good morning, stocks closing yesterday at new highs the dow within 50 points of 30,000 tesla shares soaring on news that the stock will join the s&p 500, the move will make elon musk the world's third richest person and maybe the best dancer. and wall street watching berkshire hathaway taking big stakes in phrma companies, cutting its stakes in apple and jpmorgan we'll have a run through of all the big moves. it is tuesday, november 17, 2020, and "squawk box" begins right now. ♪

good morning welcome to "squawk box." i'm becky quick along with yoe kernen and mike santoli. andrew is off today. we'll start things off with the stock futures after some positive vaccine news drove the dow and s&p 500 to record highs. dow giving back some of that ground, down by about 100 point, but remember how far they have marched for the last three weeks. s&p is indicated down by about 14 points and then the nasdaq is indicated up by about 12 points. we do have some breaking news from amazon and better that coocoo bertha coombs ohas that story >> they are launching a full online pharmacy building on its acquisition of pill pack the new pharmacy is in-network with major insurers and medicare and patients can pay for their prescription co-pays with funds from their health savings accounts just like they were at

any pharmacy and they can confer with pharmacists online or over the phone about their prescriptions. prime members get free two day shipping, patients who needs meds right away with k. getit go go to a face pharmacy. and they will have comparisons to if they don't use their pharmacy tj parker the founder of pill pack tells cnbc that the experience is separate and distinct from amazon.com and that data will be stored in compliance with health privacy rules and not used for marketing. although their release says without clear permission so i get guess you could opt into that if you wanted to first czonka for the drug store chains front of store and now direct aim at the back of the store at their pharmacies.

>> this is something that probably doesn't come as a huge surpri surprise but when you hear the news that it is actually happening, it still has to come as a bit of a shock. this has been something that these competitors have been preparing for for a long time. how do they fight back >> well, they have been building up their in-store services, that is what they think will be the key. and certainly we have seen that right now during the pandemic, you know, they have been offering testing and they will be a critical point when it comes to the distribution of the vaccine. but they have really been ramping up and making sure that their pharmacists aren't just there to dispense pills, but also to offer advice and also adding other services like clinics and also dietitians and basically to make it your front door for health. so they still have the physical pharmacies and at this point as far as we know amazon is not ready to do that just yet.

but stay tuned >> yeah, a huge story. thank you very much. good to see you. >> you too our other big story this morning, tesla is joining the s&p 500 on monday december 21. based on yesterday's closing price, that would make it one of the top ten companies in that index. and with the after hours move, the market cap is about $430 billion, that makes it the eighth biggest and in striking difference of companies like walmart and visa now, because of the large size of the addition, the s&p, dow jones seeking feedback from the investment exactly do this, to determine whether tesla should be added all at once or two tranches. this would make elon musk the world's third richest person passing mark zuckerberg.

and so many different angels to this i was trying to figure out, it used to be like we had like the press techians and they were all long they were really obnoxious vocal people that owned the stock. and if you said anything, they would get mad. tesla or musketeers, they started out like that, but then they were replaced on the total obnoxious side by the people that are short this stock santoli, and are they still short this stock, the teslackers in you'll be i don't think, you'll be wrong, and they get so animated, and we're duped reporter that goes report on tes tesla. when do they throw in the towel? >> they largely have this is not nearly as heavily shorted a stock as it was. just the rise in the shares have basically taken care of a lot of that but it is fascinating because

the exact reason so many people were short, all the fundamental challenges, the valuation that you really have to stretch to compute it based on what the company is worth today, that is also what probably kept it out of the s&p to this point, which is just a lack of predictable consistent profitability and this idea that it was inflated beyond its economic foot print and three months ago, s&p took a pass on it who knows exactly why. but it seems like they wanted the fever to break in the stock. so it sort of has flattened out and maybe digested some of that. and the it is just becoming too hard to mechanically keep a $400 billion company out of the index. so it is pretty fascinating. >> and there was some crossover between the teslackers and the

modernarains or matter it got very strange. i don't think that twitter is a great place to pay a lot of attention to >> yes >> you don't want to step into the wrong stream have you done that, santoli? you don't take a lot of -- >> they will definitely come for you if you have something less than flattering to say about the company. >> i'm just waiting right now. >> even if you just put somebody on the air, when we put kathy wood on the air is when we've gotten like be the full frontal assault. >> and gordon johnson, when we have gordon on, he is very smart, but i don't know, i don't know why -- the really good reasons haven't worked out too well >> and the thing that really struck me is watching this being compared to walmart. if you look at it, the close yesterday for walmart was 3 4 $32 billion. if you look at tesla today with a 12% gain, you are talking

about a market cap of roughly $426 billion so within spitting distance. and this is not a knock on tesla, this is not a knock on elon musk, but if you look at owning a piece of a business, which is what owning a stock is, if you look at owning a piece of a business, the idea that you could have one share of tesla, a piece of tesla or a piece of walmart, it is kind of shocking to me, you know, when you think through what these businesses actually are walmart is the biggest employer in the united states outside of the federal government it is 10% of total retail sales. 10% of all money spent in the united states on retail exchanges goes to walmart. and walmart i think if you looked last year, it was $523 billion in revenue last year, it is on track for about 5$550 billion sales. for tesla last year, it was like $24 billion. so you are just looking at the

comparisons for some of these things, 24 versus 5$523 billion i understand that it is a growth stock, i understand that elon is brilliant, you see him shooting men into space -- men and women into space and that is awful great. but spacex is not part of tesla and if i had the choice of owning a piece of a business, i think i would take the walmart >> tesla is seen as what replaces internal combustion engines in the world >> i know. >> and you have -- kathy wood comes on and she's got, you know, a lot of really far -- they seem at the time to be hyper billion lihyp hyperbolic views ron has been right about it all along. >> and he's made a ton of money. >> almost went from the stone age to the drill age and we'll go from the internal combustion engine and henry ford and model

ts and all that and we'll go into this, you know, emissionless future. and i think tesla has although dreams in the stock price. >> a lot to push through a stock. >> every stock is valued based on what proportion of what the company has already done and what it might do in the future so for tesla, it is mostly about the future, for walmart, it is mostly about what it has done already. and i guess 25 years ago when amazon became public, we would have been making some of these comparisons against sears as opposed to walmart >> i don't think walmart is sears. i think what walmart has done under doug mcmillan is pretty amazing even going after things like tiktok. drug mcmillan keeps a list on his phone of the top ten retailers through every decade he is very aware of you how quickly you can become irrelevant and i think that they have done a very good job of trying to make sure that they are keeping up i'm not saying it is the same

sort of growth proves pepgspect you see with tesla, but this made me think wow. >> and this next story, i felt so good this morning remember last week, it was like lowes was looking at hd supply and i'm like what? no, that is not -- the world is right. i think home depot is buying back hd supply just to make -- wait a minute, lowes buying home depot supply was too weird. but anyway, the world is right again. home depot will buy hd supply. that was a horrible investment last time. i thought frank made the brilliant move to get rid of it at the time and it was thought of as a -- i don't know, not a great business but at least it is home depot

buying hd supply we'll go through the numbers next meanwhile u.s. equity futures indicated down 158 points on the dow. coming off new highs ♪ you can go your own way

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welcome back home depot out with earnings this morning the home improvement retailer reported quarterly earnings of $3.18 a share and that was much better than the street's estimate revenue also beat the street's forecast and comp store sales increased by a greater than expected, drum roll for this, 24. 24.1%. that is unheard of for immediate reaction to home depot's earning, let's bring in brian daboll this was better than just about every number and yet the stockstill down about 1.2% doctor do you think that is? >> good morning. you're right this was another what i call blowout quarter for home depot very similar to what we saw in the second quarter these comps are amazing for a

company of this size now, i think to answer your question why the stock is down, and look, i recently downgraded home depot on this concern that it is okay what is next. hopefully the covid pandemic will subside rather quickly especially with some of the vaccine news we're getting but the concern i think the market is starting to have and i'm starting to have, what 2021 looks like for home depot as >> so what have you done for me lately is the common refrain on wall street for things like this but brian, these numbers are phenomenal the company says that it will be investing a billion dollars in annualized permanent compensation enhance mgts for the front line hourly associates so even after covid goes away and sales come down, the company will be taking care of the associates that helped it through this incredible time where it was servicing needs through a crazy pandemic

i think that that is laudable, but do you think that that is why the stock is under some pressure >> maybe first it is the right thing to do home depot takes care of its people but this is a theme we're seeing in retail and it is clear that coming out of this pandemic, it will be more expensive to operate as a retailer. so labor expenses will be higher, there will be more cleaning costs, et cetera. and so i think this is one more indication of that but to answer your question, that may be a reason premarket, but now it is more where do we go from here >> i'm with you, it is the right thing to do. and the chairman and ceo says the reason that they are doing this, they want to lean into these investments because they think that they are critical in enabling market share growth in any economic environment, and their people are on the front lines and they should be rewarded for that. you said you recently downgraded

the stock. dana telsey upgraded to outperform from market perform she said because of the hd acquisition they announced yesterday. she is looking at that and thinks because of this, it will be assuming about a 3% earnings per share boost if you look at synergies of around 5%, she says it will be accretive to earnings next year and that is enough for her to upgrade >> i have a lot of respect for her, but i disagree with her call jo you were saying that the hd supply purchase is interesting especially given its history i get what they are doing. they are now in a much better position home depot is better run today than the company was 10 to 15 years ago. so i think that they are much better situated so to say to operate a company like hchlthd . but it is small.

only $6 billion. this is a small addition to the home depot enterprise.again, i home depot over the next few quarters this is a well run company i think once we get past this comparison issue, i would won't again turn very positive on home depot. not because of home depot supply, but the underlying retail business. >> home depot you down graded to what >> well, we call it perform, which is the mutual or hold rating i kept my 305 price target, so we see potential for up side near term, but i also considered a down side target of 220 to 230. and at that price, not to get too cute, but at that price, i would think these concerns that i'm talking about are priced into the stock at which point it becomes attractive on the long

side >> what about lowes, did you done grade lowes at the same time or is that different story >> no, i did i made almost the exact same call so we'll see what they report tomorrow given what home depot said today, i have every reason to believe that lowes had another strong quarter as well what will be interesting, home depot will host their conference call at 9:00 this morning and they will talk about the trend again, strong numbers. but we'll see what they say about business so far in the fourth quarter or first few week of november. >> brian, thank you. great talking to you i'm sure we'll check in again tomorrow with lowes. >> thanks for having me on >> brian, you're home? >> this is my home, yes. >> and you have on some wild like couch material jacket and you heard me say that and then ran up and put that's, did you do that? did you have time in. >> no, i was actually disappointed

this is my most boring sport jacket ever. i was going to run up and get something a little more flashy >> how much those couch jackets did you have, is it also the one or you go big couch hunting sometimes, don't you >> i have a pretty expansive collection i truly enjoy them >> you do have a collection. we enjoy them too. why did you think you're on so much it is little things like that when a guest goes through the extra effort to surprise us every time i mean, why not. it is tv, it is a visual medium. thank you. >> he surprised you this time, he didn't have it. >> look at him, i was like no, that is not nagel. >> mike, probably worth pointing out that home depot is a dow component, dow down by 99 points and now with the added pressure from home depot shares, now down about 182. >> yeah, so close to seven dow

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regulatory filing revealed a slew of changes to berkshire hathaway's portfolio in the third quarter. it bought 2.4 million shares of t-mobile and took on big positions in pharmaceutical stocks including abbvie, merck, pfizer and bristol-myers squibb. apple remains berkshire's biggest equity holding it sold most of its position in jpmorgan chase, from 22 mountain 2 million shares to less than a million. and also dialed back investment in wells fargo and pnc and cut its relatively new you stake in gold by 42%. >> wish i understood the rationale behind some of those moves. >> which moves >> jpmorgan. i thought this is the time that the banks have been hurt and -- it is above book unlike some of the other ones, but i don't

know, it seems like we're coming out of something that would be good >> he's built up a huge position in bank of america remember, he has really pushed up his position. he owns more than 11% of that. >> gold, the mining stocks >> i don't think gold was about him. my guess is the pharmaceuticals were him because it is $5.6 billion. that is a big position that is a massive part of the portfolio, so my guess is that these moves i would guess are you and/or charlie i would guess t mobile is not him. i can't imagine that that is him. but i could be wrong on that i don't think the gold was him, i think the gold was either ted or todd. so i think that moving their position in that is that and jpmorgan chase, a little surprising pnc bank a little surprising

i know he liked booth thoh he le >> and apple, that is such a -- a rounding error >> a small percentage. >> i actually wonder on the apple if that was something that they did or just sometimes they have moves that they make -- i don't even think that it is rebalance, i think at times they end up moving something because, you noerkts oknow, if you move funds or something in and out of it -- i don't know that but having not talked to him at all about this, but i was surprised to see the apple move and my only thought is maybe that was some shuffling somewhere >> the dollar commitment to apple remains just about exactly -- i mean, it is up so much that you trim back 3 aboutmentabout3.5%, and you still have a huge commitment to it and coming up, another

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good morning, everybody. welcome back take a look at the markets, you will see right now dow futures are under some pressure, but remember, it was a huge gaining day yesterday for the markets, up more than 400 points. and you saw the dow and s&p both hitting new highs yesterday. s&p 500 indicated down by about 15 points and then the nasdaq indicated up by 16 big news this morning including

amazon launching online pharmacy in the united states the service is called amazon pharmacy and it went live this morning. amazon prime members will receive discounts and get free two day shipping it means of course increased competition for drug retailers like walgreen's, cvs and walmart and all three of those stocks have been under pressure when the news first hit this morning, each were down by about 2%, 3%, and walmart shares up by about 0.7% probably less of a competitor. but i was thinking about it, i'm a very heavy amazon prime user, i ship everything. but i don't think that i'm going to leave either cvs or my local apothecary i keep them for specific reasons. cvs, so that when i'm traveling, if something happens that we need a prescription in a pinch,

i can go to a cvs that will be anywhere in the country and get that prescription filled immediately. or my local apothecary, i love them because i know them, they are very friendly, they will do things like mix up things that you can't get that are hard to find or they will also deliver things same day immediately great people and i have relationships with both of those for those reasons. i can't see myself switching any of our prescriptions to amazon prime at least right now >> and i can see that there will be obviously a core customer for all of these folks but i do think that amazon can skim away that kind of monthly prescription for somebody that gets it in the mail anyway and therefore there is just that added little piece of it the other part in tirms of the stock reaction, wall green's and cvs up 30% this month because they were considered to be perhaps beneficiaries of the distribution of the covid vask seen they are in all the value indexes, and those are getting

bought pretty heavily. so it seems like perhaps they were out on a limb when this news hit and you often see these kind of knee jerk reactions to anything amazon does, buying whole foods kills the supermarket stocks for a little while but it didn't necessarily last >> you like the service. i mean, i get front of store stuff, baby powder, stuff like that, but i guess that can easily -- you know i get baby powder but -- you know, chafing just much smoother operation with baby powder but you can get all those things delivered too, right what i don't understand, years ago ghe people people in rural get their medicine in the mail, so i don't see how this is that different. probably cheaper >> cvs has pushed a lot of people to take it by the mail. if you want to get it at some of

the same cheap price, they have been pushing to get it by mail too. for me, it is more of the safety factor of thinking, okay, what if something happens and i don't have somebody's essential medicine i know that i can get it filled anywhere at a cvs same day instantly and i've used that service when we've traveled. and my local apothecary, they are just great people. i prefer to talk to them and i see them and i know them and during covid, they have been delivering stuff to the door no problem. >> you need a brother that is a doctor i can get prescriptions anywhere anytime. it is really convenient. anyway, not everyone is that lucky. >> yeah. >> they will make it cheaper they will do it better you know, another thing, contact lenses should come in the mail >> i already do that, 1800 contacts >> santoli, you don't need anything except maybe a

multivitamin, do you >> i'm getting there denial it me is a pretty good strategy for now so we'll see >> state of denial >> yes meanwhile, the dow first crossed 20,000 in january of 2017. and yesterday saw an intra day all-time high just shy of the next milestone, 30 k the biggest drivers of the index for the last 10,000 points includes apple, which has nearly quadrupled, and microsoft oig a and salesforce and let's talk a bit about the markets. anastasia, good to see you so here we are, you know, past two mondays have a similar feel to them, i wonder what it tells you about where investors are positioned you saw this massive reaction to this good vaccine new, real outperformance in the reopening type stocks.

a little bit of underperformance yesterday for tech but yesterday was a muted version of that response and i just wonder, 2 1/2 months after this rotation has really begun, how you think things are. did you still need to reincrease exposure to the more cyclical areas? >> yeah, i think that the key word you said is the rotation has just begun i really think we're in the early parts of this rotation to more cyclical stocks and the reopening stocks that have several months if not several quarters to run. the big you news from moderna and pfizer, really big news the last couple months because thif they continue to be successful and joined by overs in offering large doses of vaccines that we could possibly vaccinate the bulk of the u.s. population by middle of 2021 so that is clearly a game changer that is not yet being reflected in the valuation of some of the epicenter stocks if you look at categories like

travel and mobility and real estate and bank, august of th ar most are down year to date and valuations are pretty depressed. so it will take more than one or two days to correct the underperformance so that is why i say this is likely a 2021 proposition and not just a couple of days of outperformance that we have seen and as far as why we've seen a more muted reaction to the moderna news, it is all about what is being priced in. and this was a more incremental step than what we got from pfizer, but it still argues for the continuation of the reopening trade. >> and of course you can never know precisely how much is priced in and how much is not, but we've been working under the assumption, have we not, that vaccine would be in the market beginning of next year i was looking at some stocks yesterday like booking holdings and uber, you know, casual dining, they are higher than

they were before covid so i guess how much is left to expand the values of those names to carry the market if in fact the big mega cap growth stocks will be on the sidelines >> yeah, some of the stocks that you mentioned, they are not necessarily pure plays and they have offsets. you know, you might have benefit from the the food delivery business so i think that is why some of the stocks are back to where they were before covid but i do think other stocks especially purely tied to mobility, purely tied to let's say multifamily, those are not yet moving sufficiently and still trading below their 52 week highs and the other side of that, we love tech and we'll continue to stay invested in tech, but i think that there is a rotation trade to be had in technology. what has done really well for your portfolio in 2020 are the stay at home stocks and the cloud computing stocks and for all the good reasons but as we start to venture out

into the physical world, i don't think what is priced this is that we'll use a little bit less individuvideo conferencing, we e a little less online delivery, as we go back to the office, we'll use a little bit less cloud. so i think that is yet to be priced in. if you look at some of the top performers, as some of the small and mid size businesses go back to an in-office setting, we are going to see a dropoff and again, i just think that it takes more than one or two days for us to find that right valuation levels for that reality. >> no doubt pulled forward a lot of future business, we'll see how much over the next couple quarters anastasia, thank you very much for your time. coming up, the s&p 500 admitting a new member next month, a special one, one that is getting a lot of play driving the stock higher and as we head to break, take a look at the biggest gainers in

the index this morning ♪ ♪ when disaster strikes to one, we all get together and support each other. that's the nature of humanity. ♪

♪ no one thought that they were going to do this before it happened, and everyone just did it. i think that's the way that human nature should be looked at. ♪ ♪ ♪ ♪

coming up, a big week for ehe le elon musk. spacex sends four into space and

tesla being added to the s&p 500 next month he is about to become the third richest person and as we head to a break, check out shares of draft kings, a $100 price target. deedp re than 100% impli u si we'll be right back. we live in a world of fees.

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as amy first jober, is to care for derek. everything i do is for him. when i moved to this apartment after six months, we need to connect with the world. i use the internet to keep him in the language, because that's the way to connect to my family's traditions. he has to know where he comes from. we need internet essentials. there's no excuse to not get connected. tesla shares surging on news that the company, the stock any twa, way, being added to the s&p p. phil lebeau is joining us. it was due >> i remember after they reported their q2 profitability which would give them four

straight quarters of profit and, people said it clears the way. i heard mike say that maybe the folks who decide who gets into the s&p 500 wanted to see the fever break a little bit and it did because it was up close to $500 back when they first did their split. now today you see this pop thi what, 12%, that's because the s&p has said, yes, we are going to let tesla into the s&p 500 n index. elon musk has every reason in the world to be danced right now. this video, we show it whenever there's good news about tesla. this is him when they were opening the plant and doing first deliveries in china. they will be joining the s&p 500 december 21st. the company it replaces has not been decided yet it will be one of the largest wait editions in the last s&p 500. the mechanics of how it happened, the dow jones indices

seas we're going to consult with the investment industry because of the size of tesla will it be a full float adjusted market cap all at once on december 21st or will they do it in two traunchs, and the second on the rebalancing effect sometime early in 2021 as you take a look at the market cap of tesla, keep this in mind, and i naeheard becky talking ab this earlier today, they are nipping at the heels of walmart. market cap, $427 billion i want to take you back ten years ago. you know what happened ten years ago today, guys? take a guess anybody? buller it's auto related. it's a tease the ten year anniversary of

