it's monday, march 8, 2021 "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with andrew ross sorkin on this monday morning, if you are just waking out, look out, there's something to check out the dow futures at this point down by 41 points. s&p futures are down by 24 and then the nasdaq is down another 200 points this morning. this comes after the nasdaq was down almost 5% last week big tech names, once again, under pressure remember, there were, i think, 11 of the nasdaq 100 stocks down

by more than 10% zoom led the way you saw real weakness in shares of companies like tesla, too watch what's happening this morning because a lot is keying off what's happening in the treasury markets treasury yields we've been watching so closely, it's the ten-year once again we're keeping track of the ten-year at this point is yielding almost 1.6% 1.598% 30-year at 2.30% the five-year at 0.82% this is the key of what to watch this morning i guess there's a lot of things to keep an eye on, but treasury yields is certainly one of them. >> and it's all, in a sense, one trade. kind of running the same play, and will until it stops working. meaning, trying to price in the acceleration and economic growth where basically everybody anticipating with the fiscal push on top of what already seems like a spring-loaded recovery possibly, and what does

that mean for different sectors? the five-year yield is fascinating, that's where a lot of the action has been that's where the ten-year was a few months ago the question is, we had this big 200-point rally in the nasdaq, 400 points in from the low on friday this morning giving that back because there's so much more market cap in the large cap growths than the cyclical stocks you have negative effect on the top line index we'll see if -- obviously, if it continues because the intraday action has been fascinating lately we're also watching oil prices brent crude briefly rose above $70 a barrel for the first time in more than a year after saudi arabia said its oil facilities were targeted by missiles and drones prices have retreated a bit from there. houthi military spokesman claimed responsibility for the

attacks. saudi arabia said there was no major damage, injury or loss of life a saudi-led coalition intervened in yemen's civil war in 2015 and continue to fight against the houthis in what is seen as a proxy war with iran. andrew >> i want to talk about the royals and oprah, but we'll talk about washington right now for a moment we'll get to oprah and the royals, i hope we have to at some point come on. but we had a huge piece of news over the weekend, almost as big as the royals, in fact the senate passing president biden's 1$1.9trillion stimulus package and now heads to the house. ylan joins us and she can weigh with in on oprah and the royals as well. >> i didn't get a chance to watch the interview because i was so busy following all the ins and outs of thisrelief package. >> as you would. >> that's my drama the bill is headed to a final vote in the house after

last-minute haggling in the senate over the weekend. democratic senator joe manchin held up this process for nearly 12 hours as he pushed to scale back that boost in jobless benefits the amount will now be $300 a week instead of $400 but last one week longer ending on september 6th in addition, the first $10,200 benefits will be tax-free for households earning less than $150,000 a year. democrats passed the bill saturday afternoon and republicans stuck together with every gop senator voting against it at the white house later, president biden said politics weren't always pretty but said the relief is urgently needed. >> this plan puts us on a path to beating the virus this plan gives those families struggling the most the help and the breathing room to get through this moment. this plan gives small businesses in this country a fighting chance to survive. >> the house plans to vote on

this package on tuesday. that gives the president plenty of time to sign into law before the unemployment benefits run out at the end of the week back to you. >> well, here we have a deal here we have a deal after all this time, right when is the first time you get the check? where do you start having to look in the mail for the check >> okay. so, first the house has to vote and the president does have to sign it but president biden said he expects the checks to go out some time later on this month. what we saw in december, once the last covid relief package was passed, it took a week for the first checks to start hitting bank accounts. that seems like a realistic time frame. it could take a little longer if you're receiving a paper check in the mail, though. >> what about checks to school systems and municipalities and states that are going to distribute all this money? one of the great debates about this was how much gets spent

today versus getting pushed out to '22, '23, '24 and beyond. >> so, there is a lot of discussion about that. and it's unclear exactly how fast some of this money will get to school systems and even if all the money were to arrive tomorrow, how quickly they could spend through that some of the argument was some of this money was intended to be spent over time. you think about unemployment benefits that's something you need a big pot of money because it gets drawn down over the course of several weeks or months. it's not something someone gets in one lump sum. some dollars will take time to work through the system. democrats say that's intentional. republicans say that's a sign that some of the money may not be as necessary and urgent as president biden likes to argue >> okay. thank you. always good to see you we'll talk about -- we're going to have wilf call into the show and give us a play-by-play on what his take is on all of this.

thank you. becky? >> i don't know. i didn't watch it last night i couldn't bring myself to do it it's a business story. they brought in $7 million to $9 million that cbs paid for this. >> it's a business story for them >> you think about the amount of money they made from advertising on this. you think about how that all kind of plays out. i didn't watch it because, honestly, i have a soft spot for harry and william and i don't want to watch families tear each other down, so i didn't watch. >> there was a real housewives of westminster going on, or something. i don't know what was happening. but it was fascinating you know what you realize? >> it's sad. >> i think brooke hammersly -- >> never marry a royal >> no. the real queen is oprah. the real queen is oprah.

she's figured that -- >> i did see some incredible things she's an amazing interviewer i'm definitely curious, but didn't watch how about you, mike? >> no. again, staying a little bit on brand, did not watch it, although i don't think you have to watch it because you if were paying attention to -- >> it's everywhere. >> -- headlines or social media, you were getting the play-by-play pretty well. >> i know everything that happened even though i didn't watch. >> the all-star game >> no. it wasn't -- it wasn't a this channel or that channel type of thing. >> i was switching around a little bit interesting. let's tell you what else is happening in the business world today. ge shares are sharply higher "the wall street journal" reports the company is nearing a deal worth more than $30 billion to bcombine its aircraft leasing business with ireland holdings an announcement is expected

today. ge capital aviation services is one of the world's biggest jet leasing companies. it has in service or on order more than 1,600 aircraft ge shares this morning up by 2.8% to almost $14 mike >> yeah. incredibly strong stock lately the white house is urging computer network operators to take steps to determine whether their systems were hacked in microsoft outlook. microsoft blames the attack on china. the white house says there are still serious vulnerabilities even after the microsoft patch 60,000 u.s. organizations may have been hit by the hack, including credit unions, local governments and small businesses meantime, we are watching the arc invest innovation etf. it's fallen further into bear territory. now down from 20%. they include buzzy tech and

growth related stock including tesla, square, roku. founder and ceo kathy woods recently telling cnbc she's doubling down on some of those bets and woods will be on "closing bell" in an exclusive interview later today at 3:00 p.m. eastern time. >> i would like to look at how far back that etf goes so you can see it go up before it comes down mike, this is more of what you were talking about, those momentum stockses unwinding but they wound up a very big name. >> it's been around several years. an amazing performer and drew tremendous amount of new money. i think that's one of the issues is not only is this -- is the fund in so many buzzy, volatile stocks but they own so much of them they have concentrated positions. they own something like 10% of a lot of their holdings and very transparent about their holdings it's been easy to game what was happening there. it's fascinating etf structures, when the money comes in, new shares get

created. it can be self-fulfilling in both directions but interesting how it turned around there the lows on friday everybody's got this ticker on the screen trust me >> tesla was one of those stocks that was just up -- or down under so much pressure last week at one point it was down by 14%. i don't know where it ended on friday tesla shares, we know, the last couple of weeks when they were under pressure with this, cathie wood was buying more of it ron barron actually sold some of it at the heights or near the heights. about 25% of the stake he holds in his funds for investors still says he's incredibly bullish on but said when it got that big, it was too much of the fun. he had to sell out so it didn't become a tesla fund. >> you have the idea side of the business and portfolio management, risk management kind of allocation piece, which is making sure my bets don't get

too big. they have been willing to bet big on their ligest long-term ideas. we'll see if it plays out. >> there it is it's down by 2.6% this morning tesla after getting beat up last week and the week before that, too. when we come back, government inflation data on tap this week. we'll get you ready with market watcher mark grant after this. kyle bass will give us his take on the markets check things out this morning. dow down 28 points but the nasdaq is really feeling the pressure "squawk box" will be right back. your daily dashboard from fidelity -- a visual snapshot of your investments, key portfolio events, all in one place. because when it's decision time, you need decision tech. only from fidelity.

