are headed. >> that's right. >> i want to thank everybody joe and becky, cheers. cheers to you. corona, corona, corona. >> you're nursing that thing you're nursing that thing. take a drink take a drink you're nursing it. >> "squawk on the street" begins right now. >> tap water ♪ >> good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber another wild overnight in futures as you know, stocks will try to get back some of the worst three day stretch for the s&p since june a lot of news on lululemon, slack, tiffany and of course the vaccine makers our roadmap begins with the tech tumble the nasdaq now in correction territory, but futures do point to a bounce. >> tiffany shares down more than 10% ahead of the bet this has lvmh tries to get out of it $16.2 billion deal to buy

it >> and shares of astrazeneca falling premarket, the drug maker hitting pause on its late stage coronavirus vaccine trial. jim, you just tweeted coming to us in a few. fired up about what? >> fired up because i think that people have given up we had 10% correction, most of the people i heard except for jim pullsen in the previous show basically say, look, this is a dangerous -- it's a bubble, it's a bubble, it's a bubble. now, i think that anytime the market opens up big, carl, i don't like it but europe is up strong, i think that this idea that it's a bubble, what is the it is the it tech is the it apple? is it tesla? let's take it case by case i've seen things that have come down a lot that are very interesting. it's just that i'm not sitting here saying this is the moment where you must buy all the zoom in the world but zoom just fell 30% zoom had a really great quarter. i had cloud strike on last

night. people will say these are viciously overvalued, but they have come down and maybe this is the level you want to start. look at the decline in amazon. does someone think that amazon is doing poorly? david, you know that list. these stocks are not the same. they are companies that frankly their stocks have come down and maybe they shouldn't go down as much as others it's not uniform. >> no, but look at that move up. i mean, granted we know the business at amazon is extremely strong but i could put up any number of different companies, jim, apple amongst them where we watched it go up 4% every day, tesla the same, both in front of their expected splits which have since taken place and there was nothing there, either, that necessarily supported it in terms of understanding what was better about the business. yeah, we had analysts doing back flips to raise their price targets, but, i don't know i don't know where -- i mean, i listen to you. all right. if you're telling me maybe now -- maybe apple has bottomed after hitting what was it, $3 trillion in market value now

below $2 trillion. maybe that's enough. i don't know. >> there's no called shot. we are not saying this is the bottom apple if you haven't bought apple, you got the split, people sold off a a little bit of it, no value created by splits and then you got a level. you can say i never want to be in the stock market. there are so many people that say stay away from the stock market but i continue to say it's the greatest wealth generator of all time, i prefer actually non-nasdaq stocks to nasdaq stocks, i prefer s&p names to tech names, but, carl, i look at it and i say, do you know what, are you an idiot if you come in now or were you stupid if you came in at the top, if you bought zoom when they announced that wasn't so good, but down 30%, zoom is still expensive but i think zoom is here to stay. i encourage people to think stop it with the across the board you are a fool if you buy stocks that's something you say when you're rich and don't want other people in, carl. >> yeah. data trek this morning says the

tech sector has been up 50% over 100 trading days three times '99, 2000, 2009 and 2020 three times since '99. they think this looks more like '09 but when we hear bubble that's what we are talking about, a 50% move in 100 days, does that not make sense >> i think that there is a bubble in a lot of tech stocks that are very hard to try to value. i had crowd strike on last night. they have the highest annual recurring revenue of any company i follow how do you value zoom which has changed the world over the period of six months i think the answer is it's incredibly hard to value does that mean you default to owning fedex does that mean you end up buying tiffany after the deal broke down perhaps. i'm just saying if you took something off which is what we've been advising and i've been advising, i don't know if you still want to take stuff off. i've been recommending selling for three weeks, now we have big

time people who come on air and say maybe you should get out i can't do that because i did. i can't do it now. do you know what, now is the time no, when i was saying sell them before that was just a joke, this is for real i mean, come on. that's like saying, do you know what, the chiefs, they're going to win the super bowl. well, no, you see, they won the super bowl so it doesn't really create value thursday night, by the way, against the texans. david, please, look at me because you're right there. >> i'm looking at you, jim yes. >> you know i was bearish. >> yes. >> can i be as bearish on zoom down 30% perhaps i should be. in the end the way i look at things is if you haven't bought anything maybe you dip your toe in not when it's up a lot do i want people to buy apple up 3.5? maybe buy a little and let it come in. i get discouraged when i hear people who have never let us in, so to speak, who think that the

great unwashed who watch the show are really going to hurt themselves they got hurt on sorento and vaxart made a mistake if they bought tesla at the top but let's say lou people to try to make some money is this the right level to buy campbell's soup? >> if they've been in since april they certainly are doing quite well most likely. >> yes, so they should take a little off i know. >> the broader market, yesterday was interesting because we didn't see that rotation that we had seen to a certain extent when some of the high flyers were selling off last week, there was at least then some movement into the banks. yesterday everything, i mean, the banks were hit, oil and gas got hit very badly i think pharma sort of held up okay yeah i mean, is that a sign is that something that concerns you and or is there ever going to be a real opportunity to look at value >> well, that's the sign typically on day four that you begin to get a bottom, that's been the pattern this market since 1982 you will start finding stocks that will tell you what to do.

now, you know i think that oil is a perm ma short someone came out today and recommended continental resources. do you know what, quit your job. it's okay. these stocks are wasting assets. do you think all this money going into ev is because oil is going to be a great investment no, and there's oil, oil everywhere i start saying here is where it gets hard for me bristol-myers. carl, bristol-myers is a company that is not expensive, i don't care under what guise a nine times earning stop with improving balance sheet and 3% yield i think that's reasonable to buy now, does someone want to keep our viewers out of bristol-myers because i would contest that that's the right thing to do i think that you want to buy bristol-myers. i'm not saying you have to go buy moderna which, by the way, i am not going into the trial. after last night i rethought going into the moderna trial. >> really? >> yeah, i did

i read about that illness. i read stat and i read "the new york times" and i know it's only one, but i remember david when bristol-myers bought a company and there were a couple serious adverse events, remember, dave, they wrote the company off it's serious business. >> you're talking about the transverse myelitis that we believe is at least what has held up the astrazeneca/oxford trial for the moment you can see astrazeneca is performing differently than the other names that we put up there in terms of those that are developing i did go to somebody i trust on these things who knows trials extraordinarily well and the science behind them and this is a very rare disease, as you know, guys, 1 to 8 cases per million people per year. i think there was a 2009 publication that said there were 37 cases possibly associated with various vaccines between 1970 and 2009. but there have been ten cases reported in association with covid-19 as of the end of august soi guess the question here is if it is transverse myelitis

which we are not certain it is, is it associated with either the vaccine or having gotten sars. a key thing will be to know whether this particular patient had covid-19 or not. had sars cov 2. >> is that waiting a bit instead of going down to cornell and getting that moderna. >> then we might know a little bit more it's also possible to be associated with the vaccine and not other vaccines all vaccines apparently do use some portion or all of the spike protein, if it's related to the spike protein it may be other sars cov vaccines will cause mile light 'tis. it's a good thing to wait and learn what we learn and what astrazeneca and oxford learn about this particular patient in this trial. >> carl, when i think about this i don't think i'm saying don't get a vaccine.

i'm trying to get in that j & j vaccine. i don't know what the hell happened, it's up in boston. i think they are a terrific company. i am saying i don't want to be the first. maybe i can be the second tranche. i think we have to have people take the vaccine we don't have a lot of hot spots in new york. i think a vaccine for someone my age a real good idea i care more about testing the vaccines right now we know that testing is instrumental in what's caused the decline in the number of people who have covid in the country as are masks even as the president is not necessarily the masked man he is not. but he is a lone ranger against masks. >> he is not the masked man, that is fair to say, jim. >> no. >> fauci i know said that the astrazeneca news was unfortunate, that hopefully they can proceed with the trial, but he did reiterate, jim, that his timeline on either emergency use or key data is not as early perhaps as the administration has been hoping, namely late october, early november.