bankruptcy, everybody saying man these guys are ready to go heard nobody talking about tesla. tesla was interesting, electric car company, a really provocative ceo but there was not nearly the attention that there is obviously given everything that's happened in the last decade for tesla and elon musk. but take a look at that market gap, $427 billion. >> wow >> gm, yeah, another ten years. >> joe, that's a tease i'll be back more with gm's ten year ipo anniversary interesting statistics with it. >> what's thebiggest milestone over the past ten years for gm, still being around i don't know >> you know what, and we'll talk about this in an hour. i mean, their profitability is the there, and you got to give mary barr and her team credit this last decade, easily the most profitable in gm. >> it's not the volt. >> no, it's not the volt and the

bolt those are not the milestones they're hanging their hat on it's a far different company than when they came out of the government mandated bankruptcy >> for more on tesla, let's bring in guests, and joining us is joanne lipman, a distinguished fellow at the journal -- at princeton, and i'm going to get to you, for the cult aspect, and the cult of mask, because there's something to that. i don't know if cult is a bad word by dannizen -- dan izen. if someone gave you the financials, income statement, balance sheet of a company and didn't tell you what it did, what it was, and you would look at profitability, earnings per share, whatever you're looking at know that there are some subsidies, and some special items what would this be worth,

would you think, tesla if you didn't know it was going t poine to traditional automobile companies. >> what would that be, a tenth >> i would say it would be a tenth to maybe at best in terms of where the stock would be today, and i think that continues to be really the battle between bulls and bears because i don't view this as a traditional auto company it's a disruptive technology company on the ev front, and i think that's why if you just looked at the numbers, you would not get to a valuation where it is today. >> so that's where he started to go into what i'm looking for from you, but so the difference between where it would be valued and where it is valued is due to a lot of things obviously, the cult of elon musk, but can you just opine on that and all the things that goes into that i know you're a deep thinker. >> sure. well, first of all, just to pull the camera back for a moment, i

actually think this is a bigger story than elon musk and tesla in that we're looking for this confirmation that electric vehicles are our future and that they're finally going mainstream, and you see it with every other auto maker that is rushing in to try and compete with tesla you just mentioned that hummer from gm, the electric battery powered hummer, you know, vw, you guys have reported on this, $86 billion they're putting in in the next five years into developing electric vehicles so you know, this is -- you reference, i actually think this charismatic, so much has to do with the charisma of elon musk you actually mentioned earlier, joe, you know, henry ford, people are trying to get the next henry ford. i actually think a lot about steve jobs you know, i've been around long enough to remember when he left

app and will th apple and came back. a lot of people were scratching their heads, the customers who brought the products were rabid. it was a cult. they loved the charisma of the guy, and i think that is also the big unknown with tesla because, you know, on the one hand, you've got this charismatic guy with this massive following, but on the other hand, you have to be able to separate the company from the founder and the kind of sometimes crazy things he says i mean, he just said a couple of weeks ago that they are going to be building 20 million cars a year within a decade will they? i mean, that's like twice as big almost as their largest competitor right now and he also said in march he said that covid would be down to zero cases in april and of course he was just diagnosed with covid over the weekend. so that would be kind of the question of separating the company from the hype and the founder and how does it do absent that founder? >> you get a lot of leeway, dan,

as a loose canyon non if you gea stock that performs like that. i don't know when i think that there was a problem. he gets a lot of leeway, doesn't he, so successful? >> if you look in terms of what he has done in terms of tesla. back a few years ago in terms of freon issues, and that's the heart of the story here. the one thing on the s&p 500, it's important, this speaks to profitability. that's why in your opinion they got the snub in early september. this is a validation of the feather and the cap for the bulls. no doubt he has the gold touch not just on tesla or spacex. >> we got to wrap immediately, and i got to take us to break. thank you, joanne, thank you, dan. "squawk box. we only have three hours we'll be right back. (♪ )

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stocks coming off a record breaking session as the world comes closer to getting out of this pandemic. we'll talk about the big move, your money, and what the economy is facing over the next several tough months. walmart's earnings in the next couple of minutes, and rumors swirling about president trump's media ambitions, the ceo of news max will join us to address the rumors of trump tv. the second hour of "squawk box" begins right now.

good morning, and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick, and mike santoli. u.s. equity futures down home depot accounting for a lot of that after reporting results that were so good that i think people are thinking they can't stay this good it's almost turned into a stay-at-home stock anyway, we've got the other biggie out now, becky. >> that's right. walmart earnings crossing the wires. bertha coombs has those numbers. >> reporter: good morning, becky, yes, walmart earnings came to $1.34 per share. that's compared to an estimate of $1.18 revenues topping expectations at

134.7 billion compared to 132.2 billion estimate same store sales excludeing fuel were up 6.4% that was well above the analyst estimate of 4% comps and 570 basis points or 5.7% of that was percentage points of that was made up of ecommerce ecommerce once again up nearly 80% year over year after nearly doubling in the second quarter amazon ceo jeff brigs says the company has seen the equivalent of three to five years of ecommerce growth this year, and he sees that momentum continuing, that whole omnichannel approach is right where they want to be, right where consumers want, and he likes the combination of assets. he believes customers will still want to shop in stores, but for now they are fine doing the c e

omnichannel approach he thinks it's working well for customers and for their operations telling me that it gives customers more of an opportunity to shop since it's not focused on the one day it lets them give associates date off on thanksgiving and when it comes to supplying stor stores, it helps take the pressure off the system which typically is geared towards a few days or black friday weekend and he added that he thinks that's a positive for both the consumers and for the store itself and their associates. he doesn't anticipate that covid spikes will have a major impact on holiday sales because they do have this omnichannel system they are seeing some stocking up, but not to the extent that we saw last spring and he also says that it's fairly regionally based in areas where there's more of a spike. they are seeing a little bit more of that meantime, covid related costs have come down a bit walmart spent 600 million in the third quarter, compared to 1 1/2

billion until the second quarter. year to date, they have spent $3 billion on covid costs. that compares to 7 billion year to date for amazon becky. >> hey, bertha, just looking through these numbers again. the comp store sales are phenomenal, walmart, u.s. comp store sales increased 6.4% we heard earlier, home depot were up by 25% 6.4% for such a big base you're dealing with walmart is incredible too and you look at sam's club comp store sales up 11.1% that tells you about how people are shopping during this pandemic i know the company thinks that some of these trends won't change, the way consumers are shopping right now, but you have to wonder how long something like that lasts once you actually come through a pandemic >> well, yeah, but at this point, we know we have still got a long ways to go near term well into next year before we could see that positive impact from

the vaccine and things going to normal the interesting thing is that they saw membership grow within sam's. they did launch walmart plus, and we asked about that. they are not going to give really any numbers but they are very comfortable walmart plus is short of their competitor membership plan to amazon prime but at this point, they have said that they're comfortable with what's going on there some analysts have said they may have signed up as many as 19 million people already >> wow you know, bill symon, the former head of walmart u.s. stores was on the in the 5:00 a.m. hour with brian sullivan and was talking about how some retailers are going to face pressure being able to take things they would normally sell on black friday when you have people cramming into the stores, and move that to digital sales you're looking at a shortage of issues in terms of how much fulfillment there is my guess is walmart is going to get much more of that than smaller retailers or retailers

who don't use online retail quite as much. what do you think? >> i think having the omnichannel is the real advantage here if you're just sending stuff digitally through the shipping services, you're much more at the mercy of when that stuff can be delivered if you can fulfill it from your store and have people come pick it up curbside, you think you have a bit more control and there's, you know, a better chance that you're going to be able to get something on time than if you're at the mercy of the shippers and already, i know that i have ordered things for two days and it's now taking three and four, you know, hey, i have to have a little patience from that, that kind of tells neme a little bit about what the holidays might be like. >> in other words, get your orders in now. there was huge news from amazon. you brought that to us in the last hour. want to tell us a little bit more about that for the people who weren't awake an hour ago?

>> yes, amazon now launching a full online pharmacy, expanding on the pill pack acquisition from two years ago remember it paid a billion dollars for pill pack. so you will be able to order online like you would with any pharmacy they will accept insurance, your pharmacy benefits and you can pay your copays with your fsa or hsa funds. but they'll also offer for amazon prime subscribers, they'll offer free two-day shipping on those meds, if you need them right away they'll give you a card and you can go to a physical pharmacy. they have some 50,000 pharmacies they'll be working with, and they also will offer a comparison tool, so what you might pay, similar to what good rx does, what you could pay if you don't use your insurance benefits, and in some cases, it could be a lot less. you could save up to 80% on generics of course, becky, that wouldn't count towards your deductible for the drug stores years ago we

know amazon has taken share from the front of the store in terms of a lot of us just ordering our bathroom tissue and paper towels and things once a month from amazon and the likes now they're come for the back of the store. the one thing i will say is that the drugstore chains do have a bit more to offer certainly when it comes to services they have really ramped up the ability of their pharmacists and put them front and center in terms of being that go-to resource, and being ones who can help you with things, not just, you know, your prescription. and of course right now with the covid crisis, they are a focal point for people getting tested and also for eventually when we have the vaccine for distribution of that vaccine so knowing that this amazon situation was coming, they've really tried to ramp up and change the purpose of their

stores and the role of their pharmacies rite aid, in fact, just launching a whole new revamp last week where they put that pharmacist more front and center. >> rite aid down by 11.2%. walgreens down by just over 10%, and cvs health down by 7%, and the etna tie up makes more sense now. bertha, great to see you and we'll talk to you again soon. >> unbelievable. what next, santoli, you there. he's my movie guy. you remember row bbocop, do you remember that there was one company. there was one company at that time >> amazon. >> we're headed there. it's going to be amazon. nothing else. >> we finished talking about walmart, and how there's not a weak point in their earnings, and a couple percent of gdp. >> can i still buy a book at amazon >> you can >> yes, you can.

>> you don't have to yet, though, but you can. >> think about amazon, think about that think about, i mean, there's a picture of him here at the nasdaq, becky, remember that picture of him, and you know what he looks like now. >> ringing the bell. >> yeah, exactly ringing the bell he looks like robocop. >> terminator, the guy we used to put on with the funny laugh now he looks like adonis classic the way the world works. >> you were talking about 30 years ago, buffet should have bought that company. that company didn't exist 30 years ago. i'm one of the early subscribers to amazon and i think my account goes back to 1999, 21 years ago. >> amazing, young guy. you know, i'm such a fan of the whole thing and capitalism and everything else. i feel bad for the people disrupted, though, because business is disrupted. it's the way things work it's very painful. >> a lot of ingenuity taking

place. the etna, cvs sergmerger makes sense. covid-19 cases rising, steve. this number is, you know, it's easy to say, hard to imagine 167,000 yesterday. the total in the u.s. now stands at 11.3 million, 247 deaths yesterday, and steve liesman joins us with a look at how much the current outbreak will bring down growth this quarter and how much a vaccine could bring it back how did you do this? >> joe, let's take a step back, at least in my reporting career never has the market's optimism about the future had to look through a grimmer present, a vaccine and a return to normal sometime next spring, expected only after a surge in cases, a large rise in deaths, and for

the weakness in the economy. greg daco at oxford economics writes, the economy's main growth driver consumers are poised to pull in their horns, under pinning an abrupt growth slow down in the current quarter. gold mgoldman sachs, they have their estimate from 7% to 3.5% the first quarter risks are to the downside okay, but beginning in the spring of next year, goldman adds back 3 points because of the positive effects of the vaccine. i talked to health experts, they say the surge and the vaccine, they're closely related. the worst situation before the vaccine is deployed, the less help the vaccine provides to the broader nation and the recovery. dr. bruce lee professor at health policy and management at kuni, if the virus goes unchecked, so deep in the pandemic that the vaccine alone

will not be good enough to return us immediately to normal. the more people infected going in, the more cases lee's model predicts even after the vaccine is out there in the broader country. add to that, a lack of additional relief for unemployed americans and struggling businesses and it's clear, guys, the news the next several months is going to really test the metal of the market's optimism joe, i don't judge the market. i just sort of stand back and look in amazement of how it looks through what's coming the next couple of months. >> it does, steve, and i mean, i hope we have four vaccines eventually, and i hope the therapeutics, there's still some positivity on the therapeutics, the number, 247,000 deaths going up to possibly over 300,000. and this is purely just a

signing point, 4.5% mortality to 30% of the country eventually getting it we talked to dr. scott gottlieb yesterday, and that's just simple math, if you do .45 times the number, whatever that 30% represents it's going to continue to -- >> joe, we have this chart up here i'm sure you can see it there. that's the projection from the controversial, what is it, ihme model. it's been right, it's been wrong. the bottom line is i'm waiting to see how they adjust the dotted line. do they bend it down in anticipating a curve we talked to them yesterday. they said they're currently looking at that and see if they're going to adjust that projected death number down as a result of the deployment of the vaccine and when that will bend, is something we'll watch carefully and by how much it bends. >> all right steve. thank you. it's very difficult to, you

know, to try to forecast gdp based on something like a pandemic i don't know how, what do you think your margin of error is on all of this stuff. it's got to be huge, i would think. >> it's large. they did a good job forecasting the downturn, joe. you know, we follow that almost every day, we did a rapid update they were too pessimistic about the upturn in the third quarter. that's part of what would happen the economy has been more resill yenl -- resilient. it's come back faster. we don't know how much the stimulus pushed that along, along with underlying strength here we'll have to see, joe, how this economy behaves and how it works in the absence of further relief at least at the moment >> okay. steve, thank you, steve. we're moving on, becky >> when we come back, andrew joins us for a preview of what to expect from the conference which kicks off today. obviously tough to pull this off

in this environment but the show must go on this is going to be the first ever virtual dealbook, he's going to tell you all about the huge lineup he has when we come back before we head to the break, though, let's get a check on the markets. right now, looks like the dow is indicated down pi by 116 points, nasdaq up by 40 points "squawk box" will be right back. did you know that geico's whole 15 minutes thing... that came from me. really. my first idea was "in one quarter of an hour, your savings will tower... over you. figuratively speaking." but that's not catchy, is it? that's not going to swim about in your brain. so i thought, what about... 15 minutes. 15 percent. serendipity. 15 minutes could save you 15% or more on car insurance.

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big day today if you don't already know it is the dealbook conference hosted by our very own andrew ross sorkin, it kicking off later this morning andrew joins us now with more on this this is a little different this time i know this is the first ever virtual dealbook conference but you still have a huge lineup of guests that are going to be joining. >> we do it's been a bit of a wild ride to try to make this happen we typically have done this at lincoln center with an exclusive group of 4 or 500 people

this year we're expecting tens if not hundreds of thousands of people to join us. to do so we have been preparing like crazy the last 72 hours, doing it from the new york times center i'm on a stage by myself it's going to be a little bit eerie. we'll be broadcasting the best bits for those who want to join us, go to nytdealbookconference.com to do that, and we'll be bringing you all the highlights right here on cnbc over the next two days here's what's on tap, we have masayoshi son, then we have dr. fauci, that's going to be coming up later in the day followed later in the afternoon bill gates is going to be joining us, along with albert bourla of pfizer, dr. heidi larson of the vaccine conspiracy project and at the end of the

day, elizabeth warren and we kick off tomorrow morning with jamie diamond, there's a lot on tap over the next couple of days you'll see it here so much of it on cnbc, and as i said, if you want to join us live on the virtual platform, you can do that by going to nytdealbookconference.com. that's the story >> is this is the first time it's a two-day conference too? we miss you too. >> first time we have done it two days my view was, and we'll see if i'm right or wrong about this. people used to be willing to sit for a day and come together. and it's going to be a little bit of a second screen situation. people will dip in, dip out, watch the interviews and participate in the conversations that they want to participate in, perhaps they won't on others we'll see how it goes. it's going to be an interesting experiment i wonder long-term whether these live events become bigger in

some ways because i think there's actually going to become a hybrid model in the future, which is to say i think there's going to be people in the conference, if you will, and then there's going to be people joining virtually in the future. we'll see. it's all a grand experiment here in 2020. >> i have to say, i like it from the conferences that i have done that i have been able to do, you can get more accomplished. i can still see more of people that it would have taken me a lot longer to try and get to some of these conferences, carve out the day for it it's not always easy to do that. if i can get the highlights and see the interesting interviews, and hear the big thoughts coming out of this. i'm okay with continuing that hybrid model, even after things go back. >> right we're hoping -- what i'm hoping to do is make it as interactive as possible. that's the beauty of a great conference because you get to make friends, have conversations, learn from each other. people ask great questions, and that's what we're going to try to do in a way that i don't think is being done in a lot of other virtual conferences. as i said, it's an experiment.

we'll see how it goes. >> so masa son coming up at 9:00 a.m looking forward to that. obviously this is a really important interview. he hasn't spoken publicly in a very long time. >> he hasn't spoken in about a year and a half, maybe a little bit longer so much has happened at that country, obviously a major pivot for that company at one point this year, that company had lost $50 billion in market value they were pushed by elliot management, the hedge fund, they have pivoted to sell assets. i mean, he has sold so much over the last year. now he's been raising cash, what's he going to do with that cash what's the future of technology investing look like? we're going to be asking him all of those questions and more. he's a big investor in bite dance. of course parent company of tiktok, so there's a lot on tap to discuss with him, and then of course dr. fauci there are so many questions i think all of us have about these new very exciting vaccines on one hand, but the schizophrenia of the headlines given the

positivity on these covid cases that we keep seeing rising. >> andrew, the governor of massachusetts is a republican, is that correct? getting to senator warren, i don't think she can be treasury secretary because they would put in a republican senator. are you going to ask her about that >> 100%. 100% joe, tell me now you should come. by the way, becky, you should come and we'll ask the questions. >> our invites are in the mail, is that what we decided, it could be a covid thing our invites are in the mail. what happened, becky >> hey, it's all electronic. it's virtual >> well, then my internet must have broken down, becky, how about you. send me a password then, sorkin. is there a password. >> i saw it on instagram if you can click on andrew's instagram thing and get an invite there. >> it's free to everybody.

>> okay. >> it's very egalitarian anybody who wants to participate this year can absolutely join, which means you can join, joe. >> even me, now that's egalitarian. >> it's going to be amazing. you know, how does jamie diamond, they get along okay, senator warren and jamie diamond, but there is a natural sort of, i would think, not a true love between those two. it's not going to be live. they're not going to be together >> they're not together. but maybe, i imagine there will be something that senator warren will say that we will ask mr. diamond about, no question >> excellent. >> so instagram, huh, that's the thing my kids have i'll look into it. >> on twitter. >> can i get it through parler, i'm not on twitter anymore. >> i haven't set up my parler account but i'm working on it.

>> look wahat's coming up, chris ruddy from newsmax

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welcome back, a few headlines, home depot reported

quarterly earnings of 318. comparable sales more than 24% in the quarter you see the stock backing off. walmart beating wall street forecast, suggested profit of $1.34 a share. that compares to a consensus estimate of 1.18 walmart saw better than expected comparable store sales and amazon has launched an online ta online pharmacy in the u.s., offering discounts to members of amazon prime program and free two-day shipping becky. >> mike, thanks. still to come on "squawk box" this morning the ceo of newsmax speaking out on the idea of trump tv. chris ruddy will join us after the break skpnc. and we are on tesla watching this morning, joining the s&p 500 index on december 21st the company currently worth over $400 billion that's more than 95% of the benchmark index's current members. check it out that stock up by 13 1/2% on this news this morning. "squawk box" will be right bac k.

. air bnb, plans to trade under

the symbol abnb on the nasdaq. the company made $219 million in net income last quarter on revenue of $1.34 billion and that is reversing losses during the pandemic, and earlier significant losses the founder actually cut costs and kind of revolutionized what the company actually was trying to do. a lot of people left the cities but didn't want to fly and that meant they could go to neighboring communities in an air bnb. i initially thought how could this possibly work because i just can't imagine going into someone else's house we now know surface transmission of covid is not as likely as people thought, and air bnb at this point could almost be seen as a stay-at-home play in that hotels, the losses that hotels

that are in cities had has been some of that slack has been taken up by air bnb. pretty amazing very agile move by some of the management at air bnb to get it in shape for this ipo. president trump has yet to concede the presidential election, but the speculation continues. amazing that we got chris ruddy here more on that and the impact through the news media let's welcome chris ruddy. thank you for joining us starting from scratch with a conservative outlet with, i guess, you've got your sights set on fox news to some extent, chris, not exclusively but fill us in on some of the strides that you have made lately because it's pretty significant in terms of ratings and success. then we'll get to trump tv and whether that's a possibility, but i have been seeing some metrics that i thought i was reading them wrong >> thank you, joe. well, news max has been around for a while. as you know, we started in the 90s as a digital media company

we have become one of the leading cable news channels. we are now on every major cable system in the united states. and recently in the past eight months, i would, our audience tripled before election day because of the great programs like greg kelly reports and sean spicer is others that we have had on, and then the election, we have just really boomed people are turning off fox even brian stelter at cnn said we're cutting into fox's audience. last thursday night, nielsen reported that we had over 1 million people per minute tuning in, and i say that tells half the story because we're also free on a lot of ott devices, like roku and you tube live which fox is not, and we think that almost doubles our audience when fox says they're getting 2 million a minute, and newsmax is getting 1 million, and nielsen, we're cutting in people want a consistent good

quality news product fox has been around a long time, and i think that they have had a lot of market share. they control about half the cable market >> i'm sorry i want to get to so many different things it's not a typical business model with sub fees and advertising. how did oes it work? are you paying to be on some of these cable outlets and are you profitable or? >> i can't disclose our affiliate agreements and how our deal structure is. we know that when fox started in the '90s, they paid about $10 a cable subscriber to get on, and they did that over four or five years. newsmax is on all the cable systems. we are also in our initial start up phase on all the ott devices. we are largely based on advertising, as a revenue model. that is going exceedingly well ad sales have doubled in the past several months. we're expecting it to double

again in the next three to four months >> i wonder about the -- even on fox, if i don't want that gutter thing, there's nothing else on fox that's being advertised. it makes me wonder whether fox has all the advertisers that they want. it's either that or something that seb gorka is selling me, snake oil elixirs and stuff. >> fox gets most of their money from affiliate fees. newsmax poses a real risk to them because as cable operators see they could replace fox with newsmax, it will definitely drive down their affiliate fees. could be catastrophic for their stock price because the first operator that does it, typically in the industry, all the other cable operators get the lowest rate so fox, i think, more what the weather channel did, what happened with them they used to be worth billions of dollars they have seen a rapid decline,

and i think newsmax is on the ascent >> and i'm sorry to keep -- i apologize, but i want to get to so many things, so the hicks news story that was in the front page of the "wall street journal," trump associates raising $200 million to buy newsmax as a fox news alternative, and it would be like trump tv or something you know, tom hicks, and you talked to him, but this was never discussed? >> look i don't want to reveal private discussions but i do know the hicks, i respect them, they're a great investment bank. they have done other media deals. everybody is trying to say they're doing trump tv i don't know if that's true or not. you should ask them. first of all, i think newsmax, we know our valuation is higher than $200 million so i don't know where that number came from you know, sometimes through the years we have had a lot of people approach us, joe, to buy newsmax, invest in newsmax, these are oftentimes very informal discussions they're not formal, and i think,

again, you know, the hicks family, very respected, but we had no -- friends with him a long time. the hicks family have been friends with him a long time i think they're reading into it a little too much. >> okay. and we talked about the conservative outlets, there's something called parler, and i think this was a fake parler post that said tucker carlson was headed over to newsmax, i don't know, maybe -- i don't know what the implication was for why he would do that i would think you would need that 200 million from tom hicks to get tucker over to newsmax. he said he's not going to do that he's going to stick around at fox. there's a lot of interplay, a lot of movement this thin this right now, a lot of conjecture, i don't know if that's true. >> we're in no discussions with tucker joining newsmax, we have

a great guy leading our nightly programming and doing incredibly well look, i respect a lot of people over at fox. i respect rupert murdoch for what he did in building fox, he was a pioneer. >> is that what you want to do, chris, replace fox news or at least compete in that space, and take market share primarily away from them? >> cable news market is a $6 billion market. fox has had half of it they have no competition we are the first we have the distribution now to compete with them head on. and i think that the country needs -- fox was very schizophrenic, joe, in this previous election. in its support and consistency about the president. i think newsmax was consistently supportive of the president. i think he was very disappointed, he has told me personally that he wasn't happy with the fox news coverage, and you know, the election night where they called arizona but they wouldn't call florida and a

number of other things, you know, they won't report on vote fraud. newsmax is talking about that. we don't believe there's a conspiracy but we are talking about those issues, and i think the president should have the right to contest the election if it's that close. >> but saying that fox wasn't -- that you were supportive of the president and fox news wasn't supportive enough, does that make you a news channel or does that make you like an activist or a pac >> i think that news organizations have editorial perspectives, cnn and msnbc have consistently had an anti-trump messaging going on over there. >> you're kidding? >> newsmax, while we can be supportive editorially, we report both pro and con about the administration all the time. and if you go to our web site, you'll see that. generally, you know, truth in advertising, we have an editorial point of view that supports free markets, supports free enterprise, less tax cuts, strong defense these are issues that the president supports

and i think as a news organization, i look at "the new york times," i think that is the most liberal, you know, sometimes it looks just like propaganda, and people say it's the respected "new york times," well, give me a break. >> you make some very cogent points, chris, and i'm looking at how newsmax seems to be on the rise we all love competition. i bet you fox news welcomes the competition as well, the bigger the pie, it just expands it for everyone and we wish you well and wish you luck and appreciate you coming on, and we want to check back in with you, you know, in the future for an update >> thank you, joe. glad to be on. >> okay. great to have you. mike. coming up, gm sales have been soaring, yet its investors have not been rewarded over the past decade. phil lebeau takes a look at the company coming up next, and check out the futures at this hour

looks like we're going to be backing off on the dow and s&p 500. the s&p 500 up 11% this month, on track to be down 20 points, the dow down 220, the nasdaq, though, is the out performer for a change, up 25 points at this hour "squawk box" will be right back. ok, just keep coloring there...

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gm has had its most profitable decade ever, investors have not fared quite as well. phil lebeau joins us with more >> let's give you the glass half full and half empty look at general motors it you take a look at the stock, and we're talking about in the last year. you're looking at a stock at a 52-week high getting close to trading at its all time high, just over 44, $45 a share. things have improved substantially over the last six months take a look at the stock since its ipo when it came out of bankruptcy, ten years ago today, and if cryou take a look at the stock, it's been dead money. net income of $55 million, they ever profitable. the problem is this is a company that has just not been able to get investors behind them, and say, look, we see future growth here so they did emerge from

bankruptcy, remember, it was a government mandated bankruptcy, a leaner, more profitable company. it was ten years ago, we were at the new york stock exchange when the first day of trading was taking place, and i remember at the time we were talking with gm executives you were talking with fund managers and almost everybody said the same thing, look, it's starting at $33 a share. it's going to take off 60, $70 by the end of the year what's happened since that ipo, they have exited europe, 40,000 fewer employees, it is a leaner company. they have stopped selling cars with the exception of the corvette, and they have started the pivot to electric vehicles having said that, when you compare general motors with tesla, and this is a good comparison to make today, take a look at what's happened to general motors over the last ten years. the stock up 53% you know what's happening with tesla, guys, more than 11,000% higher since its ipo which was also back in 2010. >> phil, that entire time over the past decades, investors said

it looks cheap, the narcotic is unwilli -- market is unwilling to give the company credit for whatever is inside of it. is there any rethinking about how to change that story at all? >> i think they look at that possibility but i don't think they're to the point where they say let's spin off the battery bi business for example there's great assets in general motors, and mary barr believes they can use the assets to grow the company overall, they are not looking at a situation where they're like, okay, this part is dead, let's just cleve it off. they have been strategic when they have made those types of decisions. for example, getting out of europe i mean, that thing was -- that was just a terrible business for the longest time, so for now, what they're saying is, whether it's electric vehicles or any of it advanced technology, they want to keep that within the company. >> phil, thanks very much. when we come back, jason

trenner on the market's big move. senator rob portman on the latest vaccine news and the chances of a stimulus deal slim to nothing. we'll be right back. ♪ sofi made it so easy to pay off my student loan debt. ♪ they were able to give me a personal loan so i could pay off all of my credit cards. i got my mortgage through sofi

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success. it is the second vaccine to prove over 90% effective in preventing the coronavirus at least in the early testing that's been done joining us with more on the big market move and what's still in store is jason trennert, the chairman of partners, you have a thoughtful way of looking at this, what do you think right now given all the backdrop of the covid cases climbing but also these vaccines being out there. something that hopefully by next year we'll start to see a broader dissemination of. >> well, becky, i think from a market perspective, this is going to be a little tricky period of time here over the next couple of months. it seems to me as you mentioned leading into the commercial, it's going to be very hard to get a fiscal stimulus package. divided government is good when you don't want governments to do anything, which is in my opinion, most of the time. i would say now, you want the government to do something if we're going to pursue the lock down strategy, you need fiscal

stimulus that's important i think the lock downs are going to lead to a slower economic activity in the fourth quarter and perhaps in the first quarter. and it's going to be hard to determine what's real and what you should look through. by the same token, i think starting in the second quarter next year, you're going to see a rapid expansion in the economy what that means ultimately for our hedge fund clients, we're telling them not to chase the market here. the risk/reward is not that positive we're telling them you could look for better entry points on the more cyclical stocks. >> so the market's looking through the next several months but you think that's going to be a real challenge, right? >> i do. because i think there is a not insignificant chance that you have negative gdp in the first quarter, you know, and it's very unlikely for the fourth quarter, but it is possible in the first

quarter given the fact that we're locking big parts of the economy down, and given the fact that kroyou're not going to get fiscal stimulus. fiscal stimulus was critical in the rebound. we had a deficit of $3 trillion. $2 trillion more than we expected so we tripled the size of our deficit, and all of that money was spent. you're looking at something like 16 to 18% of gdp, which was dumped into the economy, which got us through the night, if you will now, you know, you're not necessarily going to have that for a couple of months at a period in which the weather is changing, other things are changing, which a very critical period of time for the year, the holiday season, for certainly a lot of retailers you know, the markets might be okay the real economy, i think, is going to suffer, and it's going to be hard for, i think, investors. most of us are subject to linear thinking if you start getting bad economic news, it's very hard to kind of just completely look

through it in my experience. >> jason, what's fascinating about it, as we have been fix sated on things like fiscal stimulated prospected or lack thereof, this is a global rally, the total world index breaking a new high, the nikkei on the huge roll what do you make of that in terms of the entire world saying we have to make a grab for equities at this point >> yeah, well, mike, you know, i think it's a little bit reflective of the rotation i don't want to overstate it, but u.s. is very much of a growth orientation in terms of its sector weights, and developed international and in particular to a less extent emerging markets is quite cyclical, right, in developed international, you have financials are a big part of the indices. energy are a big part of the indices in emerging markets, it tends to be basic material i think it's reflective of kind of the rotation that's happening

here, and don't want to sound ethno centric about it we are kind of leading edge of the sphere in terms of market flows. i have been watching the italian market closely, and you're right, italian market, despite the fact that it has severe lock downs going on right now, the market's actually been pretty strong i think in many ways, this financial crisis is legitimizing deficit spending in the way it legitimized quantitative easing. there are no rules until the market says there's a problem, and right now there's -- the markets are not acting as a vigilante in any way >> got that right. hey, jason, good to see you, and we'll talk to you again soon thank you. >> take care. and coming up, we will talk to senator rob portman on the rising virus case count and the

possibility of another round of stimulus as more states tighten restrictions, and later, atlanta inusn eident rafael bostic jos ianxclusive interview to talk the covid economy and recovery "squawk box" will be right back. sales are down from last quarter but we are hoping things will pick up by q3. yeah...uh... boss: doug? sorry about that. umm...what...its...um... boss: you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today.

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good morning, dow 30,000 is within sight but futures are pointing to a bit of a pull back when the opening bell rings. a move lower from one big retailer playing into that, we've got quarterly earnings results this morning from walmart, home depot and kohl's and we've got government retail sales data at this hour. and a prescription for success, amazon jumps head first into the pharmacy business, and the traditional players are getting hit hard the final hour of "squawk box" begins right now good morning, and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick and mike santoli andrew is off today. u.s. edquities are pulling back about 200 points after a record

high on the dow. home depot part of that. nasdaq is trading higher treasury yields, i think we're at is somewhere around where we were yesterday, .885 still having some issues getting back to 1% becky, you're going to talk some big retail numbers walmart, home depot. we're going to talk about amazon i didn't get to talk to you and mike i think mike is not around right now, about air bnb, turning a profit, and i couldn't understand it because we have talked about it so many times. do you have people into your house? or do you go into their -- or sleep in their sheets. neither one sounds great >> if you're travel, they have been doing better. a lot of people say they don't want to go in a hotel where a bunch of people have been sleeping there you feel safer if you're in a house and you have the whole thing and you can control it i get it if you have to travel. i did have to travel last month and the month before >> driving to places instead of

flying you're in a city and you go to a community nearby has an air bnb. it's a stay-at-home stock even though you have to leave home to go there it's crazy. >> feels safer feels safer if you can control the house, yeah. >> did you think about that santoli, how air bnb returned to profitability in a covid, surface to transmission not that common you don't need to disinfect the entire place necessarily. >> massive cost cuts i looked at the numbers, big year over year revenue declines. we have used air bnb, and the extended stays are actually a big deal right now people looking from the city to get somewhere else, and maybe stay there for a month or two. and it works pretty well, as you say, especially relative to a hotel. >> right and the reason we're talking about it is unveiling the paperwork for an ipo in this environment, so little did we know that air bnb could flourish that guy is smart, agile to

reposition that company. >> very smart, and we had the -- i think he's been out renegotiating. i don't remember if we talked abtd about it yesterday, they extended some of their big cloud computing contracts with amazon, was able to do that. this guy is a smart guy, like mark said, getting cost controls, making sure they're very careful with that stopping some of the bigger plans to think that you're going to take over the world for different things, and focus on what you do well i don't go out much, but i have rented two places, two houses in the last couple of months for travel that we had to do felt safer to be in a house that i could control. >> and they got around some of the crazy stuff that was happening back then, you know, the -- prostitution is bad voyeur cameras, hidden cameras, bad, bad in the bathroom when you go there big parties, you know, thousands of people, bad drug dealers bad so, you know, but these a all

obvious. i was struck by the hidden camera thing i was like, oh, my god, i didn't think about that that's perverse. anyway, let's move along. >> had to jump with you to follow you for a minute there. but let's talk about some of the big name retailers you mentioned. we did get some reports, quarterly results this morning, home depot crushing same store sales estimates, unbelievable, 24.1%, versus a forecast of an unbelievable 17% so really knocking it out of the park even more than expectations earnings and revenue beat what the street was expecting as well but the stock is lower this morning. check it out, down by about 1 1/3% making temporary compensation enhancement programs permanent paying the front line hourly workers getting them through the pandemic and making sure they could serve all of the customers coming in, that's going to add about a billion dollars a year to employee costs. they did say that this is something they think is really important, that their growth, no matter what the economic cycle

looks like, depends on keeping front line workers happy and making sure they are big players. walmart beating analysts at the top and bottom excludeing fuel, nicely beat estimates. it was something like 6.1% just in the u.s. comp store sales, 6.1 or 6.4 digital sales jumped nearly 80%. check that out right now that stock is up about $0.45 kohl's posting a surprise adjusted profit of $0.01 a share, versus estimates of a $0.43 per share loss the comp store sales fell greater than expected 13.3%, as covid restrictions weighed on store foot traffic not as many people coming in as you might anticipate stocks off by 1 1/2% don't miss an exclusive interview with kohl's ceo michel michelle gass coming up on

closing bell. ylan mui is covering today's high profile testimony in congress from some of the country's big tech ceos. first, this is convenient. mike santoli is coanchoring, watching pharmacy stocks, doing double duty, after we got news that amazon is getting into the business in a big way, mike. >> look at amazon, actually get a little bit of a lift on this news i think in general terms it was somewhat anticipated they made acquisitions in the area but you see the stock which has been somewhat in pull back mode there's that early september high, bouncing a little bit up a couple of percent today. it's kind of layering in more value, more perks to the prim membership among other things. look at the impact on the direct competitors, things like cvs and walgreens boots alliance retail pharmacies, drug stores, as well as pharmaceutical distributors, kind of the middle men in there, and you see they were up huge month to date that's an interesting thing.

especially walgreens and cvs up 30%. rite aid up 40%. month to date. they thought they were going to have a role in the vaccine distribution in covid, and the rotation into value, and going out stocks they're having pretty sharp pull backs this morning in reaction to thchlt this is this is a knee jerk reflex that you have seen the market do in the past keep in mind, when amazon bought whole foods, back in 2017. remember the impact it had on kroger shares, the other big publicly traded grocer in the market right now if you look at a four-year chart of kroger, this right here in 2017, was, i believe, the big drop in mid 2017 is when amazon agreed to buy whole foods. it was already kind of a weak stock. it bottomed out there, and did come back, of course, you having the benefit here of the stay-at-home trade as well in other words, it's not always the immediate verdict that the market goes to when it comes to the impact of these things that's going to be the lasting impression, guys >> mike, thanks, we're going to

talk much more about amazon a little later this hour right now, let's get to ylan mui, she has more on the tech ceo hearing in congress. good morning. >> good morning, becky big tech is back in the hot seat on capitol hill with twitter ceo jack dorsey and facebook's mark zuckerberg testifying before the senate judiciary committee both of these men testified before the election when political passions were at their peak, and they just got hammered by republicans and democrats now, after the election, i do think there's still going to be some fireworks but expect both of these ceos to emphasize how they worked to secure the election, and how they want to work with washington in the months and the years coming up now, twitter, for example, is going to highlight that it labeled 300,000 tweets as disputed or potentially misleading during the election 456 of them were covered with warning labels or somehow had their engagement restricts and about 75% of the people who

actually saw those posts saw them after they had been flagged. i got an early look at dorsey's testimony, and he plans to say we want to be very clear, we do not see our job in the space as done our work continues and our teams are learning and improving how we address these challenges and earn the trust of the people who use twitter. meanwhile, i'm told that facebook plans to highlight how it took down false claims around conditions at the polls and displayed warnings on 150 million pieces of content. zuckerberg plans to call for regulations on privacy, elections, as well as data portability, and he does support updating section 230, the industry's liability shield, so becky, we expect to see the ceo's trying to extend a hand there to lawmakers but really unclear if anyone's going to take them up on that back to you. >> definitely unclear. we'll see if the comments help to assuage any of the concerns, especially that republicans have had. thank you, good to see you.

when we come back, critical new retail sales data. we're going to be watching the market reaction closely, and we'll ask ohio senator rob portman about the midwest covid surge and if he sees any chance of stimulus. and the company is going to be entering the s&p 500 index next month up 13% now on that news. stay tuned, you're watching "squawk box. and this is cnbc before we talk about tax-smart investing, what's new? -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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hospitalizations related to the coronavirus are jumping and hitting a record in the u.s. according to the covid tracking project. meg tirrell joins us now with the latest on this trend good morning, meg. >> good morning, mike, we are seeing records across case numbers and hospitalizations cases in the 7-day average, more than 150,000 every day here in the united states. hospitalizations now up to 73,000 that is higher than either of the previous peaks we have seen. the previous record being 70,000 in april, and of course these hospitalizations are more distributed across the entire country. deaths on the rise now, the 7-day average, 1,128

now, this is really happening across the country, but if you look the at regionally where is being hit the hardest, the darker states are those that have the highest per capita new case numbers per million people. you can see that that's happening in the midwest, states like minnesota, wisconsin, north and south dakota, alaska also being hit very hard. but really, we are seeing cases rise essentially everywhere. but, guys, we of course got the good news that we have two vaccines with more than 90% efficacy we've got pfizer's last week at 90% plus, moderna's yesterday 94 1/2% efficacy we talked with operation warp speed chief adviser about the next vaccines to come and where he thinks those will come in in terms of efficacy. here's what he said. >> i expect most vaccines to be effective but some will be 80%, and others will be 95% we did want to have a portfolio of vaccines with different technologies because some vaccine profiles may be more

pertinent or appropriate for pediatric use. some may be better for frail, very old individuals i think having the choice and the opportunity to mix and match the best vaccine to the right population is the right way to go. >> so, guys, where do things stand? well, take a look at this graph. you can see moderna and pfizer, they have completed their grafs. the little stars means they will submit for fda soon. astrazeneca, they are expected to have data by the end of the year or early january, and following behind that, we are expecting phrase 3 trial starts in the u.s. from novavax toward the end of november into december that's what moncef was talking about with the follow on vaccines we have to see if they shake out

with 90% efficacy as well. the hopes are high, we'll have to wait. >> thank you so much you have two vaccines showing 90% efficacy in clinical trial the next step is authorization by the fdament to talk about thris, we want to talk to our next guest, participating in johnson & johnson's vaccine trial. senator portman, good to see you. >> good to see you guys. >> before we talk about your involvement in the j and j trial. let's talk about what's happening with covid, where things stand it has been rocketing across the country, especially min the midwest. i know ohio has had its struggles. what's your take, seeing what you see and hearing what you hear from your constituents. >> as our last report indicated, the midwest is being hit particularly hard. it's all over the country now, and sadly, the phase 3 that many predicted has happened, as

people have moved indoors, the weather has gotten colder. we have more cases in ohio, more hospitalizations, more icu and sadly more fatalities. i think, becky, masks are a good idea i have mine on this morning. i wore my ohioan, just for joe social distancing very important but the most important thing we can do right now is get these vaccines out and on the market, and we have to ensure that people are actually going to get vaccinated it's one thing to have the vaccines which i think will be ready by the end of this year, so really in just a month and a half, but we got to be sure that people are willing to be vaccinated the reason i participated in the trial is because i think the vaccines are so important, i started 12 days ago, before we learned about moderna's and pfizer's great success, the 95 and 90% efficacy this is the most important single thing we can do second, e learni learned from ao company servicing many of these contracts around the country that it's difficult to get

people to join the trials. i thought by doing it and going public, we might get people to do it. it's a great idea. relatively easy to go through the process, you keep a diary and so on. they're professional and courteous, and i encourage more people to do it. finally, the numbers about people's willingness to be vaccinated are scary to me because the gallop poll from october, the latest data we have shows that 50% of americans are not comfortable with getting a vaccine right now. i think that's partly because of what happened during the campaign, which was very unfortunate where you had some people saying that the vaccines were not safe because the trump administration was in charge i mean, these are fda professionals, these are scientists that are taking extraordinary measures to be sure it's safe, and so i want to encourage everyone, you know, to participate in a trial if you're comfortable doing that, but certainly to get the vaccine when it's available. >> senator, let's just talk about you started this 12 days ago with the vaccine

correct me if i'm wrong, i thought johnson & johnson is a one dose shot versus the two shots that you have to take with both fizer a pfizer and moderna how do you feel? >> i feel great. and 50% of the people get the placebo. 50% get the actual vaccination i don't know which i got i feel great and again, i keep a diary, and every monday and thursday now i report back as to whether i have symptoms, and you know, it's easy to go through, and again, i encourage people to do it. the more people that participate in the trials, the sooner they can get to the fda for emergency use authorization, and the quicker we can get it out to the american people, and this is so important. i mean, it's a much better solution than lock downs it's a much better solution than keeping people out of school and out of our churches and other places of worship. it's the most important stiingl thing in my view congress ought to pass a covid-19 bill in part to provide the necessary funding to ensure that the vaccination progress continues. warp speed has been

unbelievable it's been unprecedented how quickly this has happened compared to other vaccine development. it's being done carefully with scientists taking the lead, scientists calling the shots but they need to have additional funding from the federal government because the government is essentially providing the funding for the manufacturer of the vaccines while the studies are going on and if the vaccines end up being successful in getting approval, they'll be ready to go that's expensive and it's important to be sure the resources are there for that i think it's the best expenditure of taxpayer money that i can think of. >> it's expensive and it's also complicated and yesterday, joe biden complained that the current administration's lack of cooperation with his incoming administration is starting to create a problem, especially in terms of dealing with covid. what would you say to that point? >> i would say two things, one, the professionals like tony fauci are going to be there, and that's good because the institutional knowledge will be there. not just at the fda but nih, and

professionals like dr. fauci and others who run the task force. i'm not so concerned about that, but second, during this period of time, of course information should be shared, and that can be done. i don't see a problem with that. i think the skurecurity briefin are along the same lines i think the president deserves a chance to have his court cases be heard, and get the final recount, and every vote needs to be counted and that's not going to take forever. in the meantime, i think it's important to provide information to ensure we don't lose track, but again, i think in the coronavirus case, many of those professionals who are currently working on it and are very involved with warp speed as an example will continue to do so because they're not political appointees >> let's talk about the idea of a stimulus package starting with the money being there to make sure these vaccinations are put out. that's a huge issue. how do you have both houses of congress saying okay at this point we're going to go on vacation we're going to leave and go back

home for thanksgiving and for christmas. we're not going to take care of making sure there's money there to get these vaccines out, of making sure that while these lock downs continue and the cases continue to climb, we're not going to deal with ppe and making sure there's money for small businesses or people who have been laid off or for the testing or anything else that goes through this. at some point it's hard to justify. >> i couldn't agree with you more, and we need to act, and act now. we can't do everything, the bill that nancy pelosi has been promoting, you know, 3 1/2 trillion dollars, she now says it could be 2 1/2 trillion dollars. we don't need all that we need the basic things you talked about, a number of items expire at the end of the year, including expansion of unemployment insurance which is important because with all of these shut downs happening all around the country, think of the number of people who are losing their jobs and joining the unemployment insurance ranks and some of them are falling off ui because by year end, again, this expansion that was put in place during the coronavirus ends. there are a number of items, including important tax relief

that's out there obviously the ppe is really important to small businesses. again, some of those businesses are now being forced to shut down by government edict again we need to help them my hope is we can have a bipartisan group here in the senate i have been talking to colleagues on both sides of the aisle about this to help on a targeted, effectiv program that deals with what we have to deal with now, to deal with the valley between now and march. by march, we should have these vaccines widely available. i hope people take advantage of it we have to encourage people to do it. if that happens, it will protect them and their families and others during the interim period, i'm concerned with what might happen both with health care but also with our economy so let's do it it doesn't need to be a huge package but should be targeted and focused and my hope is we can get something done before we take off for the recess after thanksgiving >> senator portman, i wish more of your colleagues would listen to you a lot of common sense there, and by the way, thank you for your

leadership and showing people how important it is to have these vaccines and stepping skpup and signing up for one of these trials >> thanks, becky thanks, joe. thanks, mike. >> thank you, senator. maybe draft some defense got some defensive guys, maybe, think about. it's a thought. >> how about the offensive line. >> offensive line, you suck me back in. i was on board, and now i regret it anyway, coming up, more on amazon's big jump into the pharmacy business, and an exclusive interview with atlanta, fed president rafael bostic unay ted you're watching "squawk box" on cnbc ♪ ♪ ♪ we made usaa insurance for veterans like martin. when a hailstorm hit,

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capitol hill hears testimony on big tech content, covid's

welcome back to "squawk box," rick santoli here. comes in a bit on the light side up 3/10 of 1%, however, it is the 6th straight month in a row of positive numbers on retail sales. although moderating numbers, and there's many reasons why if we strip out autos, we're up 2/10 that's also a bit light. strip out autos and gas line stations and we're up 2/10 as well also light the control number higher up the

food chain data points is down 1/10 of 1% and of course that comes after an up 1.4, which is really a solid number, and that has of course eased back. if we look at import prices for the month of october, they were down 1/10 of 1%. we're expecting unchanged. the year over year number is unchanged. that is 3/10 lighter than expected as well that's petroleum if we look at import prices year over year, down one full percent. let's switch gears, export prices, up 2/10 on a month over month basis, minus 1.6 on a year over year basis, and we know that the export market is much different than the import market with respect to the united states and the demand many are watching china, of course, to see how their export economy seems to be roaring back a little sooner than other exports economy, think germany, europe here we look at interest rates and we're down about 4 basis points at 87, coming off a charge over

90 basis points, many looking at 1%, big significant resistance, and of course in large part, whether we test that or not, is going to have a whole lot to do with how the equity markets behave industrial and capacity utilization to come. mike santoli, back to you. >> rick, thank you very much in terms of the market response, though, where would you have to look for yields to get back down to say that this move higher was a little bit unwound are we still in this range where we're bumping along near the highs? >> i think that if we start to close, close below 3/4 of 1% or 75 basis points, i think many fixed income traders would look at that as a bit of a failure technically. >> all right still got some room there, rick. thank you very much. appreciate it. when we come back, we are live and exclusive with atlanta federal reserve president rafael bostic get a lot of him in just a few moments. as we head to break, we want to

draw your attention to shares of biggest publicly traded pharmacies, as well as shares of amazon amazon shares up by about 2% this morning after it announced it's launches its own pharmacy in the united states today well, you see what that means for its competitors, rite aid down by more than 12%. walgreens, down by 12%, and cvs health down by about 7.8%. st'll talk much more about this ju ahead stay tuned, you're watching "squawk box" on cnbc everyone wakes up every morning to a world that must keep turning. the world can't stop, so neither can we. because the things we make, help make the world go round. they make it cleaner, healthier, and more connected. it's what we build that keeps things moving forward.

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the resurgent coronavirus posing new threats to businesses all across the country has states and cities impose new restrictions, steve liesman joins us now with a special guest who has some unique insight into this topic. hello, again, steve. >> good morning, joe yeah, we're joined this morning by rafael bostic, the atlanta fed president. good morning let me start off, i know you fed types like to think about and deliberate on things, but we just had breaking news on retail sales and the economy. it shows a little bit softer out there. is that part of your expectation when comes to the economic outlook that this quarter is a softer quarter and are you already seeing some impact of the resurgence of the virus on the economy? >> well, first of all, good morning, steve, and i would say that for me there are really two messages to take from the data today. first, the strong recovery that started in may through the

summer really does suggest that we would see a little weakness coming into quarter four, and i think that that's exactly what's happened here. i think for me, the other part that i'm really paying attention to is whether that weakness portends something a little more deep we know that the recovery has not happened evenly for everyone some sectors have done extremely well others have not done as well we know that the federal relief given to so many families is starting to expire, and i have heard lots of reports to suggest that people are running out of their money, and are really starting to get to the edge. so we're going to be paying very close attention to the numbers moving forward, to see whether this weakness in retail sales really translates into something more deep or is it just a reflection of the history that we have gone through >> how do you project that forward, and i don't envy you the task here, but you know, the news looks like it's going to be very grim for the next several

months, we just have jason turner on, as smart a guy there is, he said he can't rule out the possibility of a negative first quarter when it comes to growth, and later on top of that, how the promise of the vaccine will affect the outlook. >> well, i would say, look, the vaccine is definitely positive news, and it will definitely lead to, i think, a pretty robust recovery once it gets into the population, deep enough but we have really short-term and immediate term concerns with the spike in the virus, and what that's going to do for businesses in terms of the things that they're able to produce. in terms of consumers and their willingness to go out and buy things we have a short run problem that is prepared with sort of some medium term positive signs, and so one of the things i have been saying all along is that we needed to mindful of where there is weak skpness and try to get relief there as much as possible we're going to do all we can with our tools, but i would

really encourage policy makers across the spectrum to look at ways to provide some support as we move through the winter >> we're going to get to becky who has a question in just a second i want to just follow up on that you said use all of your tools fed chairman jay powell said at the last meeting there was a discussion about quantitative easing, do you expect additional quantitative easing, already doing $120 billion a month what is it that the fed can do in the absence of additional fiscal stimulus? >> well, certainly we will look at asset purchases moving forward. we will look at forward guidance and trying to provide as much support, and, you know, we also have these facilities which can provide targeted relief to particular sectors what i would say is we are committed to using all of our tools. they have juice, and we'll deploy them as necessary in terms of next meeting, we will just have to monitor how the economy proceeds, the retail

sales numbers give a sign, but there are a lot of other things we're going to learn between now and then that will give us guidance as to how we should think about our next move in terms of assets >> becky. >> president bostic, you mentioned that you're looking at the numbers very closely right now, but obviously some of the government numbers are outdated or backwards looking i just wonder what realtime data you're finding to be the most useful right now to tell you what's really happening with the economy in realtime. >> i would say we do three types of data collection one, we have a robust survey facility at the bank, and we are serving businesses, we're serving consumers, we're serving communities across the country, and getting realtime input on how they're thinking about where their sales are going to be, what they want to do for employment, and what kind of investments they're going to make we also spend a lot of time with my team going out and having one on one interviews with leaders in business and communities, and

with households to also hear from them firsthand as to what they're thinking about and how they're dealing with things, and then i talked to folks as well, just going around and trying to get that measure and all of those we take in addition to as you noted correctly, the historical data that's backward looking to get a sense of what the trajectory looks like the next three to six months that data has been valuable. it's given us a head start in understanding what is likely to come, and we're going to continue to lean on that and rely on that moving forward. >> so the factors are at all tie half-times but t time highs, but the market isn't the economy. what do you think the shape is based on all the information you're gathering. >> i think the economy is fine but i think the recovery could be more robust than it is currently playing out to be. look, we know that there are communities that are hurting the virus has hit them extremely hard

we know the small businesses, for example, have been on the edge for quite some time and we need to be thinking about our -- what ways can we -- in what ways can we act to help them get through this with minimal damage one of the things i have been looking at a lot is the amount of job loss that originally was identified as temporary that is starting to flip over into permanent. the more that that happens, the harder the recovery is going to be i think with e nee need to be ml effort that we can to reverse that trend and keep us in a place where once we have the vaccine deployed through much of the economy, we have as many people in businesses just primed to really just engage with the economy and get us back to robust growth. >> president bostic, you mentioned earlier the fed's emergency programs do you believe they should be renewed when they're set to expire at end of december, and what's your expectation as to

what's going to happen with them >> as you know, this is a negotiation between the treasury department and the federal reserve, and i'm not in those conversations directly what i have told the chair is that i think we need to keep these open and as available as possible until we are well beyond the crisis period so i'm going to support continuing these facilities, and i'm going to be a voice to try to encourage those to stay open and to stay available to those who might need to draw upon it >> president bostic, you talked about the differences in the experiences of people in this downturn what are some of the signs that you're looking at, the ways that different communities have been affected differently from this virus? >> well, we are looking a lot at sort of what sectors are getting close to their precovid levels

and which ones are not a lot of data that comes in, allows us to disaggregate experiences according to business sector, geography, types of jobs, so high wage versus low wage jobs, and what're seeing is low wage jobs are not returning as fast as higher wage jobs are jobs in a lot of the service sectors are still 40 to 50%, in some instances, lower than they were pre-covid, whereas a lot of service sector industries or businesses where people are able to work at home, they have gotten back to 90 to 95% of pre-covid levels in terms of employment those are the types of comparisons we're making and if we don't have all of our sectors getting back to close to pre-covid level at the same time, my biggest concern is that we may take down our guard, that there are some policy makers who say, well, we're most of the way there, we're good. i think that that would be unwise, and so we're going to continue to call out with every

opportunity that we have where we're seeing weakness so that we can try to get relief there, and make sure that they come back just as strong as everybody else >> if there is no additional fiscal stimulus, president bostic, will the fed do more in response to that, and will that do any good. if you're out there and do additional quantitative easing, you have a ten-year at what, it's under 90 basis points, what good would that do for the economy? >> i think for me, the bigger issue would be how do we get to a place where we find targeted relief i think the fiscal package, if it were to come, would be quite helpful. there is still money that's available in some of the facilities that we have, and i would, if we're not going to get additional fiscal relief, i'd look to find ways to re-purpose that to get it much more targeted to those sectors and

areas where there's need and so for me, i think we're going to be as creative as possible, and take the environment and the economy as it is, and just try to make sure that we inject our resources and our tools as much as possible to maximize their impact. >> president bostic, the question i'm sure you have been waiting for. your name has been mentioned as a possible treasury secretary, would you be interested in the job? >> well, you know, i see the list like everyone else, and i have to say it's incredibly flattering to be on those lists but to be honest, i'm not thinking about that so much, and you know, we'll see what happens. a i've not talked to anyone in the administration, and right now, i'm just keeping my head down, and trying as much as possible to make sure that we know what's happening with the economy i know what's happening with my team and my staff, and we are prepared to act as possible. >> president bostic, thank you so much for joining us this morning. >> steve, it's good to see you, and you can call me rafael, you

know, that's all right >> treat everybody with the same respect, thanks very much. back to mike. >> steve, thank you very much. coming up, jim cramer on the dow's march to 30,000 at least on pause this morning. and what amazon's jump into pharmacy means for the company's future and for rival drug stores plus, taylor swift's early recordings changing hands again, and the super star is not happy about it stay tuned, you're watching cnbc

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capitol hill hears testimony on big tech content. covid's rise, the new restrictions plus, retail earnings picture. "squawk on the stree

over to cnbc headquarters and jim cramer i've been dying to have you on to ask about walmart and home depot. these companies performed on every cylinder, did everything you could possibly ask for as an investor and yet both of those stocks, those dow components are down and it is dragging down the overall average. does that make sense to you? >> i think this is moderna and pfizer i think people say this was the peak, it can't get better. i disagree with that i think walmart is a buy at 149. home depot is harder i think that this is just one of

those trades where people say, look, i want the companies that are -- i would rather have southwest air for instance than home depot or walmart. i think there has been relentless pressure all morning. ever since they reported, it is almost as if someone said, look, this is my opportunity to get out, i'm going to bang them down i think that a walmart should be bought at 149. that's where it was a few seconds ago. because this was just an amazing number and they're going to wipe out all the competition, because we don't have any stimulus from washington and walmart is going to finish off who it hasn't beaten with the exception of amazon >> here's what i don't get if people thought okay this is as good as it is going to get, why did they wait until today to sell these stocks? you could have figured that out yesterday, last week, beyond that the numbers today, there was nothing in these reports that made me think, oh, okay, now i get it, this is the reason they're topping out. >> you're right.

if you look at the cruise lines, they go up relentlessly. why? they are stocks that do well when we open up. walmart, no. there is an obvious nature of trading that has started since we had younger investors come in and they're, like, wow, walmart, holy cow, don't want to own that one. i find that you have to just kind of dance around them when you have companies that are doing as well as walmart is with that online number walmart is secular winner and i think if you sell it, i want to buy it >> reminds me of what they used to say, some older reporters when i started out at the "wall street journal," no new stories, just new reporters, no new stories, just new traders. >> we have younger people, i don't know if they go to walmart or not, they think amazon is everything if amazon comes in, whoever they come in against is the death star and i get that there is drugstore -- i don't know we'll wait for david to come up

with something again, dr drugageddon, i don't know. he's smiling i look at the drugstores second day, becky, not today, the second day is the day. people say, oh, my, and that's what happened last time around so don't be diving in there. it is not -- the people tomorrow will discover it, okay >> jim, thank you. we're going to see you in a few minutes. bye, jim bye, david >> all right check out the big name pharmacy stocks this morning, getting hammered after news that amazon is lauchbnching amazon pharmacy joining us, henry blodgett, $40 price target on amazon in 1998 on prospects for getting into the pharmacy business -- no, you didn't maybe it was -- we talked about this earlier, maybe on getting into web services, no, no, maybe

it was on getting into everything you had no idea, nobody did. except one guy, maybe, who has that laugh and is he not the coolest? he's unbelievable, to -- to persevere through all that, you know, all the negativity and th skepticism he's like a demigod, no? >> jeff bezos? >> yeah, not you well, you too. you too. >> yeah, bezos think about that one man's life, to do this >> yeah, i didn't see all of it, obviously, nobody did. but the -- they had a great team, they had a massive opportunity, and i think they outperformed anybody's wildest imagination 20 years ago, been extraordinary to watch >> and what inning are we in >> i don't know. >> third inning. top of the third >> nothing goes up forever, but -- >> i don't mean the stock.

>> day one, that's what jeff keeps preaching, and he said on the record, look, some day we're going to go bankrupt, i want to stave that off as long as possible by being as innovative as possible. and they're continuing to do that and one great thing about this business, which jeff actually pointed out to me, he invested in insider inc. a long time ago, he said i like the media business, it is like commerce, it is not a winner take all game, you just try to gain a little bit of share and that's what's going to happen now in pharmacy amazon will gain a little bit of share. they don't need to obliterate everybody. they just need to have a great service and gain some share and keep growing and that's what they have done for 20 years. >> pretty amazing. i'm not even just talking about whether the stock keeps going up and someone says we're going to be bankrupt some day, don't you think that's just telling everybody associated with him and amazon's success not to rest on their laurels i think he's -- >> absolutely. absolutely >> i don't think he really

believes that. we'll all be dead some day anyway we know that but doesn't mean we'll all be bankrupt some day, except in -- of the life force. i don't -- you see amazon ever going back up? no >> in the near term, i certainly hope not and, no. but i do think the life span of a lot of companies is shorter than they seem at the time when they're at their most magnificent and seemingly completely unassailable. you look at fortunes of ge and so many other companies, just incredible 20 years ago. >> be the smartest guy on the planet, how would you disrupt amazon what does that look like >> i think you keep chipping away at little areas, you find things that don't need to be shipped anymore. amazon will be doing that too. but the way to compete with a generalist, what amazon is, is to go into a niche and do it way better than the generalist can do it. and ultimately the generalist

either has to buy you or is forced to work around you. i think that's the way to compete and that's the way we have seen media over the last 10 to 15 years, amazing niches that companies come in and do it much better than the existing companies and they grab a toe hold and can grow from there >> amazon's size and scope allows them to be okay with the slimmest of margins that other people can't be okay with. >> yes, and they had a very different philosophy for 20 years, which is instead of sitting there having the highest margin you can have and letting the cash pile up behind you, they have reinvested every dollar of margin in prices, in building new things, so forth, and, boy, as you suggested in the beginning, was that ridiculed for 10 to 15 years and, boy, has it produced a valuable company now and obviously aws is throwing

off a ton of cash. so they don't have to worry about that now they continue to do that on the retail side. continue to reinvest their margin in lower prices, which is great marketing, and new investments. >> yeah. so just specifically about this latest deal, is there enough for everyone to switch to this model. i don't -- becky has a lot of reasons for, you know, for having relationship with the local pharmacy, is that going to fall by the way side we don't do that the at local hardware store anymore, do we? >> no, that's the point i made before though for amazon they don't need to get the whole thing them need thing. they need to get some of it. now it is easier to sign up for a subscription or get all your fa pharmacy needs from amazon this is not a winner take all game we saw amazing numbers from

walmart this morning you can have many companies succeed here doesn't just have to be one of them but obviously some will lose a little bit >> henry, thank you. who would have known $400 where -- >> 67 in today's split >> 67. okay 67 you were so wrong. you were -- you got to think long-term. you got to think long-term and you got -- thank you, henry blodget, good to see you i thought i called him a demigod. he said, i don't know if i'm a -- talking about bezos final check on the markets you can see now, giving back some of the recent gains, except the nasdaq which had been -- they don't move in the same way anymore. stay at home versus open up versus vaccines and everything else santoli, confusing with santelli you handled it though. he tossed it back to you. >> it has been a while, but, yeah >> messes me up.

becky, you didn't get the jumble i sent it to you >> no. but i gave up. i was busy doing the show. >> proud of myself i'll spoil it for everyone join us -- make sure you join us "squawk on the street" is next good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber futures are getting back some of monday's record highs amid a truck load of news retail earnings, amazon launching pharmacy, tesla into the s&p, berkshire's 13 and much more retail sales were light, but up 46 the month the road map begins with the amazon drugstore, the retail giant will ship prescriptions to prime members. cvs, wal