good morning breaking news on boeing. a house committee report condemning the company and the faa for flaws that led to two crashes. >> and more on facebook. a report says the sec. and celebrities planning to freeze their instagram accounts today for protests on hate speech rising ahead of the policy announcement ahead of the trading day september 16, 2020 "squawk box" begins right now

>> becky is off today. looking in the green nasdaq to open about 78 points higher and looking to open higher as well also 22 points higher. also treasury yields you'll look at the 10-year note at .681. we have a lot going on today on the data front, details come at 8:30 eastern. breaking news overnight. >> the house transportation committee issuing the final report on the 737 max list the

failures that led boeing to design and the faa to approve the software that contributed to two crashes. around the safety system called mcas accusing boeing of concealing the information. including concealing the existence of mcas from its pilots boeing says it learned many hard lessons as a company from the accidents and from the mistakes we have made as this report recognizes, we have made many changes to our company. they expect to get 737 max back in the air in the fourth quarter. congress is expecting legislation to review the safety reviews of new plane models. reporting that there was no

singular mistake that led to the crashes. it was a series of events. >> we've heard it before that pilots were like, what is this hearing they didn't know about mcas, that is shocking you've got this huge piece of machinery underneath you and there is this new system, which was well-intentioned how do they explain that? we needed help i'm glad you appreciate becky even more so now.

>> was there a -- get melissa emergency. was there begging, pleas >> i saw the signal in the night sky and i came in. >> that's cool i love that. that's my favorite part of batman we'll move on here facebook i don't have anything to freeze in terms of instagram. >> i heard celebrities were doing this i thought should i be doing this but i don't have an instagram account. >> the ftc is gearing up the agency has spent more than a year investigating concerns that it uses its market position to stifle competition the company has argued its

acquisitions and not final decision has been made the commission doesn't always bring cases. we'll talk more about this you are going to go into it right now. you'll mention people like us but go ahead we'll talk about the ftc case and what that may or may not look like. as joe was mentioning in other facebook news given celebrity status, surprising you don't have a account some are freezing their facebook and instagram accounts for one day to protest the spread of hate speech and misinformation among the people today, kim kardashian west, orlando bloom, ashton kutcher i will say, a one-day protest,

dare a say, is not a protest i'm not sure that this is somehow going to change. >> maybe not to you. you have an instagram. you may be the only one of three. if you are kim kardashian and this is your primary way of communicating with your followers. one day is significant to these people we are not those people so maybe we don't understand that >> it is only significant if it is significant to facebook if the idea is that you are going to change facebook ways. a week or two could become meaningful you have to injury yourself at the same time but that's what a protest is i'm suggesting this is more

symbolic than that >> well we are talking about it. >> i agree >> we have more coming up. we have to talk about apple. the big news yesterday apple unveiling its new subscription bundle it means for the stocks details on the company, snowflake. all straight ahead after this. clean is a feeling.

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fedex reported strong earnings thanks to a boost in shipping ground jumped 31%. revenue per package rose the company helped by a 35% drop in fuel costs. fedex declined to provide an earnings forecast for 2021 citing continued uncertainty and shares of rival ups were higher following that fedex report. cloud storage company snowflake will debut

price above range at $120 per share valued at $33 billion. revealing that berkshire hathaway and salesforce agreed to buy stock berkshire will buy $4 million shares it will trade under the ticker symbol snow. >> apple unveiling a new subscription growth. the bundle includes different tiers for products and music including a fitness service, new watch and new ipad the stock coming off a big run year to date tech columnist and contributor and managing director at raymond james. i'll start with you, are you

impressed. i buy most apple things that i have to admit that i am unsure i plan to buy the full bundle. i'm spotify on music we've got peloton going. i'm trying to avoid the arcade stuff for my kids. where do you stand >> who doesn't love a bundle >> actually, no one zs that means you probably are paying more than what you actually need. in apple case, if you are a major apple user, which you are but you use services from other companies. this might make sense to you but if you start using one service and you see that is just $10 more and i get all these other services that's $10 you would pay for me, i pay for apple storage

and apple tv plus. in that case, the family or individual bundle makes a ton of sense. >> does it make sense or are they going to start losing money on you >> i don't care if they lose money on me. >> i know but share holders do >> they might. that's my question, if you add a lot of apple subscribers for me, i could pay $20 less. but is the game bigger for people like you who haven't been paying for some of these services >> chris, take it from the investment side. what do you think? >> the whole thing out of the apple thesis is getting a few more dollars out of the base

adding things to potentially be in the bundle is incentive to trade up when you put it in a bundling type situation, fitness is a good exam elf that when people aren't doing their gym memberships, it is a good incentive. those are things that are not large to invest in the costs are not higher relative to the charge to that >> what is the bigger picture. there are six services that make up the bundles and $5 million to

these services the revenue to these is pretty small as a perfect of its total revenue. what is the largest picture apple is aiming for? is it to create a hard wear plus services bundle. what do you think the big game plan is? >> my view is that the game plan is to sell hardware first and foremost when the services was in vogue a few years ago, we didn't agree with it because we think services makes sense and that is starting to grow again it was just the appetizer for the main event which will come

shortly. services becomes icing on the cake for those services, you need the apple watch for this that is incentive to get the apple watch. >> here on the apple watch, the incentive to upgrade every two to three years where they are coming in to say you'll also pay us $10 a month for this great workout service. seeing this, i'm thinking, i don't need to upgrade. you are probably not thinking about buying a watch >> how concerned do you think apple should be that they are

tempting regulators by pursuing a bundle of this sort. talking about fais and spotify and these bundles are competitive. i can make that argument t apple. these are harder to make a tie-in case, if you will you have to be tying to a dominant product it is unclear any of those are dominant unto themselves just by pursuing this strategy, how worried do you think they would be to pay even more attention. >> the way you brought it up,

perhaps on i cloud, apple music, spotify is a great competitor there. apple tv plus there is the underdog what this does do is build the wall higher around apple users saying these walls, the control of the hardware, software, really stifles competition from developers yesterday's case -- there is a lot of case made that apple is building its walls even higher >> chris, would it be a good idea from a business perspective, bad idea from regulatory perspective how do you see it? >> they are not dominant in any particular individual piece of that bundle. this he were trying to incentive

the deal there personally, i don't think it will wind up being an issue for them >> we appreciate your time and we'll see what happens next. thank you. an update on hurricane sally. sally has strengthened and made land fall about 5:45 a.m. eastern as a category 2 storm. the eye is near gulf shores, alabama. could bring storm surges and down pours coming up, the kickoff of an auction of a t-rex more from adobe going higher stay tuned when it comes to parenting, you're a pro.

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windows of christie's. >> we believe in this challenging time, it's important to start the new season with something positive >> the last t-rex was auctioned off in 1987 for $4 million mcdonalds bought it at the time and donated. >> stan will be auctioned with a $20 to $30 million pick asso >> quite a picasso there cracks me up did you see that

there it is. is that one person, robert help me out? i believe it is a portrait of marie perez, his long-time partner, mist res. i believe it was meant to be flattering >> what did you say to me about as old fossil. you felt the same thing going whoa, that's not very nice >> but i'm no artist we are going to go to break. we want to offer our condolences

to the gates family. bill gates senior died monday at the age of 94 years old. he was crucial in starting the bill and me linda gates foundation he called his father the real bill gates and said, he was, quote, everything i try to be. and i will miss him every day. we'll be right back after this with an update on the pandemic from dr. scott gottlieb. as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers... and deliver our products. but no matter how things change, one thing never will...

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good morning welcome back to "squawk box" here in the green with the dow looking to open about 125 points hire, the nasdaq about 70 points and s&p about 20 points higher shares of nikola under inquiry the firm accusing nikola of misleading investors about those trucks stocks were down about 8% after word the sec was looking into the same claims. nikola, the connection with gm, people now start to look at gm we had mary barra on they own a piece of nikola

>> true. the fda can use its emergency use commission to shrink the lag time of approval according to fda commissioners dr. scott gottlieb joining us now is dr. scott gottlieb he's also a cnbc contributor serves on the boards of pfizer and illumina you now have a tougher case to make, doctor, after comments you've seen that are well intentioned, helpful, whatever you heard bill gates almost questioning the legit massy of the fda under the trump administration now you've come out with this op-ed. you are proposing an expedited

process after we've just said we need to be really weary of what these companies will do. >> what the agency will do is use the fda's emergency use authorization which was cot tied by bio shield in response to the anthrax attacks and have a recall act in 2013 and teaked a little to respond to the h 1 n 1 pandemic it gives a lot of latitude to make a market entry. the fda will put out guidance for approval or authorization of a vaccine. i'm pretty sure that they'll set a bar where clinical standards and an eua would be the same the difference is under the

emergency use authorization, they would make a staged influence to approve or authorize for a very narrow group of people to make the original data sets mature. it allows the agency to bypass additional things. for the vaccine to give it a by logics application to make sure it can sit on its shelf for six months when they sit on the supply chain, they may sit for a while. you don't need initially the six months of stability testing. allowing the fda to authorize that as you mention on the board of pfizer under development for covid. >> the fine point you made about expediting the process or the safety issues

you are expediting are on the shelf. that will be muddled in this charged environment we find ourselves in right now maybe there is something to it and you look at hydroxychloroquine and the way that was very controversial, the way that was handled you look at the pressure on the cdc in terms of testing. people are naturally going to question in terms of important agencies like the fda and cdc and elsewhere are put under undue political pressure not just to save lives but in time for an election. how do you walk that line? >> it is difficult where those positions are miss held or miss communicated this is a really important

decision i have trust in the process and in the point of view the external advisors and the committee, which is going to review this application and data, i believe and before the fda makes the decision you have multiple layers of review you have the companies and monitoring looking this over so you have a lot of data, even filing let alone before you advertise it the vaccine will be available to a sub set of population. we shouldn't see this licensed to broad use what is likely to happen in late fall, winter, the fda will issue an emergency demonstration that demonstrates it is safe and effective and authorize it for a narrow sub set maybe front line health care workers and maybe those that are

older with a higher risk of contracting covid and a loutill the initial data set to mature and get more long-term safety data in that guidance which they say they'll put out. they'll articulate how many patients need the long-term follow up data with 5,000 patients with six weeks to eight weeks they'll set down the bar not just on efficacy but safety in that guidance document, which is forth coming >> so doctor, you over the years have seen there is a whole lot of conjecture about the vaccine and autism and it is anti-science, a lot of it but very controversial

