perhaps burning a hole in spackman's pocket. "worldwide exchange" starts now. good morning, welcome to "squawk box" on cnbc i'm becky quick. joe and andrew are out today a lot to talk about. starting with the market sent the dow back above 29,000 for the first time since february 20 with a gain of 450 points, 1.6% for once, it was the dow and s&p outperforming the nasdaq dow up, nasdaq up 1.5% you did see a change in rotation

there. big stocks in apple and tesla giving back gains. ibm gained more than 3% yesterday. also coca-cola up more than 4% being looing at u.s. equity few you are its. something to pay attention to. dow futures down around 40 points looking at first of september, and all of july and august with spectacular gains. looking at the treasury yields looks like right now 0.654%. those movements with he saw yesterday were interesting in terms of the rotation. >> as a general matter, those had to pull back they will have to have these pull backs the fact that the market can do

okay on a given day is a positive doesn't change the fact that we've traveled at a steep angel here there is a jumpiness a late summer week heavy volumes. you are seeing all sorts crop up there is a different energy to the market 20 what has passed in 2017, 2013 not sure the implications but there is something different >> it is 6:01 in the morning here yesterday was called a gama squeeze. we don't want to get too mechanical in the last couple of days, there has been huge options. billions being bought in the biggest gains. what happened yesterday, is market players bought a huge

amount of out of the money calls. that forces those to buy the equity that was on the options side to force huge amounts in the equities it is really an options trade that may have gone bad for huge market participants. i can't express how big the options has been the last couple of sessions. really unprecedented, which also forced equities to move. >> hey, brain -- >> i wouldn't call it a one-day event. it has been going on for a while. there has been speculation if you look at apple as a single stock, just absolutely massive,

could be stant buying pressure in call options which does have that short-term effect you do have this feedback loop that lasts until it doesn't. the implication is on the stat is call basis is that people are paying multiples for the upside. something that is in the latter part of the rally or when things get heated >> brian, the traders you spoke with, did they say who is doing the buying is it the retail investor? >> no. this is big money, becky a product called delta one, kind of a new hedge fund basket product. these are huge buyers. we don't know.

they've been willing to pay a lot of money toward the upside and protect the down side. if that goes up, you don't care it was some kind of options-related squeeze, the portfolio went up. no, it doesn't matter. to mike's point. i'm not saying this is an end of a rally. i would say there is a lot of weird mechanical stuff in the market if you look at it and go, huh, just watch this space. stocks have been going up. the index has been going up, that is a little shift from the norm and creating the other

need the symptom of the market as opposed to the cause of it >> if you look at -- go ahead, becky. >> i was going to say, 6:01. you don't want to get too technical. here we are five minutes later >> i've ruined the show. i'm sorry. >> no. i think it is really good to dig into these things but hard to follow it is important point to make because it is thetime of thing can you see that sets off a warning signal to those people watching for a long time >> if you have the fundamental investors who say i'll sell to anybody who wants to buy that doesn't take the market

higher certainly, a lot of thl option buying is the tech stock the days blend in. i think it was yesterday or tuesday where we see the nasdaq futures are up almost as much as a nominal basis. that is usual. look at them now look at the nasdaq level open 120. that has been in big tech names. apple, tech names, whatever. if this continues or has to be unwound now in certain ways. we could see monitor moves in tech look at dow futures. nasdaq down 118. so much has been occurring in the same names, which are the

clydesdales pulling the cart >> no doubt about it that nasdaq is super concentrated index right now certainly driven by the top handful. let's get to what we are looking forward to the rest of the day on the squawk planner. we are counting down to the monthly jobs report. today, we have weekly jobless claims estimates expect new clamz of 950,000. today's number will not be comparable to last week's 1 million claims because they've adjusted how they see the data >> cnbc has confirmed reports that bill 5:0man has approached them with a blank check ipo.

they prefer a traditional ipo. 5:0man's spak the largest investment vehicle he sent a letter saying he is holding discussions with a number of potential companies. >> i want to know who came up with the phrase spackman pretty good. >> i think it was making the rounds no doubt people seized on that quick. >> i appreciate that guys welcome to officially being squawkers. we managed to go 6:30 without getting into the first story i see the producers have moved things down. >> well my time here is done >> thank you i appreciate it. pros don't but i do.

when we come back, two retail stocks getting a nice pop. stocks to watch are next check out shares of tesla. that co-stock closes off after showing that the improved position >> still a long-term believer and the cut was forced by portfolio restrictions ♪ ♪ [ engines revving ] ♪ ♪ it's amazing to see them in the wild like th-- shhh. for those who were born to ride, there's progressive.

♪ if i could, baby i'd ♪ how can i, when you won't take it from me ♪ ♪ you can go your own way ♪ ♪ go your own way your wireless. your rules. only with xfinity mobile.

shares of five below are rising the company declined to give a current quarter forecast due to the paean. it expects to deliver 110, to 120 net new stores in 2020 pvh shares on the rise reporting second quarter earnings of 13 cents per share analysts wereexpecting a loss of 2.43. online sales through its own channels surged 87%. that stock up 2.5%.

>> we welcome the president of manpower group north america thank you for being with us today. >> thanks for having me. >> i know a lot of people have been spent months reevaluating what they are doing for work and with their family. a lot of people think they are going to reassess their work lives going forward, right >> yes we tend to analyze the labor market in three vectors. first, what is happening real time forward looking and how are employers looking at rehiring. and finally, any long-term shifts with he see impacting the world of work. in terms of hiring, those have been in the past and the labor market is changed by the day we are seeing a two-speed

recovery a k-shaped recovery with a demand in some roles and decline of others. software developers, app developers, it space, we are seeing increase in demand for jobs that move things. logistics and warehouse workers. and people that have truly gotten us through this paerndndc in the health care sector. i was happy to see the stocks you highlighted. clothing is seeing a decline a decline in maintenance and companies trying to decide what to do with their real estate and their hours. we have asked about 8,000 american employers, what are your hiring intention for the months ahead with he were pleased to see q 3

was marked improvement over q 2. nowhere near how we entered the year in 2020 truly across sectors finally, in the long term, it is a dynamic situation, when you and i spoke, i shared that 30% of american employiers were saying it would take 12 months or longer. only 30% would get back to prehiring levels over 60% are saying it would take a year or more to get back to prepandemic hiring. dynamic labor forces what we are seeing today >> that doesn't sound great. americans will be in for tougher times waiting for these jobs to come back. 91% said keeping their job is their top priority right now

>> i think it is a bit of a roller coaster recovery. we took two steps forward and two steps back we heard as companies reopen you are correct. their number one hope after coming outs of the crisis was to keep their job >> we asked them what concerned them most. physical concerns, losing the flexibility they gained in this crisis more and more people want to work remote a couple of days a week or full time. back to employee's side. 30% said they intend to offer remote working or some flexible working and 10% of the american employers said they offer 110% option on remote working we are seeing separation on the work force and the work place on the employer and employee sign

>> employees, i take it that is something they want well beyond with the pandemic concerns >> absolutely. it is simple they have a taste of what it is like to live one life. this blend between home and work they also told us they want to work their way i want to decide where the work place is it may be a coffee shop today or work place tomorrow. they wanted a chance to improve their skills the whole idea we've been talking about reskilling has come to a head with this k-shaped recovery. they want the opportunity to learn wherever they are. we've heard from employers that they are leaning in to rescaling. it is a new work place and work force and the employee is

interested in balancing their life gen z is interested in coming back to the work place because it is where they make their friendships. boomers and genxers, they are the ones that have kids at home. >> the idea that it is a worker's market is crazy with 10% plus unemployment. what you found with different sectors like it workers, they are more concerned about keeping their jobs and working from where they want. it seems like a separation the haves and have notes >> a huge separation from those

who have the skills and can work and call the shots and those that don't >> thank you for your time we look forward to talking to you again with the next survey coming up, is the sheriff coming for robinhood the sec opening a i probe on the platform and a big market day on the dow for the first time since february not looking that way today apple down 2%. we are back after this an army family who is always at the ready. so when they got a little surprise... two!? ...they didn't panic. they got a bigger car for their soon-to-be-bigger family. after shopping around for insurance, they called usaa - who helped find the right coverage for them and even some much-needed savings. that was the easy part.

usaa insurance is made the way liz and mike need it- easy.

welcome back, everybody. free trading platform robinhood is facing simple fraud investigation. they are looking to see if they initially failed to isclose th practice saying the practice wasn't disclose, which is

legal accounted fosaying the int an advanced stage and could see a fine of $2 million if it agrees to settle we'll talk more about the probe in the 7:30 half hour with the sec chairman halrvey pitt. walmart released the annual top rated by kids toy list featuring 36 toys selected and tested by kids for kids. this year's list reflects a more interactive and energy burning educational toys amid the pandemic kids can test them out on the retailers wonder lab site.

there you go >> coming up, we'll talk market strategy futures point to a lower open now. later senator kevin cramer of north dakota will join us to talk the latest stimulus talks as we head to break, take a look at yesterday's s&p 500 winners and losers 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. that's the clarity you get with fidelity wealth management.