is it, though -- does it make sense to say that this news from astrazeneca does give the other players who were arguably behind in the chain of events a little bit of a head start? >> yeah, but i think that the lesson of all these is when you go buy the novavaxs or when you buy a sorento you're still playing roulette here. pfizer has come all the way back from when they thought they had good things. i prefer to go with the antivirals, but regeneron is week gilead is the weakest stock in the cramer covid index what i think is important is what does it mean for the reopening of america i think a lot of the recommendations we've seen including the airlines are a belief that we're going to get vaccines in this year and maybe things are going to start looking up for spending. david, i think that if you're waiting on a vaccine, would you

stick with tiffany >> would you stick with -- i don't know you know, that's -- we're going to talk a lot about that momentarily, jim, because it's obviously a story we've been covering closely and a lot of fascinating developments there listen, we are only hoping for the vaccines to be as safe and effective as possible and get them as quickly as we possibly can. i agree with you whether it's antivirals they are going to potentially be a key and we have to keep an eye for those because they could change the complexion of the entire virus for many people if they are available and effective. >> carl, last night i had the governor on from rhode island. they had 30 cases of covid in their five colleges in rhode island what i worry about are kids coming back and what that means. we are underestimating the second wave all of a sudden with the reopening of america and i think i'm waiting for the closing of colleges because the governor of rhode island called

all the colleges in and said, listen, personally, we are going to go in and we are going to kick people out, we are going to do what's necessary. i don't hear that a lot of colleges i see numbers from colleges in the "new york times" study that tells me look out. your kids could be trojan horses. >> keep them there. >> keep them there >> keep them in college. >> three weeks ago, guys, cases were rising in three states, currently cases are rising in 22 states even though the number of daily cases is the lowest since june you are right about the back to school dynamic, especially higher education that's a big deal. we will take a break lots to get to david mentioned tiffany and lvmh, street highs on peloton, there's slack at lululemon and a lot more with futures up don't go away. ♪

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in cashmere for nothing, i am referring to bernard renault who basically founded and the controlling shareholders of lvmh i've been reporting on this for seem time relating to the bending acquisition of tiffany which by all accounts or many accounts should have been very close to closing by now but it far from that. in part as i've been reporting for months now mr. arnault has wanted a price cut it does appear that that at least according to people with his thinking is still what he would like, but he's taken an unexpected route to try to get

there it would seem and one that perhaps we did not see coming even as late as yesterday because it doesn't relate to his pursuing a claim that there has been a material adverse change in tiffany's business which under the business at least would allow him to to get out of the deal it, in fact, relates to a letter received on august 31st from the french foreign ministry dealing with the prospect of tariffs coming on luxury goods that would be imported from france to the u.s. here is the important part of the letter and how it relates to lvmh's decision to essentially abandon this deal at this point. the american golf has decided to implement a cuss comes duty on the import of certain french goods. you should defer the closing of the pending tiffany transaction until january 6, 2021. that would have the effect of delaying it or pushing it out past, of course, what lvmh says

is the so-called drop dead date. that's not really the case when you read the contract, in fact, either side would have to terminate or has the right to, but they don't have to after november 24th. that said, that's the way it's being read tiffany, well, clearly they were ready, weren't they? because they had a lawsuit of 120 or so pages that they basically filed almost immediately. what's interesting here, well, there is a lot of things first of all, this letter was received on august 31st. a least according to the contract and the way these things go tiffany should have been told about this letter so they could help plan what the response might be, they didn't learn about it until yesterday we haven't seen the french translation of it although we're told perhaps that will be forthcoming so that word should has become a key question here what does it really mean and is it going to invite response from the u.s. government in some way the french telling, well, mr. arnault, it wouldn't look positively on you acquiring tiffany given what's going on in this spat between us and the u.s. about potential additional

customs duties on luxury goods here is what roger farrah had to say after they filed that lawsuit he is chairman of the board at tiffany, we believe lvmh will seek to use any available means in attempt to avoid closing the transaction on the agreed terms but the simple facts are that there is no basis under french law for the foreign affairs minister to order a company to breach a valid and binding agreement and the unilateral decision with the french government without notifying or consulting with titch knee and it's counsel were a further breach of lvmh's obligations. the supposed official french effort to retaliation against the u.s. for proposed new tariffs has never been announced or discussed publicly. how could it possibly be, then, an effort to press urg the u.s. to revoke the tariffs. we are not aware of any french company receiving such a request making it more clear that lvmh has unclean hands. hands perhaps not even fit for a nice ring from tiffany

lvmh cfo on their press call, they had one this morning, they had some technical difficulties but this is what we did get from him. he said we have a government order, he said it's a valid order, with he checked, we spent a few days consulting eminent legal experts on the matter. all of them told us this is legal. they have the right to ask us to postpone the acquisition and therefore we have no other choice but to apply this decision it's a valid decision, unlike what has been said where does this leave us it leaves us going to delaware to court mr. where mr. arnault if we get to it will have to take the stand they've asked for expedited in delaware meaning things could move more quickly. we will have to wait and see jim, you know i've been following this arnault of course was very upset at the deterioration of tiffany's business, particularly in the u.s. and what he feels perhaps is long-term detriment to the company's prospects he wants that price cut and, man, he's able to pull a lot of strings possibly it would seem

to get one. >> that's what i wanted to ask you, david i don't know the french government that well, but it seems like that lvmh is an integrate part of the french government i mean, i want this deal killed so you call macron and say i need this thing scuttled, i want a better price is it crony capitalism more than we have in our country >> we have a president who is telling a chinese company we're going to sell you down unless you sell it and, by the way, i want a piece of the action that said, i know, i don't know what to make of it mr. arnault is an incredibly powerful man, some would say the most powerful man in france. >> really? >> yeah. so i'm sure that he has a lot of ability to do this you saw what the cfo said, they got this, it's a response in some way from the french -- i'm not sure why now i'm not sure on august 31st as opposed to when we first heard about these tariffs sometime back i can't tell you about the timing they are not looking at the mac as much anymore. they have nod filed eu though i'm told they are going to file

eu perhaps as soon as this week, but, listen, tiffany was ready, jim, for this. they've been waiting for it. the board says from what i'm hearing they are fully aligned in their believe they're going to take it to the mat but we'll see. you know, mr. arnault is nothing if not relentless and the request he is whether the tiffany board will finally say, maybe not. maybe it's not worth it. >> if i want jewelry i go to costco costco has got really good jewelry. and you find some blue box, you stick it in it the wife won't know the difference. robin's egg. what do you say, carl? >> it's true, guys yep. we will take a quick break futures in the green as we try to get back some of the last three days don't go anywhere. the lexus es.

