markets, we are about a half an hour before the opening bell dow has come down even more, about 353 points, nasdaq off about 260 points, s&p 500 off about 54 points. i want to thank kelly evans for hanging out with us. >> thank for having me jetblue's market cap $3.5 billion. it's a minnow. >> join us tomorrow. "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber futures are weak as this the fed hangover continues from woul's press run wednesday. jobless claims don't budge by much, just down about 33,000 and snow flake is back below its opening price from yesterday's action watch oil, too, as sally leaves its mark on production snowflake's monster debut, it is

buyer beware, ipos that have doubled do not have a great track record after the debut. >> plus the president and tiktok, he says he's not prepared to sign off on anything for an oracle tiktok deal. >> and wall street poised for a sharply lower open following the fed's pledge to keep interest rates low for years and technology stocks do lead the declines speaking of which, jim, sounds like your conversation with joe a moment ago kind of rings with what credit suisse says today about tech valuations overall, that is that there is some excess and they're lightning their weight at least on software. >> i count 30 companies that are selling at 30 times sales and then there's a number, even more, maybe another ten that are selling above that, 50 times sales for zoom along comes snowflake at 100 times sales. you just have to put the stop sign up because what it says is there's going to be so much supply that is coming. look, if you own a company you've been waiting for it to come public you just got the

green light and you're seeing the market come down because the supply is going to be immense and the institutions didn't even have enough cash on hand to be able to complete their allocation let's say we get a big half allocation on snowflake, they come in the rest when the stock is up in the open market and together they ended up spending far too much and they're selling everything else and that's why the futures are down david, you know when you start seeing secondaries and the likes of chewy, when you start seeing banks saying to their clients, to their investment banking clients, listen, there's so much -- this is your chance. bring ab and b public right now, okay bring stripe public right now. this is -- >> oh, yeah. >> this is the beginning of the avalanche and the market can't handle it. >> i don't know about whether the market can handle it or not, but i do understand, jim, why you would want to hit it as soon as you possibly can. again, there are things that -- let's take a look at the business models, let's take a look at what is going to file to come public, there's nothing

like the lack of quality that we saw in the late '90s, these ridiculous business models that had no opportunity or chance to hit profitability, it might not have been about that that's not now to your point, jim, the quality is one we will keep an eye on. >> yes. >> and then the multiples. i mean, that's shocking what you just said. 30 that are at least selling at 30 years worth of their revenues. >> i think people at home should understand that you should be reluctant to pay anything more than twice the growth rate of earnings now we're paying things -- i mean, i heard mr. corbat slootman just say now we've really got -- we have to somehow grow into this market cap. i don't know how he can possibly do it. he's already grown at 100%, is he going to start accelerating to 200%? carl, when you get the kind of buying in the after market that we saw what it says is pull back, raise cash, do not be overweighted in tech because there is going to be way too

much coming and the market can't handle t we saw this in 2014, that was a better example, of course, david is right, 2000, half those companies didn't exist 18 months later, but we saw this in 2014, there was a sudden surge and then the market was overwhelmed and the whole market went down simply because of the ipo market. it can happen again. >> all right so the knock-on effect, jim, if mega cap tech and we're seeing a little bit of this today starts to retest those recent lows, how much danger is the overall index -- how much danger is the nasdaq 100 at least in the near future >> look, a couple weeks ago we dropped 10% in three days. why we can't do that again i don't know by the way, this is seasonably the weakest ten days that we have in the stock market right now. so i think it's almost part and parcel with the idea that we have to go back to where we were during that labor day weekend and see if we can hold remember, you take a stock like

zoom, remember, zoom is the bedrock because zoom was at 50 times sales, until snowflake came we saw gloom drop 100 points in three days and this stock went from -- zoom is really amazing -- it went from 450 down to 350, it's growing faster than any other company in the universe and it still fell like that i think that that could be textbook about what could happen again. >> yeah. you know, because each time i make these references to the late '90s i think of things that are very different now i guess it reminds me of what mark twain said, history doesn't repeat but it rhymes was that him i think so there is this rhyming that i sense, jim. >> yes. >> and i think you are, too. i guess we need to remind people, particularly those who are not with us back then, who were not focused on the market or perhaps not even alive some of these robin hood traders, that, you know, when you get to levels like this it's easy to

pull the bottom out and say that doesn't make sense. >> one of the greatest hedge fund -- >> one of my roommates from college. >> i did not know that do you know he just sent me the implications of ipo a go-go. i'm reading it it's like, yeah, november will be a lot of selling and then i read t it's from november 30th, 1999 he sent me an old piece 21-year-old piece of research and i thought it was current research that's where we are, carl. when you read a piece of research and it's talking about how there's so much supply and you think it's like, wow, you're right. snowflake. it's not snowflake it's mwd, it's -- it's a group of companies i don't know. >> read some of those companies. >> no. >> i'd love -- i love, you know -- i'm very nostalgic. >> david, there was a company called world com, it turned out to be a fraud. >> suboptimal. >> suboptimal. >> i was very involved in that story as i recall. >> yes when you look at snowflake it's

anything but that. >> of course. >> but the problem is what comes next look, i know this sounds unimportant, chewy, they sent flowers for the death of my dog, most appreciated. >> okay. >> but i do feel very strongly that when you start seeing the secondaries and there's one filed this morning -- >> you're saying primary offerings. >> and knew secondary. >> and secondaries by selling shareholders. >> they're calling it a secondary in the news but it is a primary. i wish they would get that right. >> we refer to a secondary when other shareholders not the company are selling the stock so it's not a raise of capital. >> david, what has happened and, carl -- i think this is really important that if people want to go back to what happened in 1999 the market was still going up, the insiders were selling furiously, but when you get ipo a go go, thank you, again, steve gal breath who brought this piece what that says is look out

underneath i think, david, you made a great point. the young investors are probably figuring out but what the heck is the matter with 100 times sales? it means it's a great company. no no it means it's an overvalued stock that is associated with a great company. david, we've got some work to do to teach people this stuff. >> yeah, we do we do, without a doubt at the same time, jim, we are in unique circumstances i mean, i listen to chair powell yesterday, i know you did as well. >> yes. >> lower for longer. lower forever? no inflation i mean, it does beg the question of, well, maybe this is a little bit different. i mean, rates were a lot higher. >> rates were a lot higher but at the same time there is another piece by gal breath, he's sending me great ones -- >> he doesn't send me anything come on. >> i was a hedge fund guy, pouring the business on to him. >> i haven't even heard from him in years. >> he says he's been laying low. march 14th of 2000 he writes jail break, the coming flawed of expiring ipo lockups

what was march 14th, 2000, carl? the peak >> i thought it was march 10th that was my birthday. >> okay, so he was off by four days you're just mad at him because he's sending it to me not you. >> i am. we are old friends. >> we have on the wall a picture of snowflake, what that days to me is institutions did not put up the stop sign, they're happy to buy anything. so get ready for the supply. i happen to love the company airbnb if i were airbnb i would call the syndicate desk for morgan stanley and say i want my deal tomorrow we also have, carl, all of these deals that are, of course, direct listing so that's a new amount of supply that's hitting everybody that nobody is ready so the fed says rates are low. why are they low because there are some businesses that are doing so poorly he was calling out for a stimulus deal yesterday. said he didn't do it looks like we are not getting a stimulus deal. mr. corbat slootman, he deserves every penny. he has a cot in the office for

heavens sake i don't know if you caught how humble he is, but, wow, does he have his work cut out for him. >> what he told us yesterday at least about the price action, jim, all the things you're mentioning, the supply, the insider selling, we just had the biggest burst of selling in five years by insiders. what's between you saying this is 1999/2000 again what's between you saying that what more do you need to make that declaration >> i can't because these are great companies and there is a revolution digitizing revolution and when you go and you listen to what fedex has to say, you say, wow, everybody is getting digitized. i'm saying if you feel that go buy fedex. i deal with so many companies in cybersecurity which are work from home. i have proof plan on tonight, your eyes glaze over that there's so many of them. is this the level to go buy

