good morning futures pointing to a lower in that week we saw last week got almost down 10% at one point nasdaq almost corrected in three days nearing a plan to avoid a government shutdown. still no deal on a coronavirus relief package but they are back problems for boeing, the faa reportedly looking into quality control collapses in the company that go back almost a decade in this case, it is the dream liner. september 8 and "squawk box" begins right now

good morning welcome to "squawk box." i'm becky quick with andrew ross sorkin and joe kernen. welcome back both of you some big moves we are looking at today. let's look where things stand with the markets dow futures are off by 34. the big news is happening with technology stocks. down 343 points. that's big you are talking 3% of the market or 3% decline for the index. that's a big deal when you look

at what happened last week on thursday, nasdaq was off 5% on friday, another one and a quarter percent. you are taurking 6 and a quarter decline. because of what is happening with the biggest stocks in that. tesla indicated down 11% in the pre-market asml holdings down nvidia down advanced microoff off 4%. those that have boosted that we've seen selling off today you are still looking with these declines at a market at higher levels we've run up quickly and we are seeing it now joe. >> watching it head higher -- watching it ever day, we are

like this tech stuff is insane benefitting from what we are all living with now. we are back, congress is back better for america what are you thinking >> senate back or us back together >> i'll take squawk back >> do we have delusions of grander? companies getting back to work, washington wise, if you call what they do work. what do we do?

we are getting back to work too. we were watching you had fill ins and it had nothing to do with "squawk box." >> the selloff continuing with you back >> it did have a lot to do -- we should talk about it is the role of softbank artificially inflating those prices through the past month in call options that is going to create more volatility in the next couple of weeks. we'll get more details about the big bet. wall street journal reporting. the firm used stock options to tie as much as $50 million in individual tech stocks some of the reporting i've done in the

amount they've put out there if all of those continue to be bought are close to half a trillion of those details, shares dropped yesterday and today as investors got nervous on tech stocks prizing. you really look at late last week, they were not in the market and put a lot of pressure coming from behind having to buy that stock to hedge themselves once you take them out of the market that's where we are right now. >>. >> i heard it was something like

$4 trillion ahead of that trade. just saying there is something like $4 billion upside on that they are up on the trade at this point by about $4 billion. it is still unnerving to investors who thought they were investing in startup funds but it turns out it is just masa son playing the market >> absolutely. you could go back and see some of the buy in earlier. the issue is that they bought so much more in three to four weeks because they did it with calls because they are losing calls

and how much stock is in the market and is being pushed oup and seeing that the stocks are moved up seeing the volume that will cox later because so much was done, quote/unquote off the tape, if lu >> or it may not come because a lot of the calls were never really the underlying issue as well getting to a heart warming story. congress treasury secretary says democrats and republicans

haven't reached a final deal on spending but he expects congress will move forward. he had meetings with pelosi and said that is not expected to create relief provisions acting chairman council of economic advisors, goodsby at the rate of change and the markets down but not out you wonder how much pressure is on lawmakers to do more being a bigger tickets

>> this makes it tougher you continue to see the market at this level. the market is not the economy. it takes the pressure off some aspects and what you see as better than anticipated jobs numbers. you already had a lot of congressmen and senators not interested in coming back to the table and this probably gives them a more wait and see approach you are already way up here and now up nothing little did we know that that may have been sort of a climax in terms of buying it

we'll see the sharp corrections typically part of a continuing move higher. with the election coming, i think all bets are off poor boeing. really it is not even the other plane i read it and it was like fusilage problems and the dreamliner can you imagine checking 900 planes for structural whatever this company just can't get a break at this point. >> you can see boeing shares are off 2.1% this morning. those shares are under pressure after the faa says it is invest gating certain manufacturing flaws. the regulator isn't giving more details but a report that production issues may stretch back nearly a decade >> you are talking a lot of

planes that have to be checked to add this to the pile of many issues boeing is dealing with. it had all the issues going into this with its own planes and then to see the shutdown we've seen in terms of flights and airlines under pressure and not having money to buy new planes add it to the pile of many things they are dealing with >> some day we'll all fly again, maybe. >> yes of course, you are talking about washington, we are waiting to find out to see if the airlines will get a second bailout and boeing is waiting on that as well >> nobody has flown? >> of the three amigos, no none of us have been flying yet.

i know other people who have beenflying >> moving it around and held it here it stops looking >> we'll get you a tesla so you didn't have to touch the accelerator. you can read a book. >> but i'll have to stop at a waffle house a lot of people who were driving over the weekend, labor day gatherings were a big concern for experts. we'll speak to the former fda

commissioner dr. scott gottlieb. we'll take a look at futures under pressure the dow off marginally, the s&p off close to 1%. the nasdaq off over 3% faang stocks are down. we'll continue to talk about why and what next on cnbc. stock slices. for as little as $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing

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>> just waking up here as far as the dow is concerned, you can go back to bed look at the nasdaq, then you better stay up and monitor this. remember how some of the big stocks in the nasdaq had performed going to the levels you wouldn't believe they would reach in two or three years and they reached this emso quickly the pull back might make sense in something like a tesla. apple got to levels, $2 trillion, we talked about $1 trillion this is more than people taking money off the table. a top uk health official says a covid-19 vaccine would likely be available the first

few months of next year. noting they have started production of 30 million order of astrazeneca vaccine trump said a vaccine could be readyin october. joining us now dr. scott gottlieb thank you for joining us nice to see you again after a week off for me, not necessarily for you. doctor, help us understand this time line. does this make sense to you? i know there has been concern about this moving too quickly. in line with what you've been talking about. the president saying an approval could come even earlier. do those things square they may >> probably not. the uk is right that access to

the vaccine is riekly a 21 event. what we will see is a staged surge. the likelihood that will come in october is extremely low the trial has been lower than we thought. the pfizer trial, i'm on the board there, that has been good. moderna trial has been enrolling low. you might not be able to reach the number of events you need to have in the trial until a little later. you might see a decline in the number of events these will read out when you have the number of people with covid. in order to get covid, they have to be exposed and you have declining rates in the country to get the read out in october, you have to have absolute

perfection it is far more likely that you'll not get a read out until at least november. before you even authorize these under emergency use authorization, you'll want long-term follow up data patients get the first dose and will have to wait three weeks for pfizer and four weeks for moderna to get the second dose you'll want to start counting or looking a few weeks after because that's when the antibodies peak or start to rise waitling, that's a while >> one thing i under -- understood, are people who take the test purposely exposed to covid? how does that work

>> no. they are not exposed to covid nor tested prior to enrolling or excluded if they've been exposed in the past. it is all comers who meet the criteria you have to be certain ages, they exclude certain comorbidity. you are vaccinating and waiting and seeing how many people get it in the control versus the treatment group. they are not going to be intentionally exposed. they are encouraged in the trial to continue engaging in mask wearing, social distancing, all the things you should be doing they are encouraged to the bee lafors in the trial. >> doctor, can i ask a dumb question you said they are not taking people with comorbidities.

those look like they are the biggest aggravating factor, is there a risk if you are not doing phase three testing, there could be a problem >> they are enrolling people who have health conditions but certain things would be excluded if you are undergoing treatment for cancer, that would be something that is excluded they are enrolling older populations and people with background comorbidity you'd see in the standard population >> doctor, you were early on advocating for testing only 50 million of those tests

may get produced between now and christmas. what does testing look like even with the vaccine in place? i know many places that are planning events and looking into massive testing programs something we haven't landed for this fall including schools and other large organizations. >> i think testing will be introduced to the work place or schools or in advance of people entering certain venues, that is a longer way off that might not be the best use of a test in those settings. that will be enough before we have chief point of care diagnostics that can be used in those settings abbott t test can be used in

places roche is working on a similar test and other companies trying to enter the market. the think you'll see more available of these cheap, lateral flow tests where it is easy to administer they should find their ways to schools and more work places that will adopt testing. using testing for gaining access to a venue is a long way off and frankly might not be the best use of a test. >> if the fda were to approve something and it wasn't approved in other countries, or the other way around, do you think that would prevent people from taking

it >> with the exception of being the uk where there are clinical trials going on with the astrazeneca vaccine in particular i think u.s. regulators would want to see the data weigh out there is a data safety monitoring board they are not going to stop those early unless there is overwhelming efficacy in those and i can't envision a scenario they would do that those will read out when they have enough events and the fda will want to wait for a certain amount of patients to have six weeks to two months of follow up data i think you are looking at at least november and it will take some time before they authorize it

first, high-risk populations and then skedly increase to have the vaccine widely available to get it at some vaccination site or doctor's office that will be widely available before next year >> always great to see you and get insight. i know you'll be talking about this more in the coming weeks. thanks there are moves out on tesla now. you rprobably remember, it will issue additional $5 billion shares it saw fit from the three days it announced that. it announced september 1 it put out news it completed the sale of $5 billion in common stock completed on september 4 after announcing it on september 1. if you look back over the

course last week about what happened to that stock over time for tesla, it was an opportunity time to come in, it covid the $5 billion at a high price. down sharply today if you go back, it was at 480. it has lost about $100 significant decline. not quite 20% but a big decline. down 10.5% today today is really the overall technology stock under pressure. you've beenwatching the nasdaq this is an issue of what goes up must come down we watched all of these stocks run. even with the selloff, tesla is still up 270% year to date you are talking about these stocks that have continued to soar any of the faang names,

microsoft, those continue to soar and we've seen some of the selloff over the last three trading sections and this morning in the pre-market. >> yes buy low, sell high we'll have jeremy siege al on, he might say that's a smart move my life i kind of base on fwi r twitter trolls and trends. dictates most of the things i do in my life we'll see something. there are people who will love what elon musk is doing and people who hate it both sides of those people are going to decide that we are on the opposite side of them and get mad at us for whatever reason that's par for the course. >> comes with the territory.