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seeing some nibbling of names that have taken it on the chin the last few days, apple up 3% premarket, not on this list, though, peloton up of, tesla up number 8 g till keep an eye on those as weethe opening bell in about five minutes

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into your next pursuit. >> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. let's get to a mad dash. lulu, slack, lulu, slack, i think slack is down more, right? >> yeah, david, every one of the

major firms cut their price targets, when wells, barclays, rbc, piper what happened? well, it depends on what you want to believe. slack came out and said in a very good note that, look, the macro headwinds are the problem, the installed base not doing as well, hiring freezes keeping people from taking more slack. i totally get that it's a good product, but then, david, there is another undercurrent which is is microsoft crushing them? i think the undercurrent of microsoft crushing them is only made more stark by the company, mr. butterfield, saying that perhaps microsoft has engaged in anti-trust violations. people don't want to touch it. the "wall street journal" slack stock dives at results it's the first one of these major tech companies that people are saying, huh-uh, didn't do it didn't beat raise. this is not a b & r, david, this is a dnr, which is do not

resuscitate. >> this was a direct listing, too, right if i recall. >> yeah. i mean, look at spotify, that was a direct listing >> and pal laantir will be the t one. >> david, what i wonder is the analysts are now seeing that stocks do go down as well as up. there wasn't anyone supporting the stock. i wonder if this he reported a couple weeks ago people would say, do you know what, there's something here that we like. but we are now in that mode where not everything is going to be defended if you defend everything, you defend nothing >> that's not one of your great historical figures, a quote. >> kind of a claus witz thing. a lot of the german generals said that. >> world war i. >> yeah, and before that. >> and earlier. >> right. >> got it. okay carl, got an opening bell coming up. >> we do really quick, though, i see morgan stanley, jim, goes to

245, microsoft on the potential of a div hike which we will keep an eye out for if, in fact, it happens. >> david asked me what the key to the market is i would say this microsoft piece, solid returns in times of uncertainty and the dividend boost it's nice. it's valuable. and i'd say watch that stock >> all right let's get the opening bell here and finally some green numbers instead of red after the last few days have been -- have been tough sledding at least in the open, and also market on close has been for sale for i think eight straight days. thanks to hileem mizler. >> i don't want people to buy up 1% i want people to say should have bought yesterday, now we have to wait the day four has been a good day, but i think -- look, maybe today the nasdaq goes up 4 and you won't feel bad buying up 2, but, david, we have seen time and time again when we have

these huge rallies and then some selling comes in midmorning and then you've got a shot, but i just think this coming in right now is part and parcel with what people need to be taught about, which is discipline. times you just say, hey, do you know what, at 3:30 i should have bought david, it's not just you come in and say, hey, it's all clear i agree with you, there are levels that just don't make sense for some stocks. there is a lot of green. don't you buy when there is a lot of red >> you do, but in this tharkt don't you just buy when a stock is going up? isn't that what a lot of this cohort, these new entrants to the market so to speak have learned? >> aren't you a facetious fella. you think i'm going there. i'm not going there. dave portnoy -- i mean, carl, he's trying to get me to go there. >> i got him to say it you said his name, although you didn't say it in the first 30 minutes of the show. what, carl >> 9:31 our first portnoy

reference, that's a record. >> did elon weigh in and save portnoy yesterday? portnoy is just -- i regarding him as fun what does matter is that he did raise in twitter a commentary about how there are a lot of people that could come on air and basically scare you. and i said, do you know what, there are positions and places where you should be scared, but there's others where you have a great opportunity. if they are going to bring down all stocks, maybe microsoft -- that was a good piece, that wasn't a yahoo piece by keith wise i kind of liked that i think that's interesting i felt that when you look at astrazeneca if you believe that that one incident is not dispositive, there is a good company. i'm more circumspect, but there is a lot of things that make me feel like there's opportunity after three days down, but not necessarily tech, if neck opens up really high. >> and not necessarily tesla which we should point out is up 3 320% for the year and is

rebounding 6%, what was it down 19% yesterday? >> that's a tough one. david, they did that at the market sale of 5 billion. >> they did. they didn't get sluded in the s&p. >> that was brilliant. >> it was. >> it was brilliant. there were a lot of people didn't understand what an atm is, they thought it was a machine that prints money. >> i used to call it asynchronous transfer mode remember those companies >> but, look, i just think there are other places that might be better i'm not slamming that one, just other places, carl, where i feel better about recommending. >> yeah. >> it's okay someone this morning on brian sullivan's show said, look, the market really is tesla no, the market is not tesla. the market may not be bristol-myers, either. maybe the market is t-mobile, maybe the market is apple. i just find that we don't want to just say, look, the market is done, tesla is up or the market is done apple is down. let's look for opportunity that's all >> to your point, jim, about

people, i guess, in your words scaring the mark, gunlack on his webcast yesterday saying that the s&p is in nose bleed territory. druckenmiller on "squawk" earlier this morning take a listen to what he said. >> right now we're in an absolute raging mania. we've got commentators on your network encouraging companies to do stock splits, companies then go up 50%, 30%, 40%, big market cap companies on stock splits. >> all right jim, so critics would argue that stan has been echoing a variation of that theme for many years. >> right, and i know i've been -- i've been a proponent of stock splits i'm not a proponent -- look, i have never said they created value. i do say that they allow people who are -- want to buy some shares to come in and that when the apple split occurred there

will be people who probably sell a fourth of their stock and maybe that's your chance to get in and that's what's happened. look, could i say that stan is picking on me for stock split. no i think what stan is saying is you don't buy a stock because it announced a split. he and i certainly agree on that i do encourage people to come into the market but that's been my mantra since 1981 i'm not going to change my stripes now. is there a raging mania in the market there is a waging mania in some areas. i'vebeen struggling, david, struggling to figure out how to value a z scaler, how to value a crowd strike, how to value these companies that ever so again fitted from stay at home do you say i'd rather buy campbell's, 3.5% yield, people are starting to cook again or do you see it's important to figure out why there's been so many cyber attacks there have been. tremendous uptick in cyber attacks and mr. you should buy palo alto or crowd strike.

maybe the answer is you don't need any of those. i recommend that people have a spec or two. you don't have to have doing but 3m. >> many of the names that you have loved in particular, whether shopify or nvidia or sales force have been extraordinary performers over a long period of time. >> thank you. >> i know you have your share of critics, but those have been great picks. >> thank you >> you have been enthusiastic for all of them. that said i don't know twha level when you are talking price po sales ratios to get up to to 10, 20, 30, 40rks 50, go up even more in the case of zoom video, for example. that is reminiscent of some of the things we saw during the dot-com bubble. >> you have to bet in 2023 zoom makes even more money. they are profitable. the stock that i point to when people say what's overvalued is opta because opta is one of these companies it's an identity company, you have to know who the identity is before you can protect them tom mckinnon runs it, keeps

beating numbers and beating numbers. on how to value octa up 24%. then you try to find something not as expensive zoom down 30%, look, carl, that was the best quarter we have had this year. eric yuan has changed and transformed the way we do things and that often means let's figure out whether you can't get in on some zoom because two or three years from now zoom is going to be the way that business is conducted given the fact that so many companies closed big deals using zoom. that wasn't supposed to happen you are supposed to go press the flesh. >> i know. yesterday we talked about reed hastings really not being a proponent of work from home. you've got jpmorgan bringing back half of their investment bankers. microchip's guidance from an end market perspective the end markets of data center and

computers that benefited from work from home in the june quarter we saw them weakened in the current quarter. maybe we are all going back to work and we will use zoom just not as much. >> let's say zoom comes up with a way to be able to make it so that there's captions underneath, like netflix let's say i think zoom is here to stay simply because i think that we're not as close to solving the pandemic as jpmorgan right want to think. should it be a $100 billion stock, that's probably too high. can it be around i hear those numbers, but where is the vaccine does everyone feel safe going to olive garden a lot of guys upgraded darden. i think as long as there is a vaccine, jpmorgan might want people to come back and i love them for that. they ain't coming back they're going to fight it. they're going to fight that. >> you think they're going to fight it, really >> yes, they're going to fight it except for the younger people