octob octa there are so many people that do not know these companies they happen to be great companies but when the panic comes the etfs will be sold and the etf is so aggressive it's obviously not price sensitive. i'm not going to call 1999 because i do like these companies very much but i call 1999 when it comes to supply remember, unlike these -- unlike back then, there's so much money that is indexed, these people will not be there to bail you out. none of these companies are in the index. david, the companies that we're talking about are new, they tend to be good, they are about the cloud, but there's not enough capital to stand there when they come down. >> that may be true but there are fewer stocks now than there were back then for sure as well. >> that's true. >> a lot fewer. >> would you rather own caterpillar knowing that there is a mining resurgence would you rather own ups would you rather own fedex >> yes

what a move for fedex. >> they're auto -- valuations. someone could say, wait a second, jim, union pacific is more expensive than it's ever been i would say no it's not really because i think the earnings will be there. i am pointing out that the stuff that is working has gotten too expensive. >> there were great companies in the late '90s that are a still with us. cisco may have gotten ahead of itself. >> when did it come back to where it was >> it came back a lot. it hit $500 billion in market value. >> i don't think it ever got north of 480. >> maybe it hit 480. amazon was its first growth spurt at the time. yahoo maybe no longer with us in a significant way, aol used currency to buy time warner now a part of at&t cmgi, i get that didn't do as well

jds, that stood for just don't sell us then just don't sue us >> microsoft hit obviously a level in terms of pe that i don't think it's anywhere near now. >> no, qualcomm. >> qualcomm. >> i'm warning people it's a hidden disease, it's not something that's in front of us. you are not going to see these companies so-called disappoint in earnings or go away, but you are going to see people are going to pay less when there is a negative story i know that -- a negative story about tech i think we have to just warn people that there are two markets right now, there's the market that happens to be somewhat inexpensive, let's say trucking, transport and then there is a market that's outrageous and it's all coming home to roost because of a great company like snowflake >> yeah, and not to mention the size of tech that accounts for the s&p at large, jim. a lot of liabilities there we will take a quick break futures are weak as we see that hangover from poll psswe'sreer continue back in a minute

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time for an update on that battle, real battle, between bernard arnault and lvmh and it's prospective purchase of tiffany. late today in court -- in the court in the state of delaware lvmh filed its opposition to the plaintiff's motion for expedited proceedings. why is this important? remember they are going to go to trial in delaware, chancery

court to try to determine whether lvmh has the right to exit its transfer agreement with tiffany what they're claiming are material adverse effects but also has to do with that order -- well, not order -- that letter they got from the foreign minister in france here is a look at -- it hit late yesterday and it is a response of course to tiffany's desire to get this thing in court as soon as possible and preferably prior to the november 24th end, in other words, drop dead date, so to speak, of the agreement that binds the two to each other at least at this point. key things that lvmh shared in the opposition to the plaintiff's motion, well, one certainly is the basic idea that they say, listen, do you know what, there is no need for expedited proceedings here a trial can be held they say at a reasonable date, you can take a look at the language, in 2021. that's in six or seven months from now, subject to the court's availability and if, in fact, you found then that we were not entitled to

refuse to close under the terms of the agreement of the outside date, in other words, after the 24th, we will agree to specific performance. what does that mean? it means, all right, if you find, judge, we ever the trial six or seven months and you find that we really actually were in breach and we are guilty, the guilty party here, we will close the deal on the terms, 135 and cash remember and that's another reason why it's of course this is the focus of investors because the stock is trading 15 bucks below that lvmh and roger farrah fires back, the same line, their opposition to our motion to expedite is the latest attempt to run out the clock to avoid fulfilling its obligations under the merger agreement if lvmh were confident in its legal position they would not oppose an expedited trial schedule they urge the court to hold it on a timetable to get it in before the november 24th termination date they have ruled in favor on a few of expediting but there was

also amex biz versus carlisle where this judge did not give them expedited, the chancery court just reopened for in person or will in october, so we will have to wait and see, guys, but it's going to be interesting to watch that. of course, a lot of this does come back to that letter remember the letter, jim i have this vision now because they let tiffany's lawyer come into paris and look at the letter couldn't touch the letter. couldn't take a picture of the letter, but you could just look at the letter. and try to determine what vibes you were getting from the letter of course, the key remains whether it is an actual order as lvmh would have us believe that they cannot do a deal at least prior to january 6th cannot close a transaction tiffany is saying, no such thing. it's not an order. it isn't binding and, therefore, it has no application whatsoever to our current agreement but that continues to be something -- we haven't heard from the foreign minister, jim, at all since then. silence. >> it is funny that -- look at the parrot -- really just the --

the comparisons here the french government gets involved, what to kill an expensive deal because of what happened with covid. the united states government gets involved because the president wants a cut of the oracle -- >> he was so disappointed, wasn't he, to find out that it wasn't something he could do. >> right. >> yeah. >> and the navarro faction has just decided, look, the big guy shouldn't take this deal and i think that what's happened is -- >> you're referring now to tiktok. >> tiktok. >> and you're drawing the parallels in some weird way. by the way -- >> but kind of interesting. >> -- they're certainly not giving a clarification we want to know. if this thing is an actual binding order from the french government then it really gives lvmh a significant out here, even though they still will have to go to trial in delaware, but we don't know that. >> you left out the key piece of how powerful lvmh is. >> very powerful man, no doubt, but does he go back again and

say please try to clarify this so that everybody knows that you're really telling me we can't do it? >> he is the fashion dee gall. >> on the larger question of tiffany's performance, remember the dividends they paid drove lvmh crazy, it's littered in the complaint here they did it, did it again. it drives them insane. the luxury market, jim, the luxury market and this is a report this morning from b of a is quite strong. >> yes. >> mainland china continues and even they say u.s. luxuries up mid teens in the third quarter very strong. >> very strong maybe time to get back in at a better price. >> all right there it is. 20 bucks below, carl we will see what we get from here that's our latest update >> yeah. we're going to watch some of these levels, too, on the triple qs and the nasdaq 100 tech stocks at large as futures are close to their lowest levels of the morning. don't go away. incomparable design makes it beautiful. state-of-the-art technology

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few tears weak as we see most of faang going to open down between 2% and 3%. a lot of news on amazon, oracle, tiktok, obviously, southwest okg ines, chewy and snowflake loinat 232 today

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opening bell in about three minutes. let's get a mad dash with jim. >> the company that i just love, company that makes me favorite chair, herman miller, they reported a completely blow out quarter last night why? because, carl, people are rebuilding their homes by the way, stewart miller said the same thing, executive chairman of lennar the conference call is going on right now. when i think about herman miller i'm chig e-commerce up 248%, expansion in margins by 300 basis points get this, 300% increase in purchases in the home. this is what's going on. when you asked me earlier about how much risk there is in the market given the fact that the fed is totally in favor i'm not saying that the market is going to go down huge i just think that you could revisit what happened during labor day the reason why it can't go down huge is stocks like herman miller the office is going home despite

what i hear from people who have a vested interest that tell us on air don't worry everybody is coming back, barclays in london just today two people have covid, they are going back home. it's herman miller market. don't panic, recognize that we could do a retest because of the overexuberance of snowflake if we don't get that overexuberance in the next deal we are going to say we're fine one more point david is jammed, but one more point. if we get a stimulus package, carl, and you're out of the market you will feel awful i do feel that the stimulus package is very hard to get, but if we do get it, carl, you can't be out of this market. just cut down the exposure to the highest tech stocks. that's all i'm asking. >> meadows today who was on our air yesterday did say potus is open to $1.5 trillion. >> really? >> going to meet with airline executives later on today. this is meadows. on the other hand, i mean, i know a lot of the d.c. reporters are going to watch to see how