>> it is, isn't it people have said i'm long a trillion shares of tesla, and others say i'm short a trillion shares even though they are not allowed to invest in anything. i didn't look at it. i just can't >> there will be some angry investors today. es sp les especially if they bought at the top. looks like the right thing for tesla. they he is occurred the money. when we come back, a battle of the billionaires over raising taxes on the rich, more after this what you're made of, we're made for. usaa

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develop the covid vaccine. these are the forerunners. all of the companies in addition to merck, pfizer and astrazeneca, astro smith kline, sanofi and others. signing on to always make safety and well-being of vaccinated individuals our top priority continue to adhere to high scientific and ethical standards. they pledge to only submit after proving safety and efficacy in phase 3 clinical studies and working to ensure a sufficient supply and range of vaccine optons saying we believe this will help to ensure public

confidence by which the covid-19 vaccine will be evaluated and approved this comes as development is coming at unprecedented speeds and we hear about those uneasy taking these the vaccines as specially as the fda leadership has come under question regarding political influence with plasma and hydroxychloroquine 30% of people have said they would definitely not or likely not take a covid vaccine so the companies stepping in to say they'll keep safety first. >> in response to the rumors we get to using one of these before completing the process there is always pressure on the fda obviously in especially when

we are talking about life and death situations to cut corners. they are putting that out there. especially with so many people, vaccines are so controversial, even before this with the anti-vaxers and everything else. we remember with polio before we knew anything, luckily nothing happened you need to be sure. so much more now understanding how they work. i would be comfortable with one of these -- scott has talked about earth the adnomediated if it is a small stretch of the messenger rna, i'm not too concerned about contamination. i understand a weary public

needs to be absolutely certain we've crossed all the is and dotted the ts. right? >> as they say we are coming up on that final stretch in the vaccine development process. this only began in january, really but when we get to the end of october. that's when pfizer is indicating that they may see results about whether their vaccine works. they've scheduled an advisory meeting. a lot of people will look at that date and say, will we see the data these are nine major drug makers saying their first priority is safety >> saying not only building public confidence for covid vaccine but protecting the

sanctity of vaccines in general. the reason you don't want to rush through and put something out there that hasn't been thoroughly vetted with a fiez 3 trial, if there were problems with it, it would convince people not only to not take a covid vaccine but undo a lot of work with vaccines around the world. joe brought up polio he actually vaccinated his children when testing this out we don't do that anymore there has been so much we have done with vaccinations that we don't even think about because over the last 50 years or so, they've gone away. this is important not just for covid but faith in vaccinations at large >> it is so fragile.

public health experts are concerned with a miss step here when vaccines are so important could shake the fragile confidence in vaccines in general. as you pointed out that they've rendered all these diseases. we don't appreciate that vaccines did that for us so there is a lot on the line here. >> yes meg, thank you we'll get back to less esoteric stuff coming up. futures pointing to a lower dow open now down 132 pressured again by tech stocks. we'll talk some of the bgeigst movers after we come back from a short break. as business moves forward, we're all changing the way things get done.

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we have tech stocks under significant pressure this morning. joining us now, reggie brown, principal and global market strategist reggie, just looking through some of your thoughts and comments on the current state of things, in summarizing, i guess you'd say these bull market corrections can be sharp you think eventually, even in tech, you get a resumption of upward trend >> good morning. it feels that way. september, october, it is always

a little rocky for investors, particulary going into an election cycle i think any temporary move to the down side will be met by that action going into the year. >> what do you attribute september and october on any year is problematic. what do you attribute what you sought, is it technical or anything in terms of polling, does it have anything to do in terms of what is happening >> it may be due to the large investor that may have some options going on that may be part of it you may have some offset around the tech sector around the natural buyer into the marketplace.

it is fundamental here but, look, the work from home situation and the drive to technology delivery, i think we are just in a new investment cycle. i see nothing but blue skies going forward. >> okay. so david, the jobs report, continues to show progress but do you see the recovery stalling or indications that the recovery is stalling? >> i think that's the key question, joe. this is evolving into a tale of two different recoveries on one hand, you are seeing a strong bounce. a nice inventory build and the contrary to that is everything going on in the services sector where we are bringing things fully back on line it is still being impeded by the presence of the virus. part of what is happening here

and the selloff was really a recognition of easy money to be made, the easy bounce has occurred and will be more challenging. some of these high fliers will come back to earth and depending on the outlook >> so after labor day. how was your labor day you didn't go to a big party, hopefully. >> definitely not. >> this is when we start focusing on what's coming. i haven't done the math. it is not too far away i reference with reggie. you've got the white house, the senate

is that the focus and we have the coronavirus? are these washington events going to have any impact on the stocks, the stock market between now and what did you expect that to be? >> i think the answer is absolutely near term, we need to see another round of stimulus and that's where the market is placing its focus. that will bridge the gap of the economy shutting down and coming back on line as policy does that, i don't think we'll do that with the stride assuming we get another round of fiscal spend, they'll focus to another round of fiscal suspension with relation to china's relationship you mentioned this, what happened with the congressional races. what happens with the race for

the senate and the house i believe if we see the possibility the blue weave is increasing, markets will not take that well and you'll see that increase on the back drop >> in closing, you expect possibly some new highs in the averages is that across the board, do you think? will the nasdaq recover what we saw last week? will all averages move to new highs? >> i think we'll end up end of the year with new highs here talking about the election with president trump or also potential biden administration, fundamentals doesn't change. i think investors would quickly understand where investors lie in a biden administration. look, nasdaq 3% to 4%. i thi i think you would end up higher

at the end of the year s&p and nasdaq 100 >> appreciate it time will tell we'll have you back. you may be coming to say, i told you so or not we'll have you back. >> coming up weeshlgs return to more in the markets. some of these tech names getting hit hard this morning. tesla off close to 10% tonight on cnbc, tune in to a special program. path forward, race and opportunity in america i'll be joined by john ford and we'll look at underpresentation of black leaders that's tonight at 7:00 p.m. eastern time here onnb cc. anything your wild child does

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welcome back to "squawk box. we have completed the sale of $5 billion it sold all of that stock. it's off by 9.6% dan ives is managing director at web bush securities. dan, we want to talk about tesla. given the selloff we're watching

in technology stocks, why don't we talk more broadly about the stocks that are unraveling and unwinding. >> the process our transmission is there. covering it. the ambassadors call me.

>> from what i view, an eye for an eye the confidence in the uptick. i will white knuckle here and the northeast.

>> if you go back to 2017, you can continue to bring it up. this isgoing to be the sector that goes. as you look at the conditions they've been accelerated by that >> i believe in terms of what we're looking at the recovery in terms of first

rock of gibraltar through the environment. now you have an economic recovery >> dan, we're out of time. >> i think it's a knee jerk. they'll market it. s&p. >> what to expect.

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after the holiday weekend, what to watch ahead of the opening bell in the health care the flu season

for boeing phil lebeau and the second hour of "squawk box." good morning "squawk box" here on cnbc. becky quick and joe kernen all three of us together it's coming to an end. this is where we are this year things to watch right now. the s&p 500.

