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tv   Squawk Box  CNBC  October 7, 2020 6:00am-9:00am EDT

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piecemeal solution we'll take you live to washington and airline stocks on a round trip recouping much of yesterday's losses and plus big tech bombshell, a house panel calls for the breakup of some mega cap technology names including apple, amazon, facebook and goog google it is wednesday, october 7, and "squawk box" begins right now. >> good morning, welcome to "squawk box. i'm becky quick along with joe kernen and andrew ross sorkin. stocks were down during yesterday's session after president trump tweeted that he had instructed white house officials to halt negotiations
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on further coronavirus stimulus until after the election the dow, which had been up, turned around and actually closed down by about 375 points. it was down by 1.3%, s&p down by 1.4% and the nasdaq off by 1.5%. however, this morning the stock futures are sharply higher this started last night around 10:00 p.m. when president trump posted a flurry of tweets, one of them calling for airline and small business payroll support immediately. and another calling for a standalone bill on stimulus checks he was saying that he would sign these bills immediately. and as a result, take a look at the futures, dow futures indicated up with fair value by close to 200 points. ylan mui has been following all of this and has more >> good morning. and just hours after the president walked away from the bargaining table, he appeared to take three steps back calling on
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democrats to pass targeted relief first it was that $25 billion for the and i remember industries payroll support program and $135 billion for the payroll protection program that is designed for small businesses he promised that he would sign those bills now. a little later, the president tweeted again, this time calling for a standalone bill to send $1200 stimulus checks to our great people immediately now, all three of these issues were part of the comprehensive relief package that the treasury secretary and nancy pelosi were ghoe negotiating. and until yesterday the white house and republicans had been hammering home the message that their priorities for any new deal were kids and job, more money for schools and help for businesses but the president laid out last night leaves out the first part of that equation still the abrupt end to the negotiations did draw criticism
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from moderate republicans. susan collins called it a huge mistake and rob portman of ohio says no one should be throwing in the towel so it is possible that the president's tweets were a repleks r reflection of the difficult reality, but part of the reasoning for ending the talks have been so that republicans could focus all of their energy and their time on the next big fight, which is their nominee for the supreme court, so it is very difficult to see how either side wades back into the debate especially before the election >> and just trying to play through the politics, each side slamming it back into the other's court, now it is in the democrats' court this is not everything that they have been asking for, but a lot of what they have been asking for. why don't this just pass it and send to the senate >> what i would imagine that pelosi would say is that these are items that were already
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passed and the senate didn't take it up and it will be hard to have relief for businesses and not have more relief for worker, especially those unemployed. the direct checks that the president called for, those are things that democrats had actually wanted in the package and that republicans resisted putting in there so unclear how that would play in senate as well. once you start adding all of these items together, starts looking a lot like a deal. and if you have a deal, pelosi's position has been it needs to be a big one because it is tough to weigh all the competing and conflicting needs of the voters right now. so we'll see how she ends up responding to this, but a lot of this will also be up to republicans to understand what exactly will the president support and what can all republicans rally behind >> and not that anyone on either side would necessarily be
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playing politics just 28 days before an election, but that is what this is at this point i mean, the upper hand on this, if the president saying on the top line level these are the things that i would support, i don't understand why the democrats wouldn't take him up on that. there is obviously a lot that has to go into this, but if he would be willing to sign some of the big issues, okay, move it along. a lot of americans are out of work and need help and granted this doesn't cover everything, but it certainly goes to a large step of what had been out there particularly the airline workers and small business where the need has beaeeen so great >> i think the other part of the challenge is while the president is clear in the tweets that came out last night around what he would support, his position has shifted over time. again, just a few hours before the tweets came out saying that he would support these items, he was also saying that didn't want to reengage until after the election so there could be some distrust
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on the part of democrats where the president would stand and what any of the bills would look like and the other issue, republicans feel that democrats are not negotiating in good faith. mitch mcconnell said that pelosi never put forth a reason able offer and was just stringing republicans along in order to score political points so there is a lot of rancor and distrust on bort sidth sides >> and this is pretty volatile and you can watch it in the markets reaction, the wild swings up and down any thought about that volatility, whether that slows down, whether the whip sign reaction slows down or does it just speed up as we get closer to the election? >> well, i think that this was a very surprising turn of events i think that democrats were caught flat footed by this, they were supposed to be continuing their negotiations yesterday not calling them off so i would imagine that there is
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ongoing volatility especially when tensions are so high for the markets, i think there is a lot of noise and confusion and mixed signals. there are efforts by both sides to pass individual bills and tried to provide some relief but a lot of that ends up being political maneuvering at the end of the day so it is difficult to see what actually gets passed >> i know this came as a surprise to the democrats, nancy pelosi said as much, what about to the republicans and to mitch mel? >> 24r >> there was a phone call that took place yesterday afternoon we're trying to get clarity on what was happening in that conversation when the president put out this tweet but from my own private conversations with folks from the gop, there was indications that there was an imminent deal, that the talks so far between
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mnuchin and pelosi were progressing and there was surprise on the behalf of the republicans as well that the president would walk away from the table. perhaps the tweet that the president sebnt out last night did more to sooth that anxiety that the president is not completely walking away from providing aid to businesses and families, but again, there are a lot of competing priorities here and in order for republicans to rally behind an idea, they need a clear message from leadership that provides both the policy prescription as well as political cover for them to take what potentially could be a difficult vote at a sensitive time and so it will be incumbent i think on the president in order to make that case. and right now what we've seen is a lot of conflicting signals from the white house >> and i'm sure that won't be the last twist or turn that we see in the story good to see you. thank you.
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guys, what do you think? >> we shall see. we'll have neel kashkari on. what happened to him he wants to open the spigots >> you could go piece meal, i appreciate the idea of going piece meal, but i think the politics long term are worse in some ways because if the airlines for example get bailed out, and the small businesses don't, or the unemployed don't -- >> that is why i think that there are a lot of questions to it at this point they are playing politics and politics only and each side is trying to smash it back into the other's court and saying hey, we wanted to help but the other side wouldn't so at some point, you have to call somebody's bluff.
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>> a lot more coming up, guys. great to have you back, becky. when we return, the other big bombshell yesterday, house subcommittee releasing the antitrust report calling big tech companies monday ongahela that pmonopolies and saying that they should be broken up or regulated, we'll tell you what it means for amazon, apple, facebook and google. and apple announced a product launch event to happen october 13th, it is expected to reveal the next model of the iphone plus more news on facebook, the company has announced that it is banning qanon across its platforms. the latest attempt to stop the spread of disinformation ahead of the november election fourth deployments
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there were tsunamis in the world. and once they happened, we were in a major hurry to get to those regions to provide aid and support. it was very humbling to be able to help out all those people. it's my dream now to go into clean energy and whatever the next new fuel source is, that's where i want to be. i want to be on the front lines of implementation.
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stocks, dan i'ves. 449 pages, it is damning the question is whether it has a real impact. >> the word monopoly used over 100 times. at this point, it really comes done to legislative fix. they have weighed the dwrout co outcome, but at this point it is really more words. but right now enforcement of this is the key issue. i think investors continues to be what is needed to contain risk unless as we've talked about you get a blue wave in november, it changes the game. because then you potentially could have law changes in terms of sherman and antitrust issues. that is the focus right now for
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investors. >> in a way you could take it as a positive for some of the companies that current law as written would actually make it very difficult to bring a meaningful case to break up any of these companies, right? >> yeah, it hits the nail on the head and that has really been our view and i think most investors that the way the law is written today, it is almost an impossibility to enforce the issues right now the dwroeoversight boy will change, ftc with ultimately more power, but when you look at apple, 107b, facebook, google, that will be the focus for investors going into november. right now it is more words than actions, but that could easily change with doj and state ag potential suits. >> could you imagine the sherman act being rewritten?
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>> given what we've seen here in tech, i could see it i think what we're seeing in terms of the strong getting stronger, especially even over the last six, seven months and you are seeing the big tech battle really start to ratchet up i mean, this is really fort sumpter moment or fork in the road in terms of how it is handled calling out the he will haven't in t he wielephant in the room but without a blue wave, i don't see that.will elephant in the room but without a blue wave, i don't see that >> if you could measure from highest risk to lowest risk of the four companies that were the targets of that report in term of how damning that report was, ultimate ra you would rank order them how? >> i think worst is facebook and followed not too far by google
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and alphabet and then amazon and then i think that you would put apple at the last but i still think even when you look at apple, honing in on the 30% in the beltway and the eu, if you look at stock trillion of market cap and from an investor perspective, i think facebook and google, they have the target on their back front and center >> do you believe there is a discount already applied to whatever you think the regulatory cost is relating to their existence frankly that is an overhang on all these stocks or not at all? >> not at all. i'd say right now from an investor perspective, remember fines for these companies is like pocket change and investors are fine with fines. but you in terms of regulatory risk from a breakup or significant business model tweaks, as well asle you lo lyo
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acquisitions, they will be i impossible for these companies going forward. if we get into november and we see changes in the beltway, then i think there is more pronounced risk depending on the drum roll as we see this over the next year i view this risk much more than the u.s./china when it comes to tech companies >> and finally, dan, on our screen, we're listing another company that lived through their own antitrust crisis of sorts 20 years ago now, but still one of biggest companies in the world, microsoft. where do you think they land >> they are on the outside looking in they went through their nightmare "nightmare on elm str scenario i think that micro off the is in a good situation as you have seen because they don't really have antitrust worlds.
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cloud continues to be front and center they can be aggressive on acquisitions so to extent their history becomes part of their success going forward as they don't have the handcuffed situation in terms of acquisitions and where they could go. and i think that is what you saw on tiktok, they are the only ones that could potentially go after them, faang names couldn't look at it >> dan, what are you doing on october 13th, have you already scheduled the whole day? >> scheduled the whole day to me, it is the most important product event in the last decade for apple. it is the super cycle, iphone 12, 350 million iphones in an upgrade opportunity. i view this as really this precedent setting for apple and that is something that the calendar is booked that day focused on what cook and
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cupertino will come out with >> so do you buy ahead of the news or sell on the news in this days do you have a different view >> i have a different view i think this time it is a golden buying opportunity because of the super cycle it is an unresidentsed -- you have 40% of the install basis haven't ungrade fd in 3 1/2 yeas 5g is a parabolic change for apple. i'm a buyer into the event i think we look six months now, it is a $150 stock, a year from now, it could be $175 >> dan, appreciate it. you got your own name behind you there. >> yeah, that is the ives etf which is along with webbush, we launched that in april >> sneaking in a product placement in i like that. thanks, dan.