many members are going home to campaign it's going to be to a large degree just a head count of who is sticking around in anticipation of any deal. >> we've done so many stories here about the other part of the economy and there's a piece today that's really excellent, recommending darden, which is olive garden an they are talking about once they start getting third-party delivery they will do great what is olive garden doing right now? they're doing the reformatting of the floor of the restaurant see, they have the money to be able to make it so that they can cut the seats in half and still do well. but what the stimulus has to do is be targeted to all the companies we know that can't make it. do you know we're seeing lots of pieces now about companies coming in and buying up the leases because so many mom and pop stores are going under is that good no that's why i think that there has to be a stimulus package. >> this was part of the conversation with powell yesterday that kind of got lost, you know, why is the

transmission mechanism so weak in getting money to the enterprises that you're talking about. jim, i wonder if you think 10% surcharge for new york city restaurants is going to help at all. >> no. i mean, i think the only thing that helps is seating, carl, and we need money to tide people over you need money to tide people over and i think that the parties have to agree -- i'm not even saying which party is wrong -- i'm saying they have to agree because -- look at that sea of red a stimulus bill would change that that's not why we should have that, but it's for the 14 million people that will and are going to be unemployed when it gets too cold to have restaurants outside which is what's going to happen. >> yep it's starting to happen already. >> yes. >> in the north. there's the opening bell at the nyse celebrating an ipo, telehealth company amwell. sumo logics, realtime software analytics company, we will talk

to the ceo in sidewalk alley. the 9/11 ndx low 10945 so we will keep that in mind you mentioned vaccines, jam, and moderna was on "squawk" this morning talking about the timeline, the aggressive timeline, the bull case, the bear case of when we might start to get some data here is what he said >> we are sticking to what we have said before which is based on the current epidemiology, the rate of infection in the country at the location and counties where we have sites, we anticipate a base plan for efficacy for the first intermodal to be in november, that's our base plan our best plan is october i think it's unlikely, but it's possible, and even infection rate in the country was to slow down in the next weeks it could potentially be pushed out as a

worst-case scenario i would say december. >> all right so october, jim, unlikely but possible >> not enough illness. i know that sounds terrible, but, you know, if you are in an area where covid has been tamped down like united states, new york where it is, in new york there is a trial going on, it's not going to produce anything. i mean, the placebo is going to be equal to the actual and that makes it very difficult to try to figure out whether it's working or not look, wouldn't it be great if you could go to every college campus i think that's where the hot spots are right now. we don't have enough arms in the right places david, you know that if we can't figure out the hot spots and then put the vaccines, the trials there, then what we're going to do is have a lot of people say, hey, listen, this vaccine works but we really don't know because there is not a lot of covid >> right and we need -- you need some, you obviously have a lot of people who don't have it at all.

but, jim, pfizer has 30,000 people in their trial. >> yeah. >> they managed to get -- >> j & j is going to have 120,000. >> 120,000. >> everybody from j & j apparently is going to take the vaccine. >> interesting. >> that's one of the reasons i want to be in the j & j trial. some of these trials are very hard to get into. >> once again we need to make it clear to people that the vaccines there's also the -- there are also the monoclonal antibodies, that's regeneron and lily and then there is the small molecule which is merck. antivirals i'm talking now those are antivirals as opposed to the vaccine we will talk about it every day until we actually get something out of phase three that gets approved or emergency usage, but then the question becomes, guys, who is going to take it, how quickly will they take it? manufacturing may be there but can you distribute it. you have all seen the 8,000 boeing whatever it is that would be needed and the minus 80 degrees fahrenheit. >> fedex is ready with those. >> are they? >> yes, they said it on the

call. >> maybe it will happen. >> honeywell is ready with vials. >> you like to listen to dr. fauci and he didn't seem particularly optimistic for the idea of it being widely available next year. >> i think maybe we spent too much seem talking about one case that may or may not be related in what was supposed to be a very powerful vaccine. >> the astrazeneca, which has resumed. which has resumed. >> right and what i want to relate to the stock market, we are now at the levels, carl, that i thought that i'd like to see the market hold this is it right here. >> yeah. >> i think vaccine -- >> every -- >> i'm sorry >> no, i was going to say, jim, you're talking about levels, i was looking at breadth fill in, you have every component on the nasdaq 100 red and every dow component red. i haven't seen that in a while. >> that's probably wrong after what the fed chief said. fed chief has basically said -- it was very distracting that massive hollywood squares game they're playing with all of those people it was clear he's saying, listen, we need a stimulus if we get a stimulus and at the

same time we get the antivirals, david is right, that's your hope, in and out of the hospital, we're going to say why didn't we buy this day i think this is the snowflake hangover, i think that you can entice people in at certain prices and i want to make it very clear i'm not talking about robin hood people. they got a break yesterday larry colb told a positive story in ge, ford told a positive story in ev. those are the two most consistently popular stocks on robin hood it's not the robin people who are doing this, it is the momentum traders if they would step back and exert some discipline and we get some sort of stimulus and we keep hearing some better things about the antivirals because i know regeneron thinks they have something pretty good we are going to say why didn't we buy today. i was hoping for somewhere closer to where we went a few days ago in labor day. we're there. we're there. we're there. >> hey, jim, remember when there was that brief rotation into banks a couple weeks ago. >> that was ill-fated.

>> we said it was probably only 4 hours long that was right banks were lower than they were then in the overnight trade it was only about 18 hours. >> was it 18 hours we do look at the markets and try to figure out if there is an algorithmic rotation, the machines citing some connection that we are not particularly aware of looking at it but that doesn't seem to be the case right now. i don't know, when do you -- after what powell said yesterday, what do you do with the banks? >> well, you sell them and buy paypal and square. >> okay. so you just come back to the same trades over and over. >> fintech. >> right. >> you buy visa. look, we need to see -- wells fargo has been stable pleased for a while, that is a positive but stabilized down 52%. citi has to stabilize, they will obviously have some regulatory issues coming up. >> maybe. >> maybe >> i don't know. my understanding is that core bat's plan was in place long before we heard any of this other news. >> i think that the "wall street

journal" article was unfair. there was no firing here, this was all planned. core bat made a huge amount -- i'm glad you brought that up i think core bat has been unfairly tainted by the "wall street journal" article. i read it and reacted to t i wish i hadn't. >> right. >> just because i thought the article had to be true what matters is there's still regulatory issues and dividend pressure if the fed is watching this show they're saying, wait a second, we have to worry about the dividends. carl, nobody is worried right now to the degree that they should be about potential pause in dividends ordered by the fed. i think that's one of the reasons why i'm reluctant to come out and say, do you know what, you have to go big, bank of america, you have to go big jpmorgan i think people are complacent in the stocks and think that the citi 4.5% yield is fine. i can't go there. >> i guess are you more bullish on loan growth than consensus? because a big part of the conversation yesterday was why they are not taking more good

loans at least. >> well, i actually think that we're in a position where the consumer is so liquid they are not even going to take a lot of loans. there were some chargeoffs for citi, but citi didn't have that much bad credit card i don't think -- i think that the fed is just prepared to say, look, there is a part of the economy that's about to be shut down and those people we don't -- we don't really want the banks to lend to them, we want stimulus from the government i thought -- i thought powell was so good yesterday, really laying the case out for stimulus, but, carl, it may be falling on deaf ears because as you said there are people going home and congress -- there's just so many people in congress who think if we don't get a stimulus package it's good for their party and i wish that weren't the case because it's bad for america and that's what matters. >> yeah. by the way, the airline executives are in washington this morning, guys i understand gary kelly spoke a few minutes ago outside the white house. meadows is on the tape now, jim,

saying that the airlines do not understand why there is not a stand-alone bill to help the industry and that the time frame for layoffs is pretty dire, likely to start coming in the coming weeks as we well know. >> they didn't get the big rebound in traffic they were thinking about on labor day. phil lebeau has been all over this, the hotels are in a similar -- it's hotels, airlines, travel, leisure. yesterday i had a fellow by the name of aaron levee on, he runs this small company called box. one of the things he made clear is there are so many deals being made without having to get businesspeople on planes, without having to get businesspeople into hotels these are -- and, david, you know this -- these are the profitable clients and they're not doing it they're doing it on zoom >> they are. >> if you can still close ten-figure deals on zoom, why fly out a team of five people, flying first class, on an airline and then staying at really nice hotels and buying very expensive bottles of wine

