally come at this throughout the year. that the gains might still be to come because there will be a post pandemic euphoria if you will. >> you are right we'll get through the paindemic and survive the election we are still concerned about the

valuations of the market how far we've come, how fast we've come the s&p is trading 21.5 times all record earnings. we can talk forecasts. we do believe for 2021, about $$165, equivalent is in reach. but a lot needs to go right. that includes an election that does not turn out to bring at least immediate policy changes we are concerned about the prospects of a democratic sweep that would bring higher corporate tax rates and dividends on capital gains i don't want to talk investors out of their favorite stocks we've been most attracted to growth stocks. >> okay. >> also we found value in corporate bonds. we've been surviving this bull

market even though we've been cautious we've gotten to the point where it is best to protect the gains. count yourself lucky it is not seasonality. all of those valuations. the knee jerk reaction, we look at how low the interest rates are. remember, unemployment is still below about 10%. continuing initial jobless claims are over a million higher than the records, so think about what interest rates might be if employment is better what would normal interest rates be i don't believe they'll be this low if you believe in recovery >> i don't even know what normal means anymore. back to you. talk about making some money i'm sure clients have all done

well this year if they stad long in stocks but probably getting jumpy. where are you finding value? >> we are really looking at taking a barbell approach. for the last few months, that growth area has been strong. we've seen really big gains there. we've taken a little off the table. we've trimmed our apple, we've trimmed microsoft. adding names like walmart. we think that will be a big advantage and of course the tiktok deal coming adding things like mccormick, the spice company. going to financials that are not typical. still finding those opportunities. charter communications for br d

broadband. getting past the pandemic or the vaccine, those are areas for longer term investments. >> david, what about you >> we are still finding value in growth stocks. tech and communication and also what we are trying to do is not be so dependent on tech. 40% of the s&p 500 market cap is now tech and communication sector stocks. we received long-term growth the valuations have been longstanding moving forward with more health care stocks. in the short term, many consumer staples, utilities is an overlook sector. 18 p.e their play on low interest rates. a play on green energy project

should they come if interest rates and inflation were to prize, they have real assets and regulated businesses. for those just lamenting the lack of income, look at utility stocks not sexy but they would deliver. right now, the dividend taxes are very attractive. a simple way to add value to the portfolio. >> i love how you through utility stocks in there with tech and growth. david, victoria, great stuff we'll see you both soon. still to come, a pulse check on jobs in america ahead of friday's big report. we'll talk to paycheck ceo with data coming up next. take a look at the best performers among the dow 30 this year led by apple and new edition, salesforce up 70 or

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welcome back it looks like the record run we had in august may continue dow futures up 17 points this is coming off the best august for the dow since 1984, best august for s&p since 1986 and the best august for the nasdaq since the year 2000 september historically, the worst month of the year. right now, happy september, by the way, no indication things will slow down in the meantime, a new survey conducted by survey monkey says americans are saving more and spending less

46% describe themselves as a saver compared to prior to covid. only 13% say their spending has gone up. half say they are decreased on spending some say losing income and fear of another stock market down turn those that increased spending cite hire cost of essentials and say they are spending more because they are bored investors in acorn i posted this last week, trying to do a roofing job, talking to a roofer, he said i was 78th on his list and he may be able to get to me late 2021, early 2022. thankfully the roof isn't leaking. >> i believe you i tried to get a handy man back

in may they told me they were keeping a list and they thought they could get to me by sometime in july. everybody is trying to get their house fixed up we have things we are noticing because we are in our homes more thinking about that coming up in a second he's coming up in just a moment and will tell us about areas where you are seeing big increases in pay one of them is construction. it blends in to what you are talking about, brian >> a buddy who runs a small business, he said if i just owned a backhoe and dump truck, i could make money the next 10 years. it is true, trade schools should get renewed attention because of this electricians, plummers, all those folks, they are going to be super in demand and they are

going to print money for the next five years. >> that's right. in fact, we'll hear more about this coming up next. it is jobs week in america pay cze paycheck ceo is with us to talk about the monthly jobs data and kodak with a big move with more than 5% stake in the company right now kodak up 45% we'll be right back. >> announcer: don't forget to subscribe to our podcast you'll get interviews, original content and behind the scenes access look for us on apple podcast or your favorite poasdct app and subscribe to squawk pod today. when the world gets complicated,

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welcome back, everybody. paychex releasing the first read on friday. the report shows hourly earnings have actually increased since this time last year although the job index overall remains similar to that since the start of the pandemic. joining us is marty musi good to see you this morning.

>> good to see you, becky. >> for everybody who's looking, there are obviously some real concerns in the job market these days we have double digit unemployment your report shows a lot more silver linings than i would have anticipated. the pay being up in lots of different sectors. what's happening >> august did drop a little bit from the overall job segment and we saw that bounce back in may from the drop in april and now it's just kind of held or dropped a little bit in each month. the biggest drop was in the south and west reej begins as covid spiked, there were more closures we saw businesses closing at least temporarily and we saw the job market drop off. the south is still the strongest and florida is still the strongest even though it had a pretty big drop over the month of july but we're seeing just as you and brian were talking about, it's construction

construction is helping the south a great deal to keep up. leisure and hospitality in the south down a lot as you would expect in closures you're seeing construction up with new home sales and commercial construction. >> marty, how much of the strength or -- i shouldn't say strength but how much of the relative strength in terms of what you might anticipate versus the overall market is because of the ppp program? i just wonder how much of this is being held together by government funding how much of this is being held together by actual demand? >> you know, becky, that's a great point. the paycheck protection program really helped a lot. we're hearing that from a number of small businesses. in fact, in our own home base we helped support over $28 billion worth of loans that were facilitated. we've seen those businesses are the ones continuing to run and run pretty much with full employees. overall of the businesses that suspended for us, only about 50%

have come back at this point from the suspended activity and they have about 25 to 26% less employees. so those with the ppp loan really have done well and they need more stimulus you know, they need more flexibility in the way the loan is provided, how they can use it, how long they have to pay it back they really need some additional support to keep going so it's important that that gets done as quickly as possible. >> we talked to yelp from time to time and they've been tracking how many restaurants and other businesses that are closed are now closed permanently instead of temporarily. what do you hear in terms of small businesses you've talked to on that >> yeah. we're still not seeing too many closed permanently in our client base about 50% have come back in actively paying. as i mentioned, paying about 1/4 less employees it's also interesting with the unemployment additional benefit we found some small businesses,

we're hearing some of them were finding it hard to find employees to fulfill the demand. you have some small businesses that came back that are having a tough time finding employees because sometimes of the unemployment and you're having others that are certainly having a lot less demand and as you mentioned, there's shortages of supplies as well for construction you're trying to do a deck or a roof sometimes there are supply shortages and people shortages to get all of that done. it is a silver lining, that demand is there, it's just fulfilling. >> marty, thank you so much. i know we talk to you every month, but i think it's more important than ever to hear what you're hearing from small businesses so we hope to see you back here very soon. thank you very much for your time. >> thanks, becky. everybody do not go anywhere because we have some great guests as always coming up on "squawk" including former sac

sachs ceo steve madeau and tomorrow friedman. we'll be here to discuss the 2020 election and more dow tus d fureanmore back after this so you're a small business, or a big one. you were thriving, flourishing, but then... oh. ah. okay. time to think, plan, pivot.