good morning u.s. equity futures this hour. modest declines in the nasdaq. a little deeper. tesla and apple are down on the day in this hour reoccupied in the rally. is the market concentrated or sustainable. take a look at the chart that takes a look at a few different slices xlc, communication services dominated by faang and other media. huge spreads there between them and this everything in the s&p outside of tech struggling below its own highs

that kind of peaked out in june. that's been the story line you see industrials right there looking like a solid near up trend. most things are going up glamorous stocks are going up faster the advantage has some what narrowed over the last through months of recovery whatever it might be that is the setup now. the question is can the overall market continue to restore the reliance offer things that have been reminiscent our next guest says we have not

yet reached tech bubble value a ation in the market and the entire move from 99 was its earnings neela, good morning. great to talk to you this morning. >> great to be here. >> compare and contrast what you are seeing in today's nasdaq and today's s&p, which are dominated by the same completely indominatable companies. >> it is earnings. earnings are a fundamental driver it is really about earnings. if you look at earnings per share contribution of the s&p 500 and those very stocks you mentioned, information technology and consumer services, communication services, what you'll see is that what they contribute is

reflective in their contribution in terms of market cap that is for this year. you look b to next year, the expectation for earnings, you get a little weaker relationship but there is only a 3% gap between these companies are providing and their overall market cap you rewind to the dot com boom, the gap was 20%. there could be a little frothiness heading in to 2021, it is not nearly what it was during the over valuation in that era >> does it concern you or give you a little pause for the bullish markets is that it is not yet comparable to the craziest moment in our lifetimes in terms of public valuations. we can grant the fair distance

of where things got back then or other things to site to say this is why the market may also remain well supported. >> history tells us what can happen, not what might happen. the orientation is very different. it didn't start in a cyclical way or with a slow down in manufacturing. it all started with a pandemic these health care stocks are sectors that produce earnings in the second quarter because of the orientation and the stay-at-home economy we can't miss the amount of stimulus we've seen from the fed, the fed doubling down on that last week and today from the fiscal side i think of this as the rally with those first run the stocks rally and monetary

stimulus for the ral yichlt we are waiting for the handoff. we are concerned the economy might be losing momentum and may not carry that baton that will be the continued rise in stocks. >> given we are in sustain pence. that is now up more than 10% year to date dividends over 11% if you are an investor you could be in a good position or maybe just sitting tight >> first thing i would tell investors is not to flinch we are in vulnerable times now we are going to see if the economy can maintain on its own

and sustain the recovery the headlines so far has been will stocks hit that new record high they've done it and done it again. we'll see if the market can broaden and sustain that rally in industrials and financials and cyclical stocks. and keeping expectations looking at the last three years, stocks have returned about 15 percent this year. we don't think that level will be contained >> stay involved don't get your expectation too high not a bad way to approach things thank you so much. when we come back, investors taking a gamble of sports

betting with the biggest names up we'll talk the biggest names in the 2350e8d straight ahead take a look at s&p and market gainers this morning you can watch or listen to us live any time on the cnbc app. >> announcer: today's big number, $3.3 trillion. that's how much the congressional budget office projects the deficit to be in 2020 triple the short fall of last year expecting the government's debt to out pace the size of the economy this year. a level not reached since after world war ii

welcome back

if you are hoping for a follow through in the market, you'll probably not get it. you look at the nasdaq we are seeing out sized move in technology you talked about the concentration of big named stocks and talking the market structure for more than a year also big news this morning and maybe more big news in the fight against the virus. sanofi and glacxo could apply fr early approval by early next year also shares of novavax on the rise reporting a study that is a phase one trial. it is early but they've found it is safe and elicits an immune

response they released response early last week. novavax up 4.5%. a little good news there in the fight against covid. we'll take any good news we can get. shares of fulgent genetics rises after a partnership to provide covid tests to 16,000 students in hundreds of locations it will use the fda approved at-home test will be used on site, not at home, which provides results up to 24 to 48 hours after it receives the sample they plan to test 10 to 20% of students and teachers once a month. each test costs between $70 to $90. i have to say this raises more questions. costing $70 to $90 when we know

roche and others have these $5 tests. the idea of new york city paige $70 to $90 per test and do it over a period of time. i realize they want to get schools open immediately that is something that raises a lot of questions you see contracts being looked at for ventilators and other things we were looking for in a hurry in march and april i would love to have testing in schools. >> it would be great to be 15 minutes. if it's going to be 48 hours, maybe it can be over a weekend unless and until we get vaccines to go around this, i'd be willing to pay for it but at $70 a pop is a heavy lift. >> it seems like a new york city story. everything is more expensive and more difficult in that town.

yesterday, i interviewed a spokesperson for the teachers association. they need to get schools open. there will be huge consequences. educational gaps kids that don't learn to read. kids dropping out of high school early. it is not a zero sum game. we have to get the schools open. anything they can do to test it so people can go to work i got a lot of notes yesterday i think 40 pirs of families have a school-aged child at home. think about that virtual school is not open, you got to be there to supervise the kid. it is almost the same as no school 40%. what do they do? we've got to keep people safe but we are looking at the impact on economy mental health, dropping out of

school, bad out comes. it is a hard conversation. >> the issue i took away yesterday, you can say you are delaying the opener schools by 10 days. whathappens on september 21. the check list is difficult. i have kids that went back to school today and yesterday i want the environment to be safe i'm very worried about them not getting the in-school learning if things don't go well. the idea this is just a plan they are working with. >> you are right got a lot of teacher's and people out there there was the whole summer not like this was a new thing. this is month 6. i have a lot of friends who have

left new york or new jersey for warmer climates. i grew up in southern california my elementary schools were pretty much all outside. the only thing was in-door hallways you could have classes outside there. in new york, in crowded new york city schools some of them are three and four stories tall, tight hallways >> i have two kids in the new york city school system. we got delayed a lot is relying on the sense that community spread in new york city is actually really low right now. they are trying to execute this check list and hope they get lucky. this testing regime looks a little more like a survey and a way to monitor as opposed to some rigorous type of, if you have a temperature, you are not welcome in the building.

very experimental. a small percentage of kids in my kids' school will be in person very much. schools always start late in new york city. the size a and scale does impact >> if you can get these tests ramped up and in work places and schools everywhere, that would be a game changer. there would be a lot less anxiety. the idea of testing ramping up is a huge key in the short to medium term. >> you are living it, brother. >> they are a little older and a little more self-sufficient. >> that's a huge difference too.

i've got a five-year-old turning six soon >> i have a three-year-old >> can he do zoom? we'll figure it out. there is multilevels to the debate and discussion. it is impossible there are no good numbers. >> there may be good outcomes but no good answers. >> exactly right all right. coming up, another big win for michael jordan draft king stocks sharing news that m.j. has joined the board as an advisor. we'll get into the gaming stocks and if they belong in your portfolio. >> announcer: don't forget to subscribe to our podcast look for us on apple podcast and

subscribe today. when the world gets complicated, 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.

and tailored recommendations. pampers the #1 pediatrician recommended brand, helps keep baby skin dry & healthy so every touch is as comforting as the first pampers. the #1 pediatrician recommended brand

welcome back to "squawk box. shares of crowdstrike are

falling despite report it beat estimates. earnings also beat estimates and did reach outlook for 2021 fiscal year. stocks run a very sharp run despite they are up some of tha after these results. a group of investors has made a takeover offer to railroad operator kansas city southern the group includes blackstone and global interest partners the stock popped more than 5% yesterday after "the wall street journal" reported on that latest bid. bribe? thanks, mike meantime, investors continue to bet big on the fast growing sports betting stocks and wall street is now coming on board. morgan stanley estimates the industry could reach 12 billion bucks by the end of the year 2025, compared to $1.5 billion last year. wow. over the past month money has poured into many of these names. look at that

penn national gaming, 70%. caesar's mgm and of course draft king joining us is jason hader. co-founder and ceo and he's reported on, analyzed, invested in the gaming community for 20 plus years i think you and i first interviewed in 1998 on this so you know from which you speak. is this a mania that can last or is it just a mania >> thanks, brian good to see you. it is very interesting last night i spent time reading newspapers from 1978, september actually september 1978 there's a lot written about the bubble that existed in a stock called resorts world. resorts world went up every day. it was a maniaaround atlantic city opening up, the first casinos, outside of las vegas. if i change the name resorts world in some of these articles, you just change the name from

resorts world to draft kings, it's truly true in this instance history rhymes i'd be very careful. draft kings is a great company they're going to do amazing. they're in a very big place right now. >> mike can probably chime in more on resorts world. i will say this to our viewers that may not remember it, they were the only company that owned a casino in atlantic city. resorts world stock soared as the market went flat it did not end well. are you suggesting that investors avoid these stocks >> i'm suggesting that over the very short term they will continue to be more states that legalize gaming but sports betting is going to be a challenge to achieve profitability in 2021, 2022 so my view is draft kings, the best thing that company could do is

make as many acquisitions it can in the gaming industry that generate cash flow resorts king did not end well. i do not think what's happening in sports betting will end well over time. i think you put in a number of $12 billion for the sports betting market there's more to sports betting online there's casino, there's poker, there's bingo. the u.s. potential for all four of those verticals is a $40 billion market that's as big as macao if you think about it, the u.s. online market has the potential to be as big as macao, which is the biggest gaming market in the world. bigger than las vegas by far so i'm excited about what's happening in the u.s. market i would argue though draft kings today is reflecting a lot of optimism but it's a leader it's got an amazing brand. wow, now michael jordan. two bubbles. bubble in air jordans, bubble in gaming stocks.