>> listen, there is no doubt that people who run companies are taking note of the lack of t & e at this point and wondering whether that can continue for a long period of time given the productivity that seems to still be available without getting people on planes i think when you are making a new introduction it becomes more difficult, but when it is an existing relationship, it doesn't necessarily need tending by in-person meetings as much. this is something that may stay with us long after the pandemic passes executives will still get on planes and people will still want to meet in person but not to the extent that they did. even those who used to go and make their rounds of asia frequently, that's going to cut back you are not going to meet with massa for an hour. you are not going to do that those meetings aren't going to happen and may not happen again. >> if you want to have a meeting like this, be my guest i would rather see you by zoom this is the honeywell support mask it's dynamite. >> it's long after that when you

no longer need to they're still not going to do it as often as they did in 2019, for example. >> true. we should go back to carl. >> this is exactly what meadows is saying. covid has not abated in a way that allows the airlines to return to their normal operating schedule let's listen to what doug parker of american and gary kelly of southwest said just a few moments ago. >> good morning. >> good morning. >> do you guys want to make a statement or are we going to ask questions? >> let's make a quick statement. airline ceos are here on behalf of the people that work for us who are doing great jobs out there, taking care of -- keeping our country moving when our country is largely paralyzed with fear, they are out there putting their uniforms on, going to work every day and making sure we're moving. without action they're going to be furloughed on october 1st and it's not fair. it's not fair to them, it's not fair to our country. there's enormous bipartisan support for an extension of the

payroll support program which will keep those people employed and the only problem we have is we don't have a vehicle for getting it done. we need to have a covid relief package that includes that so we're just here to plea with everyone involved to get to a covid relief package before october 1st. october 1st those people are furloughed and we just want to make people understand that without that, that's absolutely what's going to happen small communities will lose service. so we made that plea today to mr. corbat meadows, he's heard it before and he understands we believe they are very much interested in getting to a deal and we're going to continue to work now with speaker as well to make sure that she also is -- understands the situation. i believe she does we've been in contact with her but more work to do. we need a relief package done to

get this psp extension approved. it's not about the psp extension. enormous bipartisan support for that, it's about getting a relief package done between now and october 1st. >> just for housekeeping quickly, you met with meadows, the president, are you meeting with the president at any point today. >> mr. corbat meadows only. >> are you meeting with speaker pelosi at some point today in person >> we reached out. yeah, we had a very good meeting with the chief and as doug said, you know, our country is fighting this pandemic, we have a long way to go to recover. the first c.a.r.e.s. act kept this country out of a depression and i think the only mistake that was made is it just didn't go far enough and long enough. we are obviously here supporting the airlines and our people. there's very broad bipartisan support, as doug was describing, and chief meadows assured us

that the white house is very interested in getting something done so we've reached out to the speaker just encouraged the two sides to work together so that we can save jobs and really in a broader sense save this economy. we're obviously very hopeful, but we're down to the bitter end in this with the first payroll support program expiring at the end of this month and a number of the airlines have already announced thousands, tens of thousands of furloughs real people, real jobs, that certainly won't help the economy. and it's bigger than the airlines we are a small part of the economy, but a meaningful one. we appreciate the time with you all this morning >> so how much -- >> we have to go to -- >> how much specifically are you requesting and how long could that extension you. >> extension of the first. >> in other words, bailout as

opposed to borrowing the airlines are not looking to borrow. >> kleenex tension of the psp. exact same provisions just extend it six months >> all right gary kelly of southwest, doug parker of american, phil lebeau joins us phil, on a day where some airlines are also trying to access the capital markets like delta. >> delta, upsizing the amount of money they're borrowing against the frequent flier program they announced it last week, $6.5 billion today they said we're going to take out a term loan facility more than additional $2.5 billion. cash is king you want to have as much liquidity on hand for the next 18 to 24 months. carl, one important point, i don't know if you could hear at the end of that where somebody says what are you looking for? are you looking for an extension of the c.a.r.e.s. act? and they said, yeah, that's what we're looking for. why is that important? they are not looking to borrow money from the treasury department they are already leveraged to the hilt what they are looking for, grants

grants from the government that they will not have to repay so that they can then pay the employees who otherwise will be furloughed come october 1st. and the key is you've got to have some kind of legislation. you've got to have a vehicle you don't have a vehicle, it doesn't matter if the republicans and democrats agree to help the airlines, you have to have something passed >> i guess, phil, don't go away. jim, i guess in that case where does it end? >> grants. >> when does the chip industry come looking for its own handout. >> correct. >> how far are we going to go down this line >> it's unrealistic to give grants to some i don't -- maybe that's just a negotiating play -- >> i don't think so, jim. >> but it's not -- it's not realistic. if everybody gets grants then it's going to be defeated. it's not going to happen >> well, now, here you hit the rub in the whole issue if you are a member of congress and the airline executives come in and they say, look, we're going to furlough, i don't know,

30,000, 40,000 people, however many they have outlined so far, we're going to furlough those people, we will have to be a smaller airline and that means we're going to be cutting back service to some of these smaller markets, some of those markets are in your district you and i both know the number one thing -- maybe not the number one thing but one of the top things that people in congress do not want to lose, service. air service to their district. doesn't matter if it's a poe dunk little town or a mid-sized city they want service to their city the airlines are basically saying we're going to become smaller and as part of being a smaller airline we will have to rethink our route network and that may mean that your district may not have as much air service or any air service in the future that is the rub of what's going on here. >> but, phil, why can't they get amodified form of ppp? something that makes it so the workers are protected and there is some additional that gives us so the airline can stay in business why does it have to be a grant of which people are going to say it's just going to the execs

ppp works so well. you know, phil -- >> they would make the argument -- they would make the argument that if you do some kind of ppp and however you want to structure it as long as the airlines do not have to borrow money to pay a particular worker who they are not going to be using. let's be honest here, the airline industry is getting smaller and because the airline industry is getting smaller needs fewer workers. that is not negotiable that is happening. and as a result the question becomes do you furlough 30,000 or 40,000 people or does the government say we will do another c.a.r.e.s. act and we will give a grant or something so that these employees are paid and they are on the payroll through the end of march. >> right >> that really is the request he. >> i think a forgiven loan like they gave to the -- for ppp is something acceptable to the american people. here you can have the loan if you keep the people on we're going to forgive it. but we're not going to give you a grant. >> right. >> it may not keep those towns

from losing service. you are all over this and you know, i think, that the grant is a stance that will not sit well with the american people. >> right well, the grant was the first one. the first $50 billion included $25 billion which was primarily grants and a little bit of loans, i think it was 70% grant, 30% loans of the $25 billion that went to cover worker expenses or worker payroll so now what they're saying is we want another c.a.r.e.s. act like that but you bring up a good point, i mean, do other industries come up and say, well, wait a second, we want -- whatever industry it is -- we want, you know, some type of a c.a.r.e.s. act for us as well. >> right it's not -- meadows is making a lot of news. this is great, phil. >> phil, thank you by the way, as the s&p is trying to hold the 50 day meadows is making some comments or did make some comments about tiktok, david, and whether or not it's u.s. majority share owned. i'm sure you have a lot more on that. >> i wanted to just come back to this story we've been following of course in fits and starts t