here we are in the middle of it. do you think it is helpful we are already hearing a lot of americans say they are not going to get the vaccine herd immunity will be hard to come by. do you think it is helpful when bill gates questions the efficacy is that okay >> look. this entire crisis has been plagued by crisis that is imprecise. >> people have to be careful how they communicate about these things they are very complex. when you put out a sound bite, it can erode confidence. i think there is better ways to

air those concerns in the constructive fashion than the way these are picking up across the political spectrum to your point, there have been miss steps by the agencies and officials that breeds further confusion. >> dr. gottlieb, to that point, politico over the weekend headlined trump officials interfered with cdc reports on covid-19, the spokesperson and his team demanded and received the right to review scientific reports to health care professionals. what does that do to the credibility of these organizations? >> it erodes them. that is unnecessary. those reports were held in a very high regard people didn't get it weigh in on

those. there are reports related to fda issues i would see those reports as they kr going out. they were carefully guarded in the way the fda carefully guards their review positions those cannot be interfered with. when you see that, that's the kind of stuff that erodes confidence to let these things happen on the margins that are important you end up ee rodding these things sometimes you distinguish. because they are not there they don't know. i believe the vaccine review process, how do people trust that when they see things like you are saying >> why are they confident a vaccine process will be different and walled off from

the treatment we've seen with emergency use which then later on were found to not have the efficacy originally thought. you have president trump basically saying to abc, three to four weeks to a vaccine president says dr. fauci says it might be the end of the year then president trump says well many disagree. a neurologist, i don't want to knock them the president is still saying three or four weeks, deferring to the judgement of a neuroraidologist he's really close with how can you be confident this process won't be politicized and that front line workers will be doctors and say, you know what,

we are going to trust this process and we will accept this vaccine and take it. >> it is going to undergo multiple layers of the vaccine the people who are external will allow this all of us will know it you'll see something very public i know the folks who will be engaged in this. they jealously guard that process. something will happen here you'll know it if they feel they hadn't been leaned on and the ability to make the decisions here, you'll know that too. i'm pretty confident we'll have transparency and how the decision gets made the mere fact will discourage anyone from trying to lean in on

this >> we are about out of time doctor you heard the news of the monoclonal antibody that shaves a day off when used with remdesivir is that another single in a baseball analogy in trying to deal with this >> it is an early data set this could turn out to be a more robust drug. this will represent another they are pew tick gain going into the winter and gains on life expectancy with this disease open optimistic that more drugs will provide more treatment opportunities over time. >> thank you we missed you yesterday. i was thinking had we talked to you. i guess you have a life or

something. we'd appreciate seeing you ever day. andrew okay coming up, we have today's biggest stock movers including adobe. later, the nba bubble gets a little smaller after the nuggets knock off the clippers we'll talk pro sports and the washington wizards coming up with a reminder you can watch or lteisn any time on the cnbc app

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welcome back to "squawk box" this morning we have some green arrows this morning. nasdaq looking to open about 80 points higher, the s&p about 21 points higher. we have some news, some coronavirus news >> not just coronavirus but it looks like from lily that we

were just talking about. i don't know if this is a different one or additional news coronavirus drug trials from eli lily meg joins us now is this the same we were talking about on monday? >> this is a different drug lilly has developed specifically the drug we were talking about on monday is a different drug that is a jack inhibiter this is interim results on the drug in people with mild to moderate recently diagnosed covid-19 in outpatient setting about 450 people in the trial. eli lilly showing reports that this may work. the prime ory goal is to look at

three different doses of the antibody against placebo and to see if it reduced the viral load it found the middle dose reduced the load, the others didn't. part of that might be that time point. think did find most patients did clear the virus by day 11. it does show in mild to moderate patients, people are getting better people on the drug cleared the virus earlier. it reduced those on higher viral load they say fewer patients on the drug went to hospitals or the er in smaller numbers 7% on the drug versus 6% people that had to go to the hospital had underlying risks like age or bmi.

they saw rapid improvements on those restrictions oven safety, they say it is well tolerated. lilly's chief scientific officer say the drug has a direct anti-viral affect and may reduce covid hospitalizations reinforcing our conviction that reducing antibodies will help. they are taking next steps and running more studies that does include the potential to file for emergency use authorization. this is incredibly fast moving others are in this fight we are expecting data from them as well. >> the monday news that is a different drug it has to do with the immune

responses already in development in the pipeline. we sequence covid and look at this novel coronavirus that's when they started doing this. >> it was pretty resencent what are they basing that on the spike protein or the virus as a whole >> yes, an antibody targeting the spike protein. it was isolated from one of the first people in north america that recovered from covid-19 this has been under workerly and advanced quickly in a way to discover new drugs these are moving fast. >> all right excellent. you could have told us this before gottlieb. i know it is breaking news

we'll ask him next time he's on. we asked him about the old but this sounds like more good news than we saw on monday. do you agree it is significant. we saw early >> top of remdesivir b one day. you know, we don't have the full data on this this is a press release of top line results so when we see the full data on reducing the viral load, we'll see what this means in terms of keeping out of the hospital that was on people already in the hospital >> exactly all right. thanks, meg. melissa. coming up, today's biggest stock movers and some potential picks for your portfolio. first, japan has elected its first new prime ministerin nearly eight years he was a long-time ally of former prime minister shinzo abe. he has signalled he will maintain abe's core policies,

including generous government spending and a strong alliance with the u.s we'll be right back. 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.

shares of adobe are on the move this morning. shares jumped more than 4% and are now up about 3% premarket. adobe is one of the stocks we're focusing on in our squawk pick segment. joining us is ellen hanam. a lot of investors would be grateful for 15%, 14% revenue growth which is what adobe posted but yet that number is decelerating what should you pay for a company whose revenue is decelerating given that it's trading at a premium next to its peers. >> thanks, melissa adobe had a fabulous quarter and there's no question that the digital transformation of so many companies has been very much accelerated by the pandemic so you see small, medium businesses, individual, entrepreneurs, as well as large companies increasingly moving to

online and so you did see adobe have even faster growth a couple of quarters ago it's decelerated from over 20% down to 15% but some of that was pulled forward so i'm not sure how much we should consider the deceleration for 15% revenue growth, particularly if it's projected for the next several years, which this is, and importantly with a company who generates free cash flow far above earnings, it makes sense to pay at least one and a half times the market multiple. adobe is trading at about 35 times two years out earnings but if you look at a free cash flow basis, which is so much better than an earnings basis, it's about 25 times, which is very fair for a company able to grow revenue double digits. >> i want to get to your two other picks which benefited during the pandemic. home depot is one, ellen i'm wondering how much pull forward there is in home depot in that if you're at home and looking around and you do home

improvement and you regrout your shower or redo the kitchen floor, you're not going to do that again for quite some time so how do you -- how do you see that business and the pace of business for the rest of the year >> home depot had an unbelievably good quarter. that was the july quarter, of course, for retailers that are on the july quarter calendar comps were 23%, which is unheard of in the home space and yes, there have been people increasingly turning to nesting and improving their home, but what was interesting about home depot is you saw the strength across the board it was in outdoor, it was in indoor, it was in kitchen, it was in everything. and so there's reason to believe that it may sustain. one of the concerns about home depot is whether or not we are going to see demand fall off a little bit with the stopping of the extra unemployment

insurance, so that's something that we're watching on home depot. but on the positive side, you have so many other drivers you saw phenomenal numbers out of lennar yesterday. the home builders are doing very well so we have seen this little bump from people staying home and improving their homes, we think that that can last quite a bit longer when you see the strength in the rest of the home builders. >> ellen, thank you for your time, appreciate it. ellen hazen. joe. coming up -- thanks, melissa. coming up, a lot, including the owner of the washington wizards. but he's so much more. aol, remember? rev nugs he's more than just that blackrock's rick reeder, bill ruden all coming up. "squawk box" coming right back

good morning, mr. sun. good morning, blair. [ chuckles ] whoo. i'm gonna grow big and strong. yes, you are. i'm gonna get this place all clean. i'll give you a hand. and i'm gonna put lisa on crutches! wait, what? said she's gonna need crutches. she fell pretty hard. you might want to clean that up, girl. excuse us. when owning a small business gets real, progressive helps protect what you built with customizable coverage. -and i'm gonna -- -eh, eh, eh. -donny, no. -oh.

-and i'm gonna -- -eh, eh, eh. 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. stocks sets to rise ahead of today's fed policy announcement and forecast update. we'll get you ready for the trading day ahead. breaking news on boeing. a house committee report condemns the company and the faa for flaws that led to two fatal

crashes of the 737 max. plus cnbc's shepard smith sits down with bob woodward to discuss his new book shep will join us with highlights of that interview, as the second hour of "squawk box" begins right now good morning, and welcome back to "squawk box. i'm andrew ross sorkin along with joe kernen and melissa lee is in for becky this morning boy, joe, did we -- we needed help we always need help, but melissa is here to help us through the next couple hours. >> i can't offer you that kind of help, but i can help you with the show. >> we appreciate it. let's show the audience where u.s. equity futures lie at the hour it looks like the dow would open up about 175 points higher right

about now, the nasdaq 90 points higher and the s&p 500 looking to open up 25 points higher. >> we did friday, monday and tuesday, andrew, and i think finally the call came in it was just like, hey, guys, you know, are you watch -- have you dvr'ed and watched this? i enjoyed it, sorkin we talked about it we get to hog all the interviews. >> we covered a lot. >> you know what, and we cover a pretty wide range of opinion as people who have seen the show know. >> yes >> anyway, let's get a check on some early morning movers. dom, i didn't get to mention this to you the other day. it was really weird. i was wondering whether you did it you did domino's pizza and chuy back-to-back. >> nobody picked up on that.