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good morning futures pointing to a higher open as the bulls look to continue the summer charge road back. we will bring you the new data on the state of the economy as businesses start to recover from the pandemic. plus, watch out amazon walmart making a long-awaited move to challenge its prime rival. we'll bring you all the details as the second hour of "squawk box" begins right now. welcome back to qua"squawk box. welcome to september i am brian here with becky quick and wilfred frost.

stock futures, they are higher dow futures gaining a little steam. nasdaq futures with an implied up 133 points. technology has been on fire. i don't need to tell you that. it looks like that could continue today part of that, of course, a big part, is apple i want to look at apple in the pre-market no news, but here is a stat that would definitely be the day's rbi. with those gains, apple's up 2.5% in the pre-market apple's market cap is $2.26 trillion that is more than the entire market cap of the russell 2000 that stat, guys, coming from our friends at the spoke investment group. certainly random but interesting. one stock worth more than the entire basic universe of publicly traded small cap companies in the united states pretty amazing. >> brian, becky and i had a bet of how long it would take you in the 7 hour to mention your rbi

i actually won that one. >> one to one, frosty. got it >> we'll have to come up with a bet for 8 a.m. >> well played well played. >> i liked it. anything, frankly, that comes from "worldwide exchange" i always love, as you know something very close to my heart. making headlines, astrazeneca says it's starting phase 3 of the covid-19 vaccine. 90 are under active investigations in animals. astrazeneca up in premarket. shares of zoom soaring this morning. they raised the annual revenue forecast after it beat estimates by a wide margin the use of zoom's video conferencing platform has soared as more people work remotely we'll talk with the company's

cfo at 8:30 a.m. eastern time. walmart will launch the plus membership t. will cost people $98 a year it gives you free delivery on 160 items. it requires a $35 minimum. customers can use the scan and go app to skip the checkout line at stores and they'll receive fuel discounts at walmart super centers. guys, the big economic report of the week comes on friday but the release of the monthly jobs report from the government but this latest high frequency data is already telling us something about the august labor market and consumer spending steve liesman joins us right now with his road back barometer steve, how are we fairing? how are things going >> sort of flat to slightly up let's go through the gauges, becky, and i'll show you maybe we can do more explaining on the other side of this.

we've been following the kronos time punching. 3.2 million employees. they've done a good job tracking the changes in the payroll numbers. they're up 0.3%. that's a big drop in the growth rate from other months chase card spending. j.p. morgan chase doing interesting work with their credit card data they've segregated it into states with high unemployment. they're down more than others. we'll see that in a second then jeffries, they aggregate a lot of high freesh frequency data the growth rate has eased off at 63.2% of 2019 activity here's a quote we got when i spoke yesterday to annette markowska. she said, given the falloff in

fiscal spending, i was expecting a contracture. even though the momentum isn't strong, it's quite impressive that it's still going. here's how it's expected to work it did a very good job of tracking the decline of 20 million jobs they had an 8.8% decline it got the bounce back in may and then june it started to fall off a little bit and still remained up. there you have the august forecast 0.3% that number may be worse because if you take out the return of k-12 workers which is expected in the government seasonal, it's 0.1% we're looking for it the word on the street and consensus on the street is 1.25 million is a slowing in the growth rate. let's look at interesting work that jpmorgan has done they have credit data. lagged by four days. look at what's happened with the separation between the high

unemployment claim states and low unemployment claim states. becky, that's given us the potential impact of the falloff of $600. some is coming back through the $300 through the executive order. we're seeing a change in spending relative to that money flowing from the federal government how consequential that is for jobs in the broader economy? we'll need more data this high frequency data gives us a look at how it's affected the consumer spending. >> maybe this is a dumb question -- >> doubt it. >> -- a month ago we were saying that's when the extra unemployment would end now we're saying it's august what happened? >> well, what they did on that chart, i think, if you could put it back up, it was end of july actually, the last week before july is when it started to not be paid because of rules having to do with the july 31st end of the actual program with that

last week. that's the -- it expires the beginning of august is when that line is marked right there it's early days yet to really gauge the impact the idea that annette was talking about it's held up, it's an interesting one i suspect, becky, one thing we have seen is a huge surge in savings rates. a lot of people got money that didn't need it a lot of people also got money and they ended up saving it because there were fewer opportunities for spending you know, travel is off and all kinds of things are off. so that may be helping people through where we might see more of an impact of this in september as unfortunately savings wind down. >> you know, we were just talking to marty mucci in the last hour. he looks at this from the small business perspective one of the things that kind of surprised me is the numbers are down but not horribly down and you would think small businesses

would be the ones most at risk he said about 50% of the small businesses they service have brought employees back, 25% fewer employees than before the pandemic he said the ppp money is what's been holding november there and hanging on it's hard to say how much of the employees -- the small businesses that -- how much of the rehiring that they've done, how much of it is because of the ppp and how much is because of real demand. i think that's the question everybody is still trying to figure out how much of this is artificially held up by the government spending, what happens when the government spending goes away and how much is real hard core demand >> you know, bhecky, when we go back and look at the short history of these programs, they were great bridges to the summer and the ppp program could have been a perfect pirouette, if you will, from the shutdown to the re-opening same with the unemployment claims benefits, $600.

the trouble was we had that surge again in july and that's where you really create the need for additional ppp money i have heard some horrific stories, becky, as you know the reporting we did last week about the main street/wall street divide 20 to 30% of small businesses could go under on the other hand, you have others prospering, doing well, coming back quicker. one of the things we've seen, becky, is a lot of bifurcation the industrial economy is doing well the construction economy is doing better when you focus on those industries that are most affected by covid, those are the places where you see the deep declines the question becomes how much scarring we have after this. how many businesses don't make it back. how many employees don't have jobs to go back to >> steve, thank you. good to see you. let's take a closer look at the consumer with master card's pulse on consumer spending

steve sadove joining us. very good morning to you thanks so much for joining us. i guess first headline question, we can dive into master card's report a little bit more, is the broader strength of the consumer and what you're seeing now ab the key factors you're seeing it rely on. >> i think steve's comments were helpful and good the consumer is coming back from the depths of the pandemic look back in march, go back several months, down 14% in consumer spending. what's happened is over the last several months it's strengthened we're now down at a low single digit decline. coming into the pandemic we were growing at 4% or so. what's happened is the consumer has stabilized but at a slowing growth rate. we've had dramatic differences from one sector to another digital has almost doubled from where it was before. categories that had been stable, things like home, hardware,

grocery have been the winners and what's interesting to me is that some of the master card recovery insights are saying that other categories that had been in very poor condition, such as travel and entertainment, are starting to come back. and we're seeing reshoots. we are seeing the shift. we know who the winners have been, the large companies that have been able to provide safety, that have been providing basics, the needs, we're now moving into wants. people have been cooped up in their homes. as the economy has started to open, things like restaurants have seen some substantial improvements mini vacations, not so much the air travel but hotels that are nearby home, car rentals, micro mobility some of the master card insights are showing substantial improvement in some of these categories. >> steve, as you said, those insights in the travel area in particular definitely stood out

from the master card report. other forms of travel bouncing back more strongly i guess that speaks to leisure travel versus business travel. what are you seeing in terms of the fact that business travel will rebound >> i think business travel is going to be a slower recovery than the consumer. right now you have the consumer who has been saving. steve was right, the savings rate is up the question is how is this going to play out over the fall. if we are cautiously optimistic. consumers are traveling, staying in hotels. going nearby business travel will be slower i think it's going to be different over time. we've all gotten used to the zoom technology. the short let's travel across country for a 24 hour trip, that's going to take some time before it heads back and you're going to see a mix and an evolution of how business travel is done. it will come back. there will be conventions but it's not going to be the fast

recovery i think it's going to be the consumer, more local it will be spending on restaurants overtime as they open up but i think that the consumer will drive it before the business travel. >> hey, steve, it's brian. good to chat with you again. >> hey, brian. >> the sad impact, there's a lot of sad stuff, but from the business impact is the bigger will only get bigger small businesses, i don't know how they survive new jersey allowing indoor dining the post of rules is 40 long i have to imagine a lot of businesses are going to give up? >> i think this is going to be a difficult environment for small business restaurants at a 50% capacity, it's very hard to make money the rules on the gym openings. this is going to be tough on small business the ppp support has helped a lot