double bubble for draft kings. >> i mean, jason, as you know, and the resorts example is a good one, when people are excited about the total market opportunity and there's only one publicly traded instrument to play it, it's going to basically trade on how far along are we on realizing that big market opportunity. in this instance though, draft kings doesn't literally have an exclusive on any of this we showed penn national. obviously ngen are going to be there. how big and fast does sports betting have to get, legal sports betting to get for the stock price to still stay supported here on draft kings? >> draft kings has great currency let's see what they do with it i still believe they're going to make acquisitions particularly in europe where there are amazing companies that generate cash flow. they should be using their stock to buy other companies in the european market. let's go back to the question how long can this last and who

has an advantage right now draft kings, fan duel, they've been around for a while. their names are well known they have an advantage on two front, the cost of customer acquisition and the cost of customer retention now with someone like michael jordan, that can go down you host a michael jordan sponsored golf tournament, they get to meet or play golf with michael jordan the customer acquisition cost will be amazingly low. for another company, penn gaming with brian portknnoy, people do' understand why that was a great acquisition. penn has the ability to reduce the cost of customer acquisition through brian and this whole media company as it relates to sports betting that's innovative. that's differentiated and that's going to, i think, win the day as this business matures over time >> all right jason ader, we appreciate you

coming on. very interesting nice shot there, by the way. we like the outdoor thing. >> thank you. >> i don't know where you might be don't tell us. a shout out to dave portnoy. >> dave, brian, thank you very much coming up, a big lineup still ahead including former sec chairman harvey pitt to weigh in on developing story of robinhood. a reported probe into the unicorn over the way it discloses how it makes money. plus, with the race for the best electric vehicle battery coming up, bill gates-backed spac and as we get to a break, take another look at the futures indicated low on the nasdaq by 1% 123 points dow pulled back 16 points. s&p looking like it would open do 1 o1%wn/3f

at massmutual, we know that traditions matter more if they're celebrated with the ones you love. that's why we're proud to partner with the kentucky derby. ♪

the dow pushing above 29,000 for the first time since before the pandemic just 2% from an all-time high. but the futures are pointing to a lower open this morning. popular trading platform robin

hood is facing an sec probe. the clock is ticking for tiktok and now the government in china has announced restrictions that could affect that sale we will discuss the move and what it might mean for microsoft and other bidders. the second hour of "squawk box" begins right now. all right. good morning and welcome or welcome back to "squawk box" right here on cnbc 7 a.m. on the east coast i'm brian sullivan along with becky and mike santoli joe and andrew have the day off. a squawk check on futures to see if the rally can roll on the answer to that is likely no. look at that futures, they are down not much on the s&p or the dow look at the nasdaq futures, guys, indicating implied open

down 119 points. nearly 1% to potentially another outside move for tech stocks as we kind of went into the weeds early on in the 6 a.m. hour of "squawk. a lot of that having to do with options activities that might have worked yesterday may not work today nasdaq could take a pretty big tumble with the tech stocks. >> it was concentrated in the big tech stocks. apple and tesla did give back. as well as zoom video. meanwhile, the dow closing above 29,000 for the first time since february now the march to 30,000 would seem to begin now. dom chu joins us with more hey, dom. >> mike, if you take a look at the moves we've seen in the dow since the pandemic lows, we are talking about a roughly 10,000 odd point gain around 10,500 points that we've seen since the lows that we saw back in the third week of march up to where we are now so we'll just say roughly 10,000 points to keep our context in mind there that's been the march to the

29,000 mark. as for the stocks that got us there, the most important ones contribute the most in terms of points remember, the reminder here always the caveat the dow is a price weighted index, not market cap. so the stocks would be biggest prices have the most effect on the dow. take a look at this. in your mind, 10,000 points that march higher since the lows. these are the stocks that got us there. it was apple, the big one. that was going to be the one that added a lot to it 1900 of those 10,000 odd points came from apple. united health, 854 points. home depot, roughly the same amount of points in terms of that contribution. microsoft added 650. and then visa added about 551. these not coincidentally are the five most heavily weighted stocks in the dow prior to the rebalance that happened earlier this week. now take a look at apple we remove that from the equation because it is now after the

stock split the 14th highest weighted stock in the dow. so apple and the massive gain that we've seen over the course of the last year contributing the most now that list, mike, just moved apple all the way down to 14 and put mcdonald's at number 5 and that list with mcdonald's becomes your next most heavily weighted stocks. those are the ones to watch to see if they can take us to the 30,000 mark, mike. i'll send it back to you. >> with some perspective, 29,000, it's only 3.9% to 30,000 maybe 30 could be the last one we feel like we have to commemorate with $1,000 threshold. >> ironically enough, 3.4% is apple's new weighting. >> there you go. dom, thanks a lot. our next guest joining us with some stock picks. leah bennett is president of westwood wealth management's

office and lamar hillary good morning to you both set it out for us here as a stock picker, you have market that is really completely favored the mega cap, handful of secular growth other stuff has participated that's where most of the growth has come a lot of other stuff struggling below the highs. where would you orient yourself and what particular names? >> good morning. great question yeah, 105% of the return of the s&p 500 has come from the technology sector. so on a net basis no other sector has positively contributed over the last year, which is astounding. you see all of theisen sayingsal numbers, the market cap of apple is now larger than the market cap of the entire russell 2000 so i think if you are looking at advancements in health care, we're seeing better testing kits every day. we're seeing advancements on vaccines as well as treatments

for covid and the market is an amazing discounter usually looking out six months in advance. i think if you're looking out that far in advance you're looking at a more normalized environment. by nature we're all social creatures. there is a continued pent-up demand for people getting out and going to market. two are shake shack. shake shack did really well last month. the stock was up 40% which was a great move but the stock is still well below the 52-week high they opened a new concept in beijing and even in this environment where people are socially distancing, they have 200 people lined up to go into a shake shack. so i think there's continued demand for their brand and they have a great balance sheet starbucks is another one that i like starbucks has done relatively well and they've opened to new stores they will benefit significantly

to increased travel and they have stores around airports. >> a couple of pretty targeted reopening plays right there. lamar, in general as you look at this market, does it feel as if we're early in this move, that we've had the large caps do better than most expected or is this something that feels like you're going to have to have some giveback soon >> i think on the megacap side you're going to have to have some giveback. leah's point is correct. the whole performance, the whole massive run in the s&p scene has been concentrated on a small handful of these tech names. you know, i think those have some room to come back there are a number of smaller names, interesting stocks that haven't had that much that have a decent outlook. >> what would some of those be in terms of looking at those lage lagers >> one that we like is caesars this is one. you guys were talking about

draft kings. they have 21% of william hill and they have the caesar's brand which is great in sports gambling we had a conversation with the management team yesterday and we think there's huge amount of savings. this is el dorado bought caesar's and now they own caesar's and harrison's. they're going to have to pay down some debt the balance sheet needs a little bit of work. right now what they said is they're seeing 90% occupancy in vegas on weekends. things are not as bad as the press might suggest and what you might expect to be hearing out of vegas the convention business, large group business is down but things are really picking up i think you're basically getting online sports gambling business here for free. >> leah, you did mention health care as obviously the kind of march of progress there trying to sort out.

any particular names you would gravitate to there >> yeah. health care has been another sector that's been interesting and bifurcated in performance. anybody with a vaccine or treatment or does manufacturing related to a vaccine has done really well. anybody with exposure to the hospitals or elective procedures have certainly lagged this rally. one stock we really like a lot is serner health care. they do information technology as it relates to health care and you've seen hospitals really push out big projects as they've been able to treat some of our sicker patients across the u.s. and not been able to do as many elective procedures. serner is one we think will bounce back quickly. >> all right looking ahead to maybe when we're not all staying at home and doing the basic. thank you for your time.

>> thank you all right. coming up, it has been a year unlike any other before golf and pretty much everything else. now there is only one event left in the 2019-2020 pga tour season we're going to speak with pga tour commissioner jay monahan about hotlanta robinhood pre.ob the portnoy push "squawk box" will be right back. when the world gets complicated,

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.

and tailored recommendations. ♪ if i could, baby i'd ♪ how can i, when you won't take it from me ♪ ♪ you can go your own way ♪ ♪ go your own way your wireless. your rules. only with xfinity mobile.

the pga tour championship kicks off friday top 30 players in the fed ex cup championship are among the field competing for $60 million in prize money. joining us is pga tour commissioner jay monahan jay, really good to see you. >> great to see you, becky thanks for having me >> well, i want to say, first off, congratulations you are now looking at the 13th event in 13 weeks and i have to say to think there were almost

3600 covid tests given to 1,000 players and caddies, out of that only 7 players and 3 caddies came back positive you have managed to successfully get through this you must be feeling pretty good right now. >> we are. it's gratifying to being here. what has gotten us here, our players and caddies as you mention deserve all the credit because they took our protocols. took responsibility and ownership of those protocols right from the outset. they are open to the adjustments we made and it's wonderful to be back here in east lake, a tournament and a venue that is reflective of the great work that we do in the communities, where we play. compete for the fed ex cup playoffs with this field one, two, three one, two, three in the fedexcup. if last sunday is any indication of what's to come, i think it

will be a phenomenal tour championship. >> you bring up east lake. i have going to bring this up later in the interview since you mentioned it now, let's jump into that i don't think people know about what tom cousins has done with east lake, how important that has become he's a developer for atlanta for those who don't know it. he came up with the idea of making sure he was going to give back to the community by with the golf club making sure all the profits go back not community, doing it in ways that you have affordable housing in an area that was very low income, very high crime. by doing that giving back to the schools, education and hiring people, the results have been phenomenal i think they went from a crime rate of down 96% and 78% of the kids passing the state math test versus 5% before it's an example that's been held up all over the place and is now in 13 other communities. i think you can't say enough about that. >> you really can't. you said it beautifully. we love tom and anne cousins and

that vision goes back to 1995. this golf course was revitalized in 1998. the drew charter school, which is just off of the front entry way here to east lake, last year the men's golf team won the classic state golf championship and you drive around this community and there's incredible thankfulness and appreciation for what mr. cousins has done here when you look at the atlanta community and coca-cola southern company, our partners, there's great appreciation for everyone in this community and what they represent. that's hope and that's pretty spectacular. >> hey, jay, watching what's out there. people have been so hungry for sports i know it's been huge in what that's translated to in broadcast ratings and other things the broadcast ratings for nbc and cbs were up 23%. golf channel up by 50%

the pga tour social engagement was up by more than 62% i think which is really exciting thinking about what's out there. we have all of these companies come on, zoom and others ones who have really become companies that have taken off and done even better during the pandemic. i just wonder, do you think that engagement lasts after life gets back to normal >> i do, and, listen, we came back the week of june 8 to 11. we were excited to be back, to be back early. not only were we back as a tour but our game was back. as an industry we worked very hard state to state with governors, mayors, making sure golf continued to be an option for people as we battled this pandemic, safe and responsible golf as more and more people are playing the game, we're seeing the consumption numbers on the pga tour and you're seeing the consumption numbers as it relates to participation, record retail sales the last two months this is a game for everybody