because they have to come back because you have to teach them there are a lot of senior people who say, do you know what, i'm kind of done i don't want to risk my life. >> there may be. and i think we can expect zoom to be a part of the society in a significant way for years -- from here on in. right? >> so it's not worth $100 billion? what's it worth? >> i don't know. but at the same time people are going to go back to their offices, there is a need for that although many ceos tell me that they are surprised at the level of productivity they've been able to get from people, that they will never look at somebody who says i want to work at home. and to reduce their footprint and costs are going to insist 20% of their workforce will be remote i don't know what the numbers will look like certainly doesn't seem to be a particularly positive prospect for urban areas with office space. over time perhaps that will improve. but, yeah, zoom will be a part of our life, jim, no doubt about it

whether or not you can expect they're going to keep doubling revenues, i don't know. >> they can't do that. i look at, say, would i prefer zoom over cisco, cisco has webex. well, cisco doesn't have the growth i like, 3.6% yield, futures of 12. you get a little momentum, that's definitely a value stock that's intriguing to me, but i also understand why someone might want to buy some zoom. i just disagree with the whole thesis that we're all coming back to the office and the reason i do is because the one thing that you can trump anybody's comments have the ceo's office is to say, do you know what, sir, mr. dimon, i'm afraid of getting sick and he cannot say, will you get it together, you coward put a mask on. no no i mean, it's like it's health. and i think that health makes it so that you can say i don't want to be. meantime, they call you at 6:00 a.m., they call you at 6:00 p.m., you're closing deals left and right, it's cheaper to work

on zoom than to go around the country. i think things are changed they're changed fundamentally. unless you tell me that there is a vaccine and we are in a china situation, i just think, do you know what, i don't want you visiting my office and i'm not going to visit yours carl, someone asked me to go to the super bowl, okay, yesterday. i'm thrilled but not if it's going to kill me i mean, i love football. >> now the super bowl -- now when i think of the super bowl i just think of tepper talking to you about how big a deal this was all going to eventually become. >> and i missed the chiefs winning. chiefs play thursday night against the texans, nbc. i feel very strongly that when i told my wife i wanted to go to the super bowl she said, well, you are an idiot she was, you know, circumspect i regard that as a maybe david -- david, how is your boy doing in school? >> reporting for duty tomorrow >> tomorrow. >> yes i will not be here >> you won't be here you're going to go up? >> yes yes. going to go up.

>> you are not afraid. >> afraid of what? >> how about an illness. it's called covid-19. >> believe me, they're doing every protocol properly and we are all very hopeful and excited. >> okay. all right. >> i think once they get there you want to just keep them there. i certainly don't want them coming home. most parents would agree with that we hope for the best, jim. >> that we do. you know, my wife is on the word of bucknell and the president has done unbelievable things and they have a hotel and they're ready to move people over. but i don't like when you go to that "new york times" list of kids that have covid at colleges, it's a little daunting i mean, yesterday i looked because i had the governor of rhode island, brown, one kid, i liked that one kid. but i saw numbers, for instance, in auburn and they were at a level where -- and this is all "new york times" -- that say, do you know what, this is something you've got to be careful of. and, again, maybe it's because of my age, carl, but i am intently -- i'm intense about the notion of should you go to a

restaurant in new jersey i don't of to worry about it because de blasio is trying to put me out of business he's probably going to do it by the way. he's really effective at putting people out of business. >> are you doing outdoor or not? >> i've got like three tables. >> three tables. i've been eating outdoors. some of these restaurants are taking up entire locks they have more tables than they had inside get it together. of course, i don't know what happens when it gets cold, carl. >> cuomo yesterday said it's something we are working on. so maybe, jim, maybe, jim, there is hope. we do have all sectors in the green and the vix back below 30. let's get to bob pisani. hey, bob. >> good morning, carl. 5 to 1 advancing the declining stocks at the open nice open. bounce from oversold conditions, but not a dramatic bounce, more like a stabilization, take a look at the sectors, tech leading not surprisingly but not dramatically so consumer discretionary, financials are fractionally on the upside as is energy stocks. of the big movers that have had the selloff in the last four or

five days, they are up, i would say, modest moves on the upside, 2 to 5 percent, apple, nvidia, zoom, salesforce as you see here again, nice bounces, but a lot of damage done take a look at the mega caps since the close last wednesday and that's when things started getting difficult. three trading days when we have had dramatic moves to the down side apple down 11% since then, prior to the open, three days of rather noticeable call it a correction if you want, we're pretty darn close. if you look at the work from home stuff, they had a notable correction in the last several days, tesla down 20%, docusign down 20%, zoom video down 5%, way fair down 13%, sales force down 10% all of that in essentially a three-day trading period, again, bouncing a little bit today but a lot of technical damage has been done. we talked a lot about these blowoff charts, i kept showing docusign as the poster child for this goes from five days ago 220 then

to $280 and essentially all the way back down to $220 and what happens is when you have these blowoff tops art cashin has been commenting about this you tend to get blowoffs on the down side, they tend to overshoot on the down side. art has a great note out on this talking about all the people who had stop loss orders in and they all got blown through them more than half of these sell stop avalanches end in pretty much a waushout and that is because they quickly interact so fast that they take it to a level no one had placed previous stops at in other words, you blow off on the upside and overshoot on the down side. meantime, in terms of september, we haven't seen the big value more here. this is one of the things lacking in this selloff in the last few days, not a lot of big moves going into the value space so growth it down, but so is value down and low volatility stuff, krogers and procter & gamble of the world all to the down side. today we have a lunch of a new

stock exchange, we have three stock exchange launching this month. today the long-term stock exchange which is very interesting organization, they claim, eric reese claims he's looking for companies interested in sustainability and inclusion and adversity and treating employees fairly a lot of what we call esg kind of things, environmental, social and governance, that's launching today. the members exchange which is the big powerhouse launched by a lot of wall street firms will have a full launch on september 29 and a smaller firm the miax pearl equities will have a launch september 25th. they already own three options exchanges. you might wonder, guys, carl, why do we need another exchange at all we have 13 stock exchange already, now we will have 16 the answer is they keep coming up with different market niches to serve their customers carl, back to you. >> that's interesting, bob thank you. bob pisani we are going to get jolts at the top of the hour. let's go to rick santelli this morning. hey, rick. >> hi, carl. you know, obviously the effects

of the big down moves in equities especially many days in a row of them has taken a bit of a toll on treasuries as you see on a two day of tens but the thing that 66 basis points when the all time low yield closes at 50, there is an issue here that we just don't seem to be gravitating to the same type of safe harbor buying pushing rates down on the latest go round with the weakness of equities as we have in the past if you look at some of the drops in march and some of the areas actually just a couple of months ago were the equity markets didn't have huge moves, but the fixed income markets still seemed to be soft. what's going on here well, you can also look at a two day of bunds and see that it's very similar across boundaries there is a certain correlation going on there in the correlation of course is central banks and how they buffer and mask some of the signals between markets. if we look at the high yield space, look no farther than the

hyg. given the fact it is trading a bit higher today doesn't dismiss the fact yesterday you were hovering at some of the lowest levels in roughly seven and a half weeks commodities as well. commodities as evidenced by the crb index hovering at near five and a half week lows which does demonstrate the unique relationship that our currency has with commodities and how it seems to be in a bit of disarray as you look at the march 1st start of the dollar index, yes, we are down 9.5% from some of those march highs, but if you look at the recent trading activity, the bounce has been small, it doesn't really seem to be correlating with what's going on in some of these space for commodities. carl, jim, david, see you in a few minutes with the job opening and labor turnover data. >> all right rick, we will see you then in the meantime, as you said, some green arrows to start this wednesday morning. s&p pretty much just touching yesterday's intraday high at