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>> thank you yesterday it was physics, monday we had medicine, today it is chemistry and molecular biology. but it has been -- which is kind of the same thing. been awarded to an american scientist and french scientist they developed a xwgenome editig to this is much more recent anyway, we're waiting for the big one, the nobel peace prize, that could be the october surprise maybe it is putin. i know he got nominated. coming up, a t-rex skeleton shattering expectations at a christie's auction what do you do with that thing after you buy it
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i don't know but we'll show you the price tag next here is a look at the latest airline stocks erasing much of yesterday's losses after the president called for congress to pass an airline stimulus bill in piece meal
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my parents worked long hours and i helped raise my younger brother. when college felt out of reach, the kpmg future leaders program was there for me. it was more than a scholarship. it was four years of mentorship and support. today, i'm an investment banking analyst and i'm just getting started. the kpmg future leaders program. empowering young women to reach their potential since 2016.
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♪ time for the executive edge. and an update on a story that we first told you about a couple
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weeks ago. christie's sold the t rek skeleton nicknamed stan, $31.8 million, that includes fees. the auction culminated in a 20 minute bidding war with buyers on the phone in london and new york, the winning bidder has not been identified, but somebody is taking a dinosaur home today >> how do you do that? >> very carefully. >> i mean they assembled it obviously. they would have it pay to disassemble it and -- i guess it doesn't matter if you have $38 million to spend on a dinosaur a little compression in that one disk there bets you that was painful. >> i think you're projecting, joe. >> maybe i am. i've been called a dinosaur, proudly.
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anyway, and -- >> i was talking about the compression in your disks. >> i know you were but as an aside -- yeah, no, i'm good and the music world sad, remembering guitar wrist eddie van halen who died yesterday, been battling throat cancer for several years. the band was in-dektsed ducted rock 'n roll hall of fame back in 20007, considered one of the greatest guitars and he never learned to read music. i don't think that lead guitar player -- what percentage of lead guitarists really read music? they are playing lead guitar he once told "rolling stone" that he learned by watching his guitar teacher's fingers i'm sure he knew chords, but
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very few -- now, piano is different. you got to -- you really need to know how to read music but i don't know, to be in a normal band, reading music maybe some did i don't know i never did. >> it depends on if you are writing the music itself or following somebody else's stuff. i think that he came up with a lot of his own arririffs. >> air guitars don't need to read music >> those of us of a certain age remember eddie van halen with his row plans with valley bertinelli, she was on talking about how much she will miss him, she and her son, they were divorced but still very close. so just a big piece of our growing up and going through middle school and high school. so hard to look at this. he was only 65 >> only 65 a big lineup still to come,
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good morning, everybody. welcome back to "squawk box. we are watching the futures this morning and if you left watching yesterday's session, things have completely turned around yesterday stocks were under pressure after the president said that he would be walking away, he wanted to end negotiations on any additional stimulus until after the election overnight, he tweeted out a few things suggesting that he would sign some of the bills if passed
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immediately. things like bringing aid to the airlines and to small business, you can see this morning that the dow futures are indicated up about 210 points, nasdaq up by 345. and kpmg kicks off its women's leadership today the goal is to try to help women advance from business to politics, sports and media speakers will include condoleezza rice as well as mike worth who is the chairman and ceo of chevron and in fact he will be joining us later in the show, but right now we'll talk to the person behind the summit, ceo of kpmg paul, i want to hear about what you are doing today, but first a few comments about what you think about the president's stimulus talks, what he said yesterday, what he tweeted overnight. and what that could do to corporate confidence you talk to ceos all the time. what did you think when the president calling off talks and
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what did you think later when you heard the tweets that he would sign some of the bills into law if passed on to him >> good morning, becky and it is great to be with you again. yes, it is clear that there are sectors in the economy and that there are viare individuals, pen the u.s. hurting from the dual health crisis of covid-19 and the severe economic crisis it also seems clear that additional fiscal stimulus will be necessary so we remain hopeful that lead hers from across government will come together and put together a path forward for the american people and businesses. >> what happens if they don't? there is an awful lot of politicking, only 28 days to election and i can only imagine that that would be more difficult than it has been up to this point >> yes, becky, it is really hard to project what will happen if they don't come together but it does seem clear that
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there will be a real difficult six in the economy if you think about the unprecedented level of this crisis, and full the masking of some of the effects through fiscal and monetary stimulus to date, it is really hard to project what exactly will happen, but it does seem clear that additional fiscal stimulus to go with the monetary stimulus that has already been promised by the fed will be necessary. >> and what does the economy look like right now just based on what you hear from all the ceos you talk to >> there still is uncertainty, but the ceos that we speak to, they are resilient, they are confidence when their products for their business moving forward. but that uncertainty is difficult to deal with as you know we like to have more certainty and clairity when it comes to policy and law. so that is certainly something
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that we're all reflecting on and thinking about as we manage our businesses and navigate through this crisis. >> the kpmg women's leadership summit, how did that come together >> yeah, this is the 6th year of the summit and as you know, we've sponsored the women's pga championship just outside philadelphia. and this kpmg women's leadership summit is -- the whole idea behind it is to advance more women to the sea suite pnd even in the broader market. and so this summit with speakers that you you mentioned earlier and that also would include speakers like mariah stackhouse, our brand ambassador, along with mike wirth and condi rice, this is meant to provide leadership
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development and training we found that of the 700 past participants that have been at this summit over the last six years, that over 50% have been promoted to other jobs within the organizations and about 20% have been promoted into the sea suite. so we feel like we're doing our part to help women advance both in the world golf and sports and in the business world. >> how do you think that women's advancement is going to be complicated by what we've seen during covid there have been a large number of parents who have had to put their jobs at least maybe not on the back burner, but they are not paying as much attention as they had been because they are dealing with kids at home, trying to make sure that they are helping the kids learn when they are not going to school or doing school virtually, trying to take care of them and even though parents both men and women have had to deal with this, it has been reported that women have probably more
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frequently been the ones who have taken on the burden with that how do you think that will impact leadership? >> it does seem like women have xwa been disproportionae porceed p y disproportionately been affected and we need to address those needs. and we have to recognize that during the crisis, that many women and working parents, men and women as understand, are really working two jobs. their job at home with educating kids and raising kids and their current job. and we know other business leaders that i've spoken to have tried to put programs in place to make it easier to educate children at home, but also more flexibility to working parents
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as they try to navigate the virtual environment that they are all working in we certainly hope that -- >> just what i hear from some ceos, they are anxious for people to get back to work do you think that this will have long term implications people are saying yes, we'll be offering more flexibility for parents. will that eventually hurt the parents who take the flexibility, will it keep them from advancing down the road >> that is a great question. and we certainly hope not. we try to remain very aware of those situations and be very fair of the impact on all of our partners and employees throughout the firm. and that is what i hear from other organizations too, it is top of mind as i talk to other ceos, they raise this issue. and i think we're all trying to creative more equity in the workplace and this is an important issue when you think
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about trying to creative that kind of equity in the workplace. so we need to be target fld helping these individuals a as we work through the more virtual environment. >> no matter what you do, you end upating some of your workforce. silicon valley, some are angry about the flexibility given and they are carrying the bigger part of the burden so how do you make sure that even is getting a fair shake >> there certainly is that risk. i think communication is key we had spoken about a survey that we did of ceos and more than 80% said that all employee. and we found that the more you communicate with your employees about the issues that we all face, the more you try to bring a sense of collaboration and sharing of this crisis and getting through this crisis, we
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think the more successful in developing a common understanding across our business businesses >> so what does it mean for ceos communicating with your employees, does it mean putting out town hall meetings where everybody listens in, relying on your mid level managers to make sure that they are communicating with your employees? i think everybody has a different idea and it is particularly difficult when you have so many people working from home, for people not to feel alienated and not to feel like they are completely disconnected >> i think it is important that those communications cascade from both directions from the top down, we certainly see a lot more video meetings of all employees. so the collaboration tools, the digital tools that we've been able to put in place since the crisis across all businesses allow us as leaders to talk to all employees about these issue,
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but it is also crucially important that we have all leaders throughout the organization very tuned into the issues that our employees are facing and working with our employee, communicating with our employees throughout the organization to listen to their issues most importantly and then for us to try to develop solutions as we ensure that our employees feel comfortable in this current environment, which is very difficult because it is a very unresiden unprecedented situation. we do see some employees getting back to work across the country, and we think that those will be cautious and pleasurmeasured res into the workplace >> paul, thank you and good luck with the summit. >> thank you so much coming up, this morning stocks to watch including a big win for blue jeans and a big
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warning for ge investors as take a look at the dow winners and leading futures higher this morning. boeing and some others and reminder, you can always watch us live or listen to us live anytime, you can do it on the cnbc app hey, dad! hey, son! no dad, it's a video call. you got to move the phone in front of you like... like it's a mirror, dad. you know? alright, okay. how's that? is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most plus $0 commissions
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. i think that song was writte written for the genie. did you put that together? it is early. anyway, stocks to watch, levi strauss and they expect the strong performance to continue as long as the pandemic doesn't get worse. and microsoft is revealing that the labor department is probing its initiative to hire more black employees. the agency is questioning whether the plan violating
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federal laws prohibiting discrimination based on race andwatch out ge investors, if you are still out there, buehler, anyone? anyway, the company facing a new scrutiny from federal regulator, it says it received a wells notice over its accounting practices. ge says the s.e.c. is focusing on the accounting for reserves related to an insurance business it has been trying to wind down if years and what is the market cap of ge you might ask? $54 billion. $54 billion. and it is a $6 stock in a financial crisis, we'll never to get it got under $6 at one point, we had the cfo on "squawk box" and it recovered a little, but that seemed like, you know, almost unbelievable to imagine ge at $6 back there again anyway, coming up, take a look
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at this mystery chart, this financial stock down more than 8% just the last month however our next guest says that it is digital banking makes it a top pick in the sector we'll reveal the name and bring you more squawpis xtk ckne
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it's that time again major banks gearing up to report earnings next week here to lay out a few stock picks in the sector, ellen hazen at fl putnam investment company.