a certain extent share some new reporting at least on that. first of all, of course, we were talking about this earlier, jim, when we were talking about tiffany and then we were talking about tiktok and the u.s. government's role here i am told the president is -- and this is people who are familiar with what is going on right now -- that will make a dt 24 to 36 hours we should know whether or not this deal under which oracle would at least become the web hoster of tiktok's data in the u.s., and a lot more we should know whether that, in fact, will take place in the next 24 to 36 hours. it's unclear, remember it was reported the owner of tiktok would hold a majority. the president indicated yesterday that was not something he should potentially comfortable. the journal reported that won't be the case. i don't have great visibility on where that stands. so what it is exactly the president is going to make a decision on. it appears one has said we're

okay with this it is included as well that oracle will have all access to the source code. in other words, at least be able to see it all to the algorithm and things of that nature. so they will be able to -- again, tiktok's data will be the u.s. will be hosted on their servers here as we've said many times, the ceo of oracle, well connected to national security circles it would appear in washington d.c another tidbit for you, apparently oracle is going to own roughly 20% i'm told of what would be this new tiktok entity. and walmart will be involved jim, we've speculated on that. >> you have it >> i'm pretty confident walmart has rolled in in some fashion to this deal and if there is a board of directors that is newly created for the entity, walmart may have a place on that board of directors that's what we have right now. again, sort of not an enormous

advance, but we should know something fairly soon and including which we don't know, what's the price 20% of hat what are they paying for, of course, what is a deal that is going to allow them then to obviously land a big client for their business at oracle it's a deal people will continue to question given the tight ties between the founder of oracle and the ceo. >> yeah. nailed that one. >> and the administration. >> exactly good walmart is involved they've been saying over and over again this would be fantastic for their e-commerce walmart plus would do very well. it makes sense they need to structure the deal so the president feels comfort after an ipo that this is barely a chinese company. >> yeah. in some ways it is reflective. the supporters of it would say of how the chinese trade our companies when you want to do business in china. the forced joint venture that's what it is. >> yes forced joint venture i'm trying to recall when i've

seen that last >> i know. maybe that's what they try to do with wechat, although that's a smaller business in the u.s. than tiktok. >> it does say if we get deals, we stem is red ink we hit the level i felt like where there are bargains >> i should point out sources from oracle have not returned calls for comment. >> never >> never you know who you are >> an initial drop below 3339 which was the 50 46 day on the s&p. a bounce back to 3350. later today, reid hoffman and mark pincus talk about their new spac later on today. the lexus es.

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>> i don't know what -- >> it's unusually weak this morning as the s&p is mostly red. got some green components. ge coming off of larry cult's comments about cash flow kroger in there, discovery, ford watch atth as we get the opening trades on this thursday. don't go away.

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time for jim and stop trading. >> there's one wild, wild up

push today it's citi taking the price target for caterpillar from 150 to 175 it's saying the dollar is weak that's great for cat that mining orders are coming back but what's most important is i want to contrast with snowflake. it sells around 17 times earnings if the numbers come through. sn snowflake is 100 times sales people are going to go to the caterpillars that's going to be a change that i don't know if everyone is ready for. >> that's a nice bounce off the rolling saling figures from earlier in the week. >> and tonight we have proof point and then a company i've been recommending since it traded at $3 pen national gaming. what is it it's a unique property that's a

nationwide small casinos but the bar stool sports gambling package has made it so they may be the best casino stock to own in the world sports book. look at this pen it's up at 270 >> yeah. steeple goes to 85 today >> it's getting there. >> only $9 billion for penn nat. it should be about 15. >> in the meantime, good thursday morning welcome to "squawk on the street." i'm carl quintanilla with david fab faber. weak breadth at the open we're bouncing a touch here back to 3351 as the fed hangover continues in the discussion about snowflake. >> that's where our road map is going to begin this morning. stocks sinking just a day after

fed chair powell said the u.s. outlook remains highly uncertain. we'll talk about how to position your portfolios amid the volatility >> joe snowflake shares more than doubling. >> and the president is expected to rule on that possible tiktok deal in the next day or so we'll have more reporting on that ongoing saga. the markets on this thursday as the dow is on pace to break a four-day win streak. ron temple is with us along with scott brown. guys, good morning good to have you >> thank you good to be here. >> ron, looks like we got another test in place. what do you think is driving it and is the discussion over whether we were disappointed in the presser yesterday a bit of a straw man here >> i think the messaged fr from

fed was congress needs to do its job. if you look at the problem with the economy,a lot of the problems cannot be addressed by monetary policy. and i think chairman powell was clear about that, and in particular, what i'm focussed on is nearly 30 million people unemployed and also the increasing risk to small businesses as they run low on liquidity. and yet, congress sits idly by on the sidelines and isn't doing its job. >> so how does congress -- how does the market process the need for stimulus with industrial production up four straight months retail sales up four months? a lot of savings accounts ballooning even the banks this week saying that households have managed to put away a pretty nice -- >> yes yes. so i think you basically have

seen four straight months of rebound. again, this is a bit of a balance off jumping off a cliff. i think the important thing to recognize is there's quite a bit of pain in the economy i guess when i think about the market, obviously the market is extrapolating off the four months of good news. we have to focus on how sustainable that is. and make no mistake, i don't want to sound too negative we will get a vaccine. i'm just worried that by the time we have the vaccine, you have people who have been out of the labor market for quite a long period of time. as we've learned watching the euro zone crisis and the financial crisis, the longer someone is out of the labor market, the harder it is to get back into it and small businesses if they run out of cash and shut their doors for good, it's not like they're going to reopen magically when we have a vaccine. that'sbasically a business that's gone. i think one thing i'm worried about is the market is extrapolating a straight line of good news when it should think about the flu season and rolling

waves of the pandemic. >> that's a good point the rise in permanent layoffs was a pretty big story on the last jobs friday i saw bernstein said a second wave is more likely than not that we'll see an up tick in infections over the next couple months do you share some of ron's concerns >> yeah. i think so certainly we're worried about the flu season, but i think more importantly, a lot of firms probably thought this was going to be really a transitional period and eventually we'd get the pandemic behind it it looks like it's going to be a long lasting event even if you have a vaccine, it might be only 50% effective. a third of the people might not want to even take it so it's still going to be a serious head wind for the overall economy. it's a mixed bag when you look at the consumer, there's no such thing as the consumer we have the top 20% of income

earners make account for more than half of consumer spending white collar workers have been able to work from home we're seeing people moving now if you're working from home, you need a bigger home, nicer location maybe so even the construction numbers we had today, the headline numbers may have been disappointing, but that's just simply reflecting the volatility we normally see in the multifamily sector the single family starts and permits are now higher than they were in february, and february was pretty strong. so the housing sector is doing pretty good. but those at the low end, remember, these are the people that suffered the worst in the bottom 20% of income earners, about 40% of the people lost jobs we've had more than half of those come back. some of the jobs aren't going to come back permanently for quite a while, and i think a lot of firms may end up trying to keep earnings up by laying people off. we certainly have seen this at

raymond james this week where we had layoffs. i think that means the recovery we see over the next few quarters is going to be slower than the initial rebound >> how much slower what does that mean? >> well, i think you're still looking at the gap closing, because we are getting used to givi living in a pandemic restaurants may be opening up in terms of indoor dining, those kinds of things. even concertsin florida. music events you can go to and there's limited seating. so there's still going to be some level of improvement. you're not going to get back to where we were back in the fourth quarter of last year really until maybe the end of next year but bear in mind the economy is not really expanding you're going to be below the previous trend we're looking at permanent changes. the real crisis is at the low end of the income scale. those people are really facing a

lot of hardship. that's really where i think the federal support should be focussed on. >> yeah. certainly that's what powell appears to have his eyes on as well, scott. scott and ron, thank you guys. appreciate it very much. talk to you soon >> thank you president trump holding a news conference yesterday saying that the wait for a vaccine may not be much longer >> we're on track to deliver and distribute the vaccine in a very, very safe and effective manner we think we can start sometime in october so as soon as it is announced, we'll be able to start that will be from mid october on it may be a little bit later than that, but we'll be all set. as soon as it's given the go ahead, they're doing trials as you know, and as soon as it's given the go ahead, we'll get it out, defeat the virus. >> let's turn to meg joining us with more. after speaking with the ceo of moderna today.