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welcome back to "squawk box. the cdc set a record 2.9 million people were vaccinated on sunday and 2.1 million on sunday. to the latest tally, 1 in 15 adults have received one dose. the biden administration accusing russia of carrying out a disinformation campaign against western covid vaccines the white house says russian intelligence agencies have worked to undermine confidence in treatments by pfizer and others it identified four websites that in recent months have questioned the vaccine's development, safety and efficacy. we have lot more coming up how much would you pay for digital ownership of this. it's the very first tweet from

jack dorsey. we'll show you where the bidding stands right now yeah, you can buy a tweet. you can also go on his twitter feed is just look at it or print it out if you want a programming note all this week, tune into cnbc's "on the edge" at 6:00 p.m. eastern time it has fiercest debates about the-b news in the business world. ♪♪ in boxing or any other business, one day, you're gonna take a hit you didn't see coming. do you stay down? or do you get up? [announcer] and this fight is a long way from over, leonard is coming back. ♪♪

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beauty two key pieces of data, we'll get the consumer price inexand producer price index on friday we have seen higher prices working into some of the commodities. we'll see how that shapes out what wet see in the cpi and ppi. joining us to talk about the markets is mark grant, chief global strategist at b. riley market securities. does this feel like an inflection point to you where valuations are starting to matter again >> yes, becky, i think valuations are starting to matter i think the other big component right now is inflation last friday we saw the biggest short ever in commodity treasury futures. and i think we're in, if you will, kind of a danger zone where things could ratchet one way or another pretty quickly. >> what makes you feel like this

is a danger zone what forces are kind of pressing on that? >> it's the valuations for some of the equities, especially some of the tech stocks it's a very open question what the fed is going to do in here when we had the breakdown in equities last month, the ten-year treasury was at a 1.20. we're at 1.60 this morning and i think there's concern whether we're going to get more inflation, though i will say on the other side of this equation that we've seen corporate bonds, mortgage bonds, even high-yield bonds compress against treasuries so you've seen treasury yields up, but the risk asset yields have gone down against treasuries and you've got a lot of factors here that could push the bar quickly one way or another

>> you said it matters what the fed chief says here. i don't think we'll hear from jay powell for 11 days or something, which is a long time when you're looking at markets like these he intentionally didn't say anything last week when he was out week talking do you anticipate what we're seeing in the markets changes his mind or, look, this is where you're headed, if you're headed towards reopening of the economy and stronger day as head >> i think there's going to be tremendous pressure. we have $1.9 trillion stimulus bill going through and the biden administration is talking about infrastructure bills and several more bills behind this you know, the fed was created in 1913 by the federal reserve act and the fed is part of the u.s. government and i think there's going to be tremendous pressure put on the fed to keep interest rates low because the cost of higher interest rates means the

borrowing cost of the country will be higher i don't think congress is going to do anything about it, so if somebody's going to do anything to keep interest rates low, becky, it's going to have to be the fed, which means that the government, janet yellen and so forth, is going to put some heat on the fed to do something it will be very interesting to see if that happens or not. >> what's the argument for it, though i understand your point. look, just realistically speaking, interest rates are higher and that will cost the government more money to borrow than they're talking about, but from the fed's perspective, it's supposed to happen at this point. do you think jay powell would go along with it and how would he justify it >> he would justify on keeping interest rates low to help the economy. he certainly isn't going to say that the government came along and asked him to do this he'll say he wants to keep interest rates low to keep the

economy going, the fed has made the commitment to keep the economy rising and being supportive they could do an operation twist where the fed bias longer dated securities than they current are, they are increase their balance sheet and buy more treasure ris they could buy more less agencies and less agencies and mortgage securities. there's a variety of things they can do but i think if interest rates get much higher than this, they're going to do something because we can't afford, with all the stimulus and all the additional debt, higher yields it would be very bad for the economy in terms of mortgage rates, corporate bond new issuance, any kind of borrowing will be higher and that's a negative effect on the economy that's why i say it will be very interesting to see if the fed does something or not. i think there's a 50-50 chance

they will. real quickly, if you think that's the case, if you think there's a 50-50 chance they do, would you advise people to buy stocks, especially the nasdaq stocks that got hit so hard. they're selling off because interest rates have gone higher. >> i would be in a more intensivintense defensive position i think there's some closed-in funds and exchange-traded funds that have double digit yields or close to them. i think it's time to take a slightly more defensive posture, both in equities and in the debt markets right now. you just don't know what they're going to do. but you do know that the effect of having higher interest rates is going to offset some of what the government's trying to do in terms of stimulating the economy. >> mark, thank you always good to see you thank you for joining us >> you, too. becky. always a pleasure.

>> have a good week. >> thanks, becky. we're going to now go to our executive edge a little marital news. mackenzie scott, formerly married to jeff bezos, has married again. she married a science teacher at a seattle private school where her children go at lakeside. according to a post on medium she wrote in december, she has given away more than $4 billion of her fortune since the divorce. in a post on saturday, dan signed onto mackenzie's commitment to the giving pledge. i believe he is a chemistry teacher. i believe that at least one of the bezos children had him years ago. so, you know, all's well that ends well. >> yeah. it seems that way. gracious comments also from jeff

bezos. seems everybody is in good shape. giving away $4 billion in less than two years is pretty impressive. >> isn't it $6 billion coming up, the $1.9 trillion covid relief package one step closer to passage. we'll talk about what it means for the market and economy next. here's a look at the biggest premarket winners and losers in the s&p 500. hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown,

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good morning, everybody. welcome back to "squawk box. monday morning for you this ought to catch your attention. the nasdaq and nasdaq 100 were down by almost 5% last week. as mike mentioned, they picked up ground at the end of the

session on friday but it's giving it back at this point nasdaq indicated down by 205 points in the premarket. dow indicated down by close to 50 points. s&p down by 26 >> thank you the senate passed $1.9 trillion coronavirus virus relief package saturday, sending it back to the house for final approval joining us to discuss this is nancy lazar and dan clifton, managing director at strategist research good morning to you both nancy, this already looked like the economy was getting ready to accelerate what does the $1.9 trillion do for gdp this year? it seems like you have so tart to predict boom times. >> we just raised our forecast for 2021 and that will be the strongest growth since 1959. basically, nobody in the business has seen as robust as we're going to have today.