of these companies get through how it plays out, i worry more about small business than i do bigger businesses. the walmarts, targets of the world have thrived -- they're going to continue to thrive the trends will continue i do worry about the small businesses that have been propped up, that are going to have a hard time meeting the rules of engagement and you're going to see a shakeout. you're going to see a major change in terms of a lot of small businesses going under >> what do you think about what washington is doing? so many people thought we would have had an agreement between the two sides. the longer it goes on, the less urgency they feel unless there is some sort of push back, unless you start to see unemployment numbers going up and the market react

what do you think it will take >> i'd like to see action out of washington unemployment is still over 10% we have millions of employees that are unemployed so we do have a substantial issue i do separate wall street from main street and within main street i separate some of the very big companies that are winning and categories that are winning versus a lot that are suffering and there is a sense of urgency relative to helping a lot of these companies ppp was wonderful. steve's analogy of getting us through the summer was absolutely right, but we're on the other side of that now i understand there's an enormous amount of politics involved but from a consumer perspective, employee perspective, there's a very hisense of urgency and need for help. >> thanks for joining us great to see you. >> thanks. on deck, tough new data on

americans facing evictions from their homes possibly it's an important and serious story. we'll go to break with some of the story stocks after this. dow futures is up just under 20. stick around anything your wild child does pampers cruisers 360° fit can too with a stretchy waistband and adaptive 360° fit so they can move the way they were born to [music]: born to be wild pampers cruisers 360° fit

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all right. good morning and welcome back. a live look at times square. 7:17 on a tuesday morning. welcome to "squawk box." the number of evictions are set to rise as moratoriums are set to expire. diana olick joining us with more on this story. diana? >> reporter: brian, today marks the end of various state eviction protections as did yesterday and the 30 days' notice requirement is now up so as of today, 30 states no longer have any eviction protections for renters. new york and california do still have pro toekt shuns and florida extended its protections just today. so the federal eviction moratorium expired at the end of

july that covered at most 44 million rental protections eviction filings are coming in in large, multi--family buildings, just over 92% of tenants paid full or partial rent by august 27th which is a 2 percentage point decrease from a year ago there was a survey of 11 million units. that's not so bad. the pain is in the smaller two to four-unit buildings where typical tenants have a median household income of $35,000. that's the most of single-family homes and 50 plus units. cities like philadelphia and new orleans are bracing for a big wave brian? >> you look at the household incomes there and the number of

folks at risk, certainly, diana, what kinds of things you probably talked virtually with ylan and kayla. aside from what you've mentioned, is there any long-term relief that we might be able to expect? >> reporter: well, they're still waiting on any relief from the government renters paid their rent over the last several months using added unemployment benefits. landlords are working as hard as they can with a lot of tenants i've spoken to the smaller mom and pop landlords. they're deferring rent but it's hard for them as well because they have to pay the mortgage and other expenses on the property the larger multi-family landlords are doing workouts, keeping them in place overtime they do need that federal aid to get money back in those tenants' pockets. >> yeah.

of course, probably i guarantee you, diana a lot of stories about how you're outside of an apartment building, i don't know if that's the brandy wine on connecticut the big apartment building owners, they're going to get aid perhaps. then there will be a furor mom and pop can't get help but many companies are getting help. >> reporter: that's already happening. >> there's a big difference between if i owned an apartment and had one apartment that i rented out versus i own 10,000 apartments and the level of aid my ten nints might get it. small landlords, that's their income as well that's what they live on. >> diana olick in d.c. on an important story. thank you very much. when we come back, we have

all heard the stories of people fleeing cities during the pandemic what are the prospects of a comeback during the fall many bond levels hold e th answer we have the story when we return some companies still have hr stuck between employees and their data.

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there are real questions about the future of big cities as families move to the suburbs and companies extend work from home policies. the debt market may be sending a message too. robert frank joining us on that story. good morning >> good morning, wilf.

last week new york city sold over $1 billion in long-term bonds. there's investor caution about the city's future. they had a 10-year yield of 1.45%. that is low. the important number is the spread between that bond and the rates for aaa bonds or the benchmark. before covid the spread for that was 20 to 30 basis points. the spread on last week's offering was 72 basis points so that is more than double. the muni bond world, that is a big and very sudden move howard cure of evercore says this reflects concerns over new york city's credit standing and potential problems it means that new york city's borrowing costs could go up. it has $38 billion in outstanding debt obligations if those drift even higher, that means further spending cuts in a city already talking about $5

billion more in potential borrowing to avoid mass layoffs of over 20,000 city workers and muni bond experts say new york city spread puts it on par with philadelphia though not as bad as chicago new york city slogan is, not as bad as chicago wilf, back to you. >> some reports come to mind on this, robert firstly, if the fed hadn't done what it had done, any semirisky bonds would have been high that depends on what the fed is targeting. muni wouldn't be in the cross hairs. either way, the fed has definitely helped stabilize across the board the spread would be no doubt wider. as you rightly point out given some of the risks to what the tax take will be in new york in the past 12 months, past quarter, they have to borrow more even a slight increase to where it would have been is a big

blow. >> that's right. if they do this second bond offering they're talking about $5 billion with $38 billion in bonds already in people's portfolios, there may not be that much more demand for more new york city debt since there is already such a huge supply out there. with this next tranche if they do 5 billion, they don't do the layoffs, that could raise it higher than 1.45 it is part of the whole downward potential spiral in new york where you get cuts which reduces services, everything from sanitation to police, which makes it less attractive to live in new york. as to your point, taxes would also have to increase. the cost/benefit analysis of living in new york city is what a lot of families are doing as they look to coming back in september. that's going to be the big question whether new york city comes back strong in september or whether it's going to be a longer haul. >> robert, how much worse are

the yields in chicago for chicago? >> yeah. i haven't looked at chicago. the state of illinois and the new york mta are the only two entities that have taken part in the fed's municipal lending facility they got a fairly low rate, although illinois i think even through the fed facility was 3.3% so that was with the fed's help and coming in with low interest rates. it is still more than double what new york city is. and it's interesting also that those are the only two entities that have taken part of that program and it hasn't really delivered what many cities expected or that even the fed, i think, hoped they would help so many cities that people just haven't taken advantage of it. >> robert frank, thanks so much for joining us >> thanks, guys. still to come, as profess n professional sports come back, we'll talk about the big business of betting. check out the biggest winners and losers

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welcome back to "squawk box," everybody. futures, we are seeing a pull back it's down by 12 points in the futures market s&p futures are up by 8.5 points the nasdaq is up by 106 points even after gaining 9% for the

month of august. phenomenal numbers across the board for the markets. the s&p was up by about 7% the dow was up by 7.6% the nasdaq was the clear outperformer in the meantime, check out shares of tesla. that stock actually comparing some of the gains we've seen the banks will be selling the shares from time to time based on instructions from tesla the stock had been up by about 7% this morning it's still indicated up trading up 2.8% now. brian? >> we've got big news in sports betting. nbc news is working with pointsbet. they will be integrated into the platforms of all eight nbc sports regional networks to bring viewers more than 2200

live sporting events every single year. joining us on that and more is johnny eigaitken welcome to the nbc family as well very cool. how will it look if i'm watching a basketball game or a hockey game or whatever it might be, nascar on nbc, how will pointsbet enable me to bet on that game >> thanks for having me on the show how it will look on the screen is really the integration can take us. we've focused this deal on the secure technology and also that nbc universal possesses. so imagine a hockey game, for instance, where the odds are integrated into the broadcast. a picture will pop up to give you a stat with a betting market part of the deal we're looking to yun lock on the comcast xfinity end is to speak into the

remote and to ask for betting odds and to really, again, integrate it from the settop box as well. we're going to explore a lot of different areas of technology and ensure that we're enhancing the broadcast experience in what you're experiencing in watching sports >> so i am -- listen, obviously comcast is my parent company i don't want to be too much of a homer. i do love the x-1 remote if you use comcast at home, you know what i'm saying i could be like, show me this, show me that it sounds like, johnny, what you're suggesting is i'll be able to hold up my remote, press the voice button, say show me the odds on the celtics versus the raptors? >> correct not day one but that's the future