our golf courses are thriving and alongside our partners of the pga of america and other partners, we're working hard to make sure as we come out of the pandemic our sport continues to accelerate we've talked about this on the air, why is the game of golf not growing fast enough? we have for the last couple of years. we've seen tremendous growth and engain am. it is an opportunity i go back to our players and the responsibility they've taken to get us here and the inspiration they're providing and for us to be able to get back to the great work we do and last year we generated over $200 million for charity. >> jay, brian sullivan let's talk some money. we made a deal with points bet on nbc sports and golf betting

has actually become a bigger and bigger thing like so much we've talked about the last couple of days and weeks so can you give us a dark horse prediction for this weekend? daniel burger is looking pretty hot. we know dustin johnson give us a name that you think is one to watch that is maybe not one of the front-runners >> all i can tell you is there are a majority of them i'm not your guy when it comes to picking the horses. they're all phenomenal to get here is such a great accomplishment to your original point, it's been an exciting time for the game of golf from a gaming stand point. we've announced more betting operator deals in partnership with draft kings and the feedback that we're getting is consistent with what we've thought about our sport. when you've got over 30,000 shots hit over four days with the number of players that are playing over those four days and the quality of play, there's so many options and so many areas

to engage in our sport i think that's starting to be reflected in the share that we're gaining from a gaming standpoint >> phil mickelson is helping out of the blue he sent this tweet out that basically said, tiger, i appreciate everything you've done. thank you for all you've done of this great game of golf. no one has benefitted more than me it sent me into a bit of a tizzy. i went to see if tiger was retiring sounds like this was throwing out random appreciation and being nice that's got to be great for your sport too. >> becky, listen, this is a time of reflection for all of us and phil has been pretty consistent through the years that he's so thankful and fully recognizes the impact of tiger. when you are out here at the tour championship and you've been out here over the last 13 weeks, candidly we're operating

in an environment we've never operated in before and it's just us together, i think the level of appreciation for the tigers, the phils, the greats that a preceded us. everybody looks around here. they're thankful to be here. i think there's a lot more looking back and asking how did we get here and how do we continue to be great as we go forward. that was an awesome tweet. that stopped me in my tracks as well >> a lot of attention. jay, thank you so much for being with us. really good to see you >> thank you folks, again, the fedexcup playoffs wrap up this weekend. you can watch it sunday at 3 p.m. on nbc. coming up, the saga of tiktok's future continues as the chinese government announces restrictions could affect the sale

cnc's john port joins us to discuss that s&p winners led by baker hughes up by 4% as we head to a break, it is now time for today's aflac trivia question which band holds the record for the greatest number -- the most, excuse me, number one hits ever? we'll have thensr ene meack. awewh w ck who helped me cover it. aflac. these are all the cab rides to my physical therapy. and aflac paid me directly to help. aflac. what he said. and this unexpected bill is from... the two-thousand-dollar specialist. thanks. aflac. when you're sick or injured, aflac is there. we can help with expenses health insurance doesn't cover. get to know us at (aflac!) dot com. riaccelerate your investments to be is or pull back?een. change the plan or stay the course?

that's why northern trust is here. with specialized expertise... a history of success through every economic climate... and proven strategies rooted in data and analytics. giving you more control. clarity. and confidence. for now and whatever's next northern trust wealth management. and whether we connect pnc kover the phone, online,ing. or face to face, we're here to help- utilizing our resources as one of the nation's largest banks and a local approach with a focus on customized insights. so you're ready for today.

welcome back now the answer for today's aflac trivia question. which band holds the record for

the most number one hits ever? guys, this is not hard you know it's the beatles. they've got 20 you probably could have guessed this, but here is what's interesting. who has got the second most number one hits at 18? mariah carey not only that, she tops the beatles with the most weeks spent at number one. you've got me. feeling emotions over that trivia quiz. >> thanks, brian by the way, i believe that all i want for christmas returned to the charts 20 years, 15 years after it was originally released she has the record along those lines. still to come on "squawk box", the clock is ticking for tiktok then "the wall street journal" reporting robinhood under investigation by the sec we'll speak to former sec commissioner harvey pitt about the probe and what it could mean for retail investors check out the futures. still looking at declines

deepened and the nasdaq down 1%. s&p 500 down more than 1/3 of a percent. the dow nejos indicated lower by 30%. we'll be right back. eration. the biggest obstacle right now is that we're running out of time. amazon now has a goal to be net zero carbon by 2040. we don't really know exactly how we are going to get there. it's going to be pretty hard. but one way or another we're going to reduce our carbon footprint to net zero. i want my son to know that i tried my hardest to make things better for his generation. i want my son to know tapps except work.rywhere... why is that? is it because people love filling out forms? maybe they like checking with their supervisor to see how much vacation time they have. or sending corporate their expense reports. i'll let you in on a little secret. they don't. by empowering employees to manage their own tasks, paycom frees you to focus on the business of business.

to learn more, visit paycom.com

coming up, former sec chair harvey pitt. as we head to break, check out shares of tesla. the company's largest outside shareholder reduced its position in the electric automaker. they said it is still a long-term believer and the cut was forced by portfolio restrictions tesla still down another 8% in the pre-market "squawk box" will be right back.

. and you know cheap leaky diapers are an amateur move. you need luvs pro-level protection. luvs. parent like a pro.

welcome back to "squawk box. looking back at the market the nasdaq is down 144 points. more than 1% >> thanks, mike. the saga of tiktok's future continues this week as the chinese government announces restrictions that could affect the sale john fort weighs in on the prospects of a u.s. company buying tiktok. >> i'm so glad the trump is pushing tiktok to sell to a u.s.

company. the norms in china are way different when it comes to collecting data. by bite dance's only count, 100 million americans use tiktok tiktok got caught using the mac addresses. they're required to hand over data to the chinese government if tiktok's in the hands of a u.s. company like microsoft or oracle, the data of more than 1/4 of a million americans is subject >> you sold me, john i had a lot of those same concerns myself. are you sure a forced sale is really a good thing? >> well, on the other hand, there's plenty not to like about a shotgun wedding. i get that the security of the data of u.s. citizens is

important. we can't preserve our freedoms by undermining due process and the rule of law. if this is really about data security, the administration should come up with some pioneering rules securing our data why should they only apply to china? they should apply to russia, france, argentina. then there's the way the trump administration is doing this forcing a sale to a u.s. company. doesn't have security. this whole transaction could be a big mistake, becky >> hey, john, let me jump in here it's brian sullivan. good to see you. we had some new news this morning outside of tiktok. facebook apparently is going to limit or even not buy political ads on the platform a week

before the elections they're trying to say, listen, you want to throw up a political ad or call the result early, we're not going to accept the ads a week early number one, your take on that. number two, do you think we could see other social media platforms. i don't know if this applies to instagram, twitter and others do the same thing have a pause period given the implications of the election. >> first, brian, good to see you. i have to address the issues on both sides there since i completely contradicted myself as i do on the other hand. there are fraught issues when it comes to tiktok and what they're doing with the data. is this a one off situation where it's just chinese companies that are going to end up getting singled out if so, does that leave us wide open to security issues from other companies maybe originating in other countries there are certainly ways that even chinese interests could do

an end around. that's an issue. as for the one week sort of moratorium on new political ads as we get one week before the election, it seems smart to me because in that sense at least they're going to be other types of ads that try to influence people's impressions about what's happening in society that might not be strictly labeled as political ads, but this would give facebook some breathing room to really analyze what's going on in the network to take stuff that's blatant and might be trying to influence the election in a way that isn't kosher and zero in on that, brian. >> the other aspect of this, john, might be do something yourself before the government may do it for you, right it's like you've got kids. don't worry, dad, you don't need to punish me, i'll give you my phone for a day because they don't want you to take it for three days facebook and others know if we have more issues with their

platforms, it could be a big uncle sam coming in rather than sort of, quote, punishing themselves on the ad side. >> i don't think that this is really going to prevent government action. can you imagine the government saying you can't run political ads on tv before the week before the election i don't see how they carve out a special case for social. >> john, on the other hand, those tv ads are vetted. on the other hand, those tv ads are vetted, are they not it's a lot different to produce up they've got to be approved, checked out, right that's a big difference than somebody coming up with an ad on their own to throw across facebook and a million people see it before somebody can realize it's bogus i think is the california term for it. >> i think you're right. there is a volume issue online you're certainly right about that there is a limited number of tv stations, you know, cable networks that matter for

delivering a message en masse in the election as opposed to when it comes to social media, you can put a ton of these things out. then even though there is a vetting process, it would be the election time or after by the time you end up catching some of this stuff that was bad. i think that's part of what facebook wants to catch up to. i hear what you're saying, brian. i still don't think politicians are going to kneecap themselves even if it looks like it makes sense from putting out an ad a week before elections. just me. >> on the other hand, good to see you. >> always good to see you. >> see you later, buddy. the sheriff may be coming for robin hood the trading app is facing an sec probe. it has to do with its disclosure or lack thereof of how robyn hood gets paid so called order flow joining us is harvey pitt,

former sec chairman. harvey, good to see you. >> good to see you. >> first robinhood did not reveal this. they updated their website to say basically we sell information to other market participants what specifically do you believe that the sec is looking at here and what do you think the ultimate outcome may be? >> at this point we don't know precisely what they're looking at but i would assume it was the lack of disclosures which went on for a considerable length of time they've now corrected it, which will help them, but the fact that they didn't tell people where their orders were going and how robinhood was making money is a clear violation of sec rules. >> now we got into a big discussion, it was andrew and i and some others i think a couple of months ago about this idea of

the order flow for our viewers who don't understand it, i'm going to say it on a layman's term, kronk, ba correct me if i'm wrong, they know what i'm buying, they sell it to the susquehannas, citadels, wolverines, virtues of the world. because they're selling that order flow, citadel knows what i'm going to do before i actually do it and may be able to get ahead of it i'm trying to use my words carefully here there are certain trigger words in the plarkts what do you think specifically in that order flow and the way they sell that data that might be against sec rules >> well, it's -- the sec staff has published a report about a year, year and a half ago in which it said that there isn't

necessarily any detriment to investors by having the sale of order flow the investors may still be getting a better price than they otherwise would be able to get, but what you do have is the potential for conflicts and it's important for investors to know what's going to happen with their information and their orders part of the difficulty with robinhood is we're dealing with a whole different generation of millennials who are not used to trading in the markets and, therefore, they may not understand what the consequences are of using what appears to be a completely costless execution service. >> let's put it into a broader context in terms of this activity in terms of payment for order flow robinhood has to have their client's trades executed somewhere.

the payments are for essentially the privilege or the ability to execute those trades, right? so it's industry practice. this is pretty much what all the online brokers do. in 2014 we looked back, i wrote a story on robinhood when they were launched. they said that's one of the revenue streams. did they simply not formally disclose it, presumably, in a way that was direct client communications do you think that's been perhaps where the gap was? >> i think part of that is where the gap was. their customers and in these times this is a bad word, but they've gone viral with their application here i think there's a serious difficulty when people don't understa understand where their money is coming from and why they're able to get a costless execution service.

in essence, it's the old story about there being no free lunch. there is always a cos cost associated with everything and customers have the right to know that before they engage in trading. >> what do you think should be the appropriate punishment, just a fine and we move on and everything stays the way they are now? >> my view is they've corrected the issues so i think here there will probably be a fine. there will probably be perhaps some order requiring them to do more with respect to educating their customers and making disclosures in lay terms so people understand exactly how the service operates and where the potential conflicts exist.