meg? >> yeah. david, these companies are getting close to fully enrolling their phase three clinical trials moderna and pfizer this morning we got an update from moderna looking at the entire pipeline. on the covid-19 vaccine, that is the one that's in focus. they've enrolled more than 25,000 of an expected 30,000 participants into this trial and importantly they've given the second vaccination to more than 10,000 participants. they've got to give two shots to everybody and follow them to see the infection rates in the trial in order to get data here's what the ceo told us about their expected timing for getting results. >> we anticipate a base plan for the first -- turned out to be in november that's our base plan our base plan is october i think it's unlikely, but it's possible and if the infection rates in the country was to slow down in

the next weeks, it could potentially be pushed out as a worse case scenario, i would say, december. >> so this depends on how much infection they see in the trials moderna is saying november pfizer earlier this week which started the trial on the same day telling us their case it looks to be end of october now probably not mid october as we were hearing from the president there. now, astrazeneca's trial is on hold in the united states although it got the green light to restart in the uk after the safety issue that paused it last week and j&j is expected to start its phase three sometime in september but guys, having the results at the end of october, we would then have to see it go through the emergency use authorization process with the fda and yesterday we heard from operation warp speed officials that within 24 hours of issuing that emergency use authorization they plan to start distributing this vaccine it's only going to be available in limited doses even if we get it that early. back over to you

>> meg, thanks for that. obviously a huge story today along with the airlines and everything else including snowflake. still to come this morning, we'll talk about the shares under pressure after yesterday's debut. get a look at the company's outlook and talk about whether it's still a good time to get in stay with us wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management.

what a day for snowflake

yesterday. appears to be a magic number once again >> yes that would be double snowflake pausing this morning still up just about doubled from its ipo price. this company argues it's got a new way to deal with data in the cloud era. making it easier to store, move, analyze, even securely share and they argue that's a huge idea. snowflake represents a paradigm shift in the tech ipo market here's what the ceo said about the ipo process yesterday when i spoke with him just after the stock started trading. >> the ipo is really not the highlight of my life it's a milestone but we're here to build our business and product that's what we're excited about. that's what we do. >> i asked him about that path to profitability that we always tend to ask about. the ipo time

clearly they're spending all of revenue and maybe a little more than that on sales and marketing. but he says this is not a growth at all costs approach he's taking he is being disciplined with the money. no profits any time soon either. so in a way, the story is driven by product, scale and market opportunity. it seems to me, david, like just a few months ago the argument was kind of post uber that the market moved away from that. that we want to see profits. well, scale this time. not profits. >> it's going to be a while. right? to your point. i mean, it's a great growth company. as jim said this morning, whether or not it's worth 100 years worth of the current revenues, maybe not. >> well, i mean, at the rate at which it's growing, and if you can argue that the executives have this currency now they can do acquisitions, maybe their vision is a lot bigger i'm sure 25 years ago people

were saying selling books online, is that a huge idea? the argument is if this is the next megascale cloud player, who knows how long that takes. >> john, one final question. doing data analytics in the cloud, what's their secret sauce versus anybody else that's trying to do that? >> i'm not technical enough to be able to give you a great answer on that, david. they do have nearly a third of the fortune 500 as customers right now. the argument they make is that even others like microsoft and amazon that are trying to convince -- compete with them with azure and red shift are bolt bolting on they're not as fluid to allow different customers to share access today a when it's necessary and practical. and if they're right about that, then there's an argument to be made where profit is. >> well, if you're not conversant in it, only imagine

how bad it is for the rest of us thank you, john. we'll stick with the cloud here. news from ak senture the launch of a 3 billion cloud investment joining me is the company's ceo. it's nice to have you. it's been about four months since we last spoke with you tell me about this investment. it's 3 billion investment in three years to help clients across all industries become cloud first businesses what does that mean? >> david, thanks for having me as we talked about just four months ago, there's been this massive acceleration in the cloud, and really what's happening is a once in an era replatforming of global business for 20% of the cloud today we believe will move to around 80% in just five years and so what accenture cloud

first is helping companies get there with a singular focus of how to replatform at speed >> all right and so you're spending a billion dollars a year over the next three years to do that what does that mean? where does that money go >> sure. so preco-vid we worked with a ton of the digital leaders who have been out up front what we see is there's three important components first of all, with our partners, our cloud partners across the spectrum, it's really critical to not just move companies, but move entire industries, and that takes the road maps, the learnings, the data integration about what problems the industry specialization so we're going to be investing in those solutions often along with our partners. the second area is the speed and so investing in even better automation and technology that's going to help not just move the companies faster but actually also be able to operate in the

cloud more and more with more and more productivity. think about the cloud becoming a platform for their productivity. and then the third place is around talent. it's sustainability. if you're replatforming entire global businesses in the cloud, we have to do so in a sustainable way. it means starting from what we've done in measuring going from the data center getting out of your data centers to the cloud. what it does for the climate change it's around things like supply chain. making sure you're building in the ability to have the integrity of the supply chain and that you're reskilling and so we'll be investing in making this replatforming a sustainable one which is core as we think about post co-vid, our belief as companies across the globe and governments, that we need to make a better future for all by building in this view of all stake holders from the planet to our people >> yeah. julie, it's interesting.

they were reporting on snowflake prior to the interview i'm not going to ask you to comment on the valuation, but when you say 20% to 80% in terms of moving to the cloud, the opportunity would seem to be enormous, perhaps reflective of some of the enthusiasm we've seen generally speaking in the equities that reflect the cloud. i mean, would you agree with that >> absolutely. i mean, the point of -- the reason why, though, is because if you think about the resilience that's needed that we've all learned during co-vid has not been there whether it's supply chain or the need to go remote everywhere and have the resilience. the fact that things are do unp unpredibltable companies need to be able to crunch data. 90% of the world's data has been created in the last two hours and only 1 % is analyzed take those two things in an unpredictable environment, you see why the cloud is critical, and you have this understanding,

because that's where you get the compute power and that's where you're able to integrate with the other technologies that allow those things to happen fast we just put out new research that said 80 % of executives believe the cloud is essential to reduce uncertainty and risk and that's what you're seeing. of course, our role is to make sure that we can help companies answer the question you had about snowflake. which of the partners? which of the technologies? how do you integrate it with your applications? what things do you move to the cloud and what pace? those are complex questions, and that's how we work with our partners, and companies with the knowledge to how to do that rapidly. >> julie, it's cay will in washington i covered your participation with the white house in some of the discussions around work force development and ri training which you mentioned as part of the cloud and the economy of the future, but the company announced it's laying