>> i did did you do that on purpose >> can i tell you that the hard-working folks in our control room and production staff came out and basically said that was one for the ages we had to take screen shots in the control room of the fact that you were standing next to these augmented reality tombstones that showed domino's and chuy at the same time. >> and chuy! >> yeah. this is what i do. i want to sneak some of those subtle things in there to see if people picked up i will say you picked up and a lot of folks on social media did so i got a lot of screen shots of that. >> we've been doing this too long we do find ways to amuse that's okay, i think it's fun. i think it's good. go ahead >> and i'm watching here because melissa is maybe 60 feet from me so we're both here to help you guys out let's talk about those morning movers we'll start with shares of boeing because melissa just alluded to that.

they're down fractionally. this is the aerospace and defense giant lower after a house committee put out a report that put a lot of the blame for the deadly 737 max jet crashes on it and federal regulators that report said that the crashes were a result of, quote, the horrific culmination of failed government oversight and boeing inaction so we're watching those shares off about half a percent next, shares of tapestry up over 3%, roughly 15,000 shares of premarket volume helped along by positive analyst commentary out of deutsche bank where analysts have upgraded it to a buy. it was a hold. the target goes up to 21, it was 18 they like among other things a refocus on key brands. they trim their product offerings and a better omni channel selling strategy so those shares up 3.5% then we'll cap things off with shares of overstock.com which are up over 3% as well roughly 15,000 shares of volume there. the retailer gets initiated with

an outperform rating and $91 target price by analysts at credit suisse. they cite things like relative value of the shares and so watch those stocks one down, two up, melissa. i will send things over to you to help these guys out. >> thanks, dom it is great to see you in person here in the studio. investors are waiting for comments from the federal reserve later today. officials have indicated no interest rate moves are likely for several years. overnight at the singapore summit, jamie dimon suggested that that has succeeded in averting a financial crisis in the wake of the pandemic >> what they didn't want was a global financial crisis in addition to a great recession. that's where markets close down and people can't get money and so they kept the markets open, which benefited everybody. you know, they don't need -- right now they're so wide open that they don't need to be pumping it up anymore. let nature take its way. >> joining us now is noah blackstein from dynamic funds. noah, great to see you.

>> nice to see you. >> is it enough for the markets for the fed to just say lower practically forever or does the fed need to move toward outcome-based guidance, average inflation targeting, et cetera, for the markets to be satisfied and continue this rally? >> well, there's the old saying that once something becomes a target, it's no longer sort of a good measure, something to focus on so we've had a problem targeting inflation for a long period of time and i think we've kind of run to the end of monetary policy so i think the fiscal supports were really important during this time from governments around the world, whether that was on income support or other things like that i do think that as long as large swaths of the economy are still shut down, it's important at least to extend some of those supports until the economy can come back. and so i think that's why, you know, there's such a push to extend some of these programs, at least hopefully until year end. i know the house is debating things

but those are important. monetary policy is probably -- can remain supportive of conditions, but to get through this great contraction induced by the pandemic, we probably still need fiscal supports for a little while longer. and so i think the market is nervous certainly into this month about the expiring of some of these things for sure. >> how much further can the fed's tremendous liquidity in the markets get us in terms of this market rally, or have we already seen -- i know that you've been invested in the cloud area for more than a decade at this point, but certainly that is an area that's really gone up in part because it's perceived as work from home but also because there's tremendous liquidity out there in the system. we've seen cloud stocks, for instance, the bbp nasdaq cloud index up 55% this year it's just been tremendous runs here so how much of that is just there is no alternative, plus the fed's liquidity?

>> well, i think to some extent obviously, this entire contraction was government induced. we shut the entire economy down. i think there was a couple of papers that were written likening it to a katrina type of event where you have a complete shutdown of the economy and you sort of see the v rebound. markets are always forward-looking so markets will anticipate that recovery so i think that this was not something that was an economy that sort of rolled over because of natural causes, whether that was too much supply or a central bank raising rates too far, this was something different. so we've seen what it required to get over the hump was the monetary and fiscal stimulus but i think you're beginning to see the early signs of a rebound. i think obviously technology has done well, but work from home and digital transformation are not the same thing this isn't vpns and video conferencing what we're talking about are

cloud-hosted applications, whether it's subscription or volume-based type of models. a lot of that digital transformation was occurring before this pandemic and is likely to continue after this pandemic whether that's because it's better and easier and more efficient to run just from a business continuity standpoint or whether now you're at the third stage of the cloud where applications are being developed in the cloud that you could never develop on premise, so it's been a long-term trend that i think is continuing. i think the business model has really been played out, that it's not try and sell as much software as you can by the end of the quarter this subscription-based model really held up well during this pandemic i think that sort of proved its mettle but as you expand across this market, we saw an unbelievable quarter last night from fedex where they nearly doubled the expectations despite higher covid costs. so you hear a lot from the bears about this bubble and that bubble we had a 10% correction in january to february of '18 we had a nearly 20% correction

in the fourth quarter of 2018. we had a 35% correction in march of this year, which was pandemic induced. so i'm not sure if they're waiting to tell you to buy the next correction, which will be 50%, but i think to sustain the move you have to have the earnings where you see quarters where fedex despite covid costs nearly double expectations, it's probably going to be e-led from here rather than p.e. expansion but there is a lot of operating leverage in the system that's going to require the economy reopening and people willing to re-engage. >> fedex up 10% premarket. the highlight there was the operating margin, which came in at 8.5%, which compared to estimates of 5% just blew it out of the water do you think fedex, though, it seems like now it's a work-from-home stock i'm not sure it's a leading indicator of the economy per se. it sort of lives in this unique place because it is delivering packages primarily through home. the volumes were increased

internationally but also the residential and that's because we are ordering things instead of going to stores >> perhaps but also i think if you look at the transportation group, you know, you'll see similar type of moves off the lows in places like rails and other things. i think you've seen -- i mean obviously i'm a growth manager and spend a lot of time in health care and technology and other areas like that, but you can't ignore the move we're seeing in the transports or the move that we've seen in home builders or home improvement stocks even some of the gaming casino companies. names like penn gaming were $4.76 in march an now are ten-baggers since then so we're seeing broad signs that it's beyond technology, it's a wider economic recovery. the pandemic certainly paused what was going on, but it probably accelerated a lot of future trends. and a lot of people had to adapt during this pandemic for sure. my parents and other people's

grandparents probably wouldn't have used zoom in their lifetime but we're forced to use it once they have used it, we're also creatures of habit so we'll adapt and then have a hacketbit. so the question becomes how much do we go back to our old ways. we're certainly not going 100% back to our old ways now that we've done it, this has become habit >> good to speak with you, thank you. >> thanks. >> thanks, melissa coming up on the other side of this break, dozens of celebrities freezing their social media accounts to protest against the spread of hate and misinformation on platforms such as instagram and facebook. we'll speak to the ceo of the anti-defamation league about the movement and if one day is enough isnsig aerx" retur rhtft th everyone wak every g to a world that must keep turning. the world can't stop, so neither can we. because the things we make, help make the world go round. they make it cleaner, healthier, and more connected.

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after six months, we need to connect with the world. i use the internet to keep him in the language, because that's the way to connect to my family's traditions. he has to know where he comes from. we need internet essentials. there's no excuse to not get connected. we mentioned it earlier, a celebrity boycott of instagram and facebook gaining steam yesterday public figures including lenaurd owe dicaprio, austin kucher, kim kardashian west members include the naacp, the anti-defamation league and the

same group that organized the boycott of facebook. joining us is the ceo and national director of the adl i find ourselves saying this more and more, this is an episodic show. this is not a stand-alone interview. we've been talking about this exact issue -- >> yeah. >> -- with you for a long time i keep thinking that you're going to come on and say that facebook is doing a better job but you never say that, do you >> well, joe, look, it's nice to see you again. i sort of wish we weren't stilling of this conversation, to be frank. but the question isn't whether they're doing a better job, the question is whether they are doing enough unfortunately stop hate for profit launched this action because still indeed months after we first talked, after more than 1,100 of the largest brands in the world said that facebook needed to do more about dealing with hate and violence on their platform, i'm back here this morning because they're

simply still not doing enough. >> and we always have the same discussion, and it's the obvious one, jonathan. and that is that one person's subjective analysis of what they consider completely objectionable might be different than somebody else's and, you know, when we talk about things, well, like in the workplace, you don't ever want to do or say anything that someone's grandmother might -- you know, might find offensive and that raises the bar high enough to where -- but let me finish with you, i'm worried that this could lead us eventually to a place where we talk about things like microaggression or things that i see happening on college campuses where you don't see any acceptance of any opposing viewpoint whatsoever to the exclusion of speakers, and where all of us have probably rolled our eyes at some point, i don't

know, maybe you haven't, about what we're seeing on college campuses in terms of what can be offensive. and that's what -- the stuff you always talk about has absolutely got to be gone, but how do you make sure that you're not just insulating me from things that i want to see? >> look, joe, we undertook this action this week not because of a free speech issue, per se. this is about honestly life and death. let me give you an example what really prompted this action where what we saw happen in kenosha, wisconsin, just a few weeks ago. following the shooting of jacob blake, we had armed militia groups who organized in the streets and then that led to the shooting and death of two people when a 17-year-old armed with a semi-automatic weapon showed up. now, the question is what does facebook have to do with it? well, facebook groups, one of the most popular products on the platform, has literally become the organizing tool for the

armed militia movement in the united states. and i'm someone who deeply believes in free speech, but i'm sorry, the freedom of expression isn't the freedom to incite violence and when facebook groups are being used out in the open to organize people to bring armed weapons, when facebook groups are being used by those who want to promote violent insurrection, joe, i don't think that's a question of free speech. i think that's a question of what kind of society do we want. now, look, we undertook this action to call attention to the fact that facebook still hasn't done enough to deal with white supremacy, violent militia groups and hate on the platform. what i'm amazed at in literally just two days, the message we put out there to the world has been picked up and amplified not just by ordinary people, not just by civil rights groups, but by some of the most prominent public figures in society. katy perry, kim kardashian,

sacha baron cohen. he really cat liesed this movement in many ways. when people likely naurdo dicaprio and orlando bloom are saying enough, why is that significant? these are people whose careers predicate on social media. who have built businesses and brands on this amazing platform. and when they are saying today we are going to freeze our instagram accounts and when they are telling the world that they have had enough of facebook's failure to solve the problem, i think we all should sit up and take notice. it's been just over 48 hours and literally the message has been shared over a billion times. something is going on here civil rights groups, child advocacy organizations, and now the biggest influencers in the world are all saying enough. >> all right i understand what you're saying, jonathan

and you're saying that it would go both ways, antifa, anything advocating violence would be something that you wouldn't want but i did kinda smile a little bit. i'm not sure i want celebrities controlling all aspects of my life with some of the stuff i hear them say. anyway, andrew has a question. >> jonathan, i think the real question i was going to ask you is some people look at the celebrities that are engaged in this campaign with you as taking themselves off the platform for 24 hours and say how much of a protest really is that, and how much of that is going to really influence facebook if the kardashians decide to leave instagram for two or three or four weeks, that might move the needle in a very meaningful way. the question is whether you think this 24-hour protest ultimately when you have a protest you're trying to, i don't want to say hurt the other side, but you're trying to impact the other side.