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we teased one of your topics before the break why don't we start with that mystery chart. it was bank of america, ellen. let me start with your overall theme. that is you want to build a bar bell in your portfolio you want some value and you'd like to avoid some of the secular challenges that other value stocks are subject to, and you think that the banks are a way to do that could you explain that >> thanks, joe that's exactly right clearly the growth stocks have outperformed value stocks for the last decade with a few fits and starts in between, but as we start a new economic cycle, when that begins to be clear we think value stocks will start to outperform and at that point you really want to own classic value stocks like banks. banks are classic value stocks, and right now they're pretty inexpensive. the bank index is down over 30% this year and yet the bank
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stocks as value stocks do not face some of the secular challenges that some other areas of the value index face so between the valuations being very attractive, the prospect of an accelerating economy and accelerating earnings into next year, we think the banks look pretty interesting as part of a balanced portfolio against the growth stocks that we also own. >> interesting okay so bank of america we highlighted the chart. why bank of america and then we'll get into your other two picks, too, as people are waiting for those. why bank of america? >> sure. the biggest reason to own bank of america is the acceleration towards digital banking. bank of america is a pretty inexpensive stock at 1.2 times book value, but the key here is that covid and the stay-at-home economy that that has prompted has really accelerated the migration to digital banking
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and bank of america had invested a lot of money in consumer digital banking for many years prior to this year, so they were very well positioned as that migration has taken place. on top of that, you have very tight cost control at bank of america, and in general we prefer the money center banks, which is bank of america, jpmorgan, over the regional banks for a number of different reasons, which i can get into if you'd like. >> let's do that while we're talking about another one of your picks, jpmorgan you like even more than bank of america >> i do like jpmorgan even more. it's a little bit more expensive but it has a higher return on tangible equity and a little bit faster growth rate let me talk about why both of those are more attractive than some of the other bank choices out there. the entire banking industry faces both headwinds and
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tailwinds. the headwinds are well known, a flattish yield curve and very well known short-term rates. the tailwinds are stronger performance in investment banking, in sales and trading, in asset management and the money center banks are much more exposed to those trends than any of the regional banks and then in addition to that, some of the companies and areas that have done poorly with the slowing economy have been, number one, commercial real estate in general, which the regional banks have more exposure to. so, again, that's a reason to favor jpmorgan and bank of america over the regional banks. and, number two, lending to small and medium-sized businesses, which unfortunately have suffered more than large companies, so as we look at jpmorgan, gold standard bank, very strong balance sheet building capital at 60 basis points a quarter because of the stock, the buy back, so their
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capital position is getting stronger and then the cherry on top is that they have taken enough loan loss reserves that it looks as though they won't need to take any additional loans in the third quarter so we accelerating earnings as the credit losses continue to be soft for jpmorgan in particular. >> great ellen hazen, thank you f.l. putnam. we'll be watching next week. earnings becky. wahoo! bank earnings. it's the most wonderful time of the year you know why we get to see wilf. >> the gift that keeps on giving. >> nonstop still this morning, we have some biggests coming up that you can't afford to miss including former fda commissioner scott gottleib, michael wirs and many more neel kashkari, steve ballmer and larry kudlow 20 years ago, i was an hourly
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associate cart pusher. the different positions i've had
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taught me how to be there for others. ♪ i started out as a cashier. i mean, the sky's the limit with walmart. it's all up to you. ♪ ♪ . president trump halting talks with democrats the futures rebounding on the
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late-night tweets. the latest is straight ahead. covid cases surging in hot spots across the country new york closing schools in the affected areas we will speak with dr. scott gottleib about america's fight against the virus. plus, breaking news on the housing front. the latest read on rates and mortgage applications straight ahead. the second hour of "squawk box" begins right now ♪ ♪ ♪ good morning and welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures after falling almost precipitously yesterday afternoon after president trump said that stimulus talks would be called off. they are now back as potentially a piece meal approach could be on the table, at least that's what the president is now
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suggesting dow looking like it would open up 243 points higher s&p 500 up 22 points higher. the nasdaq looking to open about 50 points higher joe? >> that is what we're talking about, andrew. the top story is president trump, as andrew said, calling off initially coronavirus stimulus talks until after the election then last night around 10 p.m. eastern the president tweeting in his words the house and senate should immediately approved $25 billion for airline support. $135 billion for paycheck protection for small business. both of these will be fully paid for with unused funds from the c.a.r.e.s. act have this money. i will sign now. then if i am sent a stand alone bill for stimulus checks, $1200, they will go out to our great people i am ready to sign right now are you listening, nancy steve liesman joining us with what the move could mean for the
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economy. phil lebeau will have more on the impact on the airlines sector first, let's get back to washington and ylan mui. good morning, ylan. >> reporter: good morning, joe the president's tweets threw another curveball into the prospects of a new relief package. just yesterday afternoon that the white house's offer of $1.6 trillion of aid was very generous accused house speaker nancy pelosi of negotiating in bad faiths before he shut down the talks. very shortly after, moderate republicans, including those in very competitive districts urged the president not to walk away gop congressman john katko is in a dead heat. he tweeted this. with lives at stake, we cannot afford to stop negotiations on a relief package and he strongly urged the president to rethink this move. meanwhile, susan collins of maine, who is in danger of losing her seat, called walking
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away a huge mistake and she had called the treasury secretary to register her complaint mitch mcconnell had thrown his support behind the president's decision to stop the talks he said democrats had never made a reasonable offer and that they would re-engage after the election so will this latest series of tweets move the needle what we know is that house speaker nancy pelosi has repeatedly rejected calls for that piecemeal approach, including when she was under pressure from her own caucus, not to mention under pressure from republicans steve, over to you >> reporter: thanks, ylan. we're getting warnings from both the federal reserve and wall street economists on the potential for painful outcomes for the u.s. economy if washington fails to provide additional stimulus. fed chair jay powell said yesterday, get, recessionary dynamics could develop without more aid where weakness creates more weakness.
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washington should err on the side of doing too much rather than too little. mike firoli from jpmorgan telling me we still have positive growth in our forecast even though we took out phase 4 two weeks ago. that said we have no confidence in the no double dip recession view if we got the stimulus. along with president trump's tweets saying he would sign individual aid bills one reason wall street could be looking at the stalemate, it expects aid to come. aneta markowska from jeffries says this is short lived americans have built up savings from lower spending and generous relief greg dayco of oxford said the timing does, indeed, matter. without aid until 2021, he said the u.s. economy could reach stall speed in this quarter, that includes an election and
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christmas. andrew >> steve, thank you for that we're going to try to break all of this down based on that analysis don snider is here, economist at corner stone macro good morning to you. help us try to understand not just what's at stake but to the extent that a deal could be reached, where you think we really were yesterday afternoon prior to the president's comments and where we are this morning. >> good morning. thank you for having me. i think they were pretty close to a deal on paper, 1.6 trillion was a good offer i think it's political malpractice for president trump to pull out of those talks, even if he was getting strung along to an extent 1.6 was a great offer. 400 billion and $400 a week for unemployment benefits, that was a great offer for democrats. publicly pulling out and taking the blame for that failing is
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political malpractice and i think the evidence of that is now trump asking for a piece meal approach. he's ready to sign checks, et cetera >> don, politically some people would say malpractice on one side and it sends the markets down and people thought what is he doing now he says he's prepared to do a piece meal deal. you're watching the futures go up doesn't he point to that and say to the democrats, look, if we don't get a deal, the market's going to go down and now it's on you? >> sure. but i think democrats can say, we were at the table the entire time you know more needs to be done than just checks and just an airline bill and yet you pulled out and show you have no interest in continuing the talks so i don't think that's a strong position for him to be in at all. >> don, let me ask you about
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this bill ackman tweeting out to donald trump and speaker pelosi. mr. president, madam speaker, in that you both agree on the first 1.6 trillion, why don't you do that so americans in need can get helped now what i don't nderstand, the 1. trillion that the democrats are offering, is that the same as what the republicans are offering is there a distinction >> that would be a great deal and that would be the right thing to do. i don't think the composition is exactly the same but it's not that far apart there may be more for state and local governments if you health democrats to 1.6 than you would otherwise get.
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i think how trump is going to act is interesting let's say the democrats do win and we get no deal between now and the election, it gives them a big opportunity and a mandate to pass massive stimulus i think it gives them an opportunity to load their agenda into that bill calling it covid stimulus where there is a big mandate to do something. >> so, don, if you're an investor today, this is an interesting issue, you know, there's been a conventional wisdom that if biden were to win and there was a blue wave, if you will, that that might be bad for stocks at least temporarily because there would be stock
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selling in part ahead of what people think is going to be a higher tax rate come 2021. people will lock in their gains. maybe that will be a short-term issue. after you sell, you probably go back into the market maybe; maybe not don, as an investor, would you be more inclined to have a democrat win based on the idea of economic stimulus ylan mui just talked about this. or would you be inclined to have a more conservative approach that may be, arguably, depending on your approach, more targeted. >> if you're very short-term focused, i think the market will go up if democrats win because the fiscal impulse is going to be bigger. i think in all three election scenarios, whether it's a democratic sweep, divided government or with trump as president, you're going to get a phase 4 deal either way. it will be biggest under democrats. lastly, just in terms of the core agenda, trump really hasn't sketched out much but biden has.
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what biden has sketched out is very expansion aary than he is planning to tax. >> yeah, that's what i was going to say in the long term, isn't there anybody in the market who is going to say, sure, these stimulus measures are great in the short term but long term we have to deal with our debt >> my perspective on the long term is more that eventually that spending burst is going to fade you face that with distortion naryury work so i think that is a concern as for the debt, that is a really interesting conversation that's going on right now in many ways. debt, you know, with real rates so low, there's very little cost of it. eventually it has to be paid for and slowing the growth of spending are higher taxes. that doesn't seem like it's
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going to be on the table in the next four years. >> we appreciate it. i'm sure we'll be talking with you a lot more over the next weeks and months to see how this all plays out. >> great thank you for having me. coming up, the latest on the race for a covid-19 vaccine. dr. scott gottleib will join us. we'll hear from chevron ceo mike wirth and neel kashkari. steve ballmer all coming up. before we head to break, get a check on the markets up about 250 on the dow. "squawk box" coming right back ♪ ♪ ♪ ♪ to a world that must keep turning. the world can't stop, so neither can we. because the things we make,
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rated #1 in customer satisfaction. it's your wireless. your rules. only with xfinity mobile. will come back to "squawk box. house antitrust subcommittee suggesting spinning off parts of their businesses after 16-month investigation the staff reporting that they are finding that apple, amazon, facebook, google enjoy what they're calling in quotes monopoly power that needs to be reined in by congress and enforced later in the program we're going to talk to former microsoft ceo steve ballmer. we'll ask him about that report and the idea of breaking up big tech and we'll talk so much more with him about so many issues across the spectrum. joe? >> okay, andrew.