off 25,000 employees in recent weeks. i'm wondering how you made the decision to permanently part with those employees rather than reskill them for this investment you're making? >> it's a great question so first of all, what we decided is over the course of a year, we approximately manage out about 5 % of our people. and one of the things we want to do -- and we do that year in and year out what we wanted to do was accelerate the 5% so that we're continuing to invest in the future, and so it's great. we spent a billion dollars a year on reskilling even when you do so, you can't reskill everyone so we've done it thoughtfully. and in addition we're now piloting some new things we want to bring to our clients in some of our own markets with helping those people that were leaving also look at their market and what they're learning they need

to do, and so that's a new part of what we're going to be bringing to our clients as well. really, this is about acceleration that even in a company that's spends a billion dollars a year, we also need to have a certain level of attrition. >> so it is going to help you on the expense side, i would assume >> it's certainly one of the levers around expense. >> julie, we talked to you four months ago and we were talking at the time, we continue to, about work from home, about the productivity levels companies were seeing. give me an update on what you're hearing from the various companies you deal with. are people getting more ready to get back to the office is productivity waning at all or things where they were three or four months ago? >> you know, consistently what companies keep saying is it's amazing how they can operate remotely but what's harder is strategy i think from a ceo perspective,

the difficulty of pivoting your business and doing strategy remotely is a constant theme i think across the board people want to get back and depending on the market, it's happening. for us, it goes back to the cloud. we're going to be implementing work.com which we co-created with sales force i would say every company is focussed on health first for their employees. we're also focussed on making sure that we can sustain our employees while they're at home, and i think the hard thing for ceos today is given in many markets really in every market around the world, we can't get back to normal yet is the need to adjust how we're working with our leadership teams and how we're changing our cultures from a strategic perspective. >> julie, thank you for being with us this morning >> great thank you for having me. >> ceo of accenture.

it's time for our etf spotlight. today we're looking at the first trust cloud computing ticker skyy it's up 25% near to date and look at where it is currently trading today. you have oracle moving lower amid new developments surrou surrounding tiktok david faber has more coming up regarding the deal terms and source code. we'll have it with you on the other side of the break. ♪ ♪ ♪ ♪

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welcome back cooler temperatures in the west are helping firefighters make progress against the many wildfires that are still burning. but there are still some threatening blazes this fire, the bob cat fire in a national forest was responsible for an evacuation order overnight. and forecasters warn that things could get tougher this weekend with the arrival of warmer weather. sally is doing the most damage with the heavy rain, but there is an indication of the strength of its winds. look at that it pushed over this truck wednesday morning on interstate 10 in mobile, alabama. only minor injuries for the driver and take a look at this video. his supporters say they shot it

soon after he fell ill and it shows the hotel room used by russian opposition leader alexial vaughny. they packed everything up and found traces of a nerve agent on two water bottles. that suggests he may have been poisoned there instead of at the airport as was officially believed that story is unfolding and we're watching it closely. carl, you're up to date. back to you. >> all right sue, we'll see you in an hour. in the meantime, get ready for the 10th annual delivering alpha conference on september 30th a huge lineup including mary erdeos, marc lasry go to delivering alpha.com to learn more and register. we're back in a moment ♪

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>> are you prepared to sign off on the oracle and tiktok deal even though the treasury isn't getting paid and does the deal meet your terms in terms of national -- >> it has to be 100% as far as national security is concerned and i'm not prepared to sign off on anything. i have to see the deal >> what about the payments to treasury >> we'll see about that. amazingly, i find you're not allowed to do that what kind of a thing is this >> that's president trump on a potential tiktok deal talking yesterday about it and answering questions at the press conference we have some additional reporting this morning to share with you which we did in the last hour. people familiar with the situation. giving expectations on timing. i'm told the president will make a decision within the next 24 to 36 hours is what i'm told in terms of letting the deal move

forward. the committee made up soft different members and jurisdictions in the u.s. has more or less signed off. it's up to the president to decide if it's sufficient. unclear if it involves bytedance. it was reported yesterday by "the wall street journal" owning a majority of the company. something that is different from the deal we originally expected to emerge here in which potentially microsoft or the oracle group would control if not own outright the tiktok business here in the united states so that remains somewhat unclear. walmart is a part of this effort on oracle's part along with the private equity partners those who already own stakes in bytedance, and oracle would own as much as roughly 20% of the entity if, in fact, this does go through.

it would also have, and this is some reporting as well from nbc news a board of directors which i've heard as well would include walmart and potentially its ceo. that's kind of what we have right now in terms of getting a sense for where things stand we should know more in the next day or so as to whether or not it passes muster with the president and is something we will allow the 20% number is interesting. i don't know what the -- what it is 20% of. what's the price or what is the value being put on that tiktok business bytedance being something of a forced seller here certainly doesn't seem to indicate they would be getting maximum value. although c they did have an auction that included microsoft for some time competing as well. over to you now. >> what's interesting about the board composition is that the idea that sif yus would appoint the board of directors for the new entity

that's a work around the administration has used before to get around national security concerns for zte that's a page from the administration's play book on a prior deal they did end up approving. but it's interesting because you and i have both covered processes for a long time. and one hallmark of this administration on that front is adding teeth to the apparatus. it's hard to report about what goes on behind closed doors because the information is classified when i'm talking to sources in washington, they say it comes down to the president. i'm wondering if you're hearing the deal terms are fluid or if walmart and oracle have presented the terms and say this is the final deal as it stands, take it or leave it. >> i believe they have agreed on the economics at this point in terms of that, and to the stipulation that oracle would have access to the source code, as i said earlier and the underlying artificial intelligence although, again, i continue to come back to the idea well, if bytedance is a majority owner,

does it sufficiently address the national security concerns perhaps it does. if oracle has full access to the underlying code, but those are still key questions. >> yeah. and david, let's bring in someone else who is an expert on this to weigh in on the tiktok talks. let's bring in a security adviser to zoom and a noformer officer for zoom we heard the president say it needs to be a 100% deal. based on what you know, does it meet muster? >> it's hard to tell nobody is talking about what is important. who are the people that everyday are coming into work and actually operating the service that americans will be using on the back end when they open up that tiktok app? there's a lot of discussion about hosting of data. there's a lot of discussion in the board of directors i don't find the board of directors thing strange.

that's a structure used by defense contractors. you may have bae systems sells to the u.s. government the u.s. government has handled that stuff in the past what's new in this deal and not being discussed is who are the people running the technology? my understanding of tiktok to this point is a vast majority of people are bytedance employees who work from beijing and other chinese cities that is what -- if the real concern here is the security of data and the access to american's data, that is a question that has to be answered from what i've seen a lot of that work will still happen out of china whether or not oracle has the underlying servers is not relevant >> so whether those servers are here in the united states or whether as this deal would propose, the tiktok head quarters moves to the united states and creates 20,000 jobs, in your opinion, that doesn't solve the core issue >> probably not. the oracle change is not a big

difference tiktok already uses amazon web services this is the part that seems a little bit mysterious bordering on corrupt here. the core of this change is just a swing of money from one cloud service provider who happens to be -- have a ceo the president doesn't like to another cloud service provider who is more politically connected. whoever has the underlying servers which is important, there are people who are logging into the systems every day they come in at 8:00 a.m., get their coffee or tea, and they run the systems that in tech things like data warehouses, production databases, the back-end services that store personal data. the people who write and run those things right now are bytedance employees. there's been no discussion of that responsibility swinging to oracle that's the difference between this and microsoft the microsoft proposal was for microsoft to buy everything. and for microsoft to rebuild it

and operate top to bottom everything that was going to be tiktok u.s and now we're talking about oracle plugging in here, a board of directors here, but it's the middle chunk of the people actually doing the work, that is what we need to know about if we're going to figure out if there's risk here. >> right which is why some are saying the way it appears to be structured at this point, at least, reminds people of the classic jv structure that china imposed on u.s. firms for years, and that we've complained about for years. is that fair or not? >> i think that's totally fair the structure being proposed is very close to the structure that apple was forced to take where apple's i-cloud services are a joint venture majority controlled by chinese shareholders but apple has the technical support of how it returns. and if this is the goal, then it does make me question whether or not security was really the goal