the question is whether 24 hours unto itself will do that. >> look, i think we've kindled the public conversation here, andrew, the likes of which follows up what we did earlier this summer. the goal is not to bankrupt facebook the goal is to create a conversation about the fact that they need to stop the flow of disinformation heading into this election they need to not allow violence on the platform. and indeed it's just one day, but i told you over the summer, andrew, that that was the warning shot this is yet another salvo and there will be more to come until facebook takes the action. >> all right jonathan, thank you. and we will -- we'll have another episode i'm predicting and we'll let everyone know because it's episodic tv those are my favorite series anyway, hence the series thanks, jonathan, we'll see you again soon. coming up, breaking news in the housing front and then a very special guest the host of cnbc's new program "the news with shepard smith"

will join us shep sat down with bob woodward to talk about his newly released book "rage." we'll bring you part of that interview. take a check on futures. we are looking at a higher open across the board with the nasdaq looking to open up by 50 points. s&p looking to add 20 at the open stay tuned, you're watching "squawk. time now for today's aflac trivia question. until 1946, the statue of liberty was featured on what coin cn "uaswer when bcsqwk box" continues by my health ins and this is the aflac duck who helped me cover it. aflac. these are all the cab rides to my physical therapy. and aflac paid me directly to help. aflac. what he said. and this unexpected bill is from... the two-thousand-dollar specialist. thanks. aflac. when you're sick or injured, aflac is there. we can help with expenses health insurance doesn't cover. get to know us at (aflac!) dot com.

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now the answer to today's aflac trivia question. until 1946, the statue of liberty was featured on what coin the answer, the dime welcome back to "squawk box. mortgage rates stalled last week rates are hovering near a record low. so many borrowers have refinanced that demand fell 4% for the week refi application volume was 30% higher than the same week one year ago but that annual comparison has been shrinking for several months this as the average year on the 30-year fixed for conforming loans sat unchanged at 3.07% current borrowers may be waiting for another sizeable drop before they make a move applications for a home to purchase a home fell 1% for the

week they were still 6% higher compared to the same week one year ago that's the smallest annual gain since the housing recovery began in may that comparison has been in the 20% range recently and there has been more demand for bigger loans that pushed the average loan size to a new survey high of $370,200. back to you, andrew. >> okay, diane, thank you so very much. we will be back in just a moment when we return, cnbc's shep smith is going to join us with some highlights of his interview with bob woodward. "squawk box" returns in just a memont a new way to shop

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good morning and welcome back to "squawk box. among the stories front and center, eli lilly reporting positive reports on its covid antibody treatment a reduced rate of hospitalization for patients using the treatment. a new congressional report is slamming boeing and the faa for 737 max failures that led to what the house panel calls the preventible deaths of 346 people in two jetliner crashes. the 238-page report follows 18 months of research and comes as regulators get closer to recertifying the planes. cloud storage and software company snowflake will make its debut on the new york stock exchange today the company priced its ipo at $120 a share valuing the company at around $33 billion. it will trade under the ticker symbol snow. we are looking at a positive open across the board with the dow looking at 128, the s&p up 18, the nasdaq looking to be higher by 41 points at the open this morning andrew >> thanks, melissa.

in just two weeks "the news with shepard smith" begins right here on cnbc ahead of that premiere, shep sat down with one of the legends of journalism, bob woodward, to talk about his newly released book "rage" and how his career covering eight previous presidents shaped his views on the current occupy of the oval office shep, it is a privilege to welcome you to "squawk box," to welcome you to the network we're very excited for you to be with us and be part of the team. we're going to talk a lot this morning about the big show in just a second but we want to talk about this interview that you had with bob woodward and this book that continues to make so many headlines. >> andrew, thanks so much. it's fantastic to be here. i'm so excited and ready to get going. on this book, as many of your viewers go, woodward got extraordinary access to the president, he really did 18 interviews. in this book woodward covers dozens of subjects from across the presidency among other things we talked about his reporting on general jim mattis, who resigned when

the u.s. pulled troops out of syria. he admitted a lack of plan in that conflict. woodward reports that mattis said in a conversation with the director of national intelligence, dan coates, that president trump has no moral compass and coates responded, to president trump, a lie is not a lie, it's just what he thinks. he doesn't know the difference between a truth and a lie. which takes us to covid, about which woodward reports the president told him early on it's a killer, it's spread by breath. but he wasn't saying that to the public, at least not in the early going. woodward reporting on a lack of national strategy, and how previous presidents handled their crises and the importance of telling the truth >> if you tell the public the truth, that they will rally around, they will get behind the leadership this happened in 9/11 after the

terrorists' attack in new york and the pentagon president george w. bush actually gave speeches and said, you know, we're going to respond at an hour of our choosing and the public got behind this, the congress got behind it it was bad news. people won't flee from bad news. people in this country are problem solvers, i believe >> but you described on the part of president bush a plan no one can forget him standing on the pile and saying they'll all hear from us soon. those are the things around which we would rally. >> yes. >> did this administration have a plan they had known for months then did they have a plan around which we could have rallied? >> they didn't and one of my findings in the book is that president trump is a one-man band he decides things, he has his

impulses there are not the kind of serious, regular meetings of the national security council or the national economic council. being a one-man band, he acts on the impulse of the moment. >> impulses instead of the science, often rejecting science. instead, following the oney, a we do around here. and as woodward reports, and evidence suggests, the president has throughout his life. >> the stock market is one indicator of what's going on in the american economy for the tens of millions of people who don't have jobs, who don't have enough food, who have no steady income, this is a crisis like the great depression in terms of people who live here and work here for tens of

millions of people. >> he's a new york real estate developer, he's a businessman, his muscle memory is clearly about markets. were you surprised that in this pandemic his focus or at least part of it appears to be on the markets? >> well, it's fair to raise, but -- and i said to him, i said, you know, do you realize what is going on and he will acknowledge it but he's not acting on it. it's a good term, shep muscle memory. we all have muscle memories. we all have history and the past we need to use it, but we can't be prisoners of the past. >> in other words, pay attention to the moment, woodward reports. and listen to scientists who work for him, obviously. they insist we must distance, we must wear masks, so that the economy and the markets can thrive in the long term as they did before covid you can't have economic stability and greater employment if we don't tamp down the virus

with masks and distancing, that's his reporting the president, woodward says, is not setting that example and his campaign is not living that truth. two nights ago, a rally with thousands of people, most without masks and with no social distancing set up by the campaign, a potential superspreader event, the kind that scientists, including our own dr. scott gottlieb, say can and does kill. woodward covers it all, most of which honestly has already been reported by "the washington post." it seems like they got all of the good parts in the front. the president calls of course the book fake news and says woodward always writes, as he puts it, bad books it is, though, a good read from one of the prominent journalists of modern times, andrew. >> hey, shep, i have so many questions for you. i think the biggest, though, for the business community, for those who are focused on our economy, for investors out there who are trying to handicap this election and what it ultimately means for our economy and potentially the direction with which we take, the question is

whether a book like this and the revelations to the degree that they're described as revelations, because there are some people out there who say we knew this of the president do you think it changes the equation over the next several months does it change the hearts and minds of voters? >> i'm not really a predictor, but i can look at history and say the president has had his base, it has been solid and loyal and it has stuck with him through thick and thin we can go through a hundred examples the president has his detractors who have said no more trump, we have to change course. and there's a sliver in the middle who will likely decide this race, likely in florida and pennsylvania and wisconsin, just like before. and whether this piling on of information and continuing reporting will change the minds of those of some who will make the difference is reporting for another day. maybe that's for reporting a month into the news with shepard smith when it begins on cnbc at 7:00 p.m. two weeks from today

>> shep, i've got one more for you. >> oh, yeah, yeah, i've got all morning. >> as one of the great reporters and journalists of our time, let me ask you this, which is -- because there's a bit of a controversy around this book, which some have argued that bob woodward should have reported these -- some of these revelations contemporaneously as they were coming, as he was learning about them in february and march and in april, potentially in "the washington post" at that very time. others have said that it wasn't necessary or that this is part of a book plan, or that some of that already had emerged prior where do you land? >> i asked him about that. he said that in his early reporting, he didn't really know what the truth was and in the early going in fact, when he thought he was talking about the threat from china outside of the virus before he even realized that the virus was going to be an issue, when you move forward to the time period which you mentioned, march and april, he said i was still fact finding g

i wasn't deegbeing a day of journalist i was trying to bring forward the facts for the book many of these things did come out during the time. i remember the reporting of a conference of governors where there was discussion by scientists, redfield at the time, saying, look, this is very bad, it's going to spread very rapidly. you need to get ready immediately. these were the kinds of things that were being told to governors. scientists were telling them to experts. it was making its way throughout the government the president was standing strong and in many cases in the reporting of woodward that the people within the government were following the president as mike pence is quoted as saying repeatedly to people directly under president trump who could have spoken up and said something, stay the course. he reports that mike pence said repeatedly stay the course, stay with the president and that's what they did >> shep, i want to thank you for joining us we'll call this your "squawk"

premiere. >> first day of school. >> we don't want the audience to forget, mark your calendars, put it on alexis, siri, whatever you do "the news with shepard smith" debuts on cnbc on september 30th it happens at 7:00 p.m. eastern time and you're going to want to tune in. thanks so much, shep. >> thanks, andrew. >> joe, over to you. coming up, a damning house report slamming boeing over failures in the development of the 737 max and its handling of two fatal crashes. phil lebeau joins us aer tfthe break. "squawk box" will be right back.