>> harvey pitt, it's a big story. we appreciate you chiming in on it thank you. have a great day >> you, too. still to come this morning, a bill gates backed vehicle battery supplier is going public through a spac deal. the ceo of quantum scape joins us after the break. at the top of the hour, senator kevin cramer, north dakota, will join us to talk about stimulus talks and much re "squawk box" will be right back. what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view.

♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley.

into s♪ tegies for the road ahead. ♪ you can go your own way ♪ go your own way your wireless. your rules. only xfinity mobile lets you choose shared data, unlimited or a mix of each. and switch anytime so you only pay for the data you need. switch and save $400 a year on your wireless bill. plus, get $400 off when you buy the new samsung galaxy note20 ultra 5g.

all right. welcome back and good morning. about 7:45 on the east coast live shot of times square. a little more activity every single week you see a few more cars on the streets there was a time a month ago we didn't see any cars. you can see activity slowly, very slowly, not anywhere near what a normal day would have looked like in march shares of five below are up today. second quarter earnings beat estimates. they declined to give a current quarter forecast but said that it expects to open 110 to 120

net new stores this year so we talk about retail shrinking, mike. there is one retailer that is growing. >> yeah. that's kind of the rarity there where you've got to kind of be in person. kind of this treasure hunt person and low price point seems to work right now. shares of fashion brand owner pvh is rising. they reported second quarter earnings of 13 cents a share analysts were expecting a loss of $2.43 a share it did suffer from closed department stores. online sales through its own channels surged 87%. you see looking to be up about 1% in the pre-market right now. a group of investors has made a takeover offer for kansas city railroad. that stock popped more than 5%

after "the wall street journal" was up a little less than 1% on top of that. the world has changed if we're doing lbos of railroads. didn't used to be the kind of business you'd see private equity get involved with but infrastructure -- >> 1897? >> exactly, right. >> next going after an anvil company. just kidding you're right although -- although, i do know a gentleman, becky, he's based in omaha, just turned 90, he bought a railroad years ago, burlington northern santa fe. >> i think he owns a brick company. >> he does acme brick and he bought it, remember, back during the last crisis when you could get a better deal on some of these things, too. i don't know private equity companies are getting a little more creative they have to. >> is it really acme brick >> yeah. >> is the name acme brick?

who does he sell to, wiley e. coyote corporation >> and road runner, yeah but we had david reubenstein on saying it's hard to find businesses they can buy and take private and they have to scrounge on this it's something they're watching closely, too. in the meantime, quantumscape which is developing solid state batteries is going to be announcing it's going public through a spac reverse merger phil lebeau joins us with a special guest. phil, good morning >> reporter: hi, becky let's bring in the founder and ceo of quantumscape. he joins us from san jose, california thank you for joining us this morning. i'm curious from your

perspective, you are a company developing solid state batteries used in electric vehicles. very promising but far from profitable why go public through a spac ipo right now? >> good morning, phil. two answers. we've addressed most of the science risks that were ahead of us when we started the company now they're mostly behind us we feel like we're ready to go public one of the remaining risks was to get the balance sheet basically with this transaction we end up with a billion dollar balance sheet. that can fund into the start of production those are the reasons why now is the right time. >> you'll be raising $700 million proceeds from the spac ipo that will be helping the balance

sheet you referenced there volkswagen is targeting using your batteries, your solid state, your lithium metal solid state batteries by 2025. that's a long ways out that's a bit of a leap of faith for investors that you're going to have the batteries ready by then and that this will work volkswagen will see the demand for electric vehicles. what do you say to the skeptics that look at this and say that's a big bet for 3 years, 5 years down the road? >> i think ordinarily if a company is a few years away from revenue, that implies there's technical risk vw has already announced they're testing these batteries in their labs in germany at automotive rates of power that is key. a lot of solid state batteries don't work at high rates of power which is required for all the tuomotive. more importantly the reason why the revenue is out has to do with the automotive

qualification process. it just takes time to go through the process of getting technology into cars as it should human beings are sitting in cars you don't want the technology like batteries, for example, to not be fully vetted. relative to market risk given the science risk and vw's commitment to the technology, we feel good that this is going to be real. >> jagdeep, how much more real will this be take the standard, i know there's nothing standard, how much greater will the range be with your batteries? >> depending on what you compare it to? between 50 and 100% greater range for the same size of pack which is substantial as importantly as the range is the fact that you will be able to fast charge these batteries with our batteries you'll be able to do a 15-minute fast

charge and that combination has never been done before the idea of a long range battery that can be charged more rapidly really helps close the gap between electric cars and combustion engine vehicles and that's exciting about what we're doing. >> jagdeep, it's brian sullivan. thanks for coming on cnbc. we've been talking so much about the spacs as well. what was the ultimate selling point for you and your team versus any other exit or strategy or whatever what was the one thing someone sold you on about the spac that made it so appealing we didn't talk about spacs for years and suddenly, jagdeep, we're talking about them every week what's happened? >> in general these facts produce a stream lined way for companies to access public markets. in our case, what got us

interested is this spac. this is done by automotive guys. these are guys that have built and run great automotive businesses over many decades and that really was the key because we felt that we understood the technology really well we have the customer engagement with volkswagen that's already been announced what they represented is the automotive state requirements which complement our team. it wasn't just that we were going public but we were doing it with a partner that could complement the team. >> hey, jagdeep, phil. one more question for you. we've got tesla's battery day coming up on september 22nd. i know that you don't know exactly what they're going to be talking about there, but the expectation is that elon musk is going to say, look, here are the batteries coming out, greater range, lower cost. we lead the industry in terms of electric vehicle battery costs and production

are they the competitor that you are most focused on? you're not to market yet are they the company that you benchmark and say, we've got to be better than this? >> it's an important question. tesla is in no way a competitor. tesla is an automotive, car manufacturer that uses car batteries. so, you know, if we execute on what we're planning, which we obviously have confidence that we will, there's no reason that tesla, like other automakers, wouldn't be interested in what we're doing. >> jagdeep singh, going public with a spac that plans to raise $700 million we have had six ev-related spacs

since the beginning of june. >> it truly is incredible. it's not, of course, just that market phil, to your point, just in your industry covering cars, automotive, electric vehicles, we just joked about railroads. one does wonder if you look back ten years from now who will be the surp viefors that went down to 10 or whatever the number was do you think because you've dug in all these evs can make it >> reporter: no. does that mean that i think the spac ipos will be a bust that's not a commentary on that. we're coming out with an electric vehicle, a lot of these will never pan out they may come to market, but after a year or two years you will see that the public says, this company i'm not really interested in them this company, yeah, these guys are the ones so we haven't seen that happen

that's a couple of years down the road at least before we start to see that flurry of niche models coming in that's when you'll start to see it shake out. >> i'll tell you what, phil. if i missed it, i'm sorry. have there been any spacs on the ev electric side. >> yeah, there have been. >> i don't want to wait eight hours to -- >> yeah. >> otherwise i see a lebeau/sullivan spac. >> lum luminar, velodine battery related, infrastructure related, and there will be manufacturers of ev spacs coming to market. when you talk to people, everybody says the same thing. there is a lot of capital sloshing around and looking for a place to make that bet.

>> thanks, phil. >> you bet. coming up, senator kevin cramer joins us to talk stimulus stalemate and the possibility of a deal getting done. plus, we're expecting the latest read of jobless claims at 8:30 the futures are weaker nasdaq down 140. that's more than 1% the rest of the market dow jones lyon down by 10. it is holding up "squawk box" will be right back.