obviously, the consumer will be the driver of that 10% consumer spending this year is not aggressive. the amount of savings they have, given the additional stimulus checks, consumers, that will help boost consumer spending in and of itself potentially by 20%. meaning these numbers are surreal. we're assuming they save some of it and/or it helps the economy capital addition will be very robust we were already strong in the back half of 2020. confidence will get a booster shot we're bullish on the onshoring renaissance them and what's going on around the world reinforces that theme. the community, quite frankly, has never seen anything as robust as we're going to potentially have this year. >> the fact it's so unfamiliar to have these growth rates is probably why there's so much attention on the idea of the risk of overheating. whether that means manifesting in inflation or the fed having to move, where do you come down

on that? >> it is certainly a risk when you grow as quickly as we did. but we did grow just as fast in 1983 when you didn't have inflation or a disinflationary environment. we were beginning the upturn in productivity growth in the early '80s and that continued in the 1990s. given the capital spending cycle we've seen, which was focused on technology, we have a secular shift up in productivity unfolding, which we think is one of the biggest underappreciated supports for the economy at the same time there's so much labor market slack as the fed has been highlighting. we think that comes back we think that labor supply comes back you see that in labor force participation rate inching higher that combination of stronger productivity growth and more labor supply mitigate a sustained shift up in inflation. cyclically, yes. secularly, i don't think so. >> dan, democrats needed pretty much the majority in both houses to get this done obviously, it's a pretty

aggressive fiscal effort at this point. what do you think investors need to hear at this point? >> i think there's a couple key takeaways. the democrats had control of the government after georgia elections. you press your bet and go for the big package. $1.9 trillion. they got everything we wanted and we're going to do more stimulus this year than last year last year we had 15% unemployment rate and approaching lockdowns. we have 6.2% and reopening that feels like the berlin wall came down in terms of states reopening. this is a classic indicator of washington being a lagging indicator. we're going to have more americans with two shots today than covid that's a very big deal consumers will be able to spend their money. that's reflective with what

nancy is talking about in their forecast as interest rates start to normalize, that will be the background for the next debate over insifrastructure the challenge will be keeping everybody together this time around like they did on the first fill, which is much harder to do. how do you pay for it? there's likely going to have to be tax increases and the reconciliation rules that allowed this bill to pass is much, much tougher i would urge investors that the next round of stimulus won't be as easy. it may be more wanted by investors, but it also will have to deal with the economic and inflation environment. in the short run, you'll see price pressures. you can't give out all this money to consumers and i think we're going to have the production to do that. that is going to be the background by which that

infrastructure bill is debated i think it will be a bit of a longer three to six-month type of process we'll have to work through. at times it's going to look like nothing will pass. >> nancy, just finally, i mean, how do you think ultimately the federal reserve is going to have to navigate this you mentioned productivity shut come in and dampen some inflation effects of a lot of this growth. but the market seems like it's going to have to find its own way to test the premise that the fed is going to be patient. >> yeah. there we're watching the potential risk to the economy from higher bond yields, higher commodity prices we'll watch our daily consumer confidence survey very closely it seems to be turning up. credit will be very important. we're bullish on the profit outlook. again, economists, strategists, i've never seen a gdp number like this year you've never seen a profit recovery like this year. if you have a robust profit recovery, you could see corporate spreads remain

relatively tame and maybe that means the fed wouldn't have to step in. bond yields this year by the end of the year, 1.70. by the end of next year, approaching 2% could you be 2% to 3%? yeah the economy is not dysfunctional, we're not italy, and we have wig drivers of growth this stimulus is fueling those drivers of growth. if we can get our productivity and labor supply story in place, the fed may be able to stay on their current path in that case i am listening to my colleague who has a better feel for that. >> nancy and dan, thanks for your time this morning >> thank you coming up on the other side of this break, it was a rough weekend at the box office for the latest pixar movie this was undercut with a major dispute by a theater chain. later, don't miss our interview with kyle bass for his take on markets, tech, reopening and another favorite topic,

china. you can watch us or listen to us any time you can do it right this second if you want on the cnbc app. we're back after this.

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and longer. zzzquil pure zzzs all night. fall asleep. stay asleep. welcome back, everybody. u.s. equity futures this morning under some pressure. nasdaq off its worst levels but still down by 188 points in is coming after all of those

big declines we saw last week for those big tech stocks. that pressure is continuing this morning. the dow futures, both the dow and the s&p were down last week but not by nearly as much. the dow futures this morning down by 31 points. the s&p futures down by 24 disney's new animated movie "raya and the last dragon" topped a sluggish weekend at the box office the movie was also available for purchase on disney plus pulled in $8.6 million amid continued signals of of a tough road ahead for the movie industry that $8.6 million was just in the theaters, not those people who paid to watch it on disney plus at home the film didn't appear in cinemark theaters. a representative told deadline that the company was negotiating but did not reach an agreement on licensing terms with disney the studios and the theaters have been at odds over simultaneously releasing on streaming services it happened during the pandemic when movie theaters were closed. theaters in a lot of states are

now being gradually allowed to reopen in some states, like new york city, they're just opening up but only at 25% capacity this is going to be something where we would probably see a lot more negotiation that's taking place because for so long the theaters had the upper hand in this. they got to show it for the first 90 days, no matter what, even if they decided to pull it out of the theaters. the film companiescouldn't do anything about it. obviously it's changed in terms of who has the upper hand in this we'll see how this plays out >> and consumer behavior has been conditioned differently now through the pandemic, so we have to see what the new normal is going to be in terms of these releases >> we watched it at home on friday night we're so desperate for new content that we paid we watched it. >> and worth it? >> it was good the kids all liked it. everybody watched it, even the 18-year-old. it went all the way up. >> it's good would you pay more, becky? to me, this is the fundamental

question if it was 50 bucks what's the - >> that's getting up there that's getting up there. if it's 50 bucks and i have the choice to go to the theaters and we had our vaccine, right now none much us have the shot, so i would pay more for it, but not eventually. >> we'll see to me, when they get the pricing to match or get closer i suspect they'll have to try to do that to push people in the theaters since there's more money for them in terms of margin i think. there may not be as much margin for them because one is direct to the consumer and the other they sar with the theater. >> yeah, they don't get 100% of the box office. the fda granting emergency use authorization for rapid at-home covid test we'll talk to the ceo straight ahead. >> announcer: don't forget to subscribe to our podcast

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welcome back to "squawk box. this week marks one year since the w.h.o. declared covid-19 a global pandemic. the world has changed dramatically since then, especially when it comes to health care and the costs of lingering effects of covid for that, bertha coombs joins us with a look at covid-19, the next chapter i wish we didn't have to talk about the next chapter >> well, we're hoping the next chapter is when we are over

this, but it's really a lingering problem for so many people covid costs continue to be a big chunk of health care spending. for some patients, it goes well beyond hospitalization according to new cigna data, 7.5% of covid patients suffered long-term, called long-haulers her lungs shut down, making for 18 trips to the e.r. last year for breathing, heart issues and big bills. is. >> my medical expenses last year, if i didn't have insurance, were upwards of $200,000 even with insurance it was close to $8,000, which is a lot, obviously. >> obviously early data on claims for nearly 150,000 employers show higher diagnoses for heart conditions and tissue damage, nervous system, lung and mental health

issues in post-covid patients than the average they saw in 2019, requiring ongoing treatment. >> it's very concerning because you have this new population of people that are suffering long-term consequences of their covid infections. >> hard to know right nowhow long term that is >> reporter: for hannah, it's been a year and she's still struggling with fatigue, brain fog and wondering when she'll feel like herself again. andrew. >> bertha, thank you appreciate it. a break through in covid testing at home. the fda granting emergency use authorization for q health's rapid testing. it's the first molecular test for at-home use without a prescription it's great to see you this

morning. we've been following your story since the beginning last winter. now this device is for people to get. this is the box you put it in. it's very easy to do tell us how expensive this product is ultimately going to be now and how available it will be >> yeah. it's, as you said, on friday the fda announced they have authorized our product, the first ever over the counter molecular test molecular means it's on par with essential lab testing techniques so the accuracy is on far for both symptomatic and asymptomatic people. for the first time this is like having a lab in the palm of your hands. this really is a breakthrough.