in the first place my suggestion here is i think we should slow it down. the truth is it was not built to do something this technically complicated. we don't have a good precedent for the data we care about for americans and the technical controls we require as a country to be placed around the a. there was no reason to figure it out in 90 days that was an impossible task. tiktok poses a risk as do other chinese companies. i think other chinese companies are more risky this is something that's really important to get right there's no need to do it on an arbitrary deadline before the election all of these senators and congressmen talking about this need to go back to the drawing board, hold hearings from chinese and american companies that have chinese operations and start to put together real guidelines that will guide the government and not try to shove this in as some kind of big win before the election. this is important. if we get it wrong, we're not going to mitigate the risk

but the other thing is american companies are going to be held to the same standard we have to be careful of what we're telling the european union and india, and we're telling brazil all these places would love to be in the same situation where they can force companies to spend billions of dollars domestically and hire domestic workers. if we're going to do this, it has to be on standards we feel confident on >> you mentioned engineers there's 12,000 engineers in china. that's tiktok. it powers the platform that keeps people engaged originally the plan was that whoever bought it would get a year of updates. take a snapshot of the code and the engineers would have to build a new infrastructure is that something from your opinion that would have presented a better national security sense >> yes absolutely what you really want to do --

what's really important here is not the tiktok that we all see when we open our phones. it's the stuff in the cloud that powers it. right? and my understanding of kind of that original deal as discussed with microsoft was that the code like you say, we call that being forked you'd split the code up that bytedance goes their own way with their own code, and it would be frozen in time and microsoft takes it over and then microsoft replaces the back-end services one by one on their own cloud computing services people running it day today would be employees if you have 10,000 bytedance employees who are still writing and running the software and it happens to be sitting on oracle servers, that doesn't address this issue and so that's what we really have to focus on i think the ownership, the board of directors, like, the board of directors doesn't sit there and log into commuteputers every day we're worried about the line engineers and the fact that if you work in china, the people's republican, the communist party,

the ministry security, they all have leverage on these folks and whether they intend to, they could be turned into tools of the government i think that's what we have to be thinking about. >> and many china hawks on capitol hill have been vocal about that alex, we appreciate your time today. >> thank you things look a little uneven at the open there with breadth negative we are off the initial lows. some of the laggards on the dow. back in a minute when the world gets complicated, a lot goes through your mind. with fidelity wealth management,

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with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management. let's go to rick for the santelli exchange. >> thanks. i'd like to welcome jerome schneider. he's the head of short-term portfolio management at giant pimco. welcome. let's get into it. yesterday we listened to chairman powell talk at great length about how he's going to keep interest rates low

potentially for years. my question is why should investors think that's necessarily a good thing it didn't seem to generate a lot of horse power in the economy under bernanke and yellen. it seems to take urgency out of the equation >> monetary policy is multifaceted i think the fed ultimately yesterday kept their optionalty open it's a long road until we get through the healing process. they recognize through the summary of economic projections that rates have to be low for a long time until late 2023. maybe even beyond. but there's a second component that there's many tools in the arsenal. and jerome powell did a great job reiterating that and the additional purchases or the ability to ramp up additional asset purchases in the future that's in their back pocket. zero rates are here for a long time as investors and cash managers

and savers, the high savings rate is going to have great implications for us over the next three to five years because the benchmark rates are low, but the fed has policy measures that it can use to help sometitimulae economy and get inflation to 2% and above. it's a long road as we go through the future >> doesn't that make your job as a trader on the short end more difficult? if the fed can buy 80 billion a month of treasuries but if they decide they could double the number or they could cut it in half, aren't they pretty much putting rates where they want them doesn't that make trading obsolete >> well, perhaps difficult but not impossible i think that's one of the key things rationalize the fact that even though rates are low, that doesn't mean there's not opportunity. there's plenty of people with high amounts of cash and want to be defensive given the economic

uncertainty. and really what we're focussed with us is the opportunity to have total returns in the short-term space a treasury note may not be appealing to people at 12 basis points for the 2 -year note, but there are things to look at. more importantly, i think investors have to think about the shadow savings that's out there. what i mean is the high amounts of cash that are basically being put into money market funds, earning 0% and investors are looking to move beyond that. the challenge is not necessarily for us as portfolio managers but for investors to recognize there's a secular view that rates will be low and they're going to have to actively manage the shadow savings that moving out of money market funds into other realms of fixed income difficult but not impossible especially if you have degrees of freedom in your portfolio that's the key to success as we

embark on the zero rates >> we're about out of time it would seem to me the savings rate being high would negate the logic behind syrzero rates you want the economy to be more vibrant even with the co-vid restrictions >> clearly high savings rates are a symptom of the economic cycle as the economy improves, should the fed likely be successful, you'll see a savings rate come down it's not going to come down quickly. investors need to plan for the savings rate, higher cash balances in their pocket for a foreseeable future that's the focal point is pushing people into other ways of managing their cash allocations. >> excellent you always have a nice way to make things easy to understand we thank you for that. we look forward to more conversations in the future. kayla, back to you >> all right thanks so much for that. as we head to break, keep your eyes on two players.

draft kings and penn national naming, a street high price. the stock is up 8 %. we'll be right back. stick around ♪ you can go your own way

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tgifriday is warning that 20% of their restaurants will possibly close forever ray, welcome back, always good to talk to you >> great, great to be here thanks >>. >> you have been able to weather some crazy comps when things

were crazy earlier in the year can you talk about what liabilities there are for existing restaurants and why >> well we're still trying to close that last sort of 10% to 15% of same store sales that are very meaningful. we operate on very thin margins. we need to get all of that revenue back we are going to compete differently than we have in the past, right? finding new growth layers that we can lay sbeer the business. our segment, the casual dining full service segment is one of the most hard hit. we lost dining rooms and in new jersey we just got back we're still lagging a little bit, but we're generally optimistic that we will continue to find ways to improve.

>> is that through delivery or direct to consumer or outdoor or indoor as the temperature turns? >> we have been very scrappy through property access. process. string lights, atmosphere, whatever we need to do i've been so proud of the team they have rallied around because they sell experiences. it is likely that that is going to be the case they backfill with some of the third party delivery services. i think we will see that expand a little bit as the outside seating starts to contract

we are a little trepidation. >> the white house is describing this against a blue state and red stiet ate fee nom non. i'm wondering if you can speak to the despaisparities in the weakness or the way you're operating. >> not necessarily, a lot of the blue states that we compete in those are business that's we own and operate. those are some that have responded the most favorably to the outdoor seating and some of the alternative solutions that continue to support the business through third party deliver ri and traditional curb side pick up i don't know that we see a big despaisparity in overall performance. there is a disparity in where the economy is in terms of

reopening dining rooms is but we err on the side of safety for our team members. we are responsible for reopening our restaurants and it is still critical >> how is the ceo like yourself having access to markets how do you think about and empathize with mom and pops. we keep talking all day about the difference between publicly run restaurants and those privately owned small shops. what are they supposed to do when they're going up against chains like you're own even chains, we compete locally, right? most of them have the economy.

people are delivering food and services to our restaurants. i think every restaurant competes small, if you will. independents, in particular, because this industry is such a low margin industry, i think in a lot of places, even though there was ppe money available to independents to essentially help them through the crisis, i think people just get to a point where "what's the point" you know, we're barely making a living to start with do i will have the internal fortitude to put up with this. >> the ultimate butt check if you're an entrepreneur in food not to mention the joy that has been sucked out of it.

ray, we hope you'll back, thank you. >> have a great day. >> coming up, do not miss the founder of linkdin and mark pincus on their new spac we got no free pass.

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