3375 we are back in a moment. of it. it t. ♪ come on in, we're open. ♪

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♪ ♪ ♪ is the apple app store a ma noply? >> well, i certainly think they have the unilateral control of what gets on the phones in terms of apps. i think it's probably about 50% of americans who have smart phones and a lot more people around the

world. i think there are more than a billion apple devices. i do think there are questions that people should be looking into about that control of the app store. >> that's mark zuckerberg with axios talking about whether or not the app store is a monopoly. and apple is pushing back over the deal with fortnight. >> i think those of us faced with the notion of developing their own website versus saying we have to go give apple the cut and then we get far more viewers are really in a free market. you don't have to use apple. if you've got enough pull and enough power and enough promotion, then you can do it on your own, but i do think that apple turns out to be the easiest way to build your business no one says you have to use them and i think that's the essence of a free market look, i think mark zuckerberg was being thoughtful but david, in the end, apple's

created a fabulous product, and it's been really good for companies trying to do a business it's not been bad. it's not nefarious >> but creating scale is a difficult thing to do, and it's a key for so many businesses in terms of getting themselves to profitability in some way. i mean, you need scale without apple, it's not clear you can get it >> i don't disagree, but once you're there -- i mean -- >> how are you supposed to get it without them? you're showing you can do it can you? >> you can if you have a big powerful brand you're right if you don't. but look at shopify. i like shopify i also like canada >> he loves canada >> that was a nice way out of that conversation. >> one more break before we get to stop trading with futures looking good on this wednesday don't go away. stay restless with the icon that does the same.

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back on ton. nasdaq 100 gainers tesla's number one with a 9% increase after the 21% loss. the biggest one-day lost in the history followed by zoom sky works and nvidia, microsoft. this is decision tech.

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it's time for jim and stop trading. >> i said the market was going to bounce. lulu at let ka is an interesting

quarter. it was a good quarter but not good enough. the company had cautious language i think it was boilerplate people don't stocks very expensive. you can see what happens and you don't blow the numbers away the numbers were in line some people were disappointed. i believe in lululemon let it come in and then you have a good chance to buy something but not yet. >> yeah. jim, there was commentary that it was a name. there was already good at digital. it was in the apparel space where people were already headed affluent customers why do you think they were cautious about at least the current quarter. >> one of the things that's difficult is there's lines to get in because of social distancing when you have a line to get in, you say i'll come back some other time, or maybe you go to gap athletic i think the problem of crowds is not easy remedied. the we can get crowds into lulu,

they may go to another store >> yeah. jim, how about tonight >> cooper reported a good quarter. down 16. that's a high flier david is telling you not to be in and then ulta which i used to joke is the key to the market. mary dillon doing an incredible job. i want to talk about things above the mask that's what matters. >> jim, we'll see you at 6:00. mad money on cnbc. good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with david faber and leslie picker. 1% gains across the board. let's get to santelli. >> yes the july read on job opening labor turnover expected to be in the 6 million area good call by economists. 6.618 million. this follows a revision that put last month a bit under

5.9 million to right around 6 million. a decent revision as well. and what's fascinating about this number is it is as maybe a bit better than expected but as pointed out, my guest on friday after the big jobs report, we see the separations, layoffs, openings has been rather brisk, that process is active that's a good thing considering what we're trying to recover from we see that the markets on the fixed income side haven't responded much to this data but i would look for yields potentially in the ten-year to rise back toward 70 basis points especially if the equity markets remain in a mode to recoup yesterday's drop >> rick, thank you our road map begins with market mania. big-name investors weighing in saying what comes next is uncertain. >> then correction coming. why one of our guests says a 15%

correction would be healthy. >> a luxury letdown. why a deal is being scrapped to deal tiffany the volatility in stocks is where we start this morning. >> i have no clue where the market's going to go in the near-term. i don't know whether it's going to go up 10% i don't know whether it's going to go down 10% the next three to five years is going to be very, very challenging. >> morgan stanley's andrew and valerie join us now. thanks for joining us. valerie, i'll start with you do you agree with druckenmiller that we always hear it's uncertain times but is this an extreme uncertainty as we look ahead for the markets in general? >> yes there's a lot of volatility markets because there's

uncertainty in the real economy. the pandemic is not over and we know that the progress in our ability to control the pandemic will ultimately affect economic activity and covert earnings i think it's very, very hard to predict at this point. i think we should expect more volatility >> andrew, do you think the market today is a better reflection of the underlying economy? you know, are investors appropriately pricing in risks of a potential second wave, of the potential for a delayed vaccine? all those things we keep hearing about but over the past few weeks investors have been shrugging them off >> sure. you know, like i think there's always uncertainty in the market i've never heard anyone say the green light is on. the path is clear. it's all in. let's go it's always uncertain. and so look, i look back to the market rally of 44% from march until june i'm hearing a lot of people saying the economy looks great, let's get all in there's all this uncertainty

it seems to me that the average stock in the s&p is down 5% year to date. there is a mania in some stocks but you can't say the whole stock market is in a mania that doesn't make sense to me. i think the opportunities are in the opening stocks that are slowly showing signs of leadership taking over in the last 30 days the material sector has done better than tech in the last two months the industrial sector has done better than tech in august of the five best performing stocks in the s&p only one was tech. the rest was a cruise ship, a casino, an airline so there are a lot of opportunities in stocks. it's just they're not getting the notice, and i think they are starting to price in the economy is reopening >> is that opportunity, have stocks gotten cheap enough for

there to be opportunity? do you think that some of this mania that andrew was describing has kind of taken a step back and makes things a bit more reasonable or do you think it still has more room to potentially go down before you start to see the opportunities >> i think there's always opportunity. and what we're seeing within stocks underperforming and those that are performing ahead of the market, and i would like to comment on my colleague from morgan stanley, because i think that, in fact, what we're seeing is the benefit of diversification. right? i think it is important to maintain exposure to different sources of excess return over time because it's very difficult to predict week to week or month to month what's going to perform better than something else i think some balance in the portfolio is appropriate between valuation, growth, momentum, size, and other contributors to

excess return. >> andrew, i don't know. where are you on valuation at this point i mean, are you finding a lot of stocks you feel are fairly or undervalued and do you think there's going to be a return to those who agree with that enough to send the stocks higher? >> yeah. that's a great question. look, i listed the five best performing stocks in the s&p in august those stocks if you take out the tech stock, they are down from the peak 35% so i'm not a believer in bottom fishing but i do like to find stocks that are cheap relative to their history that are starting to show some momentum and i think the point is there are a lot of stocks out there that are starting to show momentum that are down a lot, but the s&p is a cap weighted index, and you can't say the s&p on a cap weighted basis is cheap. because of the waiting in the tech stocks.

so i think there's great opportunities in stocks or equal weighted s&p i'm not sure there's great opportunities in cap weighted s&ps, because a lot of these tech stocks have moved so much so i'm fearful in the nasdaq stocks and i want to be greedy in the ones people are fearful of >> yeah. valerie, give me your take at this point on the economy. leslie asked a question, and i wonder are you fearful that we're going to have perhaps another downturn as a result of no further aid from the federal government, for example, or the prospects of a second wave? >> i'm not fearful i think we have to be prepared for a range of outcomes. i do think that the fiscal stimulus is important. i think it is important to provide a bridge both to consumers as well as state and local governments that have been

adverse ri affe adversely affected by the covid-19 crisis. it supports consumer spending. it will support corporate earnings and it gives us an opportunity for the economy, the underlying economy to recover. i'm looking forward. i'm looking at third quarter earnings season and i'm curious to hear what companies are talking about in terms of expectations for the fourth quarter. this will be unprecedented to have a holiday season in the midst of a pandemic. so i'm very closely monitoring how companies respond and also how consumers respond with respect to spending. they go across multiple sectors in that regard >> your point about some value being hidden in names that are hedged to the -- or key to the economic reopening, i keep hearing the narrative the economy will reopen and economic output will grow, but certainly not to preco-vid levels for a