we're really excited about this and being able to have this paradigm shift towards making a more accessible, convenient, easy to use health care system and this will lead the way. >> tell us, how much is the box going to cost? this is the box here that you actually put the test into and i can -- i'm going to open this. i'm going to do it in front of everybody so we can see how it works. how much is this going to cost so i open it up here like this just so everyone sees what it is you get this at home you take this. this is the little box that you're going to put your nasal swab in. i won't do the stuff -- it attaches to your phone but then you're going to put it up your nose everyone can watch me put it up my nose. as i said, tell us how much is this going to physically cost

people >> yeah. so the -- right now we're distributing -- we have this contract with hhs and dod, $500 million contract scale to pharma on shoring our entire supply chain and we're starting to produce large numbers. do several hundred thousand tests to hhs and d.o.d. on the way to 6 million tests on the way to nursing homes, k-12, fisheries and as soon as we're through that we'll start to deliver more to consumers. >> you're killing me because i demoed the thing, i'm talking about it on the air and you're not telling us what the cost is and then i want to talk about the efficacy of it >> so the cost for the test, it's going to be -- we haven't announced pricing. it's going to be comparable to other tests. honestly over time we hope that insurance companies pay for it

because you're, as you pointed out, as the cdc pointed out in the last segment, the costs are enormous for having covid so being able to prevent spread, everybody benefits your payer, insurance company, your employer. so ultimately we want to make it free and in the meantime it's going to be comparable to other test pricing. >> i'm going to show everybody it's very easy to use. while i'm talking, i want you to talk about the efficacy. the question i have, i know that it's comparable to a -- here's the question is it comparable to a pcr test, which is the gold standard, or is it comparable to a rapid pcr test which is good but if we're being honest, not as great. >> it's much more comparable to a pcr test mayo clinic published the results in a peer reviewed journal last month and they

showed 98% comparative accuracy to central lab pcr testing and i want to note this is nasal swab, which is lower part of the nose. >> so you take it like this. you swap it. everyone gets to see me putting it up my nose. like this. then you take it like this, you stick it in here and then you take the box, which has to be plugged in or it has a battery, you stick it in here and then 20 minutes later on your phone you get the result anyway, becky's got a question. >> andrew, that was like your katie couric colonoscopy moment we got to watch. >> that's how it happens. >> pretty easy. >> that looked painless. let me just ask you. you said it's 9 % comparable based on what the mayo clinic did to other testing if i am pre or asymptomatic, what is the efficacy rate if i

do this today? >> for the data that was published by the fda for the -- for our product insert, it was showing around 97% sensitivity across the board, over 99% specificity and it was also showing that out of the set of asymptomatic people, we caught all ten out of ten >> but what are the false readings on any of those i only ask because the rapid test -- they're 43% accurate you might as well flip a coin. if i am asymptomatic, presymptomatic and i do this, what's the efficiency? is it 80% effective, 90? >> so we didn't see a difference in accuracy between symptomatic and asymptomatic people. the fda did authorize it for symptomatic and asymptomatic and that's why it's otc, over the

counter. >> how quickly can folks -- i know you have to get through the first it sounds like half a million of these or more to the d.o.d. and others, but how quickly are people going to be able to buy these at the store is this going to be a bit of a razor and blades model in terms of you're going to either make the box very cheap and then the tests more expensive or how are you thinking about that? >> so it's 6 million tests that we're getting through hhs and d.o.d. we're producing 100,000 tests per day in the summertime frame. we've been scaling up really quickly. we've been building big factories. in terms of the way that we're thinking about it, really thinking about it as, you know, obviously you have the reader element and then you have the cartridge. and so the concept is that you'll have this and it's a single platform for many different types of tests right now we have covid-19

authorized and we're planning on bringing on a full menu. >> we'd love to follow your progress i'm happy to do this so people can see me put things up my nose we're at a hard break. >> next time the colonoscopy but i do love this this is great. it's really cool for people who want to see family they haven't seen in a nglo time. "squawk box" will be right back. check it out, nasdaq under pressure

the senate passing president biden's $1.9 trillion spending bill clearing the way for a house vote this week, but some democrats say it's not enough. republicans say it's too much. we've got the details straight ahead. on edge. investors grapple with surging bond yields as growth stocks struggle to make up for what's been a lost year to date and oil in crisis. yet another major direct rocket attack in the middle east. this time attacking saudi aramco's oldest oil refinery oil prices surging we'll break it down with what it means for your money the second hour of "squawk box" begins right now

good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and mike santoli. joe is off today take a quick look at u.s. equity futures at this hour where things stand the dow off 8 points, 7 points nasdaq off 180 points. looking to open down 120 points. a couple of big headlines. shares of ge higher in pre-market trading after the wall street journal says ge is close to a deal to have a deal with aercap. meantime, california will allow disneyland and other theme parks to reopen. it will happen on april 1st. their capacity will be severely limited at first and strict

covid-19 safe protocols. we need to be in place in parks and stadiums in the state closed for nearly a year due to the pandemic. earlier we told you about q health's covid test. there's another one in the news right now. check out shares of adaptive biotechnologies. they're surging after the seattle-based company received emergency use authorization. this tells if patients have an infection or if they've ever been infected. mike >> this week marks one year since the world changed when the w.h.o. declared covid a global pandemic two stories looking at the next chapter when it comes to debt and the economy. steve liesman on the outlook and growth we begin with ylan mui with the record amounts of money being used to combat the effects. >> reporter: good morning, mike. it is so easy to forget the

sheer magnitude of fiscal support. there were five bills signed into the law, $4 trillion in spending and a new record for red ink. we spent $1.7 trillion on loan programs alone like ppp, support for airlines, another 673 billion towards income we sent $458 billion directly to the american people in the form of stimulus checks together that has helped drive the national debt to equal the size of the economy. if we stay on this track, it will be double gdp in 2051 blowing all previous records out of the water that doesn't even take into account the $1.9 trillion covid relief package currently working its way through congress when you add that to the mix, the pandemic response will total 4.6% of gdp. in comparison the response to

the great recession which is 2.4% as the debt has piled up, the political will for spending has dwindled leading to the party line votes we're getting now back to you. >> ylan, thank you now to steve liesman and the weather and economic crisis has in fact been averted, steve. >> reporter: yeah. mike, government relief is famous for coming too late in a crisis and often for being too small. not this time. the federal government has told us in five separate bills, $4 trillion into the economy last year and now we're going to introduce an additional 2 trillion in aide most economists agree. the result was not only to help turn the economy around but to avoid far worse outcomes after crashing 33% of the second quarter of 2020. growth came back by an unexpectedly strong 31% in the third quarter. business reopenings and a huge impact from government flooding

the economy with cash. economists have initially forecast half of the third quarter and the fed in june forecasted 6.5 decline for 2020 and it ended up being down 3.5%. the current impact of the large spending the economy is in better shape for the turn around. we have a higher savings rate. it will spur spending. what's clear is that the rule book has been rewritten for government responses to future crisis to go big and go early. it's growing 6% this year. that's as a result of the prior bills and the current relief package. what's not been released is better times to prepare for worse times. what we will find out, the bond market and inflation, whether there is a limit on just how big you can go mike >> steve, as you suggest, this