(music) anncr: give customers access to precisely what they want, when they need it the most. with adyen, the payments platform that delivers convenience for all. adyen. business. not boundaries. good morning is the jobs recovery still on the road to recovery we'll find out with the weekly jobless claims. the stimulus debate raging wall street and main street looking at the gc. we'll get the latest from

senator cramer. the new names on the new york state real estate market. will broadway continue to be a bust we're going to find out as the third hour of "squawk box" begins right now. good morning, everybody. welcome back to "squawk box" here on cnbc i'm becky quick along with mike santoli and brian sullivan we have plenty to talk about when you talk about the markets and where u.s. equities are. it was a strong couple of days in september yesterday was huge the dow was up by 450 points it was a gain of 1.6%. the best gains the dow has seen back to july 14th. s&p very strong yesterday and it was up 1.5%. nasdaq was up yesterday but it

was only up by 1%. uncharacteristic move. the under performer for once out of those three indices this morning there are red arrows across the board. that's a new thing we haven't seen dow futures indicated down by 14 nasdaq is the big under performer. it is down by 142 points continuing to watch what's been happening with the treasury market yields a little bit lower. 10-year is yielding 0.653% guys, watching what's been happening with these markets, you have so many people thinking, wow, lots of sort of turnover that's been happening yesterday it was tesla and apple. stocks like coca-cola up by 4% and then you also had ibm up better than 3%. >> i would jump in and say yesterday was interesting in how localized the damage was that doesn't seem to be the case

this morning it was almost the four stocks people have been marvelling at, apple, tesla, salesforce and zoom video they took it on the chin the rest of the market held up fine as you say, the defensive stocks got the strong bid it seemed very mechanical. seemed like, okay, now it's time to buy the utilities, coca-cola and staples. that choreography can work or it can fall apart i think we'll be tested on that front today as we came into the week saying, look, market looks over bought, over heated a lot of short-term speculative stuff going on >> and we talked about it at the top of the segment we in the media always want to have a reason for stocks moving. well, on hopes of a stimulus debate and hopes of a vaccine. trader notes, traders i'm talking to, very mechanical. a lot of what's been happening has been a little bit bizarre. i don't want to go too much into

the weeds. yesterday was what they called a huge gamma squeeze here's what happened you've got some people out here, we don't know who or why, making huge bets on out of the money calls in the equity market if you are going to sell those calls, often you've got to buy them the underlying stock as a hedge. so someone says, i want to put a huge bet in, now i have to buy stocks to cover my hiney it's an options spread mechanism. the vix was moving up as the equity market was going up which is rare. a lot of this having to do with the weird options thing. there are players out there, i don't want to make too light of it, who are clearly making some outsized bets, either in options or around equities by buying all of the out of money calls, but

the options market is what really moved the equity market yesterday. if those bids end, that could flip the day. >> right so this dynamic has been in the play in a less structured way. that does if it's a dominant enough activity to have the effect of causing the stocks themselves to go up. it takes a constant flow of new buying energy in the calls to get that feedback loop working in a way it's not exactly like it's completely automatic you can't have the perpetual motion machine it's a reflection of a rally that's been barrelling ahead localized in fast-moving stocks and that's one of those ways you can gauge that perhaps the rally has gotten, you know, a little bit over heated in the short term >> and as you've talked about it as well, becky and the gang have

talked about it, not to beat the old horse, but we've talked about market structure for a year and a half. just keep in mind with so many, to your point, narrowness, with so much money and influence in just six or seven stocks, 40% of whatever it is of the s&p 500, apple itself is a top five holding in over 200 major etfs, something like that. if the option bets or market bets go the other way, i'm not saying we're going to see it, we could see a fast move on the down side as well. keep in mind, the s&p 500 pretty much, guys, is at the highest price target of any of the strategists that we talked to every day on cnbc. either the strategists like analysts covering individual stocks are going to have to start bumping up their plays or removing the target altogether or one wonders if finally this market is running out of steam, oh, and by the way i'm told in two months we have this election

thing. the market didn't do anything ahead of 2016 ahead of the election all right. making headlines this morning, outside of all of this, well, actually, maybe because of this, free trading platform robinhood is reportedly facing a civil fraud investigation by the sec the sec probe focuses on whether robinhood initially failed to fully disclose the practice of selling the clients orders to high speed trading firms, so called order flow. the investigation is at an advanced stage already and could result in applying more than $10 million if robinhood agrees to settle facebook announcing it will prohibit new political ads one week before the presidential election ceo mark zuckerberg said they will try to flag any early calls of a victory >> i certainly think anyone

who's saying the election is going to be fraudulent, i think that's problematic additional context needs to be added to that. >> not just anyone regular joe, the president of the united states. >> this will apply to the president once this policy goes into place and will apply to everyone equally >> all right so there you go. there's the news facebook stock down a little bit. futures down as well, guys overall facebook's had a big run of 45% this year. meantime, a bill gates backed vehicle battery supplier planning to go public, quant quantumscape is going to go public quantumscape ceo joining us a few minutes ago. here''s what he had to say. >> one of the big risks is getting the balance sheet to be able to build out factories.

it takes capital and basically getting -- with this transaction we end up with $1 billion balance sheet which really is a lot of us funding all the way into the start of production >> the company will list under the ticker qs on the new york stock exchange it has already, guys, an implied value of 3.3 billion a spac becky sulliquick or quicktoli or just bss which is my favorite. >> how about just bs >> yeah, i like that i'll live with that. i have >> all right, folks. senate majority leader mitch mcconnell expressing doubts yesterday about whether lawmakers will agree on a new stimulus package when they trourn washington. nancy pelosi says talks remain at a state of impasse.

let's bring in kevin cramer of north dakota he is a member of the budget committee. senator, good to see you this morning. >> good to be with you, becky. thank you. >> so let's run this through right now the senate is looking at about a $1 trillion plan. the president would like to see something that's closer to $1.3 trillion and then the house is looking at something between 2.3 and $3 trillion depending and what can you tell us about what you're hearing on that front >> sure. i think we're very close to having an agreement, at least among republicans in the senate, that would be -- you hear the term skinny. a much more modest bill than the others that you've been talking about, than the speaker has been talking about. a broad stimulus

education, students are in a safe environment and that remove some of the anxiety around that. focusing on extending paycheck protection and some demonstration, not just simply across the board some folks on the forgiveness of the ppp. those were small loans and small businesses that don't need an extra couple thousand dollars of compliance costs and there's a streamline version and we need to make sure the pandemic itself has enough -- the fight against the pandemic, i should probably say, has enough resources to make sure we're getting to that end which is the ultimate stimulus

>> senator, that skinnier package is closer to half a trillion dollars the side at the bottom goes up and the side at the top comes down you are taking the floor and cutting it in half saying that is something you think you might get consensus among republicans. that sounds like we are a lot further away from getting any sort of deal done between democrats and republicans. >> that's a great point. you're exactly right, becky. what we're trying to do is find our position, if you will. the position we start with obviously realizing in a negotiation and in a compromise situation probably going to lose some republicans on one side and some democrats on the other side and the middle will hopefully be big enough to pass something that's meaningful and matters to people but remembering there are some unspent dollars there are about $350 billion unspent dollars and that's not

just pocket change we're trying to focus on that first, repurposing the existing appropriations so they hit the targets and so we don't drive up the debt any further there are policy issues. we can stimulate the economy with all the liquidity in the world, but if the vultures disguised as trial lawyers are hovering over every hospital, clinic, school waiting to pounce, we have to have i believe some liability reform. >> what your plan does not include is anything that would go to the states or cities as a way of kind of bolstering up those areas that have been hardest hit. i realize that's something that the democrats have put front and center, but we have had several republicans that have come on the show in favor of being in states that have big cities that have been hit hard and with the president's additional moves last night it looks like to try

and make sure that some of these cities can't get any federal funding, i would think that is going to be a much bigger priority do you think that this plan that you're talking about would get any support on the other side of the aisle? you may not have all of the republicans on it, but i can't see you getting a single democratic vote. is this anything more than putting up something so that your members can say they voted for a package? i just -- >> well -- >> it's kind of baffling to me i understand democrats have stood firm you are now taking the lowest common denominator and cutting it in half. >> often times though, becky, remembering it first has to start with the one side and in this case among senate republicans, we need to find a starting point i think we're very close to doing exactly that what a path -- a package that actually passes both chambers and remembering you need 60 votes in the senate, what that would look like and it will go to the president would be

different than whatever 51 republicans will come up with, say, on tuesday of next week with that said, you do have to have a starting point. we have to be realistic about things at the end of the day we have an additional issue we are coming up on the end of the fiscal year at the end of this month we have to have a continuing resolution that takes us hopefully into december so that we can get past the election and know that the government's being funded that's going to help, i think, everybody get breathing room that will help provide certainty to our military as well as the other government stakeholders a and, again, remove the fog that might be the vehicle that actually helps people. >> senator, let me ask you very quickly. we had bill daly on yesterday,

we had mick mulvaney on and both of them said in an election year they would anticipate things happening very quickly what it sounds like, what i'm hearing about from you is not a process that gets us there quickly. how quickly do you think there will be a final plan that comes together >> john bone nehner said congres a place where things happen slowly until they happen very fast there are people in different positions. there are several people on the republican side know that having a deal is what may get them over the top, particularly in the senate there are a number of moderate democrats, freshmen in these congressional districts that need a deal. politics does work it may seem clumsy

at the end of the day, the people will drive the process. i think enough pressure being put on politicians you'll see something come together quickly after there's been a long negotiation. >> never fun watching the sausage get made thank you very much. >> it is not my pleasure, thank you. all right. coming up on "squawk," some new numbers on new york city real estate and the increased flight to the burbs stay tuned you're watching "squawk box" rit reghhe on cnbc dow futures down a touch we're back after this. 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.

and tailored recommendations. ♪ if i could, baby i'd ♪ how can i, when you won't take it from me ♪