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some breaking news this

morning on boeing. the house transportation committee issuing its final report on the 737 max. i want to get over to phil lebeau who joins us now with more on that report and what it means. phil >> andrew, this is a damaging report and really not a surprise, given the fact that this was an 18-month investigation scores of people interviewed, people within boeing, people in the industry, people who used to be with the federal aviation administration and who are still with the faa we're not going to go into all of the conclusions that come out of this report but a couple of things stand out first of all, they cite numerous failures that were made by both boeing as well as the faa. they cite issues among those issues that are cited, production pressure at boeing to get the plane, get the 737 max built and out into service as quickly as possible faulty design and performance assumptions. there were a number of examples within the report as i read through it where you sat there

and you said, wow, did they really think this at the time as you're looking at the statements that were coming from former boeing engineers, and also a culture of concealment at boeing now, boeing has issued a statement. this was expected. they knew this report was coming in the statement they say as this report recognizes, we have made fundamental changes to our company as a result and continue to look for ways to improve. change is always hard and requires daily commitment, but we as a company are dedicated to doing the work that work continues, by the way, on the 737 max it has been grounded for 19 months you've got to go back to march of 2019, march 13th, that's when it was grounded. now, it is expected that it will be recertified by the faa and other regulators around the world by the end of this year. that's when we may see deliveries begin again as you take a look at shares of boeing, this is a stock that is well off of where it was back in march of 2019.

and they have lost either through cancellations or adjusting the order book more than 1,000 orders for the 737 max. that's the bottom line impact. they're still not out of the woods, guys. remember, the doj has had a grand jury investigating this matter for some time i would not be surprised that at some point there is some kind of an agreement, a plea bargain similar to what we saw with general motors and with toyota when they had their issues, whether it was with unintended acceleration or the ignition switch failure don't be surprised if we see that at some point down the road as the doj continues to look into boeing. >> phil, one of the more shocking revelations out of this report is the concealment of the mcas system from pilots, which just seems to be -- >> correct. >> -- awful. i'm wondering if you think that this report could arm investors, could arm other airlines out there with evidence in a lawsuit against boeing >> sure.

>> and investors should think about whether or not boeing should set aside more for legal reserves >> sure. and they already have set aside billions of dollars. i don't have the exact number, melissa, but several billion dollars have already been set aside in special charges some of that has already been paid out they believe that they have as much as possible calculated what the legal impact will be in terms of dollars and cents but what you say, melissa, is true you read this report, you come away going what were they thinking what were a lot of these people thinking some examples, some of the testimony, when you talk with representative defazio and representative larson as we did yesterday before they released this report, there is a tone in this report that really leaves you with a very unsettled feeling. so that comes out. now, we'll have to see whether or not we'll see even greater reserves needing to be set aside in the future, but they have

already set a large amount of money aside anticipating that. >> phil, thank you phil lebeau. boeing shares down 1.5% premarket. coming up, sports are back but ratings are down we'll hear from the washington capitals owner about the reopening of sports, the gambling craze and the impact of no fans in the stands. taking a look at futures, the s&p looking to be up by 20 points on this fed day "squawk box" will be right back. ♪ ♪ ♪ good job, michael! does. ok, lindsey now tell the class what your mommy does... my mom has super powers. it's like she can see the future. what?! it's like she time travels in a rocket ship. that's cool! and then she comes back saying "try this" or "try that." she helps everyone. she helps them feel less worried. wow! mommy, so what is it that you do? i'm a financial advisor.

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sports hungry fans are welcoming back live events, but ratings are down from a year ago, according to neilsen. the first round of the nba playoffs were off 27%. thursday to sunday nfl ratings were 4% lower. monday night football was down 26%. joining us now to talk sports, big tech and a lot more is deadte ted leonis, entertainment and co-founder partner with revolution growth. hey, ted i was kind of laughing because we called you the owner of the wizards. do you think there's a lot of young people that never heard of aol? maybe they have seen the tom hanks/meg ryan movie, "you've

got mail." anyway, welcome. how are you? >> very well just watching the show and seeing how business and government are coming together and reflecting what we've just been through with sports i think sports really is a great metaphor for managing through crisis strong commissioners we have governors. that's what we're called we have 30, 31 governors in each of the leagues we've all really come together for a common good. we've kept our players and employees safe we've allowed them to self-express around social justice and we've been able to keep the business going, mostly serving our immediate partners and our sponsors so i've been very, very proud to see how the groups have worked together very, very well teams win. this this is much bigger than

basketball or hockey and to see how we've worked through this is a case history on good governance. >> i'm not a very good proxy for this because i've been watching more sports than ever. nba -- i was so -- i feel guilty sometimes because i heard maybe some of the other football -- college football leagues are now reconsidering not playing it and i feel guilty because i'm at home safe, watching, and i should worry maybe more about the downside of starting too early. but as you say, i'm gratified and heartened that it has been -- we had the bubble for the nba. we've got a lot of testing for the college players, and maybe they go out even less. maybe they're not out -- if they're not playing football, maybe in that setting, they can be protected so i don't want to feel guilty, but i really want sports and

major league baseball i think has done a great job >> there's enough to feel guilty about. i think that the bubblesreally really worked. we lost last night in the playoffs for the wnba and so now we're all at home. but we have three teams in the bubble and the bubble really, really worked. it's a good metaphor for using technology, using process and protocol to keep people safe and still be able to deliver the products obviously our businesses are dramatically affected locally. we can't bring fans into the arena. our goal for next season would be how can we find ways through rapid testing, hopefully as the vaccines start to roll out that we can start to get fans back into the buildings that represents usually about half of our revenues in terms of ratings, we are

carrying every one of the important demographics on a nightly basis across the board there is this great equinox, we've never seen this before, of having both baseball, football, basketball and hockey and other sports all coming at the same time certainly august is not a traditional time to be having nba or nhl playoffs. you know, hopefully we can do better on the scheduling but when you think about it, we were the harbinger of shutting down businesses and doing it in the right way back in march. we planned really, really well and collaboratively to go into the bubbles. we've been delivering the programming. there's certainly a lot of programming. and just about every single night -- last night i was watching a wnba game, an nhl playoff game that went into overtime, two nba games. it's really almost overwhelming

with the amount of programming, but we're providing it it's very, very competitive. i think we're being very creative in the way we're presenting the game with different camera angles, more interactivity, allowing fans to zoom in. we are pumping in kind of the sounds and the voices. and it's going well for how we go forward because we strengthened our studio and our technology capability, social media streaming and the like we also have deep relationships with at&t and comcast/nbc and disney and espn. they have been very happy with us and we're finding new ways to generate new revenues. we talked about earlier the draftkings phenomenon, william hill is one of our partners. trying to gamify all of the data

that we generate and really get higher levels of engagement for fans there's a lot of money that is being bet on games right now all through mobile apps. >> yes. >> in our case they're coming into our building. >> i lost both last night. i was close on the celtics because i had the under and they were ahead for a lot and then they lost in overtime so it didn't matter and then i lost -- i don't know, the nuggets really came on. so, ted, there is some conjecture you said that you've let the social justice come into a lot of the venues that we've seen. there is some conjecture that there are certain viewers that are turned off by that and actually the approval of sports took a little bit of hit as well do you think that that is

transient? people that swear off sports don't swear off for very long, i don't think, ted so how do you see that playing out and do you think it has had an impact? >> well, people do want to be entertained and -- but this is a moment, the black lives matter movement is very, very important to our players, very, very important to our organizations most of our teams are in big metropolitan areas we want to be very, very socially responsible this was the time to do it we saw a commitment to our players in the bubble, especially in the wnba and the nba. we're being very, very proactive until terms of creating funds and charities to make sure -- and we're opening our arenas into voting centers. i'm hoping as time moves on that we get more balance back into

it this is a wis thatbusiness that entertaining and we can get through the pandemic and bring fans back. >> okay, ted i'm sorry to ierptntru we have a hard break hitting thank you, ted and i apologize, but thank you

everyone wakes up every morning to a world that must keep turning. the world can't stop, so neither can we. because the things we make, help make the world go round. they make it cleaner, healthier, and more connected. it's what we build that keeps things moving forward.

so with every turn, we'll keep building a world that works. good morning stock futures in the green that's been a theme all week the dow and s&p 500 currently riding a three-day winning streak but will the fed's latest message on the economy keep investors happy? that's the question. they're going to be listening closely to chairman jerome powell this afternoon for comments on everything from inflation to the need for more fiscal stimulus from congress. rick rieder will join us and

then new comments on the fed from jpmorgan's jamie dimon. and faultily technical assumptions and grossly insufficient oversight house committee blasting boein and the faa over certification of the 737 max we'll bring you the details of that exhaustive investigation that just came out overnight the final hour of "squawk box" begins right now good morning and welcome to "squawk box" here on cnbc. i'm joe kernen along with andrew ross sorkin and melissa lee. melissa is still here! thank you, melissa, you're hanging out with us. this is the third hour and we were hoping that we wouldn't do anything -- >> i'm counting the minutes, though. >> what am i saying. >> 59. >> u.s. equities -- take that

back take that back that's not nice. anyway, u.s. equities futures at this hour, as andrew said, the green has beenthe color. the color of money, tom cruise movie, paul newman anyway, we're up about 157 points s&p indicated up about 21.5. nasdaq indicated up 53 and treasury yields at this point are not necessarily the most interesting thing to talk about, but we're at about .669% on the 10-year. according to jay powell, we'll only be there for the rest of the century. so not necessarily that long not for the century, but we'll hear some comments on that today, melissa at least a couple of years i think is what we're thinking so -- >> at least. the fed obviously a big story but here's some of the other top stories we're following for you

this morning forecasters are warning of dangerous flooding as hurricane sally makes landfall on the u.s. gulf coast sally came ashore near gulf shores, alabama, moving at just 3 miles per hour a specialist with the national hurricane center tells the associated press there it will be catastrophic and life-threatening rainfall over portions of the gulf coast, florida panhandle and southeastern alabama and will continue well after landfall an extensive report from u.s. lawmakers blasting faa and boeing over the company's still grounded 737 max the 250-page review from democrats on the house transportation infrastructure committee found the two crashes back in 2018 and 2019 were, quote, the horrific culmination of a series of faulty technical assumptions by boeing's engineers, a lack of transparency on the part of boeing's management and grossly insufficient oversight by the faa. boeing says it has learned hard lessons from the accidents and continues to look for ways to improve itself the faa says it will work with

lawmakers to make improvements the report highlights. eli lilly reporting positive results on its antibody treatment. it shows a reduced rate of hospitalization for coronavirus patients using the treatment the experimental drug helped people diagnosed with mild to moderate covid symptoms get rid of the virus sooner. the clinical trial is ongoing and it has enrolled 800 patients that stock is up 2% premarket. joe. >> thanks, melissa. snowflake, snowflake, could be the hottest ipo of the year the cloud data management company begins trading today and investors are paying up to get in leslie picker joins us now with more for years all it meant was, you know, the things that you'd see starting in november and december but now when i read it, i can't help i just think it's almost -- it's used as a pejorative, isn't it, sometimes? >> yeah, i think the company was founded before that came about i don't know, maybe that will

help them to a certain extent with some of the robinhood trader, we'll see. but that deal coming in at a whopping 36 times forward revenue, likely the highest multiple ever for an ipo of this size and scale snowflake is garnering a $33 billion market cap with shares 40% above the range it had initially sought throughout this process. just to give you an idea of how the market is revaluing software in a pandemic world, snowflake's current market cap is nearly three times the valuation it received in a private round just seven months ago in february i spoke with some investors about this deal and here's where they see the opportunity snowflake provides cloud based data warehousing software for large enterprises. the popularity of this model allowed snowflake to see revenue jump 133% in the first six months of the year to $242 million. rarely, guys, do you see this kind of growth at scale, even though the company is still unprofitable and here's the kicker.

snowflake landed an unprecedented anchor investor, berkshire hathaway, handing over $735 million concurrent with the ipo. while it was todd combs who signed the s.e.c. paperwork related to this investment, it would be the firm's first ipo going back half a century to ford's 1956 offering we'll hear from snowflake's ceo in just a few hours on "squawk alley. guys >> so if it's so highly valued, what does that mean for the deal today, the debut >> no, it's a good question. so we took a look at some of the other recent software ipos that have come in at loft evaluations. the second and third highest, data dog, zoom info, both over the last year or so, they came in at 19 and 18 times respectively on their first day of trading

data dog was up 39%, zoom info was up 62% if history is our guide that bodes well for snowflake that said, snowflake is coming in at 36 times, so that's many, many turns away from these other software companies that in their day just a few months ago were seen as pretty high values so it will be interesting to see how the market receives this one, but it certainly has the wind at its back, the momentum to -- at least it has a lot of people on the street talking >> all right very good. thanks, leslie we'll be watching it all play out today. andrew >> thanks, joe meantime the fed wrapping up its latest two-day meeting ahead of the central bank's interest rate decision jamie dimon making headlines by saying effectively the fed has done enough at this point to support the markets. here's what he had to say at cnbc's 2020 singapore virtual summit >> i think they're doing the right thing now, which is to let

us get through this. there are going to be serious issues about government deficits, fiscal and monetary stimulation. that's kind of a secondary problem right now. this is the problem. we can get through this and hopefully cooler heads will prevail how we can unwind some of the stuff wisely. >> joining us right now to talk more about this is rick rieder, chief investment officer and head of the global team at blackrock. i want to talk about jamie's comments but really wanted to mention leslie, just prior to the segment we were talk about snowflake. you look at thevaluations you're seeing in the marketplace around some of these new tech companies and the like there's so many questions about whether the fed is sexual abuina bubble i'm wondering if you think they are. >> it's a great question

i think ultimately the governor on whether the fed has to move, i don't think it's going to be inflation. i think keeping financial conditions as easy as they are will ultimately create valuations that are too high i think that's what's going to push them off the dime do i think we're in a bubble today? i don't. i also think that some of these new businesses, the ability to scale and how commerce has changed. many years ago we talked about tesla, et cetera you think about how many -- your ability to create scale, your ability to change commerce, i think we're going through a revolution in technology i think -- listen, some of the big tech got a bit full and deserved to recalibrate. but i don't think we're in a bubble yet i do think if you keep rates at zero through '23, if not longer, what that's going to do, think about what it does to financial conditions when you put the discount rate on assets at zero, all of a sudden those assets, particularly if you're a growing company and particularly if you have free cash flow growth, they

become pretty attractive the 10-year note is not very interesting but you have to find other ways to generate return. >> but what would be the tipping point at which then you think that powell puts his foot on the brake? >> you know, andrew, markets are -- you think about what drives business today or drives the financial systems, everybody has a return target. that return target doesn't really change. you think about what your liability stream is, what your irr target is. so i've got to hit a return target how am i going to get there? what are the tools that i have to get there you think about what happened years ago, the financial crisis and otherwise. when you keep rates low for too long, it will create leverage building up in a system, it will create stress in terms of overpurchasing of assets at the wrong price. listen, i think the equity market is where a lot of the income is today. the fixed income market, there are parts of emerging markets, but the equity markets is where all the income is today.

we look at some of the dividends being paid out to free cash flow yield generation, but then it's going to get overdone. >> but just to put a fine point on it in terms of the valuations, you think even tech valuations today are very much within the realm of reality, meaning you don't think that they are being artificially inflated but it sounds like you don't think they're being artificially inflated yet. >> that's correct. listen, i think what happened in august and the beginning of september, some of the valuations and some of the big tech names got extreme the call option activity was unbelievable i've never seen anything like it and now it's pushing some valuations of six or seven companies to levels that i think were too high. i think that was a very healthy recalibration. but i look at a lot of business. i think what's the most fun today is a lot of these new businesses, these new companies coming to market, cloud, ai, data simulation, these are really exciting businesses their ability to get scale

quickly. you talked earlier about draftkings think about how you can create scale globally it's different than anything we've ever seen before, and i think you'll see commerce change pretty quickly and we're witnessing that play out today >> how do you feel about the unloved cyclicals that i think there's still a wait-and-see attitude given the pandemic about whether they're going to come back and when ostensibly you want to get in before that moment happens i imagine it's a bit of a binary event around the vaccine maybe it's not binary, because it could take quite some time. we've heard from officials on a vaccine level basis for the whole world it might actually take several years to actually vaccinate the world. >> we've done a bunch of that. per the discussion about big tech being too high, we've rotated an awful lot into the cyclicals. i do think the economy is in good shape i think we'll continue to get retail sales -- you could get a

monthly aberration, but the consumer is in good shape. the economy is in better shape we've talked on your show for months now the economy is in better shape than people give credit too. i'm not a big believer to buy what is, quote unquote, value, companies that are old businesses where commerce is changing the efficacy of their business model but i do think cyclicals, whether it's in trucking or rail or chemicals, i do think there's some interesting cyclicals to play in today's environment. we've done some of that rotation i still think it's there to do >> and then finally, we started this interview showing you that clip of jamie dimon and i want to get your thoughts on that particular comment that he made. specifically about how much we're really supposed to worry about the debt long term >> so listen, first of all, i think his point about -- i think the fed has done an a plus job i think what they're doing today is paving the runway for more fiscal stimulus. i think liquidity is a big deal. i think moving interest rates, we're done on interest rates

i'm not sure you have to be at zero liquidity makes a difference fiscal stimulus is a really big deal because it's targeted, you get an income redistribution, an infrastructure spend, you get a health care spend. i think the fetd d is doing tha and paving the way i think the economy can absorb higher levels of debt because of the aging demographic. i think we can absorb a bit more debt the key goal is to put more people to work and you can do that through fiscal. so the economy today can absorb it we've got to grow nominal gdp to diffuse the amount of debt that's glowirowing, but you cane some more today. >> rick, always great to see you getting your perspective and insight. hopefully we can do this in person soon. >> that could be good. >> we've been doing this through the screen for too long. >> i'd like that. >> rick, thanks so much, appreciate it. >> thanks, andrew. >> melissa, over to you. what's it going to take to get new york city humming along and fully back to work

bill rudin will join us next. check out shares of fedex. earnings crushed estimates in the company's latest quarter volume surged 31%, operating margins a real bright spot the stock is up 9% stu stay tuned, you're watching "squawk box" on cnbc i feel like we're forgetting something.

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welcome back to "squawk box. general motors announcing mans to manufacture its open family of electric vehicle drive systems and motors gm has ev partnerships, including one with nikola. nikola shares are under pressure under reports that it is under investigation. tesla shares are down by 1.3%, but of course the relationship, the partnership with nikola is

really highlighting some concerns about gm and whether or not it actually did the due diligence necessary to enter such a deal, joe. jpmorgan is reportedly sending some traders home after one employee tested positive for covid-19 this comes just days after the bank told traders they were expected to return to in-person work by september 21st the reported setback underscores the challenges of reopening offices in the covid world let's bring in real estate developer bill rudin, the ceo and co-chairman of rudin management and the chairman of the real estate board of new york we are still kind of right in the middle of all of this, bill, and learning as we go. bring us up to date just on the state of things in your view in new york city and elsewhere. >> well, the state of things i think are getting better literally by the day

our occupancy levels in our office buildings were at 15% yesterday. my guess is next week when public schools reopen we'll be over 20% i think you're seeing that across the city. you mentioned about jpmorgan but obviously this virus, as we all know, has not gone away. we have to remain vigilant, wear our masks. i've got my big apple mask here, we wear it around the office and in the streets we're going to have little setbacks and so we'll have to remain vigilant, continue to test, continue to social distance and i'm pretty sure that the requirement that jamie talked about in terms of getting his people back will continue. just have to continue to work hard and do all the right protocols, social distance, wash your hands, and i think we'll get through this i think also as i mentioned before, people are coming back to work. you're seeing the marketplace in

new york continue to -- positive things happen. we just announced a major deal the other day with wework moving about 500 of its head quarter employees to our building in brooklyn, on top of amazon making an announcement that we're moving into 40,000 feet of space and williamsburg moving from hell's kitchen into brooklyn, and we're seeing really positive signs and activity continue to grow. we're building -- we own a building right behind you at 3 times square we're in the midst of that starting a major buildingwide renovation. we're seeing very strong activity we have some announcements we'll make in the next couple of weeks about some renewals and other deals. so there are positive things going on, but we have to remain vigilant, there's no question about it >> hey, bill, covid is one thing. let's say that there is a therapeutic or a vaccine

are you convinced that some of these other issues in new york city and big cities around and for lack of term i'll call them quality of life issues, and i'm referencing that letter that the ceo sent to mayor de blasio, is that going to be an issue after we are through this pandemic in your view? >> i think we're already seeing quality of life issues get better in the city the mayor and the governor over a month ago allowed restaurants to have outdoor dining if you walk around the city today, many, many restaurants are open for lunch, breakfast, lunch and dinner we're seeing a tremendous amount of activity at the end of this month. limited indoor dining, 25% through the month of october will happen and then it goes to 50% if everything goes well. but i think your previous guest was talking about the federal

reserve. chairman powell has continually talked about the need for the federal government to get aid to cities and states all over the country. and i think there's a frustration level literally every place around the country where we need to get that aid. and that will help our cities get through sort of a bridge loan in essence, because we lost significant revenue, there's been some cut backs in services. but if we start getting federal help, that will help us get through and deal with education, safety, homelessness, you know, all the basic services that the city needs i think there were other letters and other conversations going on and i think the city is responding -- yes, andrew, how are you? >> hey, it's great to see you. i have two quick questions for you. one is that you were one of the signers of that letter and immediately the mayor used that letter to effectively say to the

business community, if you believe that, come support me and our effort to effectively take out more loans. not just get money from the federal government, which is something i know you are backing, but to go get additional loans, something the new york city partnership i believe is adamantly against where do you stand personally on that >> well, as representing the real estate board, we have been very clear we've followed the lead of another organization called the citizens budget commission that has been very clear that no borrowing should happen without a comprehensive and feasible plan that leads to fiscal stability like all of our companies and businesses, we've had to go look at our expenses, how we operate, and the city needs to do the same they need to have a concrete plan that shows through attrition, not through layoffs,

through restructuring of contracts with unions, working with the private sector. part of the partnership letter talked about public/private partnerships, something that my father created back in the '70s when he started the association for a better new york, when the city was near bankruptcy, and the realization that business leaders have that government cannot solve the problem themselves they need to bring in private sector >> then let me ask you this. why has the -- why has the business community in new york city not pushed harder, and also spent money, to create a massive testing program? when people talk about how you create confidence in the system, ultimately even when you get a vaccine, testing is going to be a key component of this. as much credit as you can give to cuomo after some of the problems -- some of the problems is maybe an understatement that we had in march and april, but in terms of actually having real surveillance testing for public

schools, for businesses, so that you can actually get traders into a jpmorgan without having the problems that we're starting to already see, and we can actually have the confidence come november and december when it becomes colder outside and becomesharder to do some of these other things, that you can actually continue some of them >> well, i think there is significant amount of private sector testing going on. we're working on a couple of initiatives for our company and for our buildings. i know other major companies have instituted testing, and i'm sure that's part of the reason why they were able at jpmorgan to catch those couple of traders early in the process so there is -- there is significant planning and use of testing. but there again, the federal government needs to ramp up through their authorities to get the producers of the test kits

out there in a much more rapid way. you're seeing spit tests coming into play at schools and at companies. so i think as the production of these testing ramp up, you will start seeing more and more of that deployed. that definitely is a key to getting people back into work and feeling more confident our company, we're at 50% occupancy. i'm in my office we're encouraging our employees to come back to work we're starting to see that and i think there is a confidence level that's building up but again, as i said at the beginning, cautiously -- >> bill, what kind of testing program do you have at your company? bill, if you have 50% of the people coming back to the office, what's the testing protocol >> we have our employees tested every month through a pcr test we may -- >> every month >> every month >> once a month? >> every month we may move it up to every two

weeks as we start moving up into more people coming to the office so we have a doctor who we consult with and gives us guidance we've had that doctor with us from the beginning of march or actually february helping us and guiding us through a lot of these questions about how to deal with the virus. so you seem surprised a month. not enough or too much >> too little. i would be thinking you'd want to do it twice a week. >> you have to balance -- you have to balance all these issues out. maybe we get there, i'm not sure but so far through our testing, none of our employees in our main office have -- since march have had any covid >> i hear the music again, bill. thank you, bill rudin.

appreciate it. >> we're going to get through this i promise you. >> all right we'll get through it together as they say bill, than. > mi up, breaking retail sales data stay tuned, you're watching "squawk box" on cnbc when i was in high school, this was the theater i came to quite often. the support we've had over the last few months has been amazing. it's not just a work environment. everyone here is family. if you are ready to open your heart and your home, check us out. we thought for sure that we were done. and this town said: not today. ♪

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welcome back to "squawk box. rick santelli standing by with breaking retail sales data rick, the numbers. >> yes we're waiting for our august retail sales number. china had theirs and they finally turned positive. they had their first positive reading of the year. we went positive much earlier than that. our may reading was positive here we go, up 0.6 of 1% on the advanced retail sales for august that is not as high as the expectations we were looking for a 1% number. if you strip out autos, up 0.7, we were also expecting up 1% there. take out autos and gasoline

station, sales up 0.7, we were expecting up around 1% and finally the control group number that gets fed into other data points actually minus 0.1 of 1%. we're expecting up 0.3 these numbers are a bit on the soft side. they aren't out of the realm of positive, though, and that's a good thing other than the control number but it is an advanced read and they put in advanced for a reason because this will get tweaked in the final august numbers that will replace these. ultimately, the effect on the market, at least the markets that are open, we see 0.66 on a 10-year note, which has been hovering right there, right in the midpoint between the high at 90 basis points from june and the low, all-time low of 0.50, half of one percent in august. the median is 0.7 and that's where we've been gravitating to. revisions are coming out subtle revisions all taking something away so the number last time of course was up 1.2. that's now up 0.9.

strip out oos, that moved from 1.9 to 1.3 strip out autos and gas, up w 1 1.1. and the control number moved to 0.9 so both what we received and what's in the rear-view mirror both a little less than we were expecting. back to you. >> rick, appreciate it stay where you are, i want to bring in steve liesman to join us with more on these numbers. steve, are you concerned >> concerned, but not necessarily surprised, andrew. this is a hit to the economy that's recovering faster than we thought. i'm going to throw out what i think is perhaps the culprit here, which is that $600 benefit from the federal government wore off or expired in the month of august i think what happened is we took

a hit to the growth rate of retail sales as a result i'm looking at things like discretionary spending, sporting goods, hobby, musical instruments and bookstores down 57 nonstore retailers which tries to capture the internet, up zero after being very, very strong. rick is correct to point out the control group. that's going to feed into gdp. i think it's also worth pointing out here that what we're looking at here, consumer spending is two-thirds of the economy. the good spending within that is one-third of consumer spending the other side of this, the e s service sector, is the part that's probably been hit the hardest. so what i'm saying, the good sector has to hold up very strongly in order for consumer spending to do well. look, the economy is recovering. we have estimates of a 30% rebound in the third quarter it's been up from 20% and i've seen estimates as high as 35%. this could perhaps knock it down i do think, though, that it may

be a bit of the writing on the wall if we don't do more to get funds out to people who are unemployed or at least some additional benefit from the federal government out there that $300 benefit from the executive order from president trump does seem to slowly be making its way out but didn't necessarily make up for it rick is right, these numbers could be revised but the june revision was downward. sorry, the july revision was downward, the august numbers are a bit of a disappointment, though they are still growth >> okay. >> all right, steve. >> thank you so much >> all right, steve, thank you we appreciate that and rick, you said high. i really was thinking with the revisions you were going to say higher but it didn't come. coming up, more reaction of this breaking data with our all-star retail sales pal.ne stay tuned, "squawk box" is coming right back. [ thunder rumbles ]

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welcome back to "squawk box. a gain in retail sales last month coming in below expectations, both on the headline number and ex-autos joining us is matthew shea, jerome martis and justin norman. matt, i'll start off with you. what do you make of this, because it's not just the below

consensus estimates that came in for the month but also the revisions lower for previous months how do you think about a reduced benefit going forward, and if there's a compounding effect consumers know that it's going to be reduced, consumers think that it may not be coming and so that they pull back even more? >> yeah, melissa first of all, good morning i think you are view on this, the numbers are a little bit mixed, but as both ricks, rick santelli and earlier rick rieder, said, consumers are actually in pretty good shape. if you think about the way consumers have been behaving over the past few months, they certainly responded well to the relief measures that the federal government, the fiscal stimulus that was put in place that supported the recovery, the $600 a month -- $600 a week bonus unemployment payments as well as other dimensions of the relief program. so that did taper off.

that ended in july so not a surprise we see a little lag in august i think looking ahead, the question is going to be how do consumers behave as we go into the holiday season, which we know is going to be beginning earlier. everyone is behaving differently. you've already seen public announcements from retailers about how they're thinking differently about the holiday season we're about to go live with a campaign helping to education consumers about how to behave safely, responsibly, respond to the holiday season so i wouldn't get too worried about the august numbers but we've seen the relief recede i'd be looking more how we go into the holiday season and the rest of the year. >> jeroan, what data are are you looking at to see if consumers open up their wallets come christmas, come hannukah, whatever holiday you celebrate >> the one indicator is the unemployment number. the consumer confidence report

is telling us unemployment is beginning to shrink and consumers are feeling slightly better about their economic situation. still, with the money that they had in the second quarter, they definitely went out and splurged now we're seeing a slowdown going into the third quarter the data tells us for the second half of the year spending is expected to be slower than the second quarter, especially in the third quarter as consumers take a break right before the holiday season then the holiday season we're expecting to see earnings drop about 22% for the retailers and then it's not until the first quarter of 2021 that we'll start seeing positive growth again >> justin, what are you seeing on the closure fronts? restaurants and retailers were the hardest hit. are you seeing closures tail off, start to taper? and does that jive with the economic data that we're seeing? >> so it jives pretty well, but unfortunately we are still seeing closures in all categories but in particular for restaurants and retail, which

continue to be the hardest hit early on in the pandemic we saw a lot of retail businesses be able to shift their operating models, offering things like curbside pickup, online ordering unfortunately those measures aren't always enough to sustain the business over the long term so we ended up seeing at the ending of august about 30,000 total business closures in the retail sector and shopping categories at 17,500 that's the majority of which are permanent. so we're definitely going to see a different landscape for consumers both in how they access the shopping activities and then also the specific businesses they're able to go to based on the closure data. >> matt, that would seem to be very concerning to see this level of closures because you're talking about as justin mentioned the ability to access services and goods but also each business implies people. they have business owners and all of a sudden they're out of jobs, which seems to indicate that the pain is still to come,

as closures continue, and that sales might be even slower >> well, certainly it's sad and unfortunate to see these business closures. that's one of the reasons that we've been encouraging the administration and congressional leaders to put additional relief into the economy from fiscal stimulus, because we really do believe those small businesses need that help i think if you look at closures in the context of the total number of businesses, and again those are only statistics and so it belies the real pain that people are feeling, but we're talking about an environment in which there are almost 1.1 million small businesses in retail and restaurants and we've got substantial closures, certainly more than we want to see, but i'm not sure than other than signaling dramatic transformation in the near term, i think over time you'll see recovery there similarly, the bankruptcy issue i think in the same context,

there have been about 40 announced this year. if we go back to the recession of 2008-2009, there were 400 each year. so we're still dramatically lower than that. i think we need to get back into keeping the economy open, reopening business, and i think that's what we're seeing is the intersection of relief tapering off as businesses are trying to reopen that's why we have this little august lag. >> we're going to leave it there. thank you all. >> thanks, melissa coming up, mega asset manager blackstone saying investors face a potential lost decade ahead here's what the firm's executive chairman said on "squawk box asia" this morning >> i think this could be a lost decade in terms of equity appreciation, both because at some point we'll have interest rates normalizing somewhat or at best stopping further decline on the one hand and 10 therethen ts plenty of headwinds for

corporate earnings. >> and we'll get reaction from the leader of one of the world's largest pension fund managers and ask where she's ndg fiin value right now. stay tuned, you're watching "squawk box" on cnbc

welcome back to "squawk box. take a look at futures right now. we are in the green across the board. the dow has come off a little bit, about 116 points if we opened up this second. the nasdaq would be up 48 points, s&p 500 would open up about 17 points. melissa. coming up, marcie frost on where she is looking for value in these markets and jim cramer's first take on the day ahead. check out the premarket gainers on the s&p 500 in the meantime you're watching "squawk bo ox"n cnbc fedex leading the charge there

let's get to cnbc headquarters, jim cramer joins us now jim, i know how you watch these things, and there's just no way that you're not looking at fedex. i mean it's going to be a two-year high in the stock i tell you what i thought, and i want you to tell me -- help me with this. so online we get it. online -- my wife was just here saying it's online i'm telling you, it's online they're here every day is that all, or is it also just a strong economy is it a little bit of both or just the pandemic play >> first, hi to penelope i think what's happening is it's much stronger than expected. it's so strong, for instance, that they can raise price, that they can take surcharges, they can take another surcharge they're talking about they're going to have the mother of all -- i mean four times, joe,

four times they talked about a peak like none other that is coming up, four times. so what's happening is they expect a strong holiday season they're seeing numbers they thought would happen in 2026 and 2023 and they're a beneficiary of the fact there's so few actual commercial planes, they're can't -- they are out of it, that things are better, and i think it's one of those calls where the numbers just back them up it's quite a conference call i urge people to listen to it because it's a very optimistic hopeful call >> jim, i may show my ignorance here there is a lot of amazon trucks around so i'm figuring, you know, that that's got to be -- it's not all fedex, but in the whole logistics chain is fedex involved somewhere in just about everything that online shopping? >> well, i had union pacific on last night and union pacific is experiencing basically a boom in e-commerce, that's their word, not mine, and a lot of it is

just everybody -- every truck in the country, every train line in the country is stressed by amazon and its colleagues. because it's also walmart. there is no doubt in my mind walmart is a partner of fedex that we just don't have enough infra, infrastructure to handle all the e-commerce and the jump that it was supposed to be that it went from -- it's 26% it's just -- right now it went from 15, 15% last year, to 21% and they are seeing that a lot of it is up, you know, up in 26, 28 i mean, europe by the way very good for them at last. it's hard to believe, joe, that things are as bad as people think when you look at those numbers. >> all right last question, jim so, you know, it's a big component of the transportation average which a lot of times is a harbinger of good things to come for the other averages and for the economy. do we say, oh, but that's just

fedex, which is up because of online, or do we say it doesn't matter why it's like that, it just is? >> i don't know. united parcel ask doing kprat, xpo is doing great every trucking company is doing great. there's tremendous business back from china and forth from china. so i don't know. i mean, look, your panel before about small business, the yelp analyst, none of this stuff uses this one of the things that's so great is they literally talk about how we transferred from a true service economy to an economy that is about things and delivery levels and, you know, it's a change entirely in the country and they are the biggest beneficiary and the analysts are just now realizing about the pent up demand extraordinary. >> okay, jim. >> thank you. >> i know that -- i know this is going to be on your mind at 9:00 and we will be watching on "squawk on the street. >> it's a very important call. very important

>> yeah. okay thanks, joe. meantime, mega asset manager blackstone warning of some potentially tough years ahead for equity investors here is the company's executive vice-chairman on "squawk box" asia earlier today. >> i think this could be a lost decade in terms of equity appreciation, both because at some point we will have interest rates normalizing somewhat or at best stopping the further decline. on the one hand. and then there's plenty of headwinds for corporate -- corporate earnings >> joining us right now for her take on investing in the days, months and years ahead marcie frost from calpers, the largest defined public pension fund in the country. good morning to you. you heard that comment and if it's right it's going to make your job that much harder. do you agree with it >> yeah, i think we do agree with it, but we always have to remember that we're long-term investors, we think in terms of

decades not quarters, certainly our credit teams can be quite active looking at opportunities including in the private credit or private debt space which we're able to fund a number of those deals during the market volatility due to covid-19 so the teams are active, but for the most part we would agree with that sentiment. >> and if that's the case, what is your target, what's your benchmark in terms of the target that you think is reasonable in this day and age what does that do to your budget and how do you invest against it >> right so our target is 7% over the long term and currently those capital market assumptions for the ten year and the actuarial assumptions at the so and 30 years mark have come under 10% we are concerned about the current positioning of the portfolio, we will be leading our board over the next 12 months through our asset allocation and liability

management cycle where we will be looking at how to deploy this capital across the various asset classes. meaning diversification continues to be extremely important to us, we are primarily passive on our equity side, our public equity side of the house, but we have to take a stronger look at private equities if we can increase our target allocations both in private equity and private credit and then the other part of our investment strategy would be to look at putting leverage, some amount of leverage, a prudent amount, on the portfolio itself but, again, long term investors and we have to be really thoughtful about short-term disruptions but the long term macro trends or micro trends will be much more important to us >> marcie, let me ask you about that and a you just mentioned private credit and private equity your former cio departed last month and we can talk about that in just a moment but he had been a great champion of moving more of the money into private equity and private credit has that strategy not changed at

all and do you imagine it may depending on what the mix of your team ultimately looks like? >> the strategy really is not going to change. it really is a calpers strategy, certainly was being led by our former chief investment officers, but calpers has had a pretty significant allocation to private equity for a couple of decades, went into asset class i would say in the early to mid '80s similar to washington and oregon's systems we understand the importance of private equity to the portfolio, it's one of the asset classes that is expected to earn greater than the 7% so we need to up the policy target to that asset class, the policy target today is around 8% and so really the challenge for calpers is to continue to work with our general partners in the private equity space to find those deals and find those opportunities to partner together, to improve the pacing, we have had a little bit of inconsistent pacing during fundraising that has really i think harmed the returns we had at one point stopped our co-investment program, we want

to get that restarted and have gotten that restarted immediately. that helps with some of the fee drag and then also the diversification of the way that we invest in private equity. we really have not done much in the growth space, we've done more in distressed, for example. so i think it's less of a by-product of the departure of our chief investment officer, more of the fact that calpers has to have exposure to that asset class in order to hit its return target. >> marcie, i know you are a long-term investor but there are a number of investors putting a lot of money into the private equity space now thinking that there's going to be a moment of distress and that that would make this current vintage that's currently being raised right now and in the market a success. do you agree with that >> i think fundamentally we would agree with that. we are certainly working -- our deal teams are certainly working with a number of our high quality managers on some fundraising. we had funded some deals, we

have some deals certainly in the pipeline, but, again t goes back to the consistency in your pacing if you have concentration risk and in particular vintage then that can be problematic to your long-term return we are taking a serious look at everything being brought to us. >> marcie, i have to ask you about the departure of ben meng. he departed over concerns about a conflict of interest having personal holdings. can you speak to it and what it means going forward for calpers? >> right unfortunately mr. corbat meng did decide to resign from the fund, you know, and i can't really speak, you know, in too much detail about the reasons why, you know, this is a very public job, we have a $415 billion portfolio and it does cause quite a bit of public attention. some chief investment officers would certainly prefer to focus on the portfolio and focus on the team, but, you know, the next chief investment officer has to understand that it's both understanding how to manage the portfolio, build a very strong

and competent team, but also understand the public nature of the job. so one of the things that we are looking at, our board is meeting this week, is whether the new chief investment officer would need to put any financial assets into a blind trust, that way it would avoid any perception of conflicts and truly avoid any actual conflicts as well >> okay. marcie, appreciate it very, very much thank you. thank you again for joining us this morning. >> yeah. >> fascinating to hear about all of it and i hope to talk to you very soon. a quick thank you to melissa for keeping us all honest this morning. always great to see you. >> always a pleasure, guys. >> joe, we will do this again tomorrow looks like we've got -- a big week ahead. >> we do >> what did you say? >> friday it's back to the bromance with the two of us, i think. and ilk back at the nasdaq tomorrow, and drew, so maybe less of a lag, which would be

good, less of a delay. >> a lot to look forward to. meantime, i want to thank everybody, make sure you join us tomorrow when joe is at the nasdaq and "squawk on the street" begins right now ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. futures are solid for a third straight morning as we await a fed at the same time and presser this afternoon big ipo day, snowflake pricing strong, retail sales were a miss and oil is responding to hurricane sally which did make landfall as a cat 2. our roadmap begins with fed watch, news conference later on this afternoon, stocks are set for gains at the open. >> quote, a lost decade for stocks, blackstone's warning for investors about expected economic and corporate headwinds. >> and big tech measures, the ftc eyeing an antitrust suit against facebook and spotify