has been a real world experiment in a lot of activist fiscal policies many people advocated and many feared depinneding where you're coming from. we had nancy lazart saying 8, 9% gdp growth this year something none of us have seen in 40 years. what do you think that means we have to ask about the fed, whether in fact they can look in the face of this powerful growth and stand back >> i think the fed has told us it's going to be watching the jobs numbers in is a big change the fed saying, hey, we're watching the dual mandate. we think the inflation numbers are going to be temporary. we know there are supply disruptions. we also know there are issues in terms of commodities and all sorts of prices that are out there but the idea the fed believes that's temporary. they're going to try to look through it it's going to be tough we'll see if powell can really

hold the line. until the jobs numbers come down and without massive inflation i think the fed has a tolerance for 2.5 to 3 persz %, i think te going to hold the line. >> steve, i bring this up. mark grant said it in the last hour, this is a related question, he thinks the fed is going to have to do something because of what elon was just reporting on this, this big package, $1.9 trillion the amount of money that's now being spent and what we will have to pay. if you see interest rates continue to tick up like that. he said, they're going to have to do it to make sure we're not paying back too much in interest i know we never say things like that enter the fed's line of thinking, they have the mandates and the things they look at, but what about just the realities when you spend this much money, if the interest rates go up and you have to pay it back, that money adds up pretty quickly is that something that will be discussed? >> reporter: i don't think

they'll discuss it publicly. i think they'll whisper it and talk about it privately. what's the right word? the mantra is the fed is not going to be doing asset purchases because it's going to try to keep down the amount that's paid by the federal government whether that actually enters into their thinking i think is -- it's a part of it. i think though, becky, you had a situation you had very, very strong inflation and i think in that case the federal reserve would not be in a position where we continue the very easy monetary policy. i believe the fed in low unemployment, high inflation environment would turn the attention towards inflation. >> ylan, you mention the appetite of further fiscal spending initiatives might be mentioned here the conventional wisdom was they had a good shot because there might be bipartisan support. has that changed given the size of what's already gone through

>> i think that could possibly be, mike i think what we saw was joe manchin getting uncomfortable with the size of the package and the amount of the support going to individual americans. democrats were forced to scale back some of those measures. so i think that says a lot about how big they're willing to go in an infrastructure package, especially if some of these economic forecasts bear out and you see 8 or 9% growth as you were mentioning. a stronger economy could make it harder for democrats to pass a 2 or $3 trillion infrastructure package they were discussing at one point. so i think the economics do play into this as well. i think it's very difficult for them to make a case that you need to do things like extend unemployment, additional rounds of direct checks. >> a lot of it may be front loaded ylan and steve, thank you very much when we come back, bank of

america's is a vote that subramanian. before we let to a break, news in of an all stock merger between apollo global and retirement services company athene holdings. both up in the pre-market trading. athene up by 14.5% and apollo up by 5.4%. "squawk box" will be right back.

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joining us, sav savita subramanian great to talk to you >> good morning. >> the indicator we talked about here, the sell side indicator getting a little bit in the area where there's a lot of bullishness out there in combination with where valuations are, where yields are going to perhaps, what does that net out to in terms of a market

outlook view what investors should emphasize here >> yeah. no, i think it nets out to we're not going to really see the strongest returns from the s&p 500 this year unlike pretty much every other year over the last decade i think investors need to get used to u.s. large cap stocks don't go straight up forever i think what these indicators are all telling us in concert is sentiment has grown fairly euphoric on stocks we don't hear too many bears out there. we're seeing a point at which the market has essentially priced in a lot of the good news that we're likely to see this year don't get me wrong, i think this is going to be a great year for the economy. i think it's going to be a great year for s&p earnings for us we have something close to 20% penciled in for corporate profits growth last year the market saw massive multiple market expansion in anticipation of that growth. our view is there are probably other spots where you can get

better bang for your buck, namely value stocks, small caps. we still don't think those areas of leadership are over that's where we would focus our portfolio concentration at this point. >> this rotation, this kind of exit from large cap growth which dominates the s&p and entry into more cyclical and value areas, it's been going on for a few months right now. >> yes yes. >> what would you be looking for in terms of knowing when we have sort of priced in this outlook when those sectors have become more fully valued? >> yeah, it's a great question when do you get out of the value trade? there are three things you want to look at one is valuation cheap stocks are still really, really cheap relative to expensive stocks the way we measure that is between the dispersion of high and low pe stocks. almost at record wide levels we want to see that snap back. the second thing i would watch

is positioning what's interesting, even though we all kind of know this year is going to be pretty different from last year for a whole host of reasons, new administration, reopening versus shutdown, et cetera, investors haven't really changed their positioning that aggressively when we track hedge fund holdings and institutional holdings, they're still very embedded in this growth, tech over weight positioning. they've started to leg in to energy, inancial that's another factor to watch when the selling pressure is over and when that buying pressure is over and when you see more selling pressure. the third thing i would watch is the economy. here what i worry about is as we get further into the year, if the economy starts to recover and look like it's on better ground, we might start to hear some of the negative rumblings from policy makers around potential tape perfecting, tax hikes and what we saw a couple of years ago some of those negative headlines

might weigh on the cyclical recovery going on forever. those are the factors to watch kind of those three factors are really important to get a gauge on how long we have to go here i will tell you this, tim pickically in an economic rec recovery, value outweighs growth for at least a year. the fact that we've had six months of great performance doesn't necessarily make me too concerned about this continuing. >> is there a particular pain threshold for bond yields they can go to before it drags down the overall market or compromise economic growth? >> this is the million dollar question we've done a lot of work on this i don't know if there's a level. it's two things, a level and a rate of change if we see a super fast disorderly rise in bond yields, which i think the fed is under great pressure to quell, that i think would be negative for the market then the other kind oflevel that we want to watch, there's a

couple of levels, 1.75, 175 on the 10-year is typically when allocators start to shift out of equity into bonds, especially income allocators. that's what we found in our historical data. the second level to watch is around 3%. that's when you start to see a lot of other things happen for example, the equity risk premium starts to normalize. dividend and total return look like they're going to be 5% per year if you get 3% or higher on the fixed income on a treasury, that's a pretty compelling combination. i would start to watch around 175 which is coincidentally our rate strategist forecast for the end of the year and we're not too far away from that level >> no, we're not. >> so it's another factor to watch here. >> we have gotten there faster than most thought was possible savita, thank you very much. great to see you this morning.

>> thank you great to be here >> okay. when we come back on the other side of this break, oil soaring above $70 for the first time after last year after saudi arabia said its oil fields were targeted by missiles and drones and walter isaacson talking about his new book and so much more "squawk box" returns right after this

oil prices soaring opec rally sending crude prices higher now up 20% over the last month. a lot of this as things are starting to open up and we're looking at an economy that we hope is going to be better that's not all of the story. brian sullivan has more on it. good morning, brian. >> reporter: good morning, becky. there's a lot going on it's the stuff you mentioned and the attacks on the saudi port yesterday. oil rising on that a little bit today although it's flat but it's been up the last 24 hours was up 70 on brent crude level you had a water-based drone attack on a storage facility in the biggest oil export port

facility in saudi arabia it'sthe home to the largest an oldest oil refinery. it's the home of many american oil workers who live and work in saudi arabia now thankfully no loss of life but it does add to tension in the region because you've had some missile attacks backed by iran into iraq as well and all of this adding what you eluded to, becky, already tightening market. you've got growing demand. of course, we know people as they're getting out, they're largely driving, they are not riding subways air travelers picked back up and production has not kept pace all in all, that factors into 2021 being the year for oil and oil stocks oil is up 38% this year. it's higher than it was just before the pandemic and that move in oil has many of the beaten up oil and gas stocks