>> the technology shares suffered their worst selloff in more than five months last week. fears that the tech run up may have pushed it to unsustainable levels mike santoli joins us. he has more on this front. mike, what do you think is happening here >> it was a give back to this. what looks like an up side over shoot in nasdaq during august. take a look at this picture comparing different segments of this market. this is the qqq. that's where it's all been happening. half of this is faang plus microsoft and others this give back here as you see is very sharp but really not even back quite yet to this little moment right here that was august 11th that was the day tesla announced the stocks put which is mostly aesthetic, mostly psychological. it did create this acceleration. you can see it's not yet necessarily cutting into most of

the margin of advantage. this is the equal weighted nasdaq 100 this is just weighted by every company equally. then you have the s&p 500, much more modest, both on the up side and down side. then this is the equal weighted s&p 500. the average stock of the 500 that's mostly been steady in an up trend but kind of calmer. so at this point it seems like it's a give back of a little bit of that excessive run higher in the last part of august. this pull back in the nasdaq 100 is deeper than the three or four others that we've had since march. we've kind of shaken a little bit of the short term up trend this is tesla compared to the qqq, the nasdaq 100. makes the nasdaq qqq look completely boring. there's a whole lot of error in there to play with if people are deciding that all of a sudden somehow the bull case with tesla has been unsettled here, becky >> mike, that's right. you made a point last week, that's a good one. the strategies work until they

don't. the huge question today is is this a reversion to the mean or is this just blowing off a little bit of steam. this time really is different. >> i think both of those forces are in play. reversion to the mean basically is the market in very concentrated bets. it was high velocity rally that we got through august. it doesn't really disturb the overall trend since march. it does tell you that people are rethinking how much they emphasize some of the short-term plays especially in the large tech stocks and in the large kind of software area. so i do think it's a rethink i don't know that we can necessarily say this is game over the question is how the market absorbs this profit taking or this backing away from the big tech stocks because there's just not that much market cap for it to move into and sometimes there's a little bit of friction in that process, even if this is just a little bit of a shift into other types of stock. >> mike, thanks. we'll check in with you a little bit later. joining us right now is mike

pyle from blackrock. mike, let's get your thought on this is this a pull back that's a reversion to the mean? is this an undoing of the trade that we thought or is this going a long way and this is going back to that >> yeah. i would say there are some really significant sources out there of fundamental uncertainty, fundamental volatility looking into the fall obviously a lot of restarts around schools, the economy more broadly, risks around the coronavirus as that happens. risks around u.s. fiscal policy and the sport and risks around the u.s. election in coming weeks. in some ways we think august was a little bit calmer than the fundamentals would have suggested it would be and the volatility in the past week. it's just reflective effect that this is an uncertain effect as we go into the fall but investors are going to be rewarded by staying invested through that volatility.

>> staying invested in what? should they be staying invested in the faang names, tech high flyers or would you be advising they pick some of the 490 other stocks in the s&p 500? >> so i'd say it's a little bit of both. the things that we've really come to like recently, we upgraded around u.s. high yield last week. we continue to think that credit broadly is the better place to be taking risk exposures right now. positive backdrop for risk overall, the restart underway, strong policy backstops but the valuation picture on things like high yield, the proximity to policy support looks somewhat more constructive. this looks like a place where investors can be recorded in the coming months. >> mike, you listed all of those concerns i get it

why do you think now we are suddenly focusing on it? is it the calendar or something else we're talking about we've talked about softbank and some of the option plays going on in the market do you think this is technical issues underlying fundamentals in the market this is the calendar and we realize a lot of these issues are dissolved and decided in the next eight weeks >> yeah. i think it's a little bit all of the above. so clearly the technical dynamics that you describe were a sort of proximate cause for some of the volatility we saw last week. to our way of thinking, a little bit these risks that i flagged that we're all talking about were the dogs that didn't bark in august. i think as we've turned the calendar over into september as we're looking ahead into a fall into this eight week sprint to the election, into the four weeks between now and when some of these fiscal policies have to be resolved, we see the growing drum beat, all of these things are really just -- are

fundamental uncertainties out there that are really now being recorded by markets. >> let's talk about washington with congress coming back into session today, we have the conversation earlier this morning about how there may be less impetus and less unanimity, if it's even possible to have that with the idea they'd come up with some sort of stimulus package. the numbers with the jobs report were better than anticipated on friday you see tech selling off you're talking about elevated markets to an extreme level. you're getting closer to the elections so there's more head butting taking place in all of these issues if we don't see a stimulus package that's signed or agreement reached by the two sides, what kind of an impact do you think that would have on the market >> so that's one of the reasons why we pulled back our call on the u.s. where we're now neutral to the u.s

we think the fiscal policy risks manifest themselves. we've seen the clouds gathering around over the summer they've really come to pass and are increasing as we look ahead. i think that we are still constructive that between now and the end of september the two sides will come together, that we'll see a deal around unemployment insurance, state and local support, what have you. that really is the failure is a pretty significant risk factor over the course of the fall i think what all of this does is highlight that the period of time where we got to the maximum policy under the spring is giving way to a much more practiced environment now and the fiscal policy risk is going to be one likely with us through the fall and maybe beyond depending how november turns out. >> mike, thanks a lot for your time today good to see you. >> thanks for having me. coming up, former commerce secretary and kellogg's ceo

carlos gutierrez launching a company developing employees and discover their skills and the ceo of em path getting boeing back in the air another hurdle with a number of dreamline dreamliners. let's check on the market. "squawk box" will be right back. the dow is down 70 that's off the wst lelorevs and off the best be right back.

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we will be hearing from tyler goodspeed coming up at 8:30 this morning. covid-19 crisis has accelerated the need for workers to reskill, but it's estimated that costs related to using external hiring versus

reskilling employees that you already have can reach up to $200,000 empath is a skills intelligence startup. it uses ai allowing them to have insights into their work force joining us is secretary carlos gutierrez, co-founder of the company, and chairman of the group and we're going to have felix ortiz, founder and ceo of empath former army veteran. for now, mr. secretary, we'll start with you i was actually going to go -- oh, hopefully we have the ceo. carlos, if i was going to found a company, it's like -- and i could get secretary gutierrez, a commerce secretary, i would do it but i wouldn't necessarily go to you as the first guy to explain ai and reskilling work

and empath and how it works. i'm not selling you short, but can i -- >> that's a good question. >> can i go to felix first go to felix first. it's a great idea, but the overall idea, mr. secretary, i want to go to you on because it's sad creative destruction you don't need all the people that were at the old skill set to just go away and fend for themselves it would be great to do it in house. i think that's maybe where you come in, mr. secretary felix, give me the nuts and bolts. how would you really go about doing this >> first of all, thank you this morning. hopefully you had a great labor day weekend. em path, we are a skills intelligence software as a service. we are allowing individual employees to uncover their hidden skills. as a result of that, we're allowing companies to fully understand the blind spots that

their employees have in the organization where managers can make better people decisions based off those insights. >> using a.i. to do that once you realize the short selling due to covid or the break neck speed of technology and change, how do you implement a training program that's customized for the employee that you've just evaluated? >> so companies today spend a lot on content in some cases some firms may have thousands if not multiple thousands of content the problem is that content oftentimes is inefficient. so we zero in to the specific skill that correlates against the learning program and meets the demands of the business so that that employee continues their reskilling, upskilling

within the organization. >> joe -- >> secretary gutierrez, when you hear felix talk, you're nodding. do you understand exactly how this works >> absolutely. >> how are you getting involved with that? go ahead >> i can use an iphone but i can't tell you what's going on inside the iphone. that's the important thing i think about this as if i were ceo, how would i view this product? i can't think of a better product for this point in time yo you are' asking about my interests. joe, i don't have a university degree so i -- while i was growing up in the corporate ladder i had to build my own skills so i took my own courses in finance, marketing, hr, industrial engineering, things i knew i would need. so i understand this i understand that focusing on diplomas as the currency isn't the most efficient and effective and companies have been moving towards skills the second thing is, look, in a

startup, tech startup, there's no question. technology is the product. technology's what's going to make you successful, but a lack of management will make you fail so what i bring to this is a passion for skills and the management but i can tell you that this is -- it's a real game changer, joe, because it changes the culture in a company it empowers employees to understand where they are, where they need to be. if they want to be in a certain job, what else do they have to do for training. and it also makes better leaders because instead of talking about these coaching sessions where they're very subjective and anecdotal and these end of year performance reviews, now the conversation is around skills. how are your skills? how can we improve them? how can we help you move up? so right time, right product. >> carlos, this is a question that occurred to me. there's some benefit to having a

really fluid work force. they have a lot of mobility for people moving around this sounds like kind of the opposite, you'd want to keep everyone you have or that may have the hidden skills that you need and they don't need to move could that actually be a deterrent overall to just having people that are suited for a position be able to get that position easily? >> well, what the skills focus does is make sure they have the skills to do the job, and we know that retention will go up because companies that pay attention to employees, especially millennials, by the way, are going to keep those employees a longer period of time this generation wants coaching they want feedback they want to be trained. they want to know where they're going and they don't want to go to generic training courses. they want training that's focused on them but, sure, they can move up the organization

you can even do a bit of a gig economy inside of the organization a lot of agility in moving from job to job because you have the skills to help honor a given task force on a team so this is -- you know, it helps move employees on a fast track you have high performer. you want to move it on a fast track. you know exactly what skills they need and what training they need >> so, felix, did the impetus for this as far as you go, you are a veteran, you know how difficult it can be for vets to come back and i can't imagine trying to go into a high tech business did that have something to do with your motivation in founding this company >> yes, it did, actually as a veteran coming back into the work force, i was lost i remember going on job boards and having these key word index systems recommend me to positions that i was either under qualified for or over

qualified for. there was never an actual match so my battle buddies and i would often get demote vated to the point where we would be frustrated so we just decided to solve the problems ourselves. >> great all right, gentlemen thank you. felix, good luck thanks mr. secretary, we have as a show gone through your various hair choices. you had the beard which looked good but shorter hair. now you've got the high tech haircut, i think, to be a -- sort of a tech entrepreneur. >> this is my covid project. i'm going to get a haircut once a year whether i need it or not. thank you, joe i appreciate it. >> you are very welcome, mr. secretary. thank you. >> thanks a lot. >> we understand that, right, andrew >> thanks, felix we deal with the same -- i've

rediscovered a longer look, andrew >> clean shaven. >> a longer look >> i go with the shorter hair but, you know, in covid times. in covid times meantime, when we come back, we've got a lot more this morning. the faa investigating manufacturing flaws surrounding a limited number of 787 dreamliners. an update on boeing's new battle is next. later, with flu season approaching, covid cases continuing and test collecting and processing is now a concern. we'll hear from haven and surgeon tuga wande it's focused on fixing america's testing problem. "squawk"etnsig aer is rur rhtft gives us confidence.ith voya they help us with achievable steps along the way... ...so we can spend a bit today, knowing we're prepared for tomorrow. wow dad, do you think you overdid it maybe? i don't think so... what do you think, peanut? nope!