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take a look at netflix pivotal research has raised the price target to 650. $650 a share on the company based on accelerating cord cutting trends and the view that netflix is likely to remain the dominant global player in the streaming video on demand market pivotal. good for a 1% move there were times when a big media company could have stepped in, you know what i mean i don't know they just missed it. 223 billion now. 223 billion. can't buy it now in fact, they're probably -- they're getting ready to buy -- the reverse pacman is not a reverse pacman that's amazing i'm on there i've got to admit, there is so
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much stuff original content it's a pretty unbelievable success story. >> who would have thought. >> culturally, financially. >> i used to get them in the mail. >> i know. >> when they sent them in the red envelope, they would send you the dvds this is better than blockbuster. it comes to the house, you can mail it right out. >> i know. they made that transition pretty fast, did they not >> they did. they saw around the corners. >> netflix good name. good everything. all right. when we come back, some breaking news on weekly mortgage applications diana olick joins us with the week after the numbers. and later, the latest on where america stands in the fight against covid. dr. scott gottleib will join us. "squawk box" will be right back. time now for today's aflac trivia question. in 2011, which company downgraded the u.s. credit rating from aaa to aa plus for
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the first time ever? n bc "uaer whecn'ssqwk box" continues aflac! now tell me, what does aflac do? aflac pays you money directly to help with unexpected medical bills. and is aflac health insurance? no, but it can help with expenses health insurance doesn't cover! that's right. are there any questions? -coach! -yes? can i get one of those cool blue blazers? you know i can't play favorites. alright let's talk coverage. it's go time! get help with expenses health insurance doesn't cover. mmm hmm! get to know us at aflac.com ♪ ♪ "hmm's and ahh's" heard in-call. ♪
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"hmm's and ahh's" heard in-call. when disaster strikes to one, we all get together and support each other. that's the nature of humanity. ♪ it has encouraged other people to take the time for each other. ♪ ♪
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now the answer to today's aflac trivia question. in 2011, which company downgraded the u.s. credit rating from aaa to aa plus for the first time ever? the answer, standard & poor's. yup. remember that. we've got the latest read on mortgage demand out just moments ago. let's get to diana olick good morning, diana. >> reporter: good morning, joe i know this doesn't sound like a headlight anymore, but mortgage rates set another record low that let a fire under refinances but didn't motivate home buyers and we may be seeing the start of a little red flag first, the average rate on a 30 year fixed with conforming loan balances dropped from 3.016.
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in response, refi application volume, which is most sensitive to weekly rate moves, rose 8% and was 50% higher than the same rate one week ago. that's the highest refi volume mortgage applications fell 2% and were 21% higher than a year ago. purchase volume has been falling little by little and is now down just over 4% from four weeks ago. there are some clues in the mortgage numbers that demand from buyers at the entry level is waning, probably due to supply issues, affordability issues the average loan size hit another record size of $371,500. that's because so much of the buying activity is on the higher end of the market. back to you guys >> diana, how long has that been happening? pretty new phenomenon? >> well, we've been seeing this
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average loan size creep up week after week i keep saying we see new records on mortgage rates hitting record lows this is hitting a record high every week that's showing you that the bottom end of the market is starting to drop out and the activity is not necessarily in the luxury sector but on the higher end of the market again, i think that may be the problem that we're seeing with affordability and with people who are entry level, millennials, et cetera, who were really heavy in the market suddenly saying, i'd love to do this but i can't afford it. >> do you think any of it has to do with the number of people who are trying to leave urban areas and maybe get to the suburbs around those areas because those suburbs tend to have much higher prices. >> yeah. they absolutely do yeah if you want the larger home in the suburban area, you may pay more depending on what city you're in now. urban flight, per se, is mostly happening in cities like new york and san francisco what you're seeing in other cities like philadelphia, which
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is actually seeing people move from new york, that is smaller cities, nashville, kansas city, st. louis, they're seeing a boom in buyers, but only in that sort of -- the neighborhood like this, where we are in washington d.c. but you're not downtown, not ina condo or apartment, you're in a single family home that's larger with a backyard and to your point, they are pricier. >> diana, thank you. it's great to see you. >> thanks. up next on "squawk box," dr. scott gottleib on the battle of covid, the president's condition and much more. by the way, it's all leading up to another big hour right here on "squawk box." chevron ceo michael wirth will be our guest neel kashkari will join us with the latest on what he's seeing in the economy and what's left in the fed's toolbox gentleman after that stormer microsoft ceo steve ballmer and larry kudlow will join us. we have the futures indicated up
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after a down day dow futures up 223 points. s&p up by 21, nasdaq up by 23. "squawk box" will be right back. ? -audrey's expecting... -twins! ♪ we'd be closer to the twins. change in plans. at fidelity, a change in plans is always part of the plan.
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welcome back to "squawk box," everybody. president trump calling out the f fda. it came after the fda issued strict new guidelines. joining us is scott gottleib he serves on the boards of i will lumina and pfizer scott, first of all, what do you think of the fda's guidelines. secondarily, what do you think of the president's tweet last night. >> well, look, i don't think the guidelines were that strict. i think they were sort of the base case. it's what people expected. these guidelines have been broadly communicated to the industry the fda had shared all of the principles in the guidance document with the companies. as you know, i'm on the board of
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pfizer i talked to a lot of manufacturers, they were well aware of the principles that were in this document. there was nothing surprising about it i don't think it represented a high bar necessarily i think it represented what people expected to be in that document so i think that the perception that this somehow represented a high bar because the fda was asking for two months of follow-up data or the fda was asking for five severe cases in the placebo arm, that's really what people expected two months of follow-up data on a safety database is pretty much a base case. most of the side bets will happen in two or three months. it's aggressive. it's appropriately aggressive given the circ couple stanumsta. in terms of the president's tweet, i didn't understand why he would put that out because earlier in the day the white house had cleared that document and they had cleared it and also put out some statement into the press taking credit for it so i'm not sure where the
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confusion was or where the debate within the white house about that document. >> the president's point is that this won't be available before election day maybe that caused frustration on his part it hasn't seemed for me for quite some time we thought we would get one before election day. >> right the reality is we thought there wasn't going to be an authorization before the election could they file an eua before the election i think it was very unlikely there was going to be an authorization before the election i don't want to say never. it's unfortunate that the election fell out when it did, right around the time that we might be getting data from the vaccine trials i suspect the white house clearly wanted a therapeutic win before the election. they weren't shy about telegraphing that. i suspect their focus is going to shift to the antibody drugs which are showing good data and frankly could be available sooner the expectation always was you
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go back to may and april when we talked about this, the expectation was that the antibodies would come first and be a bridge to a vaccine it looks like that's playing out. i think the antibodies will come to the market and be broadly available or more of a bridge to severe patients. >> that's where i wanted to go before you went there, scott you would never conduct a clinical trial of one person if we believe the president is doing well, there's -- who knows. we don't know about the transparency but to get that antibody cocktail early, i mean, you're almost -- a vaccine is to give you natural antibodies, which is great. if you could give someone antibodies and then as a starter and then the body eventually makes its own as well, that sounds very powerful if it really is working. what i wanted to ask you is instead of looking for covid progression after the antibody
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cocktail, is there a way we can measure what's happening to the virus with someone who's had the antibody cocktail? in terms of viral loads, can we see circulating virus and whether it's diminished after you get an antibody cocktail can you measure it that way? >> absolutely. that's the primary end point in the early stage by regeneron the president will continue to do well after getting the antibody it looked promising. all of our expectations are playing out. everything we outlined in terms of having the antibodies, the theoretical bases, the safety protocol that's playing out i think the antibodies are going to move to the market in short order as the data matures. it looks very good that the initial data from both regeneron
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and lily. >> my second question, let's say you are able to hold down the viral replication so it doesn't get to like full blown what we see, does that prevent that second week setback where the immune system goes into hyper drive and causes so many problems and has caused so many deaths does one follow the other? like is trump not going to have that second week setback because he had the cocktail? is that possible >> it's possible it follows to some degree. when you talk to the doctors caring for covid patients, they talk about exceptions. patients who look like they're doing well or improving and in the second week they go into the inflammatory response. generally there's a correlation between patients who do well the first week and seem to attack the virus and those who have the difficult second week where they go into the inflammatory response what it looks like in the trials with the inflammatories, the
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data is early and dataset is small. most patients will mound an appropriate response they are particularly effective in reducing the severity of the systems. some patients don't mount a good response on their own. it becomes a crutch. what you are doing, you're giving them an intact immune system to fight the virus. >> hey, scott, i wanted to ask you about what we've heard from new york, about some of the affected areas there needing to shut down schools again, new york city and some of the restaurants in the area. we've had some of the schools in my area in new jersey around here who have closed down over the last week as they've seen a case or two pop up i'm wondering, is this what you think the beginning of the second lockdown looks like in some of these infected areas in the fall how would you have imagined this playing out? >> well, i don't think we're going to have a shutdown the same way we did back in april
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and may. i think that we're better at detecting where the virus is spreading and being able to target our interventions we're more confident we have a health care system that's been stood up and has the resources to care for people that are sick. this is the beginning of the fall this is playing out as some people expected it you'll see cases build and rolling mitigation, targeted mitigation in areas of outbreaks. we have enough diagnostics for people to target the mitigation much more effectively. i think this is the beginning of a difficult fall and winter and we need to get to the other side of this. >> doctor, i wanted to also just get you to weigh in on the debate about the debates themselves as you know, president trump says he plans and is up for participating in a debate which would take place in about a week from now vice president biden has said that he doesn't believe it would be responsible to conduct a debate with the president's health the way it is and the
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possibility for spread from him. what's the medical expert say? >> well, you know, i think the president -- hopefully the president continues to improve and i think he'll be on sort of the tail end of any reasonable assumption about when he may still be infectious. you know, he's going to be out a good amount of time, assuming he continues to improve we don't have a lot of information about his condition on which you can sort of pinpoint exactly when he may no longer be contagious relative to what the conventions are, what we know about this virus look, if the president is up for it, i hope he is up for it because it will mean he continues to improve pretty quickly. that's difficult a debate is a difficult forum and so he's going to have to be in pretty good shape to do that. hopefully he'll be able to do it. >> how do you think though about -- it's not just the president at this point. it's virtually the entire white house has now been infected as we know there's virtually no
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contact tracing going on in the white house. stephen miller testing positive just yesterday how does that play into your calculus though not just of the president's own health and ability or willingness to participate in the debate but, again, as a doctor the responsibility of dealing with this given that we're going to have dozens if not hundreds of people who have to surround the president traveling with him and whatnot. >> look, it's difficult circumstances. the white house has ano outbrea. we're seeing people infected by people who are infected. now we're going to see the fourth generation of spread start to emerge and the third generation of spread is going to play out over the next two days, maybe three days you're right, they're not doing contact tracing. it's surprising that they're not. it's surprising that they're not trying to get to the bottom of who brought this virus into the white house. i think they have an obligation to try to figure that out.
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you can do that by sequencing the virus. i'm on the board of pfizer you can sequence a different strain that you get off of patients who have been infected and look at the spread from generation to generation, try to trace it back to an index case i think in that setting when someone walked the virus into the white house probably based on what we know and infected really the top echelons of our government, i think we have an obligation to try to figure out where it came from you're not going to do that unless you are doing aggressive sampling, sequencing and that's what we would do in another setting. you've seen the cdc trace the origins of an outbreak i'm surprised we're not doing it >> i know you're surprised doctor, why do you think there is no tracing going on in the white house? i ask only because so many other business leaders around the world are dealing with tracing, they've built remarkable programs around to try to protect their employees.
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they're trying to create good modeling procedures. why do you think this hasn't happened at the white house? >> i think the charitable view is that they just -- they're not focused on it. they have a lot going on there right now. they don't want people in the white house distracted the uncharitable view is they don't want to know they don't want the next three weeks to go every day news report of someone who was ineffected or came down with the infection who got it from a chain of transmission which emanated from the white house which is effectively what the next three weeks is going to be. i don't know i have not talked to anyone who's given me any indication of why this is not going on i've talked to people who are surprised this is not going on >> dr. gottleib, thank you great to see you >> thanks a lot. okay when we return, a lot more to come sirius xm holdings on the move in the pre-market. take a look, it has a lot to do
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with shock job, howard stern stock up 2%. we have details after the break. president trump saying he will back specific stimulus measures including airlines and some others we will discuss the sector in ju ait aw returns after this. (♪ )
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sirius xm is when to sign a deal with howard stern his contract expires at the end of december. the 66-year-old has been negotiating a fresh deal for the better part of a year. shares of sirius climbing after the report they announced a 10% dividend increase 2.5% this morning. becky. joe, thanks. when we come back, airline stocks on a round trip getting back much of yesterday's losses after president trump called off stimulus talks but then later tweeted that the industry could see specific relief measures with been a bit of a roller coaster ride then at the top of the hour, chevron ceo mike cat wirth will
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be our special guest we'll be right back.
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president trump again called for billions more in federal support for airline payrolls that's hours after he halted talks from democrats until after the election and sent stocks down sharply phil lebeau has more phil >> reporter: joe, it's been a
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wild ride for the airline stocks if you are an investor you saw where they dropped from 2.5 to 4.5% and you had the president's tweet and, viola, most of the stocks have been recouped. they have furloughed more than 32,000 employees the airline aid in question would essentially bring those employees back onto the payroll but it would not lower the average daily cash burn for the airlines that is completely separate and for the airlines right now, they've done better than where they were back in april but they're still losing lots of money every day. american, $36 million a day is the cash burn. the best is southwest at $17 million a day. southwest is, however, planning to cut its employee pay by 10% you heard from gary kelly yesterday, you guys were talking with him, he outlined the fact that they will need to make some adjustments unless there is payroll aid extended once again, then they will not cut payroll
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by 10% that's a non-starter by the way for the flight attendants at southwest airlines yesterday the president of the southwest airlines flight attendants union releasing a statement saying our members are not interested in making concessions to a contract that took decades to obtain at the end of the day, this all comes down to how long it will take the airlines to see some regrowth in terms of passenger levels in september the average passenger level every day was down 68% and it's not much better than where it was in august where it was down 71% so, guys, the question for many investors is separate from the payroll aid, when do the airlines start to see that break even point approach where they're no longer burning through 17 or 25 or $30 million a day? is it by the end of the year as many are hoping or is it more likely in the first quarter because the growth in passengers is just not there right now. >> all right, phil
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stay tuned talk to savante seith about this, raymond james airline analyst. your point, savante, it's kind of brutal. the airlines themselves are going to get through this. i worry about employees. i worry about them getting through this but they can weather this as long as there isn't a second wave and a slow comeback with passengers continues, they're going to survive? >> that's correct. i mean, coming into this the airlines were in a strong position most of the u.s. air lines had strong balance sheets. you can't discount the fact that the first payroll support program and the loan program has been a great support for the industry so it's going to be painful. i think any hope of cash break-even by the end of the year is pretty much going away given what we've seen from the level of recovery. most likely we were going to
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take until probably the middle of next year to get to that cash break-even level what the payroll support program would do is help keep people employed but, again, it's -- it will -- maybe not have to tap into some of the debt that the airlines have raised but at the end of the day i think the airlines will survive this it's a matter of what will their balance sheet look like once they get to the full recovery. >> balance sheets and number of employees that are still around at the end of that the prospect for business travel, i don't know what that is because of zoom meetings and such for leisure it seems like, you know, that's kind of in elastic. people are going to want to travel you can't drive. it's too harrowing would you focus on the airlines that have a strong presence in just leisure or not as much
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exposure to business >> in the near term, that's definitely how we think about the space, the airlines. every airline is going to go after leisure passengers but business demand will come back, it's just going to take longer our surveys show maybe 20% of business demand back by the end of this year and, you know, going up to maybe 40, 50 pers percent byd getting to 80% by n. everything depends on is there a vaccine, are there good therapeutics i think business demand will eventually come back, it will just take longer in the meantime, airlines that have a cost structure to have leisure will do better. >> is there a piece towards bailing out the airlines, how much more scrutiny do you think there will be on a deal itself and whether you think that the
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government will try to extract something more effectively for the taxpayers than they would have had it been part of a larger stimulus program? >> i any there's a sense of urgency. the longer you go, some airlines have held off on furloughs they haven't executed them once you start the furlough process, it's really hard to reverse it i think there's a time sensitive urgency. i don't think if something is passed, there won't be anything more than what was there they're trying to have restrictions on laying off individuals and cutting services to different regions i don't think there will be much change due to the urgency of getting something done and in place before it's too late. >> airlines can -- obviously things can change for airlines more quickly than for boeing, but, savi, boeing is predicting
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a decade long slump. how does that -- how do they get to that number i mean, it can't be great for airlines. it will come back a little that's pretty daunting >> i think what we're learning is going to be a smaller industry for the first part of the decade there is a compounding effect in their forecast i think things will recover but you're starting from a lower base so i think that drives their forecast as well in the near term it's just going to be a lot of very cheap aircraft out there and so there probably won't be as much demand for new aircraft as there was before especially with the number of airlines probably consolidating around the world >> savi, also wanted to ask you in particular about the assertions that the airlines
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have made. also some of the unions about how not necessary this transaction is but the terms of it as you know, as you may know, i've often talked about the idea of diluting shareholders it seems to me somewhat wild to hand out the money the way we would because we effectively would be advantaging the shareholders my question to you is oftentimes you hear either union leaders or the corporate executives say it's the only way you can do it, otherwise it's going to hurt the economy. otherwise, if we were to go into bankruptcy we wouldn't be able to come out of bankruptcy. we'd never be able to come out of bankruptcy. is that reasonable or not? >> first payroll support was really about i think saving the airlines and shareholders benefit from that, too the second payroll support is about saving jobs. there's a benefit to the economy and shareholders as well if you don't furlough, you know,
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not only is it good for employees and morale, if the economy recovers faster, you will be able to recover airline service faster as well if you don't go the fuller route. there is a benefit to the economy but the second payroll support is really about saving jobs if it doesn't go through, what you're doing is re-sizing the airline for the new level of demand but you are guessing what that new level of demand is. >> savi, thank you we appreciate it like to hear from you again. don't know what's going to happen appreciate your support. andrew meantime, when we come back, another huge hour of "squawk box" ahead we'll hear from chevron's ceo michael wirth. we'll hear from neel kashkari, steve ballmer and larry kudlow all on deck for a big hour ahead when we return when we started carvana, they told us
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good morning, michael wirth, neel kashkari, former microsoft ceo steve ballmer and top white house economic advisor larry kudlow
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join us as the final hour of "squawk box" begins right now. ♪ ♪ good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site. me, anyway, live in times square i'm joe kernen along with becky quick and andrew ross sorkin our top story is the bounce back in the markets after president trump tweeted late last night suggesting that he might back a series of relief measures if they would be passed by congress that followed a -- we were up over 100 went down 375. so almost a 500 point drop late in the session yesterday when the president ended discussions between mnuchin and pelosi
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who knows. we're kind of back on track up to 55. >> joe, thanks energy stocks were some of the stocks that dropped yesterday after president trump announced the end of stimulus talks. the sector has faced multiple headwinds this year including limited demand, volatile prices and unpredictable weather. joining us our first newsmaker of the hour, chevron ceo michael wirth. it's been a while. good to see you this morning >> good morning. good to see you, too >> let's talk a little bit about what the market's reacting to. the idea of whether or not there's going to be a second aid package or additional aid package coming from washington obviously oil prices fluctuate quite a bit. they move on a lot of different things but demand has been a big, overwhelming issue we've been facing all throughout the year as coronavirus shut down economies and slowed down demand in other places. wonder what it looks like from
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your perspective what does the demand picture look like? >> demand correlates with the status of the pandemic in different regions of the world in asia, china, we've seen really robust demand recovery. less so in europe and north america and it can vare jie by type of demand so air travel continues to be at very, very low levels so the demand for jet fuel globally is significantly below levels that it was at during the pandemic. gasoline has come back reasonably well in most places although you still have a lot of people working from home less commuting an offset is less public transit as well. a little more driving to upset that diesel demand has stayed firmer throughout this. so we're still in a -- i would call it a variable kind of state of the recovery and well below pre-covid demand levels, which i don't think we'll see a full
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recovery until people have confidence the pandemic is under control. >> that's what i wanted to ask you about. this week boeing lowered its demand outlook by 11% because of the repercussions of covid and people not feeling comfortable going back into the air again to fly. i know you took a big writedown in the last quarter, something like $1.8 billion for a lowered outlook for commodity prices is this the type of thing you think is going to last for years, even potentially a decade or do you see everything outside of airlines bouncing back sooner >> there are different opinions on that, becky our view is we have seen a substantial amount of the recovery that was, i'll call it the easier return of the demand that's already occurred and what remains really is that more difficult demand, the demand that's much more sensitive the
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concern. our view is that as those again to be deployed, you'll see people resume movement in behavior that looked a lot like it was pre-pandemic. we're still talking a number of quarters, well into next year most likely, and we think that commodity prices are likely to be pretty choppy and volatile along the way. there's still a lot of supply that can come into the markets to meet growing demand there's a lot of excess inventory that's built up around the world and so before we see energy prices really firm in a way that's durable, that excess supply needs to really start to match up with demand better. >> i know that you have proven you will not get into bidding wars but you did close just this week on noble energy, on that
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acquisition. i know that's a pretty big deal. this is something where you're paying in stocks so you didn't take on a lot of debt for. this how does this change the makeup of the company with the additional responsibilities you'll pick up. >> we were somewhat fortunate. noble had done a nice job of building a set of world class assets for a company their size with big positions in colorado, texas complementary to our permian position and particular success in the eastern mediterranean with large gas discoveries in the waters off israel, nice job commercializing that with sales contracts into not just israel but also jordan and egypt. and the eastern mediterranean is an area that holds some interest
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from an exploration standpoint for us, the assets really matched our capabilities well. they fit into our portfolio. they're likely to compete for capital, and of course we'll see mer merger and we could make an acquisition and derisk it. it's an all stock deal we think this is good for the shareholders of both companies and we're very pleased joining forces with them >> you mentioned some of the merger synergies, that's code for in some cases layoffs. you did say over the summer that there will be layoffs because of -- particularly in the home office, some overlap in the jobs can you give us any additional details for what that means and we're working with the management of noble to firm up the organizational decisions
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we were in a large restructuring of our own that began before the pandemic began so those two processes are coming together. it's painful and challenging because we have several thousand reductions in our work force as we go forward. by the end of this month those decisions not only will have been made but individuals will know their outcome as a result so we're still in the process of working through that very difficult set of decisions. >> hey, mike, you've said as recently as this summer that the dividend is still a top priority for you. your dividend is below 7%, something that you consider a top priority is it safe >> we've held a consistent set of priorities for decades. we know why most of our
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shareholders hold our stock. it's because they count on the dividend these are pension funds for retired people and they count on that income. we've always prioritized that first. second priority is to reinvest in the business to support the dividend the third then is to maintain a very strong balance sheet and, you know, the fourth priority has been to repurchase stock when we've got the first three priorities satisfied we came into this with the strongest balance sheet in our industry we made significant reductions in our capital spend we're spending capital at a rate today that's about 40% lower than when we entered the year and even with this acquisition we continue to have a very strong balance sheet so our dividend is secure. we've stress tested the future scenarios at prices lower than what we've seen today and still have plenty of capacity to pay the dividends. we feel good about that and we
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feel good about the way our people have executed through a really challenging period and still one, i think, that has some challenges. >> have you ever run a stress test looking at what happened earlier this year where you basically had to pay people to take oil off your hands? >> that's -- that's several standard deviations into the tail, and it didn't last long. when we saw that, there were a unique set of circumstances that came together. people were concerned there would be no place to store oil, and those who committed to taking them had to unload them a unique set of confluence we test prices well lower than where we are today. >> $20 a barrel? >> yeah. what we shared with our investors was $30 for multiple
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years, and that's well below the level that the industry would -- reinvestment of drying up. if we saw demand soft for multiple years, that's a scenario we want to understand what our company looks like. it's not fun at $30, but we can -- you know, we survived we paid the dividend and we still compete at that level. >> mike, you're here today because you are speaking at kpmg's women's leadership summit why are you speaking there what are you doing in terms of finding women to make it into the leadership ranks of chevron? >> well, we've been committed to diversity and inclusion for my entire career and it's a personal passion of mine i serve on the board of catalyst
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and our industry has a history of being more male oriented than female oriented. at the time we received the catalyst award 16% were women we've made significant progress through the last five years but there's more work to be done the kpmg program pairs women up with mentors we provide mentors for that. some of our really talented women leaders participate in the program and it's a way for us to cl collaborate and create an environment where everybody can bring their best self to work and achieve their full potential. it's a real honor to work with kpmg on this. >> wells fargo ceo kicked up controversy when he suggested it's really hard to find diverse hires, that it's hard, they
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don't exist. i was thinking about you with that, because you're right your industry. maybe you have to dig deeper for candidates who aren't obvious. how do you do that >> we have to work back into the education system our industry hires a lot of people with technical backgrounds, science, engineering, math and so we work with universities, we work with historically black colleges and universities, for instance, as well and we actually go down into the k through 12 levels of education to help strengthen s.t.e.m. programs, good aptitude in math, young girls or minorities to find ways to have fun and to reinforce the fact that they are talented
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that -- i set up a scholarship that goes to a woman or a disadvantaged minority every year to help them advance their education. so we try to build a broader pipeline of people who are talented oftentimes they just need a hand and they need reinforcement. they need talent and they need for somebody to believe in them and stay with us we work with them and we work on the recruiting efforts we're looking at reducing some of the requirements for jobs so we don't use a 4-year college degree as a threshold because there are some very tall linted people who can't or don't have the ability to do so we have a broad funnel and source talent from, you know, a wide range of different backgrounds and then create an environment where people can
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grow and succeed as they begin their professional career. >> mike, it's great talking to you today. thank you for your time. we hope to see you back here again soon >> i'll be back. thanks, becky. >> thanks, mike. andrew >> okay. thanks, becky. coming when you we return, you don't want to miss this. minneapolis fed president neel kashkari will make his pitch for another round of stimulus. then at 8:30, steve ballmer. congressional calls to break up big tech and big data numbers he's looking at aheaofhed t elections. you're watching "squawk" on cnbc free access to every platform. mhm, yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. now offering zero commissions on online trades.
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coming up, there he is, neel kashkari, the minneapolis fed president. and then we'll hear from the white house, not the actual white house, but someone that works there. top presidential economic advisor larry kudlow will be our special guest. stay tuned
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the expansion is still far from complete. at this early stage i would say the risks of policy intervention are still asymmetric too little support would lead to weak recovery creating unnecessary hardships for houses and businesses the risks of over doing it seem to be small sler even if policy actions ultimately prove to be greater than needed, they will not go to waste. the recovery will be stronger and move faster.