soaring. the xop, which is an oil and gas exploration and production etf is up 53%, becky, this year. it's like we're talking about bitcoin or something it's oil goldman sachs staying bullish. raising their target for this year and next on oil they see 18% return for most of their what they call upstream stock coverage the biggest of the big names, chevrons, conico and more. a big rise for oil and fossil fuel in 2021. >> normally when you see oil prices start to pick back up, that would be a time when the american companies would start to drill more, particularly more in the permean basin, it makes it a lot more profitable this time is different, right? >> reporter: are you suggesting the oil industry responds greatly to minor price swings in order to best serve their own

interests, becky i am shocked. >> uh-huh. >> it's interesting. in the opec oil ministry meeting, i asked, do you have a message for u.s. oil companies or what would you ask them what would you tell them he just sort of -- over zoom or whatever, he said, the age of, drill, baby, drill is over vicky holub echoed the same thing. even if prices rise, reduction and new drills in the ground might come up a little but might not come up in part. if we ban fracking on federal lands, that takes 50% off. you have deals that have made fewer players bigger so they can better control production. a lot of the smaller wildcatters you referred to, becky

production will go up and we'll get to 13 million barrels of oil any time soon if ever again but for years to come. >> yeah. it's the same story with the big oil companies too. we had darren woods from exxon mobil with us last week. his point is that, look, they're being much more conservative of things this he have reined in their capex spending and you can't look to any of those places where you have seen oil production pick up again brian, i saw you early this morning with helema kroft. you are both so good at analyzing these things tell me what she said about what this means potentially for any administration, the u.s. administration response to this? because it sounds like that is a concern. >> it is by the way, helema is the best i read what she writes and then i regurgitate what she says. as far as we know, president

biden has not made the call to saudi arabia to talk about it. obviously there's a lot going on geo politically. the khashoggi report going to be a big barrier to some of those relations at least right now coming forward but at some point there will be a dialogue, might be already, i'm not on the white house team, where there is talk about the oils, the yemeni rebels, the houthis thought these to be applied by the iranians. they have launched missile attacks into iraq and president biden ordering that airstrike into syria last week or two weeks ago. so we are starting to see some of these dangerous games begin to be played how the biden administration responds yet to be known but clearly this is the third or fourth sort of attack and they haven't been so serious yet.

right? these are small things storage tank here, a ship there but if they escalate, we'll see what kind of escalation the biden administration is willing to do. >> something to watch. brian, thank you. >> sure. thanks, becky. still to come on "squawk box," the biggest tech stories including the latest details on the recent hack on microsoft services plus, we'll get thoughts on markets this morning from big voices including mohamed el erian and kyle bass. we'll talk stimulus, rates, tech and much more. "squawk box" will be right back. risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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welcome back to "squawk box. i'm dominic chu. the start of regular trading keep an eye on what's happening with the nasdaq composite. outsized weakness in the premarket trade. futures indicating many stocks in the nasdaq 100 could see a big dip. the nasdaq composite rolling over here a little bit still hovering below the 10% correction the nasdaq is showing some signs of life here three stocks that could be in

play with technology have to do with an analyst upgrade. goldman sachs is adding microsoft, salesforce and coupa to their buy list. they could benefit from a digital transformation that's been in the works for years. microsoft the outperformer among the three. down 5% from the recent highs. salesforce and coupa have lost 1/4 of the value. keep an eye on them in technology one other place to watch, the premarket action in gamestop we're still talking about it because there's a good amount of investor trade at one point the highs, 400 plus dollar stock it's up today because of a bloomberg report citing they will tap ryan cohn, the billion dollar investor, he sits on the board now currently, they're going to reportedly tap ryan

cohn to look into digital transformation, ecommerce and strategic initiatives. gamestop up 14%. andrew, keep an eye on those shares we could see another reddit mentioned surges because of this particular headline today. back over to you. >> unbelievable, dom >> it is, right. >> $157. unbelievable digital transformation say the words and the stock goes up. >> chewy.com >> see where it lands. when we come back on the other side of this break, one that knows a lot about technology walter isaacson will join us talking about how biotechnology will be the great scientific revolution of modern times the white house, they need to take further steps to gauge whether the computer systems were targeted in a widespread hack we'll talk all of that when we come back. wealth is breaking ground on your biggest project yet.

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our next guest writes that biotechnology will usher in the next scientific revolution let's welcome walter isaacson,

tulane university professor. his new book is called "the code breaker. his latest piece for the washington post details how the work is critical to the battle against covid-19 congratulations on the book. it's really great. i am touched by so many things in it. the timeliness the idea you were doing all of this as covid came about and how much more imperative that has made all of this tell us how you got into this, why you chose this. >> i knew we were entering a new area of the life skpienss work molecules would be the new method that type of excitement to me was that you could transform health in this country, health

around the world i never dreamed it would be quite as relevant because as i was writing the book, we get the coronavirus pandemic it's one of the programmed vaccines that's going to save us likewise we'll be using this technology to make ourselves less sus sepceptible to fight viruses. we can fight cancer and then certainly as you know, becky, you and yourself and your family and so many families we know are affected by people with genetic abnormalities. those can be easily fixed with this new gene editing technology >> you know, walter, as always, you completely immerse yourself in this and you really show off like how much you know about this you learned to gene edit yourself there have beenso many promise about gene editing, and i just wonder where you think -- how

far out that future is how quickly we get to that point. i feel like there have been promises for a while but maybe we are on the cusp of something. >> by the way, it's already happened this past year, just a few months ago, victoria gray, for example, a woman who lives in mississippi, she had crisper gene editing because she has sickle-cell anemia she has been cured of it the trials are already successful on treating congenital blindness so these things are happening now. >> walter, just in terms of jennifer douda and how you made her so human, from the very opening. seeing her as a mother first and somebody who was a little girl learning about all of this going through it, why is she so city critical, why was she the one,

along with your partner, who did this why did it happen? >> international women's day so we might say more than 60% of the people studying biology or graduate school in biology are women. this is a revolution unlike the digital revolution or the physics revolution that seems to be led by women. as you say, jennifer douden and her research partner became the first time two women won the nobel prize in chemistry so to me jennifer douden was a great sort of hero that many, many other players in this book, including the wonderful people at m.i.t. and harvard who was racing with her to do this tech technology, but she was a wonderful character. her dad left on her bed the double helix she thought it was a detective

story. actually, it is a detective story about the secrets of life. she decided she wanted to become a scientist. her school guidance counselor, she grew up in hawaii, said girls don't become a scientist she became the person who was able to understand the structure of rna, especially how it replicates itself, which means the beginning of life on the planet everybody else was thinking dna was the cool molecule and rna was a step cousin or something as we've learned from this coronavirus crisis, it's rna that does the work, the dna sits in the nucleus and cure rates information. rna goes out and does things and builds proteins in our cells or guide enzymes to chop up our genetic code she comes up with this great breakthrough the other reason i chose her is that she had a nightmare after she discovered this new technology, which was that hitler called her in and said i want to learn how to use it.