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the week for boeing. involved with eight of the dreamliners. the fuselage towards the back of the plane. the fuselage joints. it's where the fuselage points

come together. two separate manufacturing flaws there. in a statement boeing says individually these issues, while not up to specifications, still meet limit load conditions when combined in the same location, however, that result in a condition that does not meet limit load requirements. again, those eight dream liners, they have been grounded while boeing works with the airlines that own the planes in inspecting those areas, fixing those areas. that's enough for the faa to say, look, we're going to investigate the manufacturing processes here whether or not this results in a full blown review, an airworthiness directive that could be applied to the 900 to 100,000 dreamliners that have been built, too early to say at this point when you're looking at a company that has had questions about the quality control when it comes to manufacturing, this is not a good headline. >> yeah. phil, i guess if you try to add it all up, if you were to put

the situation -- the dire situation of the airlines their customers are in right now, if you look at the dreamliner, if you look at everything they have been dealing with coming into this, i mean, that is an awful lot to have on their plate to be trying to sort through >> sure. >> stock is off 2 1/3%. >> reporter: right it remains to be seen, becky, is this a specific situation with these eight dreamliners or is there a broader issue? there was a "journal" report over the weekend that there is a review going on according to a memo at the faa looking at the quality control processes surrounding the 787 dreamliner i talked to some people familiar with this and they say, look, the language there, you can't extrapolate that out to say we're going to see a massive airworthiness directive that impacts all 1,000 dreamliners. it may be ultimately that the faa looks at this and says there was something that didn't go right with these eight planes, it's been corrected, it's been

identified and they can move forward from there it's a little early yet to determine exactly the significance of this in terms of a broader picture when it comes to the manufacturing of the dreamliner >> thank you, phil good to see you. >> reporter: you bet you, too still to come on "squawk box," as we head into the fall, testing concerns continue. we're going to hear from the chairman of haven about america's testing problems during the pandemic and what it means for the upcoming flu season. check out the futures right now and keep your eyes on the nasdaq this morning. slmber of big faang stocks and tea getting hit hard this morning. we're back after this.

welcome back to "squawk box. the futures. nasdaq opening down. 357 points the dow jones and the u.s. and the developers the coronavirus test they're close to useless a new article in the new yorker,

they're lagging behind in testing. to solve that problem. joining us right now, staff writer of the new yorker it's been a while. it's good to see you before they wanted to make sure. it's a study the safety and efficacy, there's a push what do you think of it? >> i think that's a very big and

following the signs. >> meg tirrell had pointed out they probably would not. the idea of what would happen. >> i don't blame them. you take the vaccine it's very important.

>> dr. gawande. >> being able to get done quickly and be readily available, you think this is a problem that can be fixed in a matter of weeks. we didn't have the tests approved we didn't have labs capable of deploying them.

>> we don't have -- i compare it to the electric grid we don't have a system that matches capacity in the regions and cities where there's lots of it that's what we have to deploy. it's sort of a fundamental aspect of the public health infrastructure that we lack in this country whether it's ventilators, now it's tests in the months to come it will be vaccines. we need that basic public health infrastructure that matches the capacity to the need and we can do it. >> i was a little surprised, shocked even at how much excess capacity there is in some of the labs that you've visited and

seen talk about how many tests you think could be done. just in the labs that you've already kind of checked out and seen >> i'll give an example. here in boston there's a non-profit lab they're affiliated with harvard and mit. >> when i visited them in the middle of the summer, they had -- they were doing a few thousand tests a day in the state of 10,000 people, they were already, you know, one of our largest sources of capacity we've had good turnaround time but they had on hand in the middle of july 35,000 test a day capacity in a country doing 650,000 tests a day and given the signal, they could expand to 100,000 tests a day. then another company here, ginko bioworks is building capacity to do north of 200,000 tests a day. again, the question is can they bring that capacity on to more than just this regional community and tap it and bring it else are with

i point to companies also like helix, garden in california. we have university of minnesota genomic center has tens of thousands of test capacity ready to come online this is the situation we have where you do have big parts of the country where there's still a difficult turnaround time. quest, lab corps have told us they can't carry the load when the surge comes in the fall and we're already not able to meet the needs in making sure everybody who's sick has appropriate testing. so this is -- this is basic public health work and infrastructure we should be building now but we aren't doctor, question for you we've talked a lot with dr. scott gottleib over the next several months about irrespective of whether we get a

vaccine next year whether we'll need massive surveillance testing programs across this country. not do that for the next several months but an extended period of time >> i think if the fire is spreading the way it is, we'll have little choice to do that.

>> second, we need to make sure that sick people, anybody with symptoms, can get a test but there are big parts of resuming normal human interaction that are going to require what i've called assurance testing. they're wanting to have travelers return into a state or getting filming going again or lots of essential work nursing homes are there.

>> they have a quick test. that would change everything in terms of creating the economy and people's ability to travel >> yes, i agree that when it comes to -- that's an example. you want to get on a plane with 200 people at the current rates you can expect there would be a case on the plane. unless we have testing, that will -- you will not feel you're able to do those things with the same level of freedom that we used to have. >> we have to know how to deal with that. >> doctor, i want to thank you for your time. it's good seeing you

we'll have you back soon >> delighted to be here. >> coming up, nikola out with a big announcement forming a strategic partnership with general motors nikola badger will be engineered and manufactured by gm gm is getting 11% ownership of nikola and the right to nominate one director to the company's board. as well as gmceo mary barra. next, gm gets a $2 billion equity stake in the company in exchange for in kind contributions. it's kind of interesting we'll be talking about it. gm will engineer, validate and build the badger for both the battery electric vehicle and fuel celek trick vehicles that are part of the in kind services nikola anticipates battery and power train.

also $1 billion in engineering and validation costs with this deal, this alliance with general motors elsewhere, amd -- >> it's remarkable. >> yeah, isn't it, andrew. go ahead >> i was going to say, you look at the market companies of nikola and gm. nikola is 1/3 of gm and now you're putting them together to some degree. i think a lot of people thought of nikola as a sort of tesla smaller version, we're going to talk with mary barra and the ceo in just a moment how does this change gm? how does this change the sort of profile, if you will, of nikola. evs have been a lower margin business for most of the auto manufacturers. what does the public or investor class see in this? there's a lot of interesting dynamics to what this means in terms of not just the trucking

market but also does gm ultimately get access to some of this technology to use in other of its vehicles? we'll discuss it with all of them >> very good anyway, i think we're going to do this now, andrew, maybe that's what it looks like here maybe we're going to skip a break. go ahead take it away. >> let's skip the -- what we're going to do, joe, take a quick break and on the other side of this, the ceo of nikola is going to join us as well as mary barra, ceo of general motors we'lbrk isl eath entire transaction and partnership down in just a moment right after this my name is joe. i'm a sustainability science researcher at amazon. climate change is the fight of our generation. 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 when disaster strikes to one, we all get together and support each other. that's the nature of humanity. ♪ it has encouraged other people to take the time for each other. ♪ ♪

welcome back to "squawk box. the dow is down. big number down more than 400 points as we're looking at the futures selling off a bit this morning. those are some of the worst numbers we've seen for the s&p as well. we're down 30 and change a little earlier now we are indicated down nearly 50 points. we'll see when the regular session gets started at 9:30, whether we have a continuation of what was a pretty dicey week in terms of the tech selloff last week. it wasn't just tech. it went to some of the other things that we've -- risk-on trades that we've seen in gold or even bitcoin which came down quite a bit. i don't know if you noticed that last week, andrew. it's funny, the things that are

supposed to be non-correlated aren't always non-correlated it has to do with whether money comes into something or comes out of something. >> i don't know if you're looking at this. tesla stock off of 12% just this morning. apple hasn't crossed the 5% threshold just yet but also looks like it's going to be off about 5% right about now. >> across the board. >> yeah. it's coming off. one of the things that i don't think has been clear yet on the softbank call options that we heard about last week is where tesla fit into that, if it did at all we do know that they were investing in some of the big faangs unclear also about netflix question is whether softbank is in the market. very curious whether softbank is in the market this morning, by the way, as some of the stocks

do fall when the price comes down looking at tesla, there's some other big news in the car business this morning or i should say the truck business, and we have two biggests to help break it down. nikola just out with a very big announcement moments ago right before our break forming a strategic partnership with general motors nikola badger will be engineered and manufactured by gm gm getting 11% ownership and the right to nominate one director to nikola's board. we'll talk all about this transaction when we do come back in just a moment you're looking at nikola stock up close to 30% this morning just on that news. gm up as well. not nearly as much though. trevor milton, mary barra will join us in just a moment gm, eye th'rup close to 8% back in just a moment.

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welcome back to "squawk box. nikola badger will be engineered and manufactured by gm gm getting an 11% ownership stake and the right to nominate one director to the board. joining us to talk all about it is founder and executive chairman of nikola and mary barra. good morning to both of you. i'm going to start on the gm

side if i could, mary, and try to get a sense of how you were thinking about this partnership and why you ended up deciding to do this. then i want to get to trevor and what it really means. >> thanks, andrew. we're very excited to be partnering with nikola when we look at the opportunity to continue to leverage our technology, the ltm battery platform system as well as the hydro tech fuel cell technology, this is a wonderful validation of our technology. then bringing our engineering and manufacturing expertise to the table. >> so, trevor, i know you were looking for a manufacturing partner for quite some time. in terms of this transaction, just break it down for us. our understanding is gm is going to receive $2 billion equity stake in the company i assume that's at the valuation prior to the move this morning and we're looking at your stock, by the way, moving 45% right now on this news gm is up 8%, is that right

>> yeah. i mean, look, we had -- with four or five different oems, we had the best one for nikola. gm was very unique because they brought a lot more than building the badger the whole world was waiting for us to tell them who was working with us building this pickup truck. gm was definitely the top of our list after i got to know mary and the whole entire team, it was absolutely the right decision for the company to do. i mean, this is -- it's a perfect relationship they're one of the best purchasers, manufacturers, engineering houses in the entire planet and they're working with nikola with all of our intellectual property combining it with what they're doing the badger will truly be one of the most amazing vehicles ever built. it compliments their existing power train. making an 11% stake in the country.

throughout our life and agreement with gm, we're going to see a 4 and $5 billion savings with battery costs alone. then for gm, cross utilize it. everything we're doing, it's perfect relationship without hurting each other >> trevor, real quick. will gm always be manufacturing it. >> no. we do not want to make our own truck line and billions and billions of dollars, engineered, validated, tested with the team as well so we get access to the entire supply chain, the team that's built some of the best programs in the world. the silverados, hummers, everything they have the best of the best and they will be building the trucks out of the plant. that was the idea to save nikola billions of dollars while still

building with several something that doesn't conflict with our dna. >> mary, gm is expected to receive 4 billion of benefits between the equity value, the $2 billion value along with contract manufacturing of the badger so i'm assuming those are going to be contracts that nikola's going to be paying you, is that right? >> sure. you know, in addition to all the technology that we're bringing and the value from both an ltm and hydro tech technology perspective, there is we'll be doing the manufacturing, validation and engineering all of that comes together it's for the badger but the fuel cell technology for the nikola and the truck segment. this is a huge growth opportunity. as trevor said, as we started to talk, we realized we had a similar vision and the teams had already begun discussions. we couldn't be more excited

about working with nikola. >> and, mary, just so i understand, while nikola will be using some of your technology, are you going to be allowed to use some of their technology in your trucks? >> well, i think, you know, the truck -- the badger truck and class 7 and 8 trucks are going to be leveraging the propulsion technology, the ltm and hydro tech as we go forward we might find other areas that we can collaborate and share but that's the foundation we're building off of right now. >> then one related question i see you're going to get a board seat on the company, general motors will. is there any opportunity for gm, like a first look opportunity to ultimately buy out this company and take it inside of general motors >> you know, i think we're very focused on working in partnership with trevor, his team they've got a strong team and a great vision and that's what our focus is is working together and seeing both companies grow

>> and related to that, mary, because we're looking at the stocks moving. it's an unbelievable thing nikola now up 42% this morning just on this news. your stock also up, mary, up over 7%. you look at the valuation, nikola, it is -- it's about 25% of or maybe closing in higher this morning of your own valuation. does that make sense to you? as someone who's been in this business a very long time. >> well, i think we're leveraging all of the skills and capabilities that we have. you know, a rich and very accomplished engineering -- design/engineering team, manufacturing team leveraging global sell with purchasing we're going to continue to advance our goal to create an all electric future with partners like nikola as well as what we announced continuing our partnership with honda that's the way to unlock value at general motors and we're going to continue to stay

focused. >> trevor, can i ask you the valuation question we are looking at the stock up as i said, 45%, which is a huge move and yet as i said this represents a big chunk of what even gm is worth today of course, there's no car that's been sold yet. >> yeah. i think the world is rewarding those that are changing the world for the better they're kind of tired of some of the old legacy philosophy where it's like, okay, this is all we do, we build cars. the more cars we build, the more we grow. we know zero emissions is a huge part of the world and the investors, esg and other investors, they're sitting back saying, you know what, we're going to invest in those and reward those that are willing to completely disrupt the supply chain and go to zero emission. that's why nikola is such an incredible story the whole world is waiting to announce this. it's out today which is a huge

relief because we can start about the full production, where we're going, when units will be delivered. this truck, it's awesome i can build a truck in a couple of months from now it's not about the next two months our generation's all about entertain me for the next two months but it's not about that it's about the long term gm is a perfect partner to be able to build a badger the truck is coming out. nikola is building out hydrogen efforts. that's why people are rewarding us it's a long-term play and the ability to get in early. that's what nikola is. it's a great relationship. >> mary, i want to try to understand -- sorry. we were stepping on each other one final question and i'll kick it over to becky, which is on the margins for evs, this is for mary, do you expect them to grow over time? how profitable could they become given how low margins evs have

been thus far? >> when you look at the margins on electric vehicles, it's all about the battery. that's why the work we've been doing to create a platform with the ltm battery system, we have a whole technology roadmap of taking cost out of the battery while increasing the power so we're very excited about that roadmap and a partnering like we're doing with nikola gives us the opportunity to build scale even faster and to get those costs down, gain the efficiency. we definitely envision a world where we're going to have strong margins in our ev products across the board >> guys, just to add a little context to this. this news caught all of us by surprise here. phil lebeau writes in and says this is a win-win for both sides. he says gm gets a stake in nikola and gets to use some of the ev capacity at the detroit plant. the ultimate battery system it's developing nikola doesn't have to pay to

set up manufacturing it can tap gm's expertise in this that's the reaction you're seeing in the stock market right now. mary, can you give us a little bit of a debate of what's going on in detroit, how much capacity you have with the ev right now >> right now we're in the process of getting ready to set up the detroit plant to build the gmc hummer ev. that's what the focus is i haven't announced a total capacity there, but it is something that is going to be foundational to the ev strategy and the team is doing great work to be able to launch our first hummer ev, our battery electric truck program next year. >> okay. mary and trevor, we want to thank you. we want to thank you for joining us on this big and what may turn out to be quite historic day in the future, both of gm and of

nikola we appreciate you joining us this morning thanks to both of you. >> thank you appreciate it. >> joe >> you bet. thanks, andrew let's get a check on the futures right now. and down off some of the worst levels we say that. then they get worse. then we say off the worst levels the dow down 170 we were down more than 200 naas dwaks down over 400 now down 390 that's a big percentage loss in terms of the nasdaq and the s&p. now indicated down almost 50 not quite. come off some of the worse levels you can see 3 1/3%, more than that in terms of the nasdaq. the dow performing best, i guess. less bearish anyway. the s&p down a little over a point. becky? >> joe, thanks the other big breaking news this morning has to do with the global effort to try to come up with a coronavirus vaccine

meg tirrell joins us once again with this news meg, this is incredibly important. why don't you lay out what's happening here >> reporter: that's right, becky. nine of the drug makers in the lead for covid-19 vaccine signing this morning what they call a historic pledge to put the scientific integrity and the highest ethics first in the development here these are the nine companies, all of which are included in the u.s. government's operation warp speed, and then merck as well which is less far along and isn't included there you know, they are pledging to always make the safety and well-being of people who are vaccinated a top priority and to only submit for approval or emergency use authorization after they've demonstrated safety and efficacy through a phase 3 clinical trial albert borla joined the "today" show minutes ago and why they felt it was necessary to issue this pledge. here's what he said. >> with increasing public

concerns about the processes that we are using to develop this vaccine and even more importantly the processes that will be used to validate this. we saw this as important to come out and reiterate our commitment we will develop this using the highest ethical standards and the most scientific rigor processes. >> reporter: now bourla reiterated pfizer's statement that it will get it by the end of october this is as the public is concerned about the pace of the vaccine development. this is from late july where almost 30% of respondents said that they would either definitely not or probably not get a covid vaccine. this is of course the fastest vaccine development we have ever seen in history by orders of magnitude, and the drug makers here sort of implicitly

suggesting that confidence in our regulators may be shaken saying here that they want to help ensure public confidence in the rigorous scientific and regulatory process by which these vaccines are evaluated and approved clearly a lot of public nervousness about the public rush to get a vaccine. back over to you >> meg, we spoke with dr. gawambe in the past hour and he said this is a huge move it will shore up the public confidence as it's intended. he'd like to see other vaccine makers sign this pledge as well. not just the first nine who have done it. >> reporter: yeah. there are other companies, particularly companies outside of the united states that are also rushing forward in vaccine development in china and of course last week we saw the data on the russia vaccine. they clearly have decided to move forward before they get through the phase three trial so it is very important but it's

also interesting savannah guthrie in that interview with the pfizer ceo pointing out there is a trust problem not just for the public with the government but also with the farm supharmaceutical y industry they are not well liked and trusted. it's fascinating to see nine of these major companies coming out and making a pledge and being lauded for making the pledge even as they have lost the public's trust so deeply over the last few decades. >> meg, where do they stand, some of the leaders, to get people to sign up for these trials pfizer and moderna >> reporter: they are in the lead, they started their trials in the u.s. on july 27th pfizer has enrolled more than 25,000 people it said as of yesterday. moderna has enrolled more than 21,000 it's interesting to see that these cases are going differently. pfizer seems to be going faster. moderna stefan bancel said they

have slowed down enrollment slightly in order to ensure diversity in the clinical trial population, particularly from the black community. right now they have about 10% of people enrolled in the trial who are black and they want that to be higher matching the sort of census percentages of black people in the united states. that's closer to 13% pfizer is around 8% in its trial. so it's really important to ensure diversity here because those are the communities that are worst affected by covid-19 and so to build trust in the vaccine and to show that it works for everybody, you have to test it in everyone. >> when we spoke with dr. scott gottleib earlier this morning he said if you were going to get any results that come back let's say in october, that would mean that you would have to be up at trial and running and getting as many people into those as you had expected earlier on. one thing to slow it down is the good news, spread has slowed in the last several months. it's harder to find people who

can go and get signed up for some of the trials do you think that's going to be an issue or no >> it could be it depends where they've been enrolling the trials "the new york times" has been doing amazing visual modeling showing the college towns are the new front of covid-19. if they are enrolling in areas like that, we could get the numbers faster not just the number of people enrolled but where they are being done that's how you see if it's protective without intentionally exposing them to the virus you have to see what happens naturally with infection rates so that is the potential concern, which is also good news that infection rights aates areg down. >> meg, thank you. we appreciate it see you soon. >> meantime, want to get back to the markets this morning and those big losses that we are now anticipating at the opening

bell tech led everything lower last week now investors need to know if apple and the other faang stocks can continue their out sized role here to talk about that is jeremy siegel, professor of finance at u penn's wharton school of business it's great to see you this morning. what we can't understand or figure out is tech stocks clearly moved throughout the pandemic higher. then there was a real push was that artificial? the roll soft gbajabiamila made -- softbank made and they bought the stock to ultimately hedge themselves and what this means in the larger context. what's your take >> andrew, i think you're completely right when you get parabolic, you're in trouble.

>> these are great stocks they have capitalization in the hundreds of blgs of dollars more, you have to be careful it's very interesting. i went back to 2000. we often talk about that episode. we reached the top on march 10th and then nasdaq went down by 14% interday move in nasdaq. it's just a little bit above that then we rallied back within 1% and then it fell apart and that's often what happens. parabolic move, downturn, rally back and doesn't make it and then goes down but, i mean, i think jim cramer

was right last week. he said a lot of people make a lot of money, don't become a pidgeon in a bull market take some off the table. i don't think the rest of the market is over valued. i think those stocks attracted trend followers. whether they're doing options. there's many, many different ways you can add to the leverage and follow the trend one thing about trend followers, once it breaks the parable, it crashes down. >> so you've been quite bullish though on the markets. >> yeah. >> would you say broadly speaking you're bullish? would you remain bullish on the nasdaq high flyers would you remain bullish on the faang stocks still >> well, first of all, there's -- i mean, there's the teslas, zooms, docusigns, then there's the faangs they're solider and th ee eer -.

at the very top i think it got crazy. among the apples and the rest, they're high i don't think they're going to outperform in 2021 as the economy reopens and we get out of covid but they're not as crazy i think the rest of the stocks, given what i see in the market, i would feel comfortable so if you're in the s&p, i wouldn't worry but if you put all -- if you have all your assets in those high flyers, i would be very careful right now. >> jeremy, what's your understanding of how much -- especially in the retail community right now, how much of this has been bought on margin the reason i ask is whether -- to the extent you're worried about things coming down even more, whether some of this is going to be in the context of margin calls and whether that

will push things lower unto itself. >> yeah. well, when you -- when you get a crash of the high flyers, no one has left them alone but the stocks that had to participate do the best relatively are we talking about a 20, 30% down i wouldn't be surprised to see a 5, 10% correction s&p but it's going to be much less than the others i don't think the s&p giving interest rates, given the fad is in what i would call a danger zone doesn't mean it won't participate in some of the selloff at a much lesser extent but i wouldn't be a long-term investor and say, hey, i'm giving up on getting out of the market i think that would be a wrong approach it's the type of stocks that worry me >> what does the siegel family do on a morning like this?

>> we're at the shore. i mean, i am not a speculator. i'm a long-term investor i've had a value tilt and, you know, honestly, that's been painful given all the high flyers rising the way they have, but i've stuck with the market and, you know, as we know, s&p did hit all-time highs and that certainly is something justified by interest rates in the fed and what i see coming forward in the economy. one thing that wasn't mentioned with all the economic reports we've had, the productivity was the highest in 50 years. i think that productivity growth is going to fuel a lot of earnings in 2021 we're going to be above expectations that's why i'm going to be fully invested in s&p and value

stocks. >> jeremy siegel, great to see you. >> thank you. >> we're going to keep our eyes on all of this we appreciate seeing you and your insights and perspectives talk to you soon joe? thanks, andrew coming up, speculator or visionary. which one is softbank's massa san. the investor's option strategy surrounding some of the biggest u.s. tech names. meanwhile, check out shares. the names that are leading the nasdaq lower this morning, wow, 14% on tesla. 7 and change on the rest stay tuned you're watching "squawk box" on cnbc when the world gets complicated, a lot goes through your mind. with fidelity wealth management,

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as part of that deal, gm getting the right to nominate investors to the board ni nikola's stock is up 13% gm's market cap was just a little over $40 billion i think and gm stock up about 6% right now. joe? thanks, andrew we're learning more about how softbank made some big bets in the tech sector. the revelation is testing investor faith in the company's

leader massa san deidre bosa joins us with more >> reporter: good morning, joe investors are spooked sending soft d softbank's shares down not knowing the extent of the losses the worry is what massa has done in venture capital, he's doing in the market. nothing big happens at softbank without massa san. he's working with rajeev misra and katsunori sago, who's the chief strategy officer analysts who cover soft bank, they tell me they weren't all that surprised one pointed to massa son's big bet of nvidia. another noted that soft bank's

sale in stakes like mobile bank and chip maker arm has changed the asset allocation policy. guys, what we are witnessing may be masa son's next big gamble. a few years ago they became the biggest venture capital in the world disrupting the startup ecosystem for everyone in it now it's looking like a hedge fund we have to see how that's going to play out, joe. >> we will one report though, deidre says the company bet billions -- sitting on billions of profits we don't know how much of the original position softbank is still holding. wi why are investors selling off shares so quickly in the company? >> reporter: as you have been talking about this morning, you see the nasdaq and big tech sells off. perhaps some jitters there softbank was selling off before we knew what stocks were doing so part of it comes down to

transparency and lack of it at softbank i've been covering the vision fund for the last few years. i'll be honest, it has been difficult to figure out how much of a position softbank has when it's getting in, when it's getting out, how they're marking the valuations now that it's acting like a hedge fund, investors don't have a lot of answers as to what the moves over the last few months have meant for the company in terms of gains or logs we do noah cording to filings what softbank held in the major tech companies as of june 30th, but beyond that months have passed since then and we've seen a lot of action in big tech. we don't know where softbank is now. that's certainly something investors are going to want to know >> all right deid deidre, thank you. >> becky actually, i'll pick it up. thanks, joe. joining us right now for more on the tech sector and specifically whether we are now witnessing a

bubble akin to that of the 1990s is ajjay chopra. he knows what he speaks of he co-founded pinnacle systems in 1986 and he helped bring that company public on the nasdaq in 1994 he was the chairman in 1999 then he remained in a leadership role with the company until 2004. welcome. good to see you. you have seen turbulent times in the past >> absolutely. in 2000 for sure >> what do you think business looks like people are wondering if this is a movie we've seen before or if this time is different what do you think? >> i think it's different if you look at 2000, internet was sort of brand-new on the scene having been brought into the public psyche in the mid '90s many of the companies that were born at that time were sort of on the promise of the internet you may recall the term pure