while. which means value is broken, and people are trapped in growth names because the economy will settle at a lower base than it was before does that thesis make sense to you? >> yes, but i think what you have to consider is what is imbedded in the stock prices if a stock is down 60%, it doesn't need to be -- there's a lot of up side even if their business is not going back to co-vid level in preco-vid levels any time soon. what i find always entertaining is when people tell me all the reasons why a stock is down, but they don't discuss what is embedded currently in the stock price. you had jim on earlier i am totally in his camp i think you're going to have a big boom next year i think that's why the reopening stocks are starting to anticipate this now. so we may not get back to

preco-vid level but if stocks are down 35 %, i think there's a lot of bad news embedded in them >> valerie, you're nodding what propels these stocks to the up side aside from the back that we could get a vaccine, things could resume a sense of normalcy are there other catalysts you see that can help reshape what the picture looks like for some of the names >> i think you have to look at the underlying activity levels there's a lot of data we have available to us that helps us monitor consumer activity. literally the exat the present time to which people are moving about. the extent to which they're spending there's more dabts we have i think that give us an early indication on how things might play out at least through as i said the end of the year and the fourth quarter with the holiday season so if you look at perhaps some of the off price retailers as an example, they are way down because they have very little e-commerce activity associated

with them. but once things begin to reopen, i have a feeling they will probably perform quite well. that's an example i think of perhaps an industry that would be characterized as a value play at this point in time, but as things reopen, i think they'll fare pretty well because expectations are so low. >> i think it will be interesting to see where the pent up demand filters through from the consumer standpoint valerie, andrew, thank you both for joining us >> you're welcome. thank you. meantime, shares of astrazeneca down this morning. this after it paused the vaccine trial for a safety review. meg has more on what is a developing story still meg? >> we learned late last night astrazeneca paused the clinical trials of the vaccine for an unexplained safety event they say it was a standard

review process triggered by the event. they call it a routine action after one, quote, potentially unexplained illness. this may be unrelated to the vaccine. the company says it's expedited the review to minimize any impact on the trial timeline that's what we know right now. we don't even know if this person was on the vaccine or in the placebo. there's some question about whether this will effect trials of other vaccines. i talked with moderna, pfizer and johnson & johnson. all of them say their timelines are the same pfizer and moderna started the 30,000 participant trials in late july. others beginning in late september. dr. fauci was on cbs and asked here's how he explained it >> it's one of the safety valves that you have on clinical trials such as this it's unfortunate that it

happened hopefully they'll work it out and be able to proceed along with the remainder of the trial but you don't know they need to investigate it further. >> and so guys that investigation underway now we don't know how long it will take or how long until we get more information about the nature of this event meanwhile this morning a senate health committee hearing is beginning now or in minutes with the nih director, and the surgeon general focussed on vaccines sure to be many questions about this back over to you >> good to get clarity over what little we can learn about it thank you meg. as we go to break, look at shares of slack taking you back to april levels here on the heals of their earnings report last night recovering a touch here. in the meantime, best s&p gain since june 16th and all three indices up for the first time in four days. we're back in a moment when it comes to parenting, you're a pro.

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our next guest says despite coronavirus shutdowns the state of the economy and particularly the consumer is the strongest he's ever seen joining us now is david berman no stranger is our viewers is mr. berman he's been tracking retail sales and inventories for almost 20 years in a way nobody else does. last week you called me. you were excited me. i've never seen anything like it it's the craziest ever

what are you seeing in numbers and what it may mean >> that is true. i did call you excited last week as you know, the second quarter is almost finished it's not finished yet. probably another week or so. but what you do is collect the data and suddenly i'm seeing when you add it up and see all the retailers together, you see a major increase i think no one expected i say no one expected it because what's interesting, roughly two-thirds of the retailers had bad sales. one-third had good sales those third are big, and they weigh out the other two-thirds there's a lot of news out there about bad retail, macy's kohl's struggling when you add it up, a 9.5% increase, 9.6% increase in total

sales of the quarter that's unprecedented in the 19 years -- >> that's almost a double digit. i can't remember that nurmber >> never, the highest we ever got was high sevens, maybe 8 in q 4 of 2017. that was the highest this is off the charts high. off the charts high. and i got excited last week and the week before as i was seeing it you're seeing strong employment and supply numbers i think you're going to see strong numbers on the back end of the economy i think this has major implications. >> tell me what you think is going on you make the point the bigger seems to be getting bigger it's not evenly distributed. i would assume the times we know well many you talked about years ago when you introduced the thesis about apple and amazon and samsung. are they the beneficiarys? >> yeah. years ago it was samsung, apple

and amazon and we felt those guys were going to take over markets in a big way. we included them in our numbers. with amazon you have to gross up the numbers. you can't just take the q numbers. that's not point of sales. when you add those in, right now you're getting 75% roughly of the total sales growth in the united states coming from those companies. but then when you really add in the fact that other retailers like walmart and target, they do well in internet everything is from the internet right now. but it doesn't matter. the fact of the matter is the consumer spending at this incredible rate of 9.5%. to put that in perspective, and i think you have the chart, the prior quarter was about 3.5% >> right >> and then the prior quarter before that was about in the 6 % range. it's strong on its own, the 6 %. the 3.5% was when the epidemic

first happened everyone was shell shocked and blah blah blah but now you suddenly see spinning in the home building and home goods into the home, anything to do with food, groceries -- >> right well, people aren't traveling. they aren't going out to restaurants as often either. i mean, i would assume as we kind of have known and we're seeing the evidence of it, a lot of that money is going toward purchases and many of them being things you would to renovate your home or buy furniture or whatever it may be, improve things >> exactly that 9.5%, i mean, we can get excited about it but i don't know i haven't done the math. it's going to be tough to do it. you have to take often as you say, people are not spending money on trips it comes to a lot of money on restaurants and entertainment. >> yeah. >> they have all that extra money to spend >> tell me about inventories that's something else you focus on you need to know whether or not they're going to have to sell

things for less than they bought them for, at least the lesser margin are inventories going up or down >> inventories are the most important. sales is one number. but as we saw at the end of 2 7 2007, our mobile shows images are too high we forecast in january of 2008 as a recession potentially so imagery is key. what's happening here, when all the imageries, they are actually down about 8.5%. imagery is down about 8 . -- inventories are down 8.2%, and that's almost 2 .9% increase in sales. not the number earlier we mentioned. we take out amazon because of the third party. we have compare like with like when you do, inventory is down and sales up 2.9 there's a spread of 11% debt

itself it's unprecedented i think you guys have a graph up there. i'll show it you'll see that sales inventory spread has never been this high. and 19 years, and this just happens. this is not my opinion this is math there has to be some major reordering from all the retailers from walmart and target and costco and kroger, they all have to -- home depot, prices will go through the roof in london. people don't really talk about inflation. wow, the downside of the recession, what could go wrong what we are seeing is another story. what we are seeing in another end is things coming out on friday, we are seeing the potential for inflation. we are seeing margins and the retailers don't have to do discounts. if you want to shop, you're not getting a good deal, even cars >> no. yeah it's -- >> i'm looking for a car for my son, it's like car prices are --

>> very difficult to buy cars. finally, this doesn't mean good news for the mall, does it or good news for the department store. that story continues on it own terminal journey >> yeah. we spoke about this terminal journey for many years this has expedited to make it happen faster. the malls are going to be hard to shop in any mall. people will go it will be a while before they go back. and i think people are itching to go out. certainly. but now people have much more used to earning online ordering online, and i think that's going to make a major difference i do but i think the key of all of this is to watch the ten-year bond yield .86% that's what's spurring a lot of the housing and not just staying at home. >> david, great information. always appreciate it

and a nice look you have going well-done. >> thanks. >> david berman. leslie over to you >> good stuff. david and david. now time for our etf spotlight look atticer ibuy. getting a lift this morning. up about 1 .6 % right now. it's up more than 65 % for the year boosted by the rise of the largest holding, pelaton that stock is higher a street high of $110. saying demand is strong thanks to the pandemic. we'll keep an eye on shares of pelaton throughout day's trading. don't go anywhere. "squawk on the street" is right back ♪ ♪ ♪