and so she becomes a person leading the discussion on should we be using this technology. so through her life and through her friends and her colleagues and her rivals and her competitors i'm able to try, i hope, to personalize this adventure story of the people who have created this technology that will allow us to rewrite the human race if we want to. >> you do spend a lot of time on the ethics of whether that should happen? should we be able to do things if you want green eyes, your children taller, stronger. should we be able to program for things like that what's your answer >> first of all, i don't give a simple answer in the book because i think we all have to go hand in hand on this slope, which can be slipslippery, unlee do it closely. i work with the reader and jennifer douden and others clearly in the case of

sickle-cell anemia, tai sax, sis stick fibrosis, you want to be able to edit you want to be able to edit in a living patient who can give consent. where it gets very difficult is when you're doing unborn children, when you're doing reproductive cells or embryos. those edits will get passed down to all descendents, they will become part of the human race and not now but in the next couple of decades we'll be able to do things like certainly increase height or eye color or muscle mass or memory, those type of things, and i think there's certain rules we want to do myself, but i urge the reader to say come with your own conclusions because we shouldn't leave this to the scientists or politicians. for me you pretty much draw a line between fixing bad genetic disorders and health problems. that should be permissible, but when you get into the realm of starting to enhance children, to

make them taller or change their hair color for non-medical reasons, i think that's where we should resist going. >> walter, you became so comfortable with this while you were doing this that you actually told us last year you signed up to be an early -- in the early test trials for the moderna and pfizer. >> pfizer. >> pfizer. one of the mrna covid vaccines out there because you had such faith in this science. did you ever find out, were you somebody given the actual vaccine or placebo >> i was given the placebo but now i've gotten the real one because they switch you over after six months i hate to say it, i'm over 65. i was kept blind during the study but you're right, i believed in it because it's a very simple type of vaccine. people get intimidated by things

they don't understand, but just like crisper technology, the gene editing technology, these are very simple things this is just a snippet of rna in the case of the pfizer and moderna vaccine that goes to the region of your cell where you build things and says here's a recipe for building part of the spike protein. you're not building the whole virus. you're not going to get the whole virus. a little bit of that spike protein will save you. with the gene editing, i did it in jennifer douden's lab i could edit human cells don't worry, we mix it with chlorine and flushed it down the drain, i didn't unleash anything on the human race, but these are pretty simple technologies with huge ramifications >> it's amazing. walter, it's a great book. we want to thank you for being with us. it's called "the code breaker.

thank you for your time. congratulations. >> thank you so much, becky. >> see you soon. a massive hack tens of thousands of organizations at risk. new details on who was behind microsoft's breach and futures at this hour still looking at losses across the board. nasdaq down 200 points about what it was up on friday more than 1.5% dow indicated lower by 50 points at this hour we'll be right back. so you want to make the best burger ever? then make it! that means cooking day and night until you get... (ding)... you got paid! that means... best burger ever. intuit quickbooks helps small businesses be more successful with payments, payroll, banking and live bookkeeping. (dramatic music) (announcer) the right car for you is out there. and at truecar, you can find it and a great price.

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welcome back to "squawk box" this morning the hack on microsoft's email software being linked to china it's infected tens of thousands of businesses and people around the country. eamon javers joins us with more. >> reporter: good morning to you, andrew. this is a hacking free for all intensifying situation over the past couple of days here let's take a look at what we know about the situation as the u.s. government is warning companies that they should check their systems to find out if they've been impacted by this. this is allegedly a chinese state sponsored hack hitting microsoft exchange servers it began january 3rd and intensified over the past week according to experts that i

talked to yesterday, it was initially very stealthy but then over the past week became really noisy and very aggressive. one of the things that's been reported is other hackers have piled in after microsoft warned on this on tuesday of last week. other hackers exploiting the same vulnerabilities all of this makes this potentially worse than the solar winds hack back in december. it's been attributed to the russians all of that presents an enormous problem for the biden administration as they try to figure out what to do. "the new york times" reporting the biden white house presenting covert white house strikes on russian networks i talked to a white house official who said the word counter strikes is not their word that's not necessarily what they're considering it i don't know where that term came from, but clearly something is in the works to respond to the russians

now with this alleged chinese hack, there are two simultaneous problems on the plate for the biden administration in terms of cyber security, one for china and one from russia. i checked in with jen psaki. here's what she told us about all of this. she's been saying publicly that the u.s. will respond in its time and place of its choosing we will be responding to the solarwinds hack with a mix of actions seen and unseen. so clearly the biden administration contemplating a response to russia but with the chinese hack on the plate as well, they're going to have to figure out what to do with the chinese hack as well once they can physically attribute it. back over to you >> eamon, thank you for that report we're going to continue this conversation right now joanne lipman from princeton and

ed lee, "new york times" media reporter and a cnbc contributor. let's start with the hack attack joanne, the question i would ask is actually how much of an impact long term do you think this is going to have on microsoft versus do you think this changes the dynamic in terms of how corporations think about microsoft versus think about a google or think about an aws situation or is this such an idiosyncratic specific situation >> thanks, andrew. i do not think this is an idiosyncratic situation. what's concerning and frightening about this entire situation. we were talking about this last week where the state-sponsored hackers are getting bolder, are getting more brazen. to me what is particularly concerning is the fact this was publicized there was a patch put out and then after that happened there was a pile on and there was additional activity.

it's not entirely clear at all that our governments, that our companies, that microsoft or any other company or government is actually equipped to handle the fallout from all of this or to even pay sufficient attention to the cyber security threats the biden administration has said they're going to commit another $9 billion fighting cyber security think about our defense budge get of over $700 billion are we really committing sufficient resources do we really sufficiently understand the threat? i'm not convinced that we do >> all very smart thoughts i want to dig into this with ed. rea. the disney film that did well over the weekend but not as well as it was supposed to do in large part because cinemark didn't put it in its theaters.

what are the long term implications >> disney has been the dominant box office studio. 60% of the box office pre-pandemic we don't know how it's going to be going forward disney is open to shrinking that window, right, the box office window meaning you know what, it used to be 90 days, 45 days now it's even a few weeks or now simultaneous they're selling it on their own streaming service at the same time it's available in theaters. if you're cinemark, you're taking money out of my own pocket if you are making it available. i should get a cut of that or you should refrain from putting it on your service until our window is closed whatever negotiations are happening behind the scenes, those are definitely the

factors. >> ed, do you think there's a -- ed, do you think there's a moment at which disney going direct to consumer can make more money charging $29.95 or whatever the price was over the weekend than they can in the theaters given that they have to share some of that revenue with the theater themselves >> reporter: not only would they have to share, 30 bucks as expensive as that sounds, that's cheaper than going into the theater. no, in the near term disney is willing to lose money or not make as much money at the streaming box office, if you want to call it that, you know, so that in the long term the missed streaming service has enough to become a sustainable business we have to think of netflix as one example of that. they only became a truly profitable business after surpassing 200 million

subscribers charging an average of $11 a month as well as disney+ has done, they're nowhere near that milestone. their game is we need more subscribers to get into the system. >> ed, joanne, thank you i wanted to talk about -- i wanted to talk about the royals. i wanted to talk about meghan and oprah last night i wanted to talk about how oprah decided to sell to cbs versus apple versus her own channel versus discovery and whatever happened behind the scenes. >> blockbuster tv event. really was. >> great to see you. i have to send it over to becky. thanks, andrew when we come back, mohamed el erian joins us with his take on the markets as we start a new trading week. plus, dr. scott gottleib on the vaccine rollout and where the country pes bexcttoe by the spring stay tuned, you're watching "squawk box" and this is cnbc.