play internet companies as opposed to traditional offline companies and there was a lot of euphoria at that time. many companies that went public actually had very little or no revenue and actually barely a business model most of the business models that came on around that time are related to either advertising or ecommerce. that's changed a lot over the last 20 years. most of the companies that are going public right now have very robust revenue levels thanks to the amount ofmoney that's poured into private capital, venture capital. they've stayed private longer so they're more mature in the way they've handled business cycles. the business models have evolved instead of being solely advertising based or ecommerce based,they're largely subscription based if you think about companies like spotify, peloton, suddenly sas companies in the b2b side

like slack or zoom, all subscription companies what we're seeing now is the next weave, softwaave, many are the stack. lemonade is a technology based insurance company. same thing with robinhood, airbnb hoteling. so you are seeing software companies evolve the business models to capture more and more of the gross margins and profit margins. it's much more sound basis not to say some of these stocks haven't run ahead of them. i think there's definitely euphoria in the market, there's no doubt about it, but they're based on sound business models, revenue, high gross margins and solid growth as opposed to

what's happening in 1999 and 2000. >> that's a very good line of distinction to draw between the two, but as you mentioned, we have seen many of these stocks run up incredibly. in fact, the private valuations were pretty high before a lot of them went public now that they've gone public you see bigger runups. part of that is because you have a global pandemic layered on top of this. many do particularly well for those working from home or staying home do you think those sorts of gains last after this? because either consumers or businesses make the change and realize this new technology makes it easier or simpler or is there a risk that once people move past this, once we get past the pandemic and people come back out in full force, that some of the premium kind of disappears >> yeah. i think -- i don't think the premium is going to fully disappear. maybe some of it is going to disappear. these companies are growing at such rapid rates

zoom just went public 100% if you look at crowd strike, going 100% zoom, the company that we're using this software we are using right now grew 400% year over year let's assume that that growth rate comes down some in the sense that people move back to more pre-pandemic behavior you know, they're still growing at a massive pace compared to the largest stocks in tech like facebook, google or apple. the other thing is i think many of these experiences that consumers are used to and businesses have become used to during the pandemic are going to be there for longer period i don't think it's going to go back to what was there before. it's going to be a new normal. i think technology is going to be a solid part of that. >> ajay, thank you for your time today. it's been a pleasure i hope you'll come back and talk to us again. i this i we can use your insight looking through what's happening

with technology right now. >> thanks for having me. take care. andrew okay thanks, becky. a lot more coming up in just a moment, the acting head of the white house council of economic advisers is going to join us to talk about whether another coronavirus stimulus deal is possible now that congress is back in washington. also a programming note. make sure to tune in to cnbc tonight for a special program, the path forward race and opportunity in america. jon fort and i are going to be looking at the under representation of black leaders in corporate america and hear ideas from ceos, investors and entrepreneurs. it all starts tonight at 7 p.m. eastern right here on cnbc stay tuned we are right back after this on "squawk. look limu! someone out there needs help customizing

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welcome back to "squawk box's" futures as you can see right now, they

are pretty bad down 233, 35 points on the dow that's not a big percentage loss if you look below that, that is. down 437 points. almost 4% on the nasdaq which comes after that rough week we had in the tech sector last week and you can see the s&p indicated down about 1.5%. so, becky, we keep saying we're altogether it doesn't feel like we're altogether we're like alone together, is that it? >> yeah. we are we're lonely together. we miss each other we're together in spirit, as you said, at the very beginning of this whole thing. >> together. >> we are. >> that's still -- yeah. we're alone together that's a famous album, actually, believe it or not. dave mason album from long, long ago, but i digress i think that was it. maybe not. anyway, it's a good term because that's -- it describes where we

are. i am so alone right here are you, sorkin? you've got nobody. you've got you, yourself -- >> me, myself and i. >> i feel like we're so together i feel like i could -- i feel i could come closer to the camera. >> we can never do that though this is -- virtual hug is as much as we're ever going to do ever again. >> for now. >> i'm convinced i don't know. >> you sure? >> i don't know if hugs will ever come back the way they were before >> no. >> i used to hug everybody. >> when someone's less than six feet away wherever i am, i feel very weird even with a mask on. >> i know. >> i don't know when that's -- i don't know >> better things are ahead don't worry. >> yeah. right. okay >> yeah. we will continue to watch those declines in the market as joe mentioned, down about 3.8% that comes after declines on 6% and 1 1/4% on friday so you're looking at about 10%

down over the last three trading sessions that chart you're looking at down 1 1/4%. the futures down another 3.7, 3.8% we'll talk portfolio strategy and what you need to know to manage your money through the latest rough patch the names leading the nasdaq lower this morning, let's take a look at those right now. tesla down by 15% right now. moderna is now down by 7 1/4%. nvidia down by 7%. "squawk box" will be right back. the united states postal service is here to deliver your packages. and the peace of mind of knowing that important things like your prescriptions, and ballots, are on their way.

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welcome back to "squawk box" this morning take a look at futures because the nasdaq down nearly 3% right now. nasdaq off 456 points. looking at the dow off 236 points the s&p 500 55 points. tesla off over 12% apple down 5% right now. becky? andrew, thanks congress returns to washington this week with the deal to fund

the government looking like it might be possible, but the future may not be as bright for another stimulus bill. eamon javers joins us with more on this front. eamon, good morning. >> reporter: good morning to you, becky might be possible is the key word there both the house and senate are back in session this week for the final push for the end of the fiscal year for the united states government at the end of september. we'll see whether negotiators can agree with a deal for what they call a skinny -- rather, clean continuing resolution which means without adding any bells and whistles and stimulus. pelosi, knmnuchin, speaker of t house have an agreement on that. we won't face a government shutdown at the end of the month. not clear where we're going in terms of the stimulus negotiations the president yesterday suggested he's not meeting with democrats to talk about it because he feels like they are playing politics with this here's what he said. >> i know who i'm dealing with

and i don't need to meet with them to be turned down they don't want to make a deal because they know that's good for the economy. if they make a deal that's good for the economy, therefore, it's good for me for the election november 3rd. >> reporter: and, becky, goldman sachs is out with a note on all of this. their call is that preelection fiscal stimulus looks like a much closer call than it did a few months ago amid mounting signs of trouble they say still they expect congress is slightly more likely than not to enact a stimulus package by the end of september. that's as good of a bet as any slightly more likely than not. there's a view in politico moving high of 1.5 trillion. want to be there in terms of the size of the overall stimulus it shows some movement is possible here, becky back over to you. >> we always characterize this as the two sides, democrats and

republicans. there's three sides to this deal we spoke with a senator, senator cramer, republican last week, who was talking about the skinny deal that the senate republicans might put forth this week that's well below the offer that had already been on the table. so how do you get these three sides to kind of dance together? >> reporter: look, it's really tricky all of the incentives are in line democrats want a large bill. the president has a political incentive to get something done before the re-election in november the idea you want to get something done because you've failed to pass a bill doesn't seem politically very smart. that being said, you have senate republicans worried about the size of the overall deficit spending there's a lot of moving parts. the other big thing hanging in there is the idea that the democrats have of nearly $1 trillion in funding for state and local governments. the president says that's

excessive. he doesn't want to see that because he feels democrats are going to use that money to paper over some pre-existing problems in state and local budgets that have nothing to do with the virus. he doesn't want to spend money on it. that said, the president has an incentive politically to get this done. we'll see where ultimately they all shake out. >> eamon, thank you. good to see you. >> you bet thanks, becky. >> joe thanks, becky. let's talk about what's possible with stimulus and joining us is tyler goodspeed. tyler, start with this point in time, and i'm looking down 300 points on the dow. i'll ask you some market questions maybe a little bit later. friday's number, as a snapshot of where the economy is right now, improving i don't know if anyone thought we would be below 10% unemployment probably looking towards a

pretty big gdp number when it finally hits is there a deceleration? is the second derivative slowing? easy gains been made in your view >> we were certainly very encouraged by the fact that the unemployment rate dropped by 1.8 percentage points down by 8.4% in august. vastly leading expectations. there was a more modest decline to 9.8% and this is despite the labor force participation rate ticking up which ordinarily we would expect to put upward pressure on the unemployment rate this was a vast improvement upon expectations just two months ago the congressional budget office nonpartisan congressional budget office was projecting an average rate of 14.1%. this was definitely an outperformance of expectation. as you've suggested, we have regained 50% of the jobs lost during those horrific months of march and april and now we have to get the remaining 50% back

and that's why the president remains committed to achieving a phase 4 agreement that can pass both houses of congress and he can sign into law. >> you expect that to happen because the -- there are hawks, if there's any left, i'm talking deficit hawks i think in the republican party you even have democrats at times talking about deficits they'll get mad that i phrased it that way. i mean, is it necessary, in your view, since the progress has been maybe faster on the rebound than people thought? do we need another stimulus program in your view do you think it will be blocked by those in opposition to republicans gaining any ground in the upcoming elections? do you think democrats want the economy to stay weak >> one point that i've been emphasizing throughout is if one

cares about long run fiscal sustainability, nothing blows a hole in it like a negative output gap that's why we're committed to regaining employment one of the lessons we've learned from 2008-2009, when you allow unemployment to persist, then temporary layoffs can become permanent, can become not in the labor force. that's why we've been incredibly encouraged by the swiftness of the rebound from the march and april lows just to put this into perspective, when the unemployment rate peaked at 10% back in october 2009, it was 27 months before we saw 8.4% unemployment again we have achieved that decline in just one month from 10.2% down to 8.4% and actually we've achieved a 6.3 percentage point drop in the unemployment rate from the april low in just four months and to achieve a similar magnitude decline in the unemployment rate from its

december -- from october 2009 high was 107 months. it wasn't until september 2018 that we were finally able to achieve an unemployment drop that low this is a testament not only to the strength of the u.s. economy heading into the crisis but also to the speed and scale of the response. >> tyler, there's been work done on the action of the s&p and the effect that it has on an incumbent. if the s&p has a good three months prior to the election, 90% of the time the incumbent is re-elected i think people were shocked how quickly the markets came back from the marleaus, as you just noted. not just the economy but the markets. do you think it's possible they came back almost too quickly now starting last week it's -- nobody knows it's possible we could be in for some retrenchment for the

election in november do you think you've got -- we went too far too fast and the timing might be off? the market peaked too soon >> equity markets are one economic indicator that we watch but they're one of many. as we saw in recent weeks, the nasdaq and s&p 500 hit successive highs i don't think it should be unexpected that there's some paws and retreat we're looking at the real economic data. we're looking at housing data. we're looking at retail sales. we're looking at equipment investment and i think all those data points are pointing to a continued strong recovery and yet we do remain committed to achieving a bipartisan legislation that the president can sign into law that expedites that recovery so we get back to full employment as quickly as possible. >> so by the end of september you're, what, 60% sure, 70% sure, 30% sure that there's another stimulus where are you?

>> when i'm looking at the economic logic, i think it should be a slam dunk case for a deal by the end of the month we have a deal on economic payments we have agreement that there should be additional support of the small business and reload paycheck protection program. we have agreement on additional unemployment ben knits, we have additional aid for state and local governments, additional aid for supplemental nutritional assistance we a agreement the one sticking point is this $915 billion demand for state and local governments and on top of that a $140 billion tax cut for the very richest americans in the form of removing the cap on state and local tax deductions which is something the speaker has been pushing for in the hero's bill we have agreement on all of these economic fundamentals.

the one sticking point is the $1.5 trillion on state aid which doesn't pass any sort of feasibility test. >> tyler, thank you for coming on this morning. tyler goodspeed. you have something from the trump collection on today. you look very presidential you have the red tie, blue suit. >> orange. >> thank you see you around >> oh, it's orange okay all right. close enough see you later. thanks >> thank you. >> andrew? it's for fall. he's wearing orange for fall the pumpkins are coming out soon coming up on the other side of this break, a little pickup in airline traffic over the summer. is the industry about to hit another rough patch of air or are things going to get better new labor day weekend travel numbers are out and we'll talk about them plus, we're going to get you prepared for this morning's big selloff especially in tech nasdaq off 422 points.

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welcome back to "squawk. a positive sign for the hard-hit airline industry which had its best weekend since mid march that might be the end of the good least for a while phil lebeau joins us with the latest numbers phil. >> andrew, it was a good weekend for the airlines when you look at the passenger level numbers, didn't quite hit 1 million passengers per day, that was the mark that many people thought we might see for the labor day travel weekend, but it was up higher than anything we've seen since the middle of march. 935,000 passengers yesterday, the high coming on friday was 986,000, so almost a million passengers again, the highest level seen since mid-march. as you take a look at the airline stocks, all of this brings up the question, okay, what can we expect for september and october? don't expect a whole lot in terms of passenger levels,

it's going to moderate and plateau a bit. vacation season is essentially over, as much vacations as were being taken in the midst of a pandemic and you've got virtually no business travel out there right now. so september and october, which tend to be a little bit slower, they're going to be slow and you'll see a plateau in terms of that the airlines have brought their schedules down for september by 51%. also remember you've got the airline job cuts they take effect on october 1st. so we're in this period here where the airlines were hoping to get another stimulus package so there could be another $25 billion to lock in payrolls. s increasingly looking like that's not going to happen in washington so as a result you will see thousands of jobs cut and thousands of airline employees leaving their jobs starting october 1st >> thanks, phil, appreciate it >> you bet >> becky, over to you. >> thanks, andrew. when we come back, jim cramer's first take on the trading week

ahead. it's a short one, but it is already looking pretty painful for the tech sector. the nasdaq indicated down another 3.6% in the futures market this morning. more "squawk box" right after this ♪ ♪ ♪ ♪ it's the simple joy of washing your hands,.

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all right, let's get to cnbc headquarters jim cramer joins us last week. jim, you were off last week when everything began what do you think about what's happening with the nasdaq and some of these tech high-flyers. >> the s&p did bounce in april up 2000, not a big bounce but it held in. the analog, of course, the nasdaq was just a disaster

the fact that he said it did bounce after the sell-off tells me that could repeat itself. the market -- the nasdaq is down so much at the opening that it may be just so torrid that some buyers come in to cover their shorts look, becky, imimploplore the pe that are newbies do you know what you own do you know why you own it do you own it just for momentum? that's it, sell. i think we all remember how we felt when we didn't scream sell enough in 2000 we can't do that now these people who are just in there because they think stocks only go up, they are the ones who are going to get hurt. it's our responsibility to recall history, not to tell them hey, necessarily, you've got to sell you should have sold then and, therefore, maybe you should have sold now. >> jim, i get the feeling we'll hear much more of this in depth in just a few minutes. it's great to see you and have you back we'll check in with you at the top of the hour. >> thank you. >> thanks.

joe. >> let's continue along the line here and get a check on tech stocks, driving much of the market conversation and selling off this morning in premarket tradi trading. joying us now, gene munster. gene, you think this is not monolithic maybe it has been up to this point where we had a lot of participation across the board, but over the next year, tech is going to be ready well but it won't be all tech. you need to be selective, is that right and what will continue to work >> i think the companies that are going to be undeniable truths about where we're going to be spending our time, companies like apple ultimately around its wearables, around 5g, these are undeniable big picture trend and that's a positive. companies like google, amazon in terms of how we'll be purchasing things, brick and mortar is an

opportunity. these are the fraction of the market i think this is where investors need to be i think companies like facebook, that becomes challenge companies like zoom. so this fraction of the marketplace i think creates an opportunity. i would see this recent pullback ultimately as an opportunity to own some of these bigger names. >> so it's a reverse pandemic play to some extent? if we emerge from what made some of those stocks so attractive, then they won't be attractive? you don't like netflix as much either, right? >> right, netflix. think of all these companies that had this rush of usage. ultimately we need to anchor ourselves into is where are we going. if i would make the most clear line here, it's very simple. if you've been trading these stocks, i would get out of the way of these momentum names but just simply think about this where is the world going which companies are advocating that future?

and the companies that ultimately are capitalizing on where this is going, i think they're going to be the big winners. let me quick frame apple we talk about poo5g, wearables. i believe this can trade at 35 times. if that's the case, we're talking about a $3.5 trillion stock. i understand that this pullback is concerning for investors in the last few days around big tech, but i just think everyone should anchor themselves in this fundamental question, where is the world going. other places that the world is going is around autonomy what google is doing in other bets i mentioned amazon, brick and mortar, that having a revelation and a fracturing towards those but then just quickly to the other side, and this is why it's such a clear view in my point is that ultimately companies like facebook advertising business, netflixwith the subscription business, these are tired

businesses these are the same playbook that they have had for the last 15 years. i don't think that that's going to yield the upside here and so this fraction of the market that we're seeing the last few days, huge opportunity to own apple i think this is going to be one of the stars of the show, surprisingly i stand behind my bet that this is going to be the top performing faang stock in 2020 and i suspect it's going to surprise investors one quick question for your viewers, if you try to get your computer fixed today, what company can ultimately do that better than anyone else? just simply go out and try to do that i think you'll leave that experience with some confidence that apple is in a great place longer term. >> all right, gene we're almost out of time a lot to think about there it makes a lot of sense what you're saying. we appreciate it thank you, gene munster. the final check now on the markets. not as bad as it was, down about

240 points now on the dow jones. the nasdaq taking it pretty tough, still down almost 400 points after that sell-off last week the s&p down about 50. we'll be -- hey, guys, did you forget, you know that today is tuesday. it's already tuesday i'm going to leave you with some positive news, today is tuesday, it's not monday. >> there you go. >> positive news. >> see you guys tomorrow. >> good to see everyone. we'll all be back here tomorrow, alone together "squawk on the street" is up now. good tuesday morning, welcome to "squawk on the street." as the tape indicates, another tough open futures weak, nasdaq on pace for what would be the worst three-day slide since march 9th, lots of news on tesla, airlines, gm, nikola and more. nasdaq futures indicate a 3%

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