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welcome back in los angeles trick or treating will be banned this hall week along with halloween parties, carnivals and haunted houses health officials say the activities pose too much of a risk for spreading the coronavirus. the sturgis motorcycle rally caused an estimated 260,000 new covid-19 infections. that's according to a new study. total health care costs are estimated at over $12 billion. south dakota officials who approved that rally dispute the

findings in greece a massive fire at an overcrowded refugee camp has left more than 12,000 in need of shelter. the camp was in lockdown after a coronavirus outbroke the top u.s. official in the middle east says the troops will drop from 5200 down to 2,000 "squawk on the street" continues in a minute. t-mobile's new offer on iphone 11 pro is even better on our most powerful signal. switch and get two new lines of unlimited for only $90 and 2 iphone 11 pro's on us. only at t-mobile. to deliver your packages. and the peace of mind of knowing that important things like your prescriptions,

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s&p up almost 2% trying to get 3400 back. our next guest side on friday he could see a 10% to 15 % correction that it might be healthy for the markets. joining us this morning, ed yardeni is back. ed, good to see you again. >> thank you very much >> you like to sort of chronicle these things you call panic attacks and you say this is panic attack 67 that could allow

the bull market to resume. everything fitting the thesis, the narrative for you right now? >> yeah. absolutely i'm actually rooting for this market to go sideways for a while. my concern was that we were in the early stages of a meltup, and if it continues, that would set us up for a meltdown having the corrections is a healthy thing. we need to give the market time for earnings to catch up, and earnings are starting to catch up and the economy is doing really great. i mean, third quarter real gdp could be up 25% to 30% following a 33% drop in the second quarter. so so far so good. >> more camps are taking the 30% number for q 3 what durz that mean for earnings estimates next year? mnuchin, dead cruz, mcconnell said a further aid package is uncertain. is it necessary now? >> i don't think it's necessary, but look, i'm not a policy

maker. i just kind of go with the flow and see what they're going to do next i will not be surprised if they come up with something like a trillion dollar package. it adds up to real money i think that's why the stock market has done so well since march 23rd when the fed came in with purchases of treasuries the treasury continues to -- it will likely provide more stimulus within the next month or so. but i don't think we need it i think the economy is doing great with the stimulus that's been provided. >> i see given that, with that in mind, caterpillar is almost to a two-year high do you think materials make sense? do make banks make sense, and if they do, why do they seem to be dragged kicking and screaming? >> i would like to see the market work out. it beats having the correction continue into a bear market. i don't think that's likely to

happen i don't think there's a recession ahead. i think broadening the economy to industrials, financials and energy stocks where the dividend yields are phenomenal. i think we're in that process now. >> i want to zone in on one thing you said about the economy doing well jeff gun john lock said it's whole -- as you're kind of looking at the economy, are you concerned that they're not acting in advance of a second wave or a delayed vaccine or different risks that are out there that could derail the recovery or the bagging of some of the stimulus measures that have worked their way through the system aepd we could start to see the effects of no stimulus >> no. it's all very good points and look, there are no guarantees in

life and there's risks in life there is a risk that kids will come back from school, college kids and we'll get a second wave there's all kinds of risks and we've had a setback on the vaccine front, but billions of dollars are being spent on the health care front. i think we know that there's about 100 vaccines that are being looked at, tested. some of them are in phase three. i think we're going to make good progress on the health care front in the next few months wee always learned to live with the virus as difficult as it is. the economy has responded well i want to see the market consolidate for a while. we need to get a little bit more clarity on how much progress we're making on health care. we need to make sure we know which letter of the alphabet we

are tracing. it looks v-shaped. we had a two month recession >> are you concerned about inflation? stan druckenmiller said this morning he wouldn't be surprised if we saw 5% to 10% inflation over the next few years or so. and fidelity said a rising threat to gdp is one of the biggest risks to the market right now. do you agree are you concerned about inflation? >> i'm studying it and thinking about it, because everybody else seems to be concerned that with all the stimulus that once we get past the pandemic the stimulus will still be there and could create an inflation surge. as could potentially a cold war between china and the united states and supply chains coming

back and so on, but i'm not in the inflation camp i think that technological innovation will help >> when fed officials say we're waiting for an inflation overshoot, we're going to tolerate, you think we're going to get a sustained overshootin the next two years >> i find it kind of comical in some ways that they want to get inflation over 2% when they haven't even been able to get it up to 2% consistently since they announced the target back in 2012 so maybe they just think this latest round of quantitative easing, i call it qe forever,

maybe that will bring back inflation, but i think it's created inflation in asset markets, not a cpi inflation problem. i don't get it i don't get why they felt they had to talk about overshooting when they haven't even been able to get it -- get it on the market at 2% >> right finally, for those who were trying to assess the selloff over the last few days, there's a school of thinkers who said look at corporate issuance would the market be receptive to new issues if we were entering a new bear period. does that seem like a reasonable tell for you going forward from here >> yeah. i think we are seeing more and more signs that business has rebounded surprisingly well, really and that that should start to have an impact on the corporations viewing the outlook as more positive we're seeing that in durable goods orders, for example. so i would expect this could

kind of feed on itself what causes bear markets is a recession, and i don't think we're going to have a w. i don't think we're going to have a disappointment here i think the economy is going to continue to grow this was a two-month recession that was caused by government policy makers locking us down for our own good, and as the lockdown restrictions have been lifted, we all had cabin fever i've had cabin fever my wife and i are right down a two-day road trip from rhode island to new york you know, people are trying to get on with their lives, but we're wearing masks and social distancing like everybody else >> yeah. goldman cede has a barometer of reopening, and they take it to a five from a four after many weeks sort of being stuck at a stable level we'll see if it continues. maybe labor day was a one-off

but hopefully not. ed, talk to you next time. >> thank you >> all right after the break we're going to give you the latest reporting, my latest reporting on lvmh's decision to say we're not going to do that deal. the french government is telling us we cat.n' we'll have more for you after this you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today. don't get mad get e*trade and start trading [baby crying] mama! from the first loving touch,

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money to work right now. more "squawk on the street" coming up.

we sent you to break, shares of tiffany now the saga between them and lvmh, tiffany shares off over 10%. it was $135 share deal after an unsolicited deal. they raised the bid and buyers's remorse after the pandemic and watching tiffany sales fall, particularly in the u.s. they have rebounded a bit. the u.s. less so the company is earning money again and i'm told will continue to show significant growth that does not seem to be enough to convince the leader, one of the wealthiest men in the world and powerful in france to say i

want to do this deal at the price i agreed to. whether or not he's in it for a price cut as i was told many times because we've talked about this as a possibility for months now. the prospect he would continue to try to find some way to get out and/or apply enough pressure to get a price cut for the deal, not clear. what is clear now is he found something interesting. that's for sure. it's from the french foreign ministry yesterday we learned about this letter or this morning we learned about this letter, tiffany learned about it yesterday. in it say they the american government has decided to implement goods to support the american government. in other words support france in fighting the u.s. government let me make that clear you should defer the closing the pending tiffany transaction until january 6th of 2021. the cfo was on, actually a couple conference calls this morning. one stopped after technical