the end game is to bring that ultimately >> you're aware that the u.k. has recently banned advertising of sports betting in and around live sports on television. the problems that arose from addiction, particularly post the smartphone era allowing people to bet so easily whilst watching live sports. how are you and nbc and the u.s. more generally going to make sure those same levels of addiction don't take hold here in the u.s. where you could even argue the level of education against the risks of betting are much lower as a starting point. >> yeah, it's a great question the pointsbet market has been operating and we have responsible gaming that was a consistent part of our discussions with nbc

universal all along. we have a responsible gaming program internally we were the first sports book in the united states to run a responsible sports book on social media the question is great. i think what we're seeing on certain networks is a bombardment of advertising part of our messaging is making sure any messaging around sports betting is responsible betting if they run into a problem they have a number to call. >> so the u.k. has gone too far by banning advertising in the u.k. the previous norm was during halftime, for example, to be able to call up odds during a broadcast is quite a big difference >> listen, i think they're different markets. i think the u.k. there's a sort of proliferation of books that

aren't still legalized having more onerous restrictions on advertising makes sense with nbc universal by direct partnership, we've always taken a responsible approach to the discussion and how we feature responsible betting through messaging. we're not seeing the target gamblers with underage consumers. the engagement and watching it and betting 2in a responsible way. >> i'm sure you've done some research on how betting changes, how we watch sports. give us some insight in what it does to us do we watch games? how has sports betting changed the way we consume sports media.

tennis it takes up those sports so we are seeing people with a wider interest in a different array of sports. a big trend we'll see in the united states is in play so when the game starts, we have the inability to place a bet you need to have greater technology it will be, again, investing very heavily in the entire experience at the time and looking to support that hopefully with nbc and their broadcast rights >> yeah, we do we have churchill downs and

kentucky derby on saturday a lot of sports. johnny aitken, welcome to the nbc sports family. look forward to the partnership, johnny >> thanks. still to come, stocks to watch. tesla is selling up to $5 billion in stocks. you can watch us live on the cnbc app un, u' wchg atin "squawk box.

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the nasdaq which has been the leader all morning long, the leader through the month of august, too. nasdaq indicated up by 104 points. check out shares of tesla. the stock pairing back gains after it had an equity distribution to sell up to $5 billion worth of shares. it's up 80% since they announced the stock split on august 11th it was up 5 or 6% this morning the pare back we're seeing now is tiny, really, when you think about it when your market cap is up to 450 billion raising 5 billion in extra capital is totally understandable and something that would, frankly, be celebrated it certainly put those questions of short cash flow or short cash balance well, well behind it just a sign of the times that they can announce a $5 billion capital raise and still be up in the pre-market following 12% of

gains yesterday and 80% of gains in the last 20 days or so. >> right when we come back, tom friedman on the big issues of the day. we'll talk to him about lots of things out there stay tuned, you are watching "squawk box" right here on cnbc. give you my world ♪

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welcome back, everybody. tiktok's chinese parent bite dance says it will follow china's newly amended rules on exporting technology that could make any sale of tiktok's u.s. operations more complicated or even impossible we are awaiting the next chapter in the tiktok saga and the trade war between the united states and china. for more on this, let's bring in our next guest, tom friedman he wrote about the u.s. and china and trade in a column where he said to deal with china trump should learn german. he's the author of the book "thank you for being late" and many others. thank you for being with us this morning. >> thank you for being with us. >> explain your quote on this. if he wants to deal with china he needs to learn how to speak

german what do you mean >> what i meant, becky, is that, you know, the cold war against the soviet union was fought and won in berlin and the impending technology cold war between the united states and china will also be fought and won in berlin for this reason. germany is the key to the european union and i think which power in the world, china or the united states, has the european union on their side in this pending technology war will be the one that will win, the one with the most leverage i've always felt from the beginning if we made this challenge with china, the united states alone versus china, we will lose. if we make it the world versus china on what are the right and fair rules of international commerce and technology in the 21st century, we can win >> that is a really interesting thesis, and makes a lot of

sense. i mean, we just had eric schmidt on last week he said one of the things he's worried about in this conflict between china and the united states is just the idea that you could have a splittering of technology and two separate internets taking place your point is whoever has europe on their side is going to have the mass on their side >> right i always say i don't like to use the term china i much prefer the term 1/6 of humanity that speak chinese. i think we better understand fast the size of what we're talking about. china is 1.3 billion people who are becoming a digital technology powerhouse to their credit the idea that we can push them around, order them around or that we alone can bend them to the rules of international commerce and trade alone i think is ludicrous i think -- i've been saying this from the very beginning. you know, i agree with what trump did. i said from the start that

donald trump is not the american president america deserves in my opinion, but he definitely is the american president china deserved, that we needed to have a president who is going to call the game with china. trump's done it with i would say more grit and toughness than any of his predecessors. i give him credit for that he thought he could do it alone. he thought he could do it without a coalition. remember, it was the country with the biggest coalition that won world war i. it was the country with the biggest coalition that won world war 3. it was the country with the biggest coalition that won the cold war the same with china. i'm not looking for a war with china. we are in a struggle over what are the right and fair rules china wants to set them one way and we want to set them another and we cannot set them alone. >> tom, so interesting your point. the importance of winning the e.u. over on this question and this debate. there was a report six months

ago that angela merkel had said i'm more worried about the influence of social media companies from the u.s. on our children than, say, huawei on the nation clearly the u.s. has influenced the u.k. on the topic of huawei. a lot of it is up for grabs as you are suggesting are you suggesting there's not legitimacy around some of the u.s. questions over chinese tech maybe huawei is the example, maybe tiktok is the exeample or there is legitimacy and there is convincing the likes of the germans of the ills. >> there are two issues. one is a long-term structural issue. for decades china sold us shallow goods, goods we wore on our back, shoes we wore on our

feet, solar panels we sold china deep goods, software, chips, et cetera what is new today is that china can now sell us deep goods 5g that can go inside your house, jackpot, inside your bedroom. we don't have the trust relationship generally for us to buy the deep goods that's the real huawei story that's what we're fighting about here over and above that, you have to understand, i think, this is what the administration -- where i have problems with it. just because china can, in theory, call on a tiktok and demand that it turns over data doesn't mean it's doing it anymore than it means america is doing it or european country is doing it with their technology i'm uncomfortable when i read these tiktok stories, ask themselves, is this proof of what tiktok has done

theoretically, they could turn over data. have they done that? i'd like to know that. i'm uncomfortable not knowing enough of that as we dive into this that said, do i think china on the basis of my own reporting has been meddling in our elections and has the ability to influence social networks in this country it does. we need to be alive to that. you remember that massive group of hacks last year, anthem, marriott, equifax. a lot of people think that was actually china building a huge database on americans that could run ai on and influence campaigns in the future. >> tom, the end of your comments there kind of make me go back to the beginning of those comments. if we think this is china and we know of other attacks china has launched on us, we may not have proof of them using huawei or

any of these other sort of ways in and spying on us, but as the relationship has grown more frayed, as we know about a lot of these cyber attacks that have taken place that have been sponsored by the people's liberation army of china, how comfortable should we be about that i hear your point about not seeing the actual proof of this being done, but you know the history of some of the issues with huawei with corporate intellectual property being stolen and ripped off and you know about the cyber attacks you put those two together and it does raise a lot of concern about what we might be setting ourselves up for if this is is happening. >> i'm not a wuss. i take it very, very seriously i was in shenzhen last year and before i went to the interview i looked up huawei, cyber, whatnot.

you know what's the first thing that comes up on google when you do that? one of the first things? it was how america hacked huawei's networks a decade ago in order to tap into pakistani intelligence the idea that they're the only ones doing this, you know, and we're not, i think we have to be -- have an adult conversation on that. becky, we're in a world where everything is dual use hammer is dual use the chat bot is dual use it could have military, civilian, intentions i assume everyone is hacking everything, you know what i mean >> yeah. >> if we start looking at every single chinese company and what it does, everything is dual use including your kids' next bathtub ducky. it probably has a chip in it, you know we have to -- that's why i say, there needs to be a kind of

global conversation between the e.u., america, china or wise we are heading for a silicon, digital berlin wall and the world will be less stable and less prosperous if that's where we go. >> very quickly. i don't want to let you go without getting your thoughts on what happened with the uae and israel that first flight taking place between the two countries this week you are somebody who has followed the middle east so closely. where do we stand? how important is this? >> becky, in short, this is a good thing the most successful arab country today, uae, has gotten together with the most nonsuccessful, israel they will be forming an access of what my friend calls could he existence versus the axis of resistance in the middle east, people

emulate success. i think in the long run it will have an important impact on the region. >> tom, thank you. always good to see you i think we have 50 mosh questions for you but we'll have to have you back again soon. >> any time, soon. still to come, tesla announcing plans to sell up to $5 billion in stock from time to time we'll talk to phil lebeau about that next. the stock is still up 3% having gained double digit percent yesterday. when it comes to parenting, you're a pro.