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>> that's fed chair jay powell a piece meal approach might work at this point. do you think a piece meal approach can work, neil? >> well, we need to get money into the hands of the 11 million people out of work the job market is roughly as bad as it was at the peak of the great recession and that's obviously devastating for those families, but as chairman powell just said, it will then have ripple effects on the whole economy because they can't pay for food, they can't make their credit card payments, their car payments, their rent, their mortgage it'll then ripple through the economy. so whatever congress can do with the executive branch coming together aggressively to put money in the hands of people who have lost their jobs and to support small businesses so that we don't have this continuing wave of bankruptcies across the economy. it's just vital that they move quickly in whatever they do. >> the numbers are getting big
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i just wonder what you think of the actual negotiations that we've seen and without assigning blame to either the white house or speaker pelosi, does it matter at this point we just heard chairman powell say more might be -- even if it's more than we need, it's not going to go to waste let's say speaker pelosi is at 2.4, is it really trillion i have to get used to saying that let's say she's at 2.4 trillion andthe white house's last offe was 1.5, 1.6 is $800 billion something ju just -- is that something not to worry about if it really isn't stuff that republicans would argue that's earmarked for stimulus, other democrat wish lists and such should we not worry about 6, 7, 800 billion at this point in the process or is it still something that we should be weary of >> well, of course -- of course,
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you know, we're spending wisely always matters, and i don't know the details of the negotiations so i can't opine what was in the 2.4 versus the lesser amount i think speaking for myself, but i think most of my colleagues at the federal reserve would agree, whatever assistance can be provided is important. whatever assistance can be provided to small businesses that have been directly affected by the pandemic is important and supporting state and local government whose revenues have been hammered by the covid crisis, that's also important because they employ a lot of people if there are other things attached to t that's going to be political debate that's the assistance that's needed to respond to the covid crisis. >> neel, you have a piece out about that it's unfortunate the american people don't have a financial system that can stand on its own through thick and thin and every ten years it needs a bailout. easier said than done. i don't know how covid -- how a
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pandemic factors into it and the banks seem to have been better prepared this time around, but you point out that the fed actually did have to aid banks in a large degree again this time in terms of the financial system what changes would you make that wouldn't be detrimental to economic growth that we haven't already done >> well, a couple things one is i do think i've been saying this for years, that the biggest banks do need more capital. i absolutely applaud the actions that congress has taken, but how have americans been able to pay all of their bills it's because congress has been so aggressive. if they don't continue that, these losses roll up into the banking sector and nobody knows how big those losses will ultimately be and whether or not the banks will need more direct support. so that's one piece of it. a second piece of it is look at the financial markets that proved to be so fragile in march of this year every ten years the central bank
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has to step in and do a full tloeded back stop to the financial markets. that strikes me as crazy think about these overnight funding markets that financial institutions and nonfinancial institutions fund themselves by trading overnight. why do they do this? it allows them to eke out a few extra basis points and then when they get scared, the markets collapse and the central banks have to step in to backstop it that's the definition of privatized profits and socialized losses. that's one example we need to look at. >> it's not every ten years, it was 2008 and prior to that when was it it wasn't 1998 or '88 or '78 or '68 and then after 2008 it's ten years, but it's the first global pandemic in 100. you have two data points but you don't have ten data points every ten years, do you? >> okay. should we wait for those ten
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data points? >> i don't know. my point is i don't know whether we need to totally tighten things up. i mean, we did that in '08 you get so tight that you're hurting growth, you're hurting gdp. there is a way of over regulating >> there is a way of over regulating look, joe, i agree there is a way of over regulating we don't want to over regulate i ask the american people, i ask the people who are watching the show, does it make sense to you that the u.s. economy has a financial system that requires a bailout every ten years? that doesn't strike me as the right balance. >> you only have two -- we just weren't over that. it's not every ten years. >> i understand. >> one time it happened. >> okay. but if we have a financial crisis because of a housing bust once every 100 years then we have a pandemic once every 100 years. >> world war -- >> who knows what the next one is these are not 1 in 100 year events. >> that would be tennessee quells to his first book
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i don't know how he feels about it. >> it's very clear whether you want to count 9/11, whether you want to count the financial crisis, there has been a crisis of some sort or a war where we have had to bail out and go beyond our expected budget that has not been planned for i think that's what neel was saying let me ask you a couple different questions. one on the fed, are you worried at all that all of this printing is perverting the system in terms evof the spate of spacs a how are you trading? >> i go back to alan greenspan's call that we had irrational exuberance and the stock market skyrocketed and then it crashed down if the fed had raised rates to control the stock market, it
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would have had to raise rates so much that the recession that would have caused would have been much deeper than the recession that the stock bubble bursting in 2001 caused bursting we all pay attention to these things but the idea we're going to raise interest rates to tamg p down the stock market, that's an incredibly broader tool it's hard to see how the federal funds rate is the right tool to address that. >> let me ask you a separate question as one of the main drivers and individuals responsible for the rescue and bailout plans for the banks back in 2008, how do you think about the bailout structure for the airlines and perhaps some of the other industries that may now be looking for a piece meal deal and whether shareholders in those deals should be dilutedil effectively, or significant warrants to pay the taxpayer
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back ultimately and whether that differs from the way you think about the banks. >> it does differ. it differs because in 2008 there was a clear case of moral hazard that banks and other investors had taken a risk that they fully didn't appreciate f. we didn't take on some reward for taxpayers, we'd be encouraging them to repeat the same behavior this is a natural disaster hitting the .s. economy at the same time. i don't see any moral hazard here with airlines, the nature to their business, every time there's a shock the airlines are the first buns to be issued but for the rest of the economy and for the rest of the american people, this is a natural disaster hitting the american economy. i think we should err on the side of being generous. >> neel, let's look at the other side, the true -- i don't know what you'd call them, but people that don't want -- you mentioned you don't want to privatize --
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you don't want the taxpayer to pay for the losses what about true capitalism, let everything fail that needs to fail when they get out over their skis, they make a lot of money when things are going right and then they get bailed out when things aren't going right, what about not getting more stringent in terms of -- or more generous in terms of bailouts or more stringent in terms of regulations and just go back to the fed not increasing its balance sheet 5, 6, 7, 10 times in a bailout not debasing our currency, holding the line on money printing and not letting congress get totally profitable. what about letting the chips fall where they may? you are on the -- 180 degrees from there in recent years >> well, i mean, i think it's an interesting theoretical concept. letting the forest fire rage, let it burn and eventually it
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will burn itself out meanwhile, all of the animals are dead there are enormous consequences if we let things go. the downturn will be more. if we don't support people -- >> we're almost done i apologize for interrupting you. people say that the base that you build when you don't allow the system to clear is like balsa wood who knows what finally happens with where we are in terms of the fed's balance sheet and everything else. people have been talking about a day of reckoning since before that, actually, staying too low for too long that's the argument that they'd make, if you don't let the system clear, no price discovery and you're just setting your sel self up for a problem. >> i understand people make those arguments. i see them on twitter.
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there are millions of americans affected by this letting them deal with it on their own, i don't think it's the right thing to do and i don't think it's good for the economy overall. >> i don't think it's good for you to be on twitter not good for anybody, especially -- >> fair enough. >> -- the main news organizations who now seem to get all of their perspective from the twitter feed which kind of messes things up. thank you, neel kashkari always good. >> good to see you >> i like the discussion becky? breaking news from eli lilly. >> reporter: well, good morning, becky. eli lilly saying this morning that it has filed for emergency use authorization of its antibody drug for covid-19 this is after we've only just seen the initial data on this drug so by anyone's accounts, this is incredibly early time to be filing for that, but we're in a pandemic and emergency use
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authorization says the ben fit may -- the benefit outweighs any risk lily reporting top line data on two antibodies similar to the cocktail we've heard from regeneron, saying that combination in recently diagnosed patients reduced viral load and helped with symptoms as well and are pursuing potentially filing an emergency use authorization of that in november, guys back over to you >> meg, thank you. we saw that stock up by 3.7% on the news we will continue to watch. when we come back, a congressional panel accusing big tech companies of monopoly power and calling for breakups former microsoft ceo steve r inusithi wh s reaction this is decision tech.
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welcome back to "squawk box. the house antitrust committee is saying google, amazon, apple and facebook has monopoly action and congress must take action to change antitrust laws.
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joining us is a $10 million campaign to persuade americans to stick to the facts and so much more. former microsoft ceo, l.a. clippers chairman, steve ballmer. appreciate you being here on such a newsy day newsy week feels like obviously 2020's been a newsy year to this point of the news that's out in the last 24 hours on antitrust law and these four companies given the crucible that microsoft went through already, how do you think about this idea that this report suggests that fundamentally the sherman law should be changed. the sherman antitrust law needs to be changed unto itself? >> i'm going to make kind of a crazy statement, but it blew my hair back, andrew, that's how crazy the thing occurred to me it doesn't mean that there's not
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a role for government somehow in the regulation of industry certainly what i learned as we were going through our antitrust issues in the early 2000 is that you can do things that seem 100% consistent with the law all along the way but then if you wind up with a position that somebody deems a monopoly, life gets kind of crazy and i would certainly recommend to all these tech companies to engage on the issues now, to engage with the regulators now i see no change in the antitrust law that's really going to deal with the to some degree the nuance of these businesses >> so when you look at a google, for example, having a youtube on one end or selling advertising on the other against their own customers or you look at the apple situation now where they're charging a certain amount of money to be on the app store, do you think that they
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should on their own reverse those measures or do you think there's something else that they need to do >> i think the thing that really needs to happen is they need to have a smart regulator to talk these things through with. i do not think that they can just sort of take a unilateral action and expect it to satisfy whatever it is some regulator or congressman will decide they should have done so the key is to engage. you can change the law and it still might not be clear to these companies what they need to do to comply because the law is not going to be written case by case by case. i also don't think the case of apple is the same as google as the same as amazon in a sense putting them altogether makes good theater but it doesn't necessarily mean good policy in my opinion >> but you don't think they should take preemptive action, meaning apple should announce a new program that they're going
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to allow a separate app store run independently by others to try to up end any type of inquiry into their own business? >> well, they could, but suppose the conditions on which they announce that are different than the regulators want after the fact so you can offer something, that's not the worst idea in the world, andrew. but what if you offer the wrong thing? now you have to do what you offer plus what the regulators want you know, for me, it's crazy given all we've been through and all i know about this stuff, if i'm in these guy's shoes, i say, come on, let's get down there and let's regulate me and let's get it over with so i know what i can do. >> steve, also want to talk to you about usa facts but also want to talk to you about misinformation and how you think big tech is playing a role in that you probably saw this news, i'm looking at just yesterday. facebook and twitter removing a post from president trump that
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claimed that the coronavirus was less deadly than the flu what do you think the responsibility of big tech should be in these type of cases especially when the president is tweeting or posting with them? >> i think they have a hard job. if it's a celebrated, verified poster like the president, if those companies want to review that, they can and, you know, i'm silent on what the policy should be, although as you know, i'm big about quoting the data nobody should be able to post anything like that we say covid is less bad than this it's part of the usa.org project to make sure people can see issues grounded in the same numbers and the same data. big tech companies can't run around and fix that up probably everywhere on their site but they're going to need to use more and more smart software to
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help snoop these things out and maybe they can provide the kind of context we try to do in usa facts. >> hey, steve, i just want to go back to your point about what you think these big tech companies should be doing right now in terms of engaging with the regulators i think that's sound advice, but i just wonder if it's gotten too polluted and if it's too late for the companies to try and do something like that. it does seem to be that zuckerberg's been trying to do that for the last year possibly, to sit down and get an answer from them, ask to be regulated so they don't have to be regulated themselves do you think his entreatise are not being put to the right use is he not asking the right people or is it the entire environment in washington that it is so polluted that nobody can do this >> i doubt it's the latter probably what you have is a situation that's hard. the regulators may not know what to do either the regulators need to take a
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look at these things they need to engage. have they really engaged at the detail level and really sat there and said, okay, what is your concern about the way we do this ad? what's your concern about the way we take this measure to help ensure the validity of the advertising on our system? whatever the case may be, you actually have to sit there and then people have to in a sense, i would call it negotiating, regulator brings up issue, tech company has to bring up technical solution and they have to say do these things actually work that's what we wound up having to do with both the european commission and the u.s. government do i think all of this threat of breakup, blah, blah, blah, is it really ever going to happen? nah, i'll bet money on that. i could be wrong, but i'll bet some money on that and yet at the same time, you know, i think over the course of the next few years each one of these organizations will have
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long, drawn out, difficult discussions with regulators. >> you said you'd bet money on the idea that they won't be broken up eventually >> i'll bet money that they will not be broken up, i bet money on that that doesn't mean as in our case somebody won't order them broken up before that gets pulled back. may there be -- they're talking about will acquisitions be looked at differently? yeah, i believe that might happen but really forced to spin things out. as i read the concerns, just me as a non-antitrust lawyer reader, i read the concerns and i don't even think this notion of breaking them up answers most of the questions that people are raising or many of the complaints they're raising >> steve, i want to get to usa facts but one other related question to all of this. again, headlining the news,
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you're the largest shareholder of microsoft, individually i believe, microsoft denying emphatically a letter from the u.s. department of labor that its recent initiative to spend $150 million on diversity and inclusion programs amounted to what the government was suggesting was illegal race discrimination you used to run the company. what do you think of that? >> it drives me crazy. i don't know specifically what microsoft's doing and i don't -- i haven't gone and read any specific complaint, but the notion that microsoft is being a good corporate decision and it is investing and having the most diverse and inclusive work force it can, i salute the company for that i salute the company for trying to look like its customer base to bring that kind of talent in. i think that's a phenomenal thing. if there is -- has been systemic racism in our country going back
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to our founding, then the notion the companies shouldn't at least push themselves to make sure that they're trying to become more diverse, shame on our laws and regulations if they actually say that i would be very sad. >> steve, i want to talk about u.s.a. facts you're spending $10 million on a new advertising campaign around a nonprofit you started which has a budget of $10 million annually doubling what you're doing and it really comes at a time when there is so much misinformation ahead of this election what do you think that americans don't understand about the information? and in truth, do you think that americans actually want to know the data or are they looking, dare i say, for their own version of the truth >> oh, i think there's people who look for their own version of the truth, and that's -- that is what it is. there's nothing to be done about that i think there are plenty of
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people who actually want to know what is the current state of our country. at u.s.a. facts what we do, we don't do forecasting, we don't do our own market research, we just take government numbers, which i believe the government puts together in a valid and proper way, we put them together and we present them to people. the people who do want to know really what's going on where is the tax money coming from where are we spending the money? what kind of outcomes are we getting? is our health getting better, is the -- our lifestyles in terms of what we can buy, how we can live, are those things getting better or not? and there are people, it might be 20% or 25% of the electorate, it might be 40 or 50, but we need to also do our job to step up and say, how do we make this stuff digestible a lot of people don't digest numbers very well.
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in our campaign that we're running now, change the story, what we're trying to do is help people dimensionalize how people with their daily choices are helping change the numbers and the situations and inside our country, whether it's hard disease, stem degrees. people should know what's going on in terms of increases in heart disease is a bad thing women getting s.t.e.m. degrees going up, it's a good thing. all of that and more at usafacts.org and we're doing it because we think the facts really matter. they shouldn't have their own facts about what's already happened. >> steve, it's an important project. before i let you go, nba, here we are what do you think? but also tell me, what do you think is going to happen with the 2021 season? is that going to happen in person is that going to be back in a bubble in florida?
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how's this going to work >> well, first let me say, i don't know i'm he not even sure our commissioner knows because the commissioner, the league, the players association, there's so many things that have to work out. we don't know where we're going to be on vaccines. i don't think we can keep people in bubbles for months and months on ent i'm hoping they have feverish fans cheering for their los angeles clippers after that, all i can do is leach it to the nba league office and our nba player's association. >> steve ballmer, good luck with the usa facts campaign >> thanks, andrew, thanks, becky. appreciate it. >> you bet let's get to jim cramer at cnbc headquarters.
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jim, big question this morning, what happens in washington we watched yesterday the markets sell off on the idea that the negotiations were off, and then up this morning by several hundred points on the idea that maybe they'll be a deal that gets cut through about to talk to larry kudlow. what are you thinking? >> i think the president gauges his actions by how the dow goes. that sounds simplistic, but the president wants to be able to demonstrate that the economy is strong, and i think the big proxy -- we'll get more proxy sent the market lower. one of the tweets had new records when you have a president who makes it so you can have new records, it becomes problematic for the president. so i'd like to see what's going on obviously the airlines are easy. i think that the states could get -- are going to get money from republicans and therefore there's got to be some sort of reasonable ground. it's pretty clear that the market spoke immediately and
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just said, listen, this is a mistake. the market is neither a democrat nor republican i think the president used that. i think that's correct, although many of the companies that went down are companies that will benefit. when you wipe out the small and medium size, these guys win. the wiping medium size businesses on the agenda, and i think it is not being taken seriously by the president right now. >> jim, thank you. we'll see you in a few minutes and hear more. >> we have to focus on the nfl have to focus on the fact -- adam schefter, two more titans that's outside the curve of how many days you're supposed to quarantine you got to quarantine to day 11. that's much different. steve ballmer, playing with fire, i don't know how the nfl is going to deal with this >> yeah. >> no doubleheaders in the nfl. >> watching that -- >> no doubleheaders. >> for sure. for sure we will see you in a few minutes. thank you, jim >> another patriot i saw as well let's stay on the topic of stimulus, here is what minneapolis fed president neel
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kashkari told us earlier this hour i guess -- yeah. >> whatever congress can do with the executive branch, come together aggressively to put money in the hands of people who lost their jobs, and to support small businesses so that we don't have this continuing wave of bankruptcies across the economy, it is vital they move quickly, whatever they do. >> we're joined on the "squawk" news line by larry kudlow. i had a lot of things to talk to neel, you were listening to the fellow cramer, i know you met jim, you remember him, kudlow and cramer or was it cramer and kudlow, i don't know the bottom line with neel kashkari and you, you believe free market capitalism is the best path to prosperity. is that what we're involved in now with the fed and what we're doing with all these relief packages with congress how do you view it what do we still need to do in your view? >> well, look, i think that this
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is -- has been and continues to be an emergency situation. although less so in recent week and months the worst was in the winter. governme governments, you have this kind of devastating pandemic, and the mitigation results and all the closings of states and businesses and you have the deep contraction. now, we're coming out of that contraction, i think the data is getting better and better. i think there is a v-shaped recovery putting that aside, i think the issue of the president's view on the talks is that after speaker pelosi turned us down again, you know, secretary mnuchin has done a great job running point on the negotiations, working with the republicans in the senate, has gone from a trillion to 1.6
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trillion and that's a major concession, and in particular, and i think i picked this up from the clip i heard from kashkari, look, there are several things that we believe would provide great assistance to specific targeted areas of this economy. i don't think the recovery depends on the massive assistance package however, i do think renewing or extending the ppp small business loans would be tremendous assistance i think the airlines definitely need a lot of help, probably 25 billion in there, by the ppp, they have $135 billion unspent, requires congressional legislation. we always argued that the schools need to open for the kids, and for the economy, jobs. we always had $105 billion in there. more or less
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we put in extra money for vaccines again, extending the ppp and so forth. these are crucial issues and i think what president trump was saying yesterday is that, all right, we're too far apart for a gigantic bill. yes. we only got four weeks to the election, and we got a justice of the supreme court to get passed too close to the election. not enough time to get stuff done at this stage of the game but, but, but, but, president signaled late yesterday, i'm sure you all reported, that he would sign a stand alone bill that would provide key assistance to airlines, to the small business, payroll protection plan, and also the president on the demand side, sometimes you have to have a demand side in an emergency, would provide a thousand dollar direct mail economic impact
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checks to keep things going. it islike an insurance policy. so we think we have been very flexible and the view of the president and the view of senate leader mitch mcconnell is that we do not think the democrats have been not only not flexible, but indeed they don't really want to play ball. senator mcconnell said yesterday, he doesn't think speaker pelosi will produce the results. and they're just stringing us along. that's the issue a small bill, a targeted bill, okay standing alone, you know, they did pass the -- we are able to compromise to keep the government open, why not do it again. those are essentials check, ppp, airline, schools, those are key points that would make an enormous contribution to strengthening this recovery. >> so, larry, we did see chief of staff meadows say that, you
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know, the big package is probably done. how would this work? do you see this actually happening, the piecemeal solution and behind the scenes, what is happening? who is the administration talking to where is it going to start can it happen in the next couple of days? >> joe, i just cannot make a prediction i just cannot make a prediction. again, the president and leader senator mcconnell believe that speaker pelosi is not negotiating in good faith. all right, so that's their particular view. and she's been stringing us along. i noticed the wall street journal echoed that view i can't answer your question precisely, joe i wish i could but this whole thing, right now in terms of the probability curve, this would be probably still low probability stuff. i don't want to rule anything in i don't want to rule anything
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out. secretary mnuchin has been tremendous, excellent negotiator, the nec and the rest of us are backing him up as best we can with the great treasury staff. don't know, joe that's the bottom line >> are you -- can you describe what it is like trying to navigate through the white house now with the recent outbreak in a lot of the people that you see every day. what is happening? >> the government is functioning. the president actually showed up in the oval office yesterday with extra precautions, with respect to his covid-19 and he's getting a lot better, he's much stronger, so there was some limited activity a lot of people are working from home, teleworking just to be safe and precautionary we have had a bunch of folks test positive. as far as i know, they're all in very good shape, all friends of
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mine, the people i've come into contact constantly, teleworking, we can still get the job done and i can still hook into cnbc for this great interview i myself continue to test negative i thank the lord for that. >> we heard even dr. scott gottlieb earlier said that if you took the negative viewpoint that the reason that -- i mean, there could be people that have been infected now infecting other people without contact tracing and that the acb, amy coney barrett nomination, that that's front and center and precluding more stringent contact tracing. is there any merit to that statement, larry >> no, i don't see any trade-off. i think as senator mcconnell said again and again, in the last day or two, that nomination will go through. virtual analysis and questions,
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they can telework just as well you got a couple of -- you got a couple of weeks to go on that one. i don't see any crossover to contact tracing. in the white house, there is a good deal of contact tracing, and we're doing the absolute best we can. we added additional precautions to try to protect against any further positive testing and so forth. so we'll see how that runs the president, again, is recovering quite rapidly i think that's a great blessing. and -- >> hey, does he wear a mask in the oval office when he's there? who was with him >> i can't be specific, joe. it is the work of the federal government the president, as you've seen, has been masking quite a bit and everyone else who comes into contact in the oval, the traffic is limited, as you might expect, but there are additional precautions, additional measures
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that have been taken much greater than simply masking. >> larry, thank you for being with us this morning and nec director and we got a ways to go in the trading session we'll see what happens with the piecemeal deal thank you, larry kudlow. that will do it for us andrew and becky, join us tomorrow "squawk on the street" is next good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber futures are up as the market tries to price in some piecemeal stimulus now the president has that series of late night tweets, the vp debate tonight, lots of fed speak headed our way with fed minutes at 2:00 eastern. road map begins with the stimulus whipsaw the president calls off negotiations until after the election then calls for new stand alone stimulus relief me

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