difficulties this is what he said he said renegotiating price was never an option. i'm quoting here we are prohibiting from closing the transaction. the deal cannot happen that's what we had to say. and went on as well to say the french government has the power to do this they had the right to send this letter we'll see. because the delaware court is going to have its say as you saw tiny has sued in delaware court. they had this lawsuit ready to go waiting for some shoe to drop probably not this was what they expected more likely a delay in filing for eu anti-trust approval whatever it was, they were ready to roll and they rolled out 120 page complaint they had filed in delaware they're going to take them to court. i'm told the board is unified in feeling it is willing to take on any disruption that comes from this to make lvmh pay them and make good what they say is a contract that in no way allows

them to walk away so they thi think -- i'm told by people who tell me of eu law that this deal which is under eu jurisdiction and, therefore, under eu law, it's not country -- a country is not -- a member state of the eu is not allowed to actually interfere in a deal. if it is under eu jurisdiction that's the case here it remains unclear whether or not, then, france is somehow going to be told to back down by the eu because it has no rights here or whether this is going to have the full effect lvmh says at this point. the chairman of tiffany in a statement that we showed earlier, we'll show a little bit more of it now said listen, the tariffs have never been announced or discussed publicly. how could it possibly be in order to pressure the u.s. to

revoking the tariffs we didn't know about them. we're not aware of any other french company receiving such requests all the more clear that lvmh has unclean hands. it's a battle at this point. and one that may end up in delaware court they're looking for an expedited ruling but again, we'll have to wait and see >> i pity the merger arbitrators who are working in this one. pity or maybe a fun opportunity there. great reporting on that front. as tech tries to recoup recent losses, look at shares of corvo. shares still down around 8% over the past week. we'll be right back. ♪ ♪

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are welcome back to squawk on the street stocks trying to snap a three-day losing streak with a bounce today after the outsized declines driven by weakness in technology session highs for the stock right now. as you might suspect the best performing sector is technology. it tries to recover from being the worst performing sector over the last week. the rest of the market action doesn't exactly scream trouble is over. the outperforming sectors outside of tech, you got a mix for economically sensitive names like materials and also health care and utilities. then you have the relative lagging sectors. you can see them here. and then communication services. among the worst performers in that sector you have live nation, also walt disney and

netflix. that could be a key sector that could indicate with a bounceback rally has legs keep it here more "squawk on the street" after this break see you in two minutes as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers... and deliver our products.

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a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management. we're getting a market flash on american airlining downs 5% phil lebeau has that for us. >> holding a conference today where a number of airline executives are giving presentations and at that conference american says that it may seek a larger loan from the treasury department. remember, the cares act allowed for them to borrow money from the treasury department. well, not all the airlines have taken a loan from treasury

most notably southwest airlines may not end up taking a loan and american is interested in potentially using some of that money, borrowing some of that money from treasury. the other headline which impacts not only american but also boeing is that american saying that it may defer delivery of 18 737 maxes. when you look at shares of boeing as well as american really all of the airlines, they're giving back some of the gains you saw yesterday and again american down more than 5% on the day guys, back to you. >> yeah, that was one of the cautionary notes in that morgan stanley initiation of boeing yesterday, phil. thank you. our phil lebeau. sports gambling stocks bucking yesterday's down trend coming mostly in the green with some casinos boosted by some reopening plans. our contessa brewer is in the catskills with more on that. hi, contessa. >> reporter: hi there, carl. it's been months since other states permitted their casinos to reopen.

tribal casinos in new york state began reopening the beginning of june finally commercial casinos have been given the go ahead to welcome back guests starting today. resorts world is the opening its doors in the catskills just in time for football. >> we're getting ready for also a big first weekend. we think this sunday will be huge and this casino offers the closest in states book for new york city gamblers i have seen some very excited customers heading inside these open doors you know who else is excited about football, draftkings, which has bucked entirely the downward trend in the broader markets. whether you're looking at week to day, month, quarter, penn got a lift announcing it's launching widely anticipated bar stools sports app in pennsylvania next week caesars made gains amid broader declines following a deal with william hill churchill downs and mgm resorts

and flutter which owns fanduel with me now is fanduel ceo matt king to talk about what else football but you know, matt, great to see you. we got new numbers out from the american gaming association that show through the first seven months of 2020, sports betting revenue grew 19% that's really remarkable considering there were no sports for almost all of the second quarter. >> yeah. and the demand we're seeing is incredible you're also seeing a ton of new states adopt legalized sports betting, which is a huge boon to the industry as well as common sense legislation. and so we're really excited about what the second half of the year holds >> reporter: well, how much room is there for growth here >> we think you'll see kind of 100 plus percent growth over the balance of the year. if you look at our business across everything, we were up more than 50% in the first half even with no sports.

we're super excited about how our business is performing and we think the industry will see some of that gain as well. >> you would think given all the pent-up demand for sports betting you would see this kind of pent-up demand for sports, and yet the aga survey that was just released today shows really lackluster enthusiasm for the football season. 12% of casual nfl fans say they're excited. 41% of people who consider themselves avid fans and then sports betters are the most enthusiastic group for football to return, 54% say they're excited for it how do you drive more engagement >> we think the time will be a big factor in this you think of what's going on this year, you haven't had the same rituals that really build excitement through the nfl season you haven't had high school football the same way. you haven't had college football the same way and you also had a lot of other sports going on. but that said, we think once the nfl starts playing, you might see a little bit of a lull for a

week or two but people will get excited across the board is kind of our view. >> we saw some disruption in the mlb season because of coronavirus. we saw some disruption in nfl and in tennis because of athletes taking a stand on racial equality. when you're looking at the uncertainty surrounding sports, how does that affect what comes next for the second half of the year for sports betting? >> so obviously we've all seen a lot of disruption, as you note as we look at it, our view is entirely fan-focussed. we pride ourselves on being absurdedly fan focussed. once disruption happens and people have a bad beat, we'll pay that out and engage people we're all dealing with the same surprises. so our view is how do we help fans through what's a really uncertain time by just having a lot of fun and creating a product they know they can count on >> we're paying so much attention to sports betting because we all love sports

but -- and it's offered in nearly 20 states, so that's fun. igaming in offered in a half a dozen is running circles around sports betting in terms of revenue here what's fanduel strategy for capturing market share of online casino games as that becomes more widely permitted? >> so we're the number one player in online casino today. we've been in the business since it really started five plus years ago in new jersey. and really what we do is offer kind of the broadest suite of games. you have people that are slot players. you have people that are table game players you have a big poker business in poker stars. so what we really offer is variety, frankly the same breadth of games you can find in our app as on the vegas strip. that's a value proposition that's really resonated with customers across the spectrum in terms of interest and casino game. >> this is such a crowded field because i think the widespread

assumption is there's a lot of room to run here you've got private companies, public companies, leisure companies, casino companies all building their tech stack to offer sports betting and online gaming in a year or two, how many competitors will fanduel have? >> we think it will be a competitive sector for a long time we think our number one position today and our leading product and brand today really put us in a poll position to continue to lead the market, but we expect to be really competitive for a long time. >> reporter: matt king, it's so good to talk to you. thank you so much for your time today. >> good to see you again enjoy the catskills. >> reporter: thank you i will you know what, i'm -- i never thought i would be the middle of the woods, carl, and go in and make a bet on the green bay packers, but i think i'm going to do that >> contessa, thanks. put me down for some as well our contessa brewer this morning. good morning, everybody.

it's 9:00 a.m. at headquarters in denver. 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ ♪ see that stranger ♪ come over here ♪ you don't recognize him ♪ got a voice like sugar good wednesday morning, i'm carl quintanilla welcome to "squawk alley" with jon fortt, julia boorstin with us for the hour. trying to reclaim some critical levels here, jon s&p 3400, dow 28k. we'll see what happens later on in the session. >> yes and we are going to begin this hour wit