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month mabrey tesla making a shock move. selling 5 billion more in stock. and maybe call it one of the greatest quarters in the history of big business. zoom crushing estimates. shares up nearly 30% the cfo will join us in minutes as the third hour of "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc we are live -- we're live from all over the place i'm becky quick with wilfred frost and brian sullivan joe and andrew are off we were in the green across the

board. nasdaq has been a huge outperformer up by 9% for the month of august indicated up another 100 points in the future this morning in the meantime, in the treasury market, watching there, the ten year looks like this morning it is yielding around 0.72% as brian mentioned, shares of zoom video are soaring this morning. earnings of 92 cents a share more than doubled the 45 cents it was expecting revenue rose by 355% on an annualized basis to 663 milli$6n versus expectations. there was less customer churn than had been anticipated. the growth numbers stronger than the fiscal first quarter the cfo will be joining us in less than 30 minutes kelly steckelberg, we'll be

waiting with lots of questions for her. wilf >> tesla shares, the company entered an equity distribution phil lebeau joins us with more on that. phil, not enough to put it into negative territory. >> no, what tesla has essentially done is formed an agreement with a series, i haven't counted exactly, seven or eight, where from time to time at tesla's direction they will sell tesla shares to raise up to potentially over time 5 billi billion. the money will be used to sure up the balance sheet and provide liquidity for the company. how is tesla's liquidity

it ended with $5 billion in liquidity. remember, they have strong capital commitments that are coming they're still building the giga factory. they made a commitment to build it outside of austin, texas. constantly investing in reno, nevada we don't know what they'll be using this money for in the future but we do realize they'll have big capital commitments they have said from time to time we will ask you to take advantage of the market and sell our shares at our direction. >> phil, it's a sign they can raise 5 billion so easily. just over a percent or so of the market cap. >> yes. >> today the shares aren't even flinching. 18 months ago, 2 years ago this

would have been impossible. >> correct whenever tesla has raised capital it's been muted. there was a big reaction to a capital raise two or three years ago. the big question is, oh, my goodness, what are they doing? is this an indication they can never make money we have seen less and less of reaction from the market with each subsequent capital raise or an indication that they will be selling shares. >> yeah. the share price gains again not just to mention the 18% since august 11th announcement but yesterday up double digit percent off the first day of the stock burn up in the pre-market on day two. phil lebeau, thank you so much >> you bet. >> all right now let's get to the latest on the bid to buy tiktok assets

bytedance could reveal what company it is negotiating with exclusively as soon as today companies looking to sell tiktok's american business, joining us, alex sherman who broke that news and alex cantruex we seem to be getting down to the wire could we have news as early as today? >> yesterday, brian, i reported news that tiktok was dealing in one direction and that a deal could be done as quickly as today. this morning i don'thave much more to report on. i do think there are obvious complicating factors here with both buyer and sell er in terms of how to get a deal done with the u.s. government and the

chinese government china was having their own version of a power play here saying in essence, we need to give you a license in order to sell tiktok, bytedance, we need to give you a license to sell some of your key technology in this deal. that obviously adds a layer of complication here that i think bytedance and the buyers were not expecting. we know that a deal on thursday or friday was very close to being done because the former ceo of tiktok basically said it publicly, kevin mayer, when he resigned i reported back on thursday kevin mayer was going to resign. he front ran the deal. i'm not going along with the u.s. assets in the deal which is what's being sold but, you know what, i wasn't going to go along with it anyways even if the deal was going to be announced so i'm going to tell you a day or two or whatever ahead of an

announcement the china news does complicate matters. i think we're in a wait and see mode i don't have much more to offer you than i did yesterday >> well, i wonder, alex, if the china news doesn't complicate matters as much as incredibly simplify matters from their end. let's be clear, the term license is a fancy way of saying we're going to decide who you can sell your assets to if, indeed, you sell them to anybody who do you think china would like to see own tiktok's u.s. assets, if anybody because that's ultimately what it's going to come down to if they say no, it's not going to happen. >> there are in essence two parties. the complicating factor is if you have only one boss it's easier than two bosses now the u.s. has a say in who buys this thing and china has a say in who buys this thing that's what's happening now. i can tell you that.

various companies are trying to mitigate both parties, both countries so we can get a deal done as always, whenever you have a complicated transaction, m&a deal, the longer things progress, the more time goes by, then it's going to be a harder transaction and sometimes these deals simply don't get done. >> alex sherman, we have a tiktok user behind you, buddy. >> he's a big one. >> we're going to make that into a short video. i love it. >> he enjoys the dance videos. >> alex, if you were the chinese government and you had to pick your buyer, who would you choose >> i don't think this is about them picking a buyer this seems like a done deal going to microsoft and walmart, a, because walmart needs it more

and you saw them going through a coalition of companies like softbank, alphabet, picking microsoft. microsoft has been talking to tiktok for a long time about the acquisition. i don't think this is as much about china deciding, hey, we want this company or that company. more they're seeing they don't want to deliver president trump an easy victory right before his re-election. the u.s. government extended the deadline be they had for tiktok from 45 days to 90 days putting it before the election to after the election china said, let's make some trouble and make sure this isn't something trump can spend his re-election campaign claiming he successfully caused versus saying, okay, let's wait a little bit make them sweat it out a bit they are forcing the sale and i think that's the impetus. >> i don't know if shutting down tiktok would be possible or very

popular with millennial voters that aside, alex, what do you believe ultimately will happen with tiktok assets let's say it is bought by the walma walmart/microsoft consortium it will have to change some. how will tiktok look one year from today will it leave an opening for maybe a new tiktok >> yeah, i do think it leaves a big opening for a competitor the main question and chien that talked about this in terms of the licensing that needs to happen, whether the recommendation engine and the leadership goes over with the deal one thing to know about consumer social apps, they're very delicate pieces of merchandise they have to be constantly transforming you're talking about a shell i think in terms of the buyer of

this, they need to be extremely careful about what exactly they're buying if it doesn't come with the leadership or recommendation engine, a shell, they should send it back either way, this whole -- it's going to come as a part of what tiktok is today. and i think that opens up the door to facebook especially, its product reels came out of the gate it's okay but it's only going to get better in time i think that that's a major risk people are talking about tiktok being sold for 20 and $30 billion without spending a lot of time talking about the fact that facebook has successfully copied apps of this nature in the past that could happen again. i think this entire thing is quite bad for tiktok, the app and i think it does open the door for competitors and ultimately, yeah, i think it's going to struggle because of this one way or the other. >> yeah. possibly for like a triller or somebody else rumored to be in

talks with them. alex and your production assistant, thank you both and we're waiting for this tiktok saga to come to a close one day soon. >> brian, thanks. when we come back, it is back to school season, but this year looks a whole lot different. we're going to talk to sal khan. he is a pioneer in digital learning as we head to a break, check out airline stocks american airlines and delta removing change fees on most domestic flights yesterday this morning alaska airlines is doing the same all of this follows the original move by united airlines a day earlier. stay tuned, you are watching "squawk box" right here on cnbc. give you my world ♪

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welcome back to "squawk box," everybody. we've been watching the futures. right now the dow is indicated down 3 points. the nasdaq is indicated up 112 points and s&p up 8 points we'll see if the market is going to have the performance it had in august. the nasdaq gaining 9% for the month of august. remote learning is being reinvented by school districts across the country the khan academy which offers free educational videos is a pioneer of digital learning. today it's seeing unpress dented demand with 190 million users in 46 languages registering 8.7

billion minutes of learning last year joining us to talk about overcoming remote learning challenges is sal khan he is the founder and ceo. always good to see you this time is one of the more important times we're meeting with you there is so much more different this year as kids head back to school. >> agreed to be here very suboptimal circumstances. i'm something of a poster child. if i had to pick between in person, physical teaching versus online, i would pick in person the difficulty is we've been treating this in the school system of a series of rolling two-month crises but this could be through the end of the school year depending what happens with the vaccines and therapies, could be next school year i think a lot of school districts haven't had the chance to think through what

instruction looks like they've spent the last six months can they open, how can they open? it's a difficult situation for teachers, parents, and students. >> what are you seeing the number of minutes on your platform has tripled, is that right? >> yeah. we got the first sign something was going to happen in february when we saw our users in south korea, teachers were telling us how we were getting them through closures by march we were in the same boat in much of the world. we saw our usage 300% normal what we've been trying to do is keep up with all of the demand we're a philanthropically funded

nonprofit. we are keeping up with server cost, keep up with content, run webinars we've been trying to put out as much new course load as possible we could never have seen this happening. khan academy has very well suited to carry people over through distance learning. we have practices, exercises, videos especially in pre-k through college math we have math, sciences, adding a lot more science over the coming months we have a lot of high school science, s.a.t. prep i have a sci project called schoolhouse.world with live tutoring you can get work done on khan academy. if you want amazing volunteer tutors, we have tutors on

schoolhouse.world. >> sal, there has been so much talk about the divide between the haves and have notes and how that gets stressed in a situation like this. if you don't have a laptop, if you don't have high speed internet connection you are in a much more difficult position than other kids who do have those things what are you doing particularly with some of the inner cities where that's a real issue? i know you've done some work there. >> yeah. you know, our role -- you're absolutely right for us to do the work we've done, it's predicated on -- we can work on a cell phone you need a reasonable device, reasonable internet connection we've been working with groups to close the divide. this islike not having heating or clean drinking water. school systems have done a

heroic job giving out devices and access even then seeing 5 or 10% of students not being engaged only one device at home, there we're seeing districts, places like maryland have done good programs where they're allowing those kids to go to school while everyone is doing distance learning there's an adult there who can provide child care, provide meals and a safe environment to do the distance learning in. >> sal, just back to the point that you're a nonprofit. you could have when you created this gone private or gone and taken it public, gone private, done something where you were making money with this you chose not to how are you getting through with those donations at this point? in the past you've had big

corporate sponsors, google, microsoft, bill and melinda gates. how is it going now? >> i told our team we have to do what's right and hopefully the universe will conspire we were running at a slight deficit pre-covid. you can imagine our server costs are three times what they were before now it's many millions of dollars, likely to cross $10 million just in server costs we have folks developing content and software we're the budget of a large high school thanks for asking that the social investment is off the charts we're always eager to partner with anyone who is looking to serve tens of millions of families through this tough crisis that if we don't work in a very cohesive way could easily turn to education catastrophe. >> i want to thank you for the

work you've done i've followed you for years. watching what you've put together and what you're working so hard to do. i want to applaud you. thank you for joining us, sal. >> thank you thanks for having me. still to come, more trouble from mcdonald's as it faces a new lawsuit. details on that and we're a few minutes away the cfo of zoom will join us to talk about the company's blockbuster quarter. the stock soaring once again up 20% or so. 34% now, sorry, in the pre-market after hundreds and hundreds opeen of f rctsgain we're back in a couple of minutes.

welcome back to "squawk box. futures have slipped through the morning. the dow going from green to red. there were gains for the s&p and nasdaq still up over 100 points or so which is about 3/4 of 1%

continuing its outperformance yesterday as well. want to mention the dollar which started the week positive yesterday morning was negative by the close yesterday negative again today down .3 of a percent gold is up about 1%. oil up about a percent as well brian? >> all right mcdonald's involved in high profile legal battles. today it is facing another black former franchisees are suing mcdonald's demanding economic justice kate rogers joining us with more. >> reporter: hi, brian good morning a group of 52 black former mcdonald's franchisees representing more than 2,000 stores blaming mcdonald's sent them on a financial suicide mission. the suit alleges that mcdonald's knowingly discriminated against black franchisees by steering

plaintiffs to locations with low volume sales and higher operating costs, including security costs excluding them from buying in the open market and they supported white franchisees with impact funding. the suit alleges in 1998 there were 377 black franchisees in mcdonald's that's been cut in half to 186 during a time in which store count has more than doubled to 36,000 and that annual sales for the plaintiffs were about $2 million, which is about $700,000 below the mcdonald's national average of $2.7 million between 2011 and 2016. mcdonald's, as you mentioned, also in the midst of ousted ceo steve easterbrook. they said mcdonald's does not place franchisees into locations

but may suggest places cash flow to black franchisees has been improving and across all demographic groups, the overall demographic is broadly unchanged, brian. back over to you >> yeah. certainly is a big story what kind of damages, kate, might they be seeking as a group? and how can the plaintiffs proof this loss? >> so i spoke to the attorney last night, jim ferrar he says this is all about the revenues you can see mcdonald's steered the group of plaintiffs to lower revenue generating restaurants there are 52 plaintiffs representing more than 200 stores the attorney says that each store represents between 4 and $5 million in damages alone. and he also said we're going to be hearing more from the plaintiffs in weeks to come, brian. >> kate, don't want to let you go without asking or at least making a comment happy birthday today

>> thank you, becky. appreciate it. >> good to see you >> you, too. >> first, i can't believe you -- i didn't know -- nobody told me it was her birthday. now i look like a chump. bigger chump kate rogers, i'm going to send you a mcflurry. >> thank you >> birthday bombed on that one kate rogers. let me be the first to wish you a happy birthday next year >> thank you appreciate it, guys. >> all right thanks, kate have a great day. coming up, wow, happy birthday to any zoom shareholder out there today because zoom stock is up 37% right now. that's not a misquote. 120 bucks. a blowout quarter on pretty much every level. what are you going to do for us this quarter company cfo will join us with a first on cnbc interview. u.s. equity, let's call them

flat technology looks like it will continue to run. dow futures down and zoom heis t big story. back right after this. a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management.

welcome back, everybody. a blowout quarter for zoom the company beating expectations, that's putting it mildly they pounded it on the top and bottom revenue more than quadrupling year over year the company signaling that further gains are ahead. it raised guidance for the third quarter and full fiscal year big gains. that stock is up by 40% this morning for what is now $128 billion company. by the way, it was $100 billion company last night massive gains just based on this news alone joining us right now first on cnbc, zoom cfo kelly steckelberg. it is great to have you here today. thank you for joining us. >> good morning. thank you. >> the numbers on just about every metric, incredibly impressive much better than the street had estimated. it was up 35% and that comes

after revenue growth of 169% the quarter before putting up big numbers after big numbers blows the street away which is why we're seeing that action this morning. how much of this was a surprise to you in terms of seeing this revenue number when did you know it was happening? what do you see happening in the future >> well, weindicated coming into the quarter that we expected strong growth to ti continue into q2 we saw that across all geographies. international grew 600%. strong performance in industries like education and nonprofits and also zoom phone. we're very excited we had our largest zoom phone deal to date signed in q2. strong performance across all aspects of our business. >> i look at some of the other numbers. customer churn was less than expected

the adjusted gross margin numbers include 73.2% from 69.4%. was there any number anywhere that disappointed you? >> we were really pleased with our performance. as you indicated, i any what we saw from the retention perspective is that working from home is not a fad. people are adjusting to the zoom way of life. they're integrating zoom into all aspects. we saw strong retention not only through our enterprise but our customers with fewer than ten employees as well. then as we've continued to focus on leveraging both the public cloud as well as our own co-located data center, that's why you saw that improvement in the gross margins and we're going to continue to optimize across all those metrics as we focus on the rest of the year as well >> this is a problem that any business would love to have, massive amounts of demand coming in i've got to imagine it's difficult to keep up with it and stay ahead of what's there

what is the biggest problem you face at this point >> so, as you said, we worked really tirelessly, our whole entire zoom team is doing everything we can to support not only our existing customers but to ensure that every customer who has a need for zoom has access to t. we focused quickly on scaling up our employee base. we hired over 500 employees in q2 that's the largest growth we've had to date. we're working from home like many of our customers are and really supporting our employees to ensure we can meet the needs of the customer and leveraging great partners like aws and oracle to ensure we have the capacity to support our customers along the way. >> kelly, it's brian listen, i have to imagine you feel obligated to work from home given that you work for zoom that aside i'm going to say something i've never said in coverage thousands of earnings your free cash flow rose by

2000% year over year what are you going to do with all that operating cash flow >> well, we continue to look for opportunities to invest to grow the top line we indicated that, you know, we had record margins -- operating margins in the quarter at 41.7%. we've indicated we expect those to come down for the rest of the year as we're focused on investing in more salespeople to meet the demand and more engineers to innovate and build our platform we will always look if there are opportunities for m&a technology and/or teams that can augment our platform or team to continue to drive the top line growth as well. >> kelly, do you see the future of zoom talking to the likes of microsoft team, cisco's webex the way they'll be integrated like our cell phones all accept text messages and calls from each other

>> we really believe that video is the future of communication with that, we want our customers to be able to use the zoom platform with other best of brand platforms. we have integration with many of the products out there including the names you mentioned. that's great we want our customers to use the products they know and love and have them work together seamlessly. >> in terms of the demand that you've seen for the product, what would be a bigger threat to that demand falling snof would it be airlines seeing their business take off again because business travel is back or, frankly, innovation from microsoft teams or a rival of yours? >> you know, what we've heard from our customers is while everyone is longing for the day that we get to go back to a more normal life before covid, that in many ways we are loving the flexibility this has brought to them they get to wake up with their

children, have a whole day of work and have dinner with their family at the end of the day i believe that zoom is now integrated into all aspects of our lives and we look forward to the day the pandemic is over and we can resume normal activities. i don't think that is a threat to zoom. we have grown accustomed to it we have seen so many additional use cases. you think about formula one, having great premium experiences leveraging it. bringing yo and their clients into the paddock there's a company in singapore using it to do virtual tours they did half of their new products and sale that came to fruition in q2 came to fruition this way i think this way of communicating and working is here to stay >> kelly, just going back to the zoom outage that took place a

week ago yesterday i noticed it there were a lot of people who had issues trying to get back on maybe it was because there were so many kids going back to school maybe so many businesses were using it at the same time. how big of a problem is it for potential outages in the future? some schools haven't gone back >> yeah. we test and take the resiliency of our platform very, very serious will yozer serious seriously. we want to support all of the schools that are going back, already have gone back to ensure that we're doing everything we can, that the platform is available and ready for all of you whenever you need it. >> how many of your employees work at home is it a mission critical where people have to be in the office or can many do their work from home >> we really have the majority of our employees working from home and have them entering the office, as you say, only for a real mission critical episodes,

if you will. we don't have anyone permanently situated in the office we've found it's working well. we miss the camaraderie. i think seeing our friends and our colleagues in the office and that more informal communication is what we love and miss about it we have found this to be very effective and our employees have been highly productive over the last two quarters. so we've proven that this works very well for us >> i know that you've been looking to hire more engineers making sure you have a lot of technical people coming in are you hiring people around headquarters are you looking for new people all over the country if you figure working from home is kind of the new way of doing things >> so we've announced that we are augmenting our r&d team by adding resources both in the u.s., we highlighted two centers in arizona and pittsburgh, as well as an expansion in india. and in the meantime we are also

just looking for great talent wherever they are. and as we have all continued and will continue to work remotely, we have highlighted we won't reopen our u.s. offices until at the earliest next summer we want to take advantage of hiring people wherever they are at this time. >> we had a conversation about how you all have won in terms of winning the verb of what you do when you go online and you have communications with people, that you are zooming. that's what we all do. that's what we're talking about mp clearly there are other players out there, everybody from microsoft teams to webex to google meet. we use all of those platforms, too. is this a winner take all area >> no. there is a huge market opportunity out there, and we do believe that there is an opportunity for many of us to be sec sesful

we've seen it used in pop culture on tv and that has been beneficial for the business. i think that's due also to the ease of use and rely bills of the platform that has made it something that we've all incorporated into our lives. >> kelly, want to thank you for your time today. appreciate you being with us that stock is up 40%, which is kind of amazing but you did have amazing numbers yesterday. thank you for your time this morning. >> thank you >> you know, becky, just to go back to zoom for a second. i think about that don't roll up to gm headquarters driving a ford don't go into mcdonald's eating a whopper. if you work at zoom you better not say let's go back to the office you want to work from home forever? >> that's right. flush times for them, that is sure >> yeah. i'm looking forward to getting back to the office at some point. apple shares jumping again

this morning with those pre-market gains, get this, apple's market cap of $2.26 trillion give or take is now larger than the market cap of the entire russell 2000 that stat, according to the spoke investment group, apple bigger than 2,000 small and mid-sized publicly traded mpies. we'll talk about that with market analyst tim long next stick around

welcome back to "squawk box. all back in positive territory nasdaq up shy of a percent 8% s&p is up .2 and dow fractionally positive. tesla the stocks turned negative after they said they could sell up to $5 billion worth of shares it was up about 5% or so earlier in the premarket

it was up 12% in actual trade of course yesterday and the $5 billion announcement of the equity some saying could have been more if it was related to joining the s&p 500 but that doesn't preclude them doing a bigger one in and around that if it happens 5 billion around about a percent, just over a percent of the current market cap brian? >> thanks, wilf. meantime, shares of apple are on the rise after its own stock split. the stock now up about 45% ove the past year. one analyst is betting this rally may pause. in a recent note barclays analyst tim long said he doubts a super cycle in iphone sales will happen amid the transition to 5g. tim joins us what do you think of that. apple's market cap is larger than the entire russell 2000 combined >> yeah, it's been a really

unprecedented move in the stock. most valuation metrics it's out of band width. it's definitely been a different dynamic as far as the way the stock has traded relative to the fundamentals >> all right so the uber rules suggest this a lot of people may have older phones or want newer phones. maybe as many as 1/3 of global iphone users will look to upgrade over the next 6 to 12 months giving apple a huge top line growth. you think that is unlikely to happen at the scale many of the biggest bulls believe. why? >> we've run some analysis here where we've looked at what's gone on in some of the other markets that have 5g so far, korea and china so far have had 5g for a year and it has not sparked an upgrade cycle 5g numbers have been good but it's replaced the 4g numbers

it hasn't driven an entire market we went back and looked at 4g to see what happened with the overall hand set market and similarly there was no overall move upward in units we do think what's more important is looking at the specific product cycles of apple and the install base we are pretty bullish on the install base in that ten years ago the average iphone user would replace their phone every two years. now it's actually every 3.7 years. so the age of the install base is much higher so that does push for an upgrade cycle, however, given the big base here, the macro uncertainty, we really haven't seen a successful iphone, in our view, since the iphone 6 or 6 plus the last five versions the best unit growth we've ever seen on an annual basis is 2%.

we're still 18% below the peak units from five years ago here so we haven't really seen whether it was the iphone 10 or face i.d. or any of the other features added helping drive the overall replacement rate of this company. >> yeah. is there anything that you see coming down the pike, whether it's i0s 14, the way the apps change, widgets, any must-have in the new round of phones or the i0s system that will basically force people to upgrade? >> no, we don't think so we think upgrades are generally -- they tend to be -- i've covered the handset market tends to be driven on just the basics your battery is not working. your screen cracks your buttons break, things like that tend to drive it more. one of the things about 5g which we've heard from some of the

other markets is just not compelling use cases or business models yet for 5g to be a must-have application. we'll see if apple's entry into this market, maybe they come out with some better applications or use cases for 1rids aindividual businesses need to upgrade for now we haven't seen that in the other markets. we think it's a little less likely that it's going to be a game changer for apple this time around >> all right tim long of barclays with a bit of a different view than some of the ultra bulls out there on apple. been a heck of a run appreciate you joining us on squawk >> thanks. >> thank you you coming up, individual investors are driving a lot of the market action right now. we're going to find out what they are buying anwh td athey are selling. that's when we come right back

a number of stocks on the move ahead of the opening bell this morning dom chu is here with a round up of them. good morning. >> good morning, becky great to see you let's get a check on shares of tesla which are up in the premarket, off their premarket highs but still up half a percent, roughly 5 million shares of volume the electric car maker continues that staggering run, despite they're going to sell $5 billion worth of stock in the future, this will be a stock sale program where tesla will tell banks when to sell stocks at various times at current market purchase that gives them more flexibility to control the timing of their capital raises tesla stock nearly 500% gain so far this year and 1,000% in the last 12 months. next up, shares of zoom communications up around 39%,

roughly 2 million shares premarket volume the company reported blowout quarterly numbers after yesterday's closing bell boosted its full year forecast helped in large part by, yes, this 4700% jump in monthly active users over the same time last year, of course, the covid pandemic helped out there we will end on shares of walmart up 2%, 250,000 shares premarket volume they will launch their membership-based shopping program on september 15th. walmart plus will compete with amazon's prime membership service. walmart's will cost 98 bucks a year and give access to free shipping provided you spend 35 bucks every time and discounts on fuel where available as well. big moves to the green and, again, very large cap companies at this point. back over to you. >> dom, thanks so much for that. now, small investors are behind some of the big moves we've seen in the stock market according to data gathered by the "wall street journal." individual investors accounted for 20% of trading volume during

the first six months of 2020, nearly double the level in 2010. here to talk more about that randy frederick at charles schwab randy, great to see you, thanks for joining us >> hi. >> before we get into that and some other more nuanced questions what do you make of the way we've seen the vix spike over the last couple trading days alongside these record highs? >> well, the vix has been trending lower, as you know, since it spiked to record highs back in march and last week towards the end of the week especially we saw the market going higher, we saw the vix going higher it's not one of those things that happens very often and something i keep a close eye on. when you do see that oftentimes it's pointing to a potential small pull back in the s&p 500 additionally, on friday we saw futures pick up, the futures that expire on wednesday which is a couple days out, were like 3 points higher than the spot vix. i sent out a tweet to warn people about that. sure enough at the open yesterday we got a 2.5% bump and i think it was up 3.5 by the end

of the day fairly small pull back, but typical. >> what would be a small pull back for the markets, gauge that in percentage terms. >> i think given where we are at right now and remarkably and there are a lot of things that are different with regard to economic data but the s&p 500 has been tracking a very, very close roadmap from 2009. at this point we're probably in line and really, i think, right about now for somewhere between maybe a 2% to 4% pull back nothing to be rattled by markets don't go straight up for seven consecutive sessions prior to yesterday the s&p 500 had been traveling higher. you get pull backs every now and then, this will probably be a buying opportunity. >> what do you make of the data, this is something we've been talking about a lot of course in general in 2020 of greater retail investor involvement, does that worry you at all or no >> well, it can be worrisome a little bit because the last time we saw something similar to this, i've been around a long time was back before the internet bubbles before things

blew up. there are differences now, many stocks driving the market higher are mega cap stocks that are very profitable, back then many of the dot-com stocks were not making any money, had few revenues the other thing that's driven it is the fact that commission prices have come way down, that began late last year, that has attracted a lot of people to the market and it's a lot simpler to trade now, more information available, electronic trading is easy to do, very cheap to do i always say that if you -- if people get into investing for the first time regardless of what gets them into it is a good thing because everyone needs to be an investor and as long as they're thinking long term that's a good thing. the negative side is if there's some speculation going on and we know there will be because there always is, that can be a problem and we have seen activity where some of the new traders and new investors have been buying stocks that are bankrupt or almost bankrupt and in many cases they're getting hurt, but if they're buying quality names and focusing on the long term it could be a good thing in the

long term because they should be. >> do you like financials at the moment >> we have an outperform on financials it's the only sector we have an outperform on right now. it has been the second worst performer year to date and obviously a big component of that is the low interest rates but when the bull market continues as i think it will and valuations get high as they are, what happens is people start looking for places where stocks are a little bit more reasonably priced and financials are one of those sectors where that's the case the only sector doing worse is energy and as you know there are lots of problems with energy energy, in fact, is doing much, much worse, but financials because of where they're positioned, because of how stable and strong the balance sheets are in many of these financial companies, they will be looked at as potentially attractive opportunities because they are priced a little more fairly than some of these other sectors, like technology and consumer discretion and a few others that valuations have gone way up. >> randy, some of the stocks that did the best in the month

of august were some of those stocks that people have been waiting to see, these are plays, if there is a reopening of the economy. i think royal caribbean and mgm resorts were both up by better than 40%, you saw the airlines up incredibly sharply. does that make you feel good just going back to what you said a minute ago, the idea that you want people to be in stocks that you can feel good about, that there is a future for. it's hard to say that these stocks are down and out for forever, but how do you feel knowing that some of those stocks perform that sharply in august >> that's a challenge and this is a unique situation as you know because the virus has caused a very quick fair market, a very quick rebound the s&p 500 is up over 50% and the nasdaq over 60% from the march 23rd bottom. i do think that there will eventually be an opportunity for transportation stocks or leisure stocks or hospitality stocks at some point, but i think investors have to be patient because we just don't know exactly when they will rebound and we don't know how much if we get a virus that -- i'm sorry, if we get a vaccine that

completely eradicates the virus, i think these stocks will come back immediately and these companies will do extremely well >> yeah. >> that's probably a pipe dream. it's not likely it's going to happen we will probably get a vaccine, it will probably be somewhat effective, there will be some people who will be afraid to take it and we don't know when it will be available my personal opinion is sometime around the beginning of the year but that could obviously be off by a few months. >> yeah. >> we just don't know. as long as you've got -- >> randy -- >> -- you just have to expect that that may not happen immediately. >> let me jump in quickly on this any way to quantify the risk of a severely contested election? >> well, the election is important but there's three components to that, there's not just the presidential component there's obviously the house and the senate what the markets will probably dislike the most is if there is a clean sweep from either party on all three that's the part that the market won't likely like, but one thing that is important and this is something you can also see if you look in vix futures is that there's not only a very harp spike in the october contract, which expires two weeks before the election, but the decrease

in volatility going out after that for the next several months is very, very gradual and i believe that reflects the fact that for probably the first time in my voting lifetime and many of yours as well we will not know who won this election on election night could very well take the month and that could be challenged and of course -- >> got to jump in. my apologies, randy. thanks so much for joining us. >> you're very welcome ♪ good tuesday morning, welcome to "squawk on the street" i'm carl quintanilla with david faber and kayla tauchy, cramer has the morning off. welcome to september, historically the worst month for the s&p but 2020 has already given us plenty of surprises futures are mixed as we await pmi and smi data, oils hanging on to 43 roadmap begins with september and stocks can the manger averages add to their