♪ you can go your own way ♪ ♪ go your own way your wireless. your rules. only with xfinity mobile. the manhattan real estate market is under a lot of stress as demand cools. robert frank joins us with a

closer look. good morning, robert. >> reporter: good morning. sales contracts in manhattan falling by 1/3 in august compared to last year while new listings piling up fast. 585 sales contracts for condos in manhattan down from over 800 last years the supply is growing. there were over 2400 apartments newly listed in august four times as many listings as there were sales contracts that is not a good sign. now the real estate dollars continued to flow out of manhattan and into the suburbs and florida. contracts in the hamptons more than doubling in august. greenwich, connecticut, nearly tripling westchester contracts up almost 60%. florida usually sees a weak time in august. this time a huge month palm beach county up 84% broward more than doubling miami-dade also higher the biggest gains in florida are

in higher end properties with contracts for seven figure homes more than tripling in palm beach. john lennon's house, which he and yoko bought in 1980 for $725,000 just sold, it was listed for $47 million sold really soon after listing so, again, this migration, guys, that we saw starting two years ago from the salt tax changes in new york down in florida really accelerating with covid. >> robert, what's the price adjustment been so far trying to figure out if the whole market is going to radically change obviously extremely soft creates competition for sales. what's that look like so far >> so let's step back. remember that even before covid new york had a two-year bear market where prices fell about 10 to 15%. right now since march prices are

down around 10%. so we've seen a 20% or 25% reduction since 2018 but prices have not come down much. again, only 10% since march and i think some of that is because there aren't many pressured sellers in manhattan financial markets are doing well wall street is doing well. you could see a long slog here where sellers just don't capitulate to where prices need to get to for buyers to come back into this market until well into at least next year. >> i guess on the one hand good news you don't have distressed sellers. on the other hand, the market doesn't clear as quickly >> that's right. exactly. >> robert, thank you very much appreciate it. joining us now with more on the real estate industry and the credit behind it is sanjeep dos. you and i spoke i think 15 years

ago when you were at citi mortgage it's good to chat with you again. obviously the market is hot. money is cheap but how available is credit? do you need 20% down do you need to have a 700 plus score? how available are loans right now? >> 9 short answer is yes you need to put money down and you need to have a good fico score. what we are seeing is even though credit availability is really high, the fico scores and income levels are extremely high debt servicing levels are high caliber is one of the largest purchase lenders in the country. we are seeing very strong credit quality, very strong underwriting standards also first-time home buyers are coming into the market >> and it's been incredible. we're hearing these stories, sanjiv, about bidding wars going

on there has to be a derivative effect of almost panic buying. it may elevate the comps, comparables, and people's appraisals do you see a longer term dislocation on the mortgage bond side of the market from what's going on right now >> not right now, brian. right now i'm seeing it driven by the fundamentals of urban suburban and first-time home buyers coming into the market. we see that caliber because we do purchase loans in such high proportions. what i do see is, as i said, high fico, good debt to servicing. i see it as more structural, brian, and less speculative from when we talked the last time, which was 15 years ago. >> okay. that makes me feel good, sanjiv because we were worried about it 10, 15 years ago you don't see problems coming from this? you don't see sort of

foolishness behind the scenes like we saw before 2008? >> no. the industry has learned a lot consumers have learned a lot i see this as structural, not speculative right now. >> what's going to be the -- what's going to be the mortgage story and the real estate story, sanjiv, of 2021? >> very strong in purchase we are seeing the fundamentals of demographics, household formation. the structural urban/suburban shift. whether this is a phenomenon on the duration of the pandemic pre-covid, people were concerned about taxes. what's happened is taxes were always the trigger the pandemic was the catalyst and technology has been the big enabler. so 2021 in our opinion is going to continue to see that

transition and a very strong purchase market. as you heard yesterday from some of the reports that were released from public mortgage companies, refinancing is very strong about 8 to 9 trillion of mortgage holders in the country still have a mortgage that's refinanceable. >> and it's, sanjiv, short new jersey, go long tennessee and texas? >> i would short new york. go long palm beach, florida, but generally speaking seems like people are going short l.a., san francisco, new york and going long miami, florida, texas, austin, and nevada so essentially from high tax states to low tax states >> yeah. especially if we get -- listen, if it's january in the northeast, we get a second wave,

raining, all locked down again, palm beach will look better. sanjiv das, pleasure to chat with you let's not make it 15 years. >> thank you, brian. >> all right >> 15 years, wow. when we come back, we've got some breaking economic news. this is the weekly jobless claims these are the numbers we watch so closely every week. we'll get the numbers and instant market reaction ahead. as we head to a break, check out the morning's biggest pre-market movers leading the way, pvh corp up 3.3% stay tuned, you're watching "squawk box" right here on cnbc. [ thunder rumbles ]

[ engine rumbling ] [ beeping ] [ engine revs ] uh, you know there's a 30-minute limit, right? tell that to the rain. [ beeping ] for those who were born to ride, there's progressive.

we're a few seconds away from the closely watched jobless claims number and there is one big asterisk this time around. they won't be directly comparable to last week's. there's a reason for that. steve liesman will explain do it. >> we're moving to a different seasonal adjustments method here, becky. the idea being the prior seasonal adjustments tended to inflate the numbers. many millions actually the continuing claims, not so much it's not like we have no people. a lot of people still filing it should be less. the numbers are not comparable they're not going back and restating it we'll have to go week to week to see what the situation is in the employment market. >> we'll see that in a moment. we have been watching the futures this morning pretty uncharacteristically.

dow futures down 25. s&p futures off by 15. nasdaq down by 150 it's been the big under performer which is rare. rick santelli is standing by at the cme in chicago he's got those numbers that are coming up. again, this weekly jobs claims number is pretty important rick >> reporter: yes, it is important. should be coming up momentarily. remember, seasonal adjustments happen with a lot of numbers that are inaccurate. here we go at least the productivity numbers coming through productivity quarterfinal up 10.1%. unit labor costs down a bit. expected to be 12%, 9% following 12.2 here's the money ball number under 1 million on initial jobless claims 881,000. 881,000. of course, that is a new low considering that we started around march 20th with 3.3 million and it has moved lower,

snugging around 1 million. it popped above it so this is, indeed, good news and it really does give us an idea that the seasonal adjustment process might have had some surprises in both directions on continuing claims, a big miss, which is a good thing. expecting 14 million, it's 13,254,000 13.254 million revisions may be coming, but at the moment i don't see them. as steve pointed out, i'm not sure that they're all that important. but we do see that the 1,600,000 moved up a smidge to 1,011,000 and it moved from 14.35 million to 14.492 million. there is one more number out that is the trade balance for july of course, it is a deficit and it's bigger than expected.

minus 63.6 billion, and this has been trending larger and larger. we want to look at the complexion, of course, between imports and export to give you a bigger idea where the issue is coming from. we look at the interest rate complex. it has ticked up a bit only a basis point but now a days, that is big because of course interest rates just don't seem to be able to garner any selling pressure pushing them higher the federal reserve is the champion of interest rates and many believe lower for longer, at least at this point, is something they're going to strive for becky, back to you >> rick, just watching the futures, the dow futures bounced into positive territory for a little bit better than expected numbers on both continuing and the new claims coming in that's pretty important. >> oh, i think it's very big news of course, we all acknowledge that we'd like to go back to the

282,000 we had before the coronavirus hit. that was the last normal number march 13th, i believe, but all things considered, we are in this chapter we'll do our best to get to the epilogue of the covid-19 situation. >> rick, thank you steve, let's get your reaction on this, too what do you think? >> you know, i kind of half share rick's enthusiasm and i half don't share it. i'm still sort of scratching my head where six months into this crisis that we have now we're still having 881,000 people file for initial jobless claims we still have something i haven't had a chance to total it, 26 million people are still receiving either continuing claims or the pandemic unemployment assistance, but both of those are better numbers than we've had before. all of that is better than we've

had before as rick pointed out, normal is like 200,000 so an additional 600,000 people are still losing their jobs, still filing for unemployment claims we had a big surge in california, up 40,000. big decline in florida i thought i saw an increase in texas for 4600 i thought i saw one in arizona as well. just up 1,000 there. but it makes me curious about what's going on in the economy as to whether or not we have really two different dynamics happening. one dynamic are people coming back into the work force and that's pushing down this number, also helping out tomorrow's jobs number in terms of gains another force seems to be pushing it up in terms of the scarring that happened in the economy. the businesses that aren't going to open. there was talk in the federal reserve beige book about companies that went from furloughed employees to permanent layoffs. there's a lot happening in the

economy, becky it makes me nervous for the long term and positive for the short te term. >> steve, i think he wants to jump back in. >> hold on >> yeah. i completely agree with your half and half. i put it in my coffey every morning, but here's the issue. the issue is the reason florida's doing better and the east coast isn't doing better is because governors won't allow the progress to open or won't allow people to be creative and try to be safe i'm not condemning either style, but you can't look at the economy and say, well, you know, it's really horrible that we're not at 200,000 we would be lower if certain governors had maybe a little bit more of an open mind you know, i live in a state where certain things are much different in the city of chicago and the suburbs. things that the governor does sometimes the people aren't allowed to do. we see this with nancy pelosi.

there's a lot of strange things going on but in the end i think it's unfair to say -- >> i think it's fair it's brian i've got to jump in. >> i agree >> steve, let me jump in. >> here's the problem, rick. >> come on i've been clawing at the tv. steve, let me jump in. you and i were going back and forth on email i think you agree with me on this we made the point the other day about the schools. i would love to see somebody overlay the jobless claims numbers by state or even by county versus schools opened or closed i would love to know that. i think that's kind of what rick was dancing around i don't want to put words in his mouth. i got a note from a bunch of people 40% of families have a school-aged kid. i would love to know, if the schools are not open -- if they're virtual, that's not open in a way because the parents have to be there to monitor it people are unable to go back to school steve, you mentioned the big jump in california a lot of schools in california,

i believe the majority of them, are physically closed. i wonder -- i just would love to overlay the states with schools open -- not making a case either way what we should do, it's not my job, but i guarantee you there's a relation everybody with a kid can't go to work that's a hot take. >> you can put words in my mouth any time there, buddy. >> there's no doubt that the lack of school opening is something that inhibits people's ability to go back to work there's just no doubt about that i can probably gin some correlations up for you. i think they're hard to come by in terms of correlating the school closures with the -- first of all, you're still back a little bit on the jobless claims data. it's something that's going to hurt i was going to respond to rick, brian, very quickly that states that open quickly ended up having surges of unemployment claims later the question of the timing of this is --

>> when you summarize it altogether, they're still doing better in the macro vision. >> because they closed down. >> and then they reopen and experimented with trying to work it out. >> because they closed down and reopened i agree. i agree. look, i'm looking for new york to open more given the good numbers that we have here. i'm sort of surprised we haven't gone faster. i think there's a lot of fear here in new york that because we live so close together compared to wyoming, it could spread very quickly. i agree with you, rick, and brian as well, a lot of this is related to the shutdowns i'm trying to think beyond that because once the shutdowns end, ostensibly people can go back to work which businesses aren't making it what's the effect of the lack of stimulus out there in the economy? what kind of changes in the dynamic of the economy are

happening such that there's some underlying erosion that's what i look at this number and i say, great, there's improvement. agree with you, rick, that essentially some of the rules are inhibiting the reopening, but it's the broader erosion of the economy that concerns me. >> we all agree the glass is half full and half empty at the same time. >> a lot of stuff to get through. >> just like the schools, becky, half full, half empty. >> half full, half empty outlook. thank you very much. steve and rick, we will check back in with you again we have a lot of this. we'll replay it tomorrow with the big government jobs number joining us to talk more about these numbers that we've just seen is mohamed el erian he is chief economic advisor at allianz. you have to weigh in on this, too. everybody is feeling around the edges trying to figure out what it means it's so hard to interpret, this economic data, particularly when you have the stock market hitting new highs just about

every other day. what do you think when you see these numbers? where are we right now what's to come in the next few months >> so i think three things, becky, thank for having me one is the numbers are better than expected for jobless claims that is a good thing now there's a lot of uncertainty about seasonal adjustment, but let's take it at face value. better than expected the stock markets are right to react favorably. two is expectations have come down a lot we are now looking at a moderation and the improvement in the labor market. that's not good news for the long term because it leaves, if you like, scars in the economy it increases the cost of long term and, third, we are dealing with two issues here, ability and willingness. yes, some people are not able to go back to work. some people are not able to engage in economic activity but there are others that are not

willing to do so they're able but not willing until we sort these two things out we're going to have what i call the square root recovery where we don't improve as fast as we'd all like to. >> the willing but not -- i shouldn't say -- should say able but not willing. are people afraid of what's going on out there, people forced to stay home because their kids aren't in school, they're learning at home >> you and i are very familiar with financial counterparty risk we saw it in the financial crisis, when banks don't trust each other, they step back what we have here is human counterparty risk. it is very difficult for any individual to be certain whether the other person is healthy or not. that other person is not certain whether you're healthy or not. until we have a way of saying the probability of us getting sick is low, then you can have

hesitan hesitancy. that's a willingness issue i know lots of people who are able to go out, restaurants are not open but we have toll deal with the human count injurypaery risk. >> i love that analogy everybody questions what everybody else is doing, whether they're safe, whether they can be around them that's something that is really hard to quantify i guess you can go back to right after 9/11 in many of the areas that were hit hard by that, new york, washington, pennsylvania and kind of see some of the same sort of thing. i guess it takes time for that to wear off and in this case probably either some sort of a cure, a better treatment or a vaccine. >> yeah. and i think there's two distinct phases we have focused on the second one, which is vaccine and "the herd" immunity that comes with that the other phase that we could well be in for the next up to 12

months, which is living with covid. living with this counterparty risk and the good news is there's a lot we can do to reduce it it has to do with behaviors and labor day is going to be real important. i cannot stress how important labor day is going to be in terms of determining what the fall looks like for economic activity and health. >> why >> because people will want to go out i can tell you in california we're looking for a record heat. dependency of everybody, including me, is to want to go out to the beach, want to go outside and be near the water, but then you get social distancing issues, mask issues so it's going to be really important that all of us behave in a way that's consistent with longer term health we can get through this. we can live through covid in a healthy and economically productive way and we can transition to a vaccine.

it requires behavioral changes why are behavioral changes so difficult? why do we want to revert to what we did before or alternatively stay and be paralyzed. we can deal with the middle and that's where we need to be. >> mohamed, put all of this in the context of the potential economic pain and outlook. i think through a bunch of the conversations we've had about schools reopening, whether parents can go back to work. i think through about the stimulus package we had senator cramer on about whether they can get close to some sort of stimulus. when you try as an economist to look at all of those issues and figure out where we're going to be, let's say at the end of this year economically, what do you come up with i know there are so many unknowns it's hard to figure through. what's the best case or the closest, most real case scenario that you can come up with? >> we're going to be better but not where we should be and not where we could be. we will do better because this

economy is healing and this economy is inherently dynamic and trip neural but we won't be where we need to be. one is household economic insecurity steve said it. over 25 million people still rely on benefits over 11 million people haven't gotten their jobs back yet these are big numbers. there's a sense of household economic insecurity. we've seen massive concentration going on so we'll be better but not where we should be and not where we could be >> i love your white shirt crisp white shirt and the black tie, and i wonder if it's something that you maybe wore about a week and a half ago when you had a big wedding that came up, right? >> yeah, no, i wore something else and thank you for that. that was a wonderful

opportunity. but, remember, it's 5:00 in the morning here so what i wear really honestly is what i can get my hands on in a closet when i don't want to put the light on because i don't want to wake anna up. >> congratulations to you and anna we're really happy for you guys. i know it's a big day. we wish you all the best >> thank you, becky. >> thank you mike all right. coming up, this morning's corporate stories including a partnership between general motors and honda stayun ted you're watching "squawk box" on cnbc at massmutual, we know that traditions matter more if they're celebrated with the ones you love. that's why we're proud to partner with the kentucky derby. ♪

some auto news this hour general motors and honda are exploring a partnership in north america that could include sharing vehicle platforms as well as power trains, that includes traditional combustion engines and electric vehicles. this is an expansion of a collaboration launched back in april to develop two new all electric vehicles. when we come back, shares of tesla down sharply this morning. we'll tell you why when "squawk box" comesig bk. rhtac

welcome back, ever been. a number of stocks on the move

this morning, like every morning. dom chu joins us with the names you need to know today good morning, dom. >> good morning. yes, ma'am beck yeerks we will start off with shares of tesla which are down around 7%, nearly 2 million shares of premarket volume the selling pressure today is due in part to a key shareholder cutting its stake in the company. scottish investment firm bail kree gifford is a 4.3% holder of tesla stock, it was a 7.7% holder that huge run in the stock means that it violated certain rules for how heavily a stock could be weighted in certain portfolios, the firm says it still says it remains committed to tesla for the long term, nonetheless, a little selling pressure, could be three straight days of losses. next up, shares of costco which are up around a percent or so, roughly 15,000 shares of premarket volume the warehouse big box retailer reported a 13.2% sales growth gain in the month of august at established store locations. that stopped analysts forecasts. and in a continuing trend

among retailers e-commerce sales more than doubled during the month of august as well, those shares up. we will end on shares of beyond meat fractionally higher premarket, 40,000 shares of premarket volume gets initiated with analyst coverage at baird with an outperform and $160 price target, cited substantial sales growth prospects in the coming years and more product distribution globally. electric cars, big box retail and fake meat all in the mix this morning brian, back over to you. >> if you could combine them, sell a tesla model y filled with fake sausage that would be perfect. dom, thank you all right. why are we playing backstreet boys because i have two ears and a heart and also they were tearing up the chart the last time people were talking this much about frothy stock markets in the late '80s. do we want it that way

we have howard ward from gamco to tl elus stop the music before my ears bleed. back after this.

today's market rally is being compared to the go go days of the dot-com frenzy. at the end of the first quarter of 2000 the s&p closed at 1498 today sits at 3580, that is a record according to s&p global 20 years ago tech stocks made up 34% of the index, today it's 29%. back then microsoft was the most valuable company howard ward, cio of growth equities at gamco was an active

investor back then he highlights his concerns howard, great to see you, navigated that market back then fairly well. hearing the echos right now, how concerned, i guess, are you at this point >> well, i want to make one comment on i think the biggest difference between now and then has to do with interest rates. in 1999 the ten-year treasury was go from 4.75% to 7%. today we are at 65 basis points. this makes a huge difference in what the present value of future cash flows are worth when you talk about sendment and some of the ridiculous marked activities of 1999, ipos are a good gauge for that. in 1999 we had 486 ipos, so far this year i think you are just barely over 100. i think that tells you something. today's companies much more profitable than then and i think

that the metrics then we went from price per pop to price per eyeball, i think we are a little bit more sophisticated now than we were then gdp growth back then was 4.7%, this year we are negative 6%, next year we could be positive 5% but in august we had the stock split mania, tesla, apple, the run in zoom and some of the other more than pandemic group stocks, that was very much a red flag we are at a high on the sloo&p be very careful putting cash to work here. we're heading into a difficult seasonal time of the market with an election looming. i would be hesitant to put cash to work here, i think you will find a better time to do that between now and then. >> we were also back then at the end of a very strong economic cycle, very low unemployment and everything else and right now you have a lot of this kind of excitement about growth tech stocks and everything else and high valuations at the same time we have an early cycle kind of

recovery mode happening, too how does that play into things >> so, yes, one of the commonalities is sort of the increasing infatuation with technology stocks, but i'm just going -- i think it's a little bit difficult now to talk about a brand-new expansion beginning because the one that ended courtesy of covid ended so abruptly and it was really almost a two-month hiccup, it happened to span two quarters so it's a recession, but it's almost artificial in some sense. it's not -- it's not like anything we've ever seen in the past so i really sort of view this as more of a continuation of what had been the economic expansion that began in 2009 even though technically it's not >> right and of course we've got the fed acting as if it is a recession and trying to stimulate as much as it can. maybe that's also another backdrop howard, i'm afraid we have to leave it there thank you very much. getting a little concerned the market is a little bit ahead of itself

howard ward of gamco. >> thank you. if we are talking about songs that encapsulate 1999 the month that the market peaked living lavida loca was released. >> now i have ricky in my head thank you. >> you're welcome. >> thank you very much for both of you being here today. we will see you back here tomorrow all three of us will be back here and we have that big government jobs report to don't miss t right now it's time for "squawk on the street. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber and melissa lee. cramer has the morning off coming off dow 29 k first time since february and while some of the mega cap tech names are down premarket they did get bought on the dip yesterday. we will see if that pattern repeats. jobless claims come in a bit better than expected when oil is below 41 our roadmap begins with that breather on wall street. futures indicate a pause for stocks but is anothe