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week. u.s. crude oil hits the highest price in two years while brent breaks $70 a barrel. saudi oil targeted by missile and drone strikes. a year after covid-19, a report you have to hear is coming up. the final hour of "squawk box" begins right now

it's indicated down by 200 points this morning. dow futures indicated down by 53 and s&p down 27. a big part of this is what's happening with treasuries. we have seen the yield pick up pretty significantly if you're looking at the 10-year right now you're going to see it's yielding 1.601% we have pushed above 1.6%. the five-year at 6.81% it's put so much pressure on big tech. >> to go along with becky's joke, we said that joe was off today, and he is except that he's been doing so much reporting work over the weekend, that's why he couldn't join us originally he now has some breaking news on a big-time market participant. we want to welcome a very special guest, our own joe kernen joseph. >> yes yes. make up, tie i'm here

i might as well have been here but i did get to talk to david tepper at length last night. he more or less initiated the conversation based on the market action that we saw on friday on the lows he described his stance on the markets as there's an aviation term where you push the throttle all the way to the wall and there's these little knobs and they go to the wall but we're not going to say that for some reason, fine with me, but he said on the lows on friday he pushed it through the wall now he got bullish for a very specific reason and it gets a little bit arcane. tepper is a guy that -- he's -- he'll go with the crowd when he needs to but he can also be very contrarian this is a contrarian call based on what happened in japan on friday kind of interesting. the yields in japan fell after

the bank of japan's gaovernor didn't say that they were going to widen the ban on the japanese government bonds on the 10-year. david's point is that for five years, more than five years the japanese have been net sellers of u.s. treasuries finally at this point, at 1.6% on our 10-year they are now likely to be buyers because they can make a nice profit based on how cheap u.s. 10-year treasuries are compared to japanese 10-year and 30-year it might not seem that way because it's lower, it has to do with currency hedged positions as you take it those have collapsed, the cost of those, so now you can make about a half of a point more on our treasuries so his viewpoint is that takes a major risk off the table

it's very difficult to be bearish and his take is we are at the high end of the range at least on the 10-year maybe the range is 1.3 to maybe 1.7 but he expects it to be much more stable now, the 10-year that flies in the face of everything you guys have been talking about today, hearing about 3% 10-year now he did want to emphasize something. this i actually got this morning because it's very arcane when you look at what we're talking about in japan and how the currency hedging and all of that basically i think rates have temporarily made the most of the move and should be more stable in the next few months, which makesit safer to be in stocks for now. not necessarily a long-term predictor on where rates are six months, a year out, but at this point a lot of what the market has given at ajuda, the rates have been moving up and moving

quickly. he thinks we're near the high end for the next several months. he combined all of this with a stimulus package he said you have a possibility of stable rates with 1.9 trillion going to be passed this week and the combination of those two things could be very bullish for stocks now in terms of the knobs to the wall and through the wall and all of that expression, he was more at the lows on friday, if you saw the nasdaq, that's i think where he got really bullish and was acting on his bullish intent he also made some interesting comments on some of the bellwethers that amazon now at 25 to 30 times, whenever it's been here, it's fallen quite a bit from where it had been, that that is a cheap -- it's not inexpensive. we're never going to buy t-shirts never going to a store to buy a

t-shirt if you can go and buy it online there are a lot of permanent changes. that's what we have. i saw a little bit of the show earlier and i did see a lot of people talking about the market is teetering on a real problem based on whether rates continue to go up so this kind of flies in the face of that. i'll be interested what you guys think and i'll be interested to talk to mohamed about it he's a global -- a watcher of all things global and it was really a shock in japan. the quote was it stunned -- corona stunned market participants by not widening the band they have yield control. they're at zero and the band now is 40 basis points they widely expected on friday to raise that rate, which would have been, you know -- they're dealing with the same thing we're dealing with they want to keep the economy going, don't want to stifle it

there is upward pressure on rates. >> joe, you probably didn't see mark grant this morning because he was on 6:10 a.m. >> i saw what he said. >> yeah, you did he was saying he thinks if rates did continue to go up it would force the fed to have to do something because, again, we're spending so much money with this $1.9 trillion stimulus money, the money we've already spent, that that would just be incredibly expensive for us to service that debt even if you see not massive moods, but slightly higher. this would be interesting if that's not the case, if that takes it off the table andthe fed doesn't have to look at that kind of amazing what it would mean for stocks. >> well, no, exactly remember all the caveats whenever tepper -- you've seen in the past when he has spoken, i've even had robin miller tell me that the guy right now for the last ten years has been

tepper to follow he makes big calls, puts a lot of money there and has done really, really well. stan said when i was more worried about returns instead of principal, remember i'm going to keep riding this horse until i don't, that was before the pandemic i don't know when he jumps off horses i don't know when he decides that's not necessarily the case. i said, when do you mean rates will be stable he said, several months. i don't knowwhat several means but it certainly is not what we're expecting. we're thinking we can be at -- worst case is this is out of hand and we're at 2% next week or something maybe we will be who knows. this is tepper's -- this is what his analysis has shown he sent me some even more arcane stuff about the currency hedge and how it collapsed make a lot of money. this should shift japanese

buyers, 5 or 6 years, now there's a large shift to be buyers cap the yield where we are now. >> joe, the other side of that is, i'm sure this feeds into tepper's overall view, is the short interest in u.s. treasuries right now, people betting on bond prices going down >> reddit. >> people have pointed this out. >> reddit. >> essentially people stampeding to short treasury. just on a positioning and sentiment basis it makes sense that we've seen the bulk of whatever this phase of the yield move might be. >> well, if we did -- mike, you can imagine if three months from now 1.6 is the high or 1.7 or whatever, and i don't know if that's going to be the case and i don't know how quickly he'd reverse his position, plus i was reading there are other people in japan that market watchers

are saying i'm sure that was just a personal opinion of corona who knows what happens when they actually set the policy. i think it's this week or next that would throw a wrench if they actually did widen that band beyond where it is. right now i think it's totally non-consensus to think that we may be at a 130, 160, 170 band now on the 10-year with all of that stimulus money, he thinks that can be very bullish. i don't know a whole lot of people who are feeling the bullish bet with the markets being higher >> joe, stay where you are we want to get more reaction to this and so much more. joining us into this conversation is allianz advisor, mohamed el erian you heard joe's report on what mr. tepper had to say. are you bullish on equities right now? >> great reporting by joe. look, david is right u.s. yields are now attractive

to foreign buyers, not just from japan and liability matching flows. so there is a self-correcting element. he's absolutely right on that. what does the fed do think of it this way, andrew we go into a regime change continuing to accelerate we continue to accelerate both on public and private. it's not clear what the fed will do does the fed start signaling paper or does the fed go all in and reinforce the flows coming from the rest of the world >> answer that question yourself what do you think is going to happen >> so i think we are going to continue to see the rotation

we've seen i think that what's being repriced is what i call liquidity risk, not interest rate risk. and whether the terms. >> it's in a very orderly fashion. it's disorderly markets. so i'm all in there for the relative trade i think the relative trade is pretty obvious at this stage because of what's happening to liquidity positions or to be more precise, people's confidence about liquidity >> what about tepper's bullishness on amazon which has benefitted by the pandemic and arguably liquidity as well >> i said it on cnbc there will come a time when the fed is going to be attracttive

because the longer term prospects are very bright. i don't think this is the time i think there was a lot of liquidity sloshing around. he's absolutely right, the fundamentals of amazon are really strong as are a number of other big tech >> joe >> just to put a -- yeah, thanks, andrew put a little meat on the bones david said some detailed analysis on the currency hedges. the dollar hedging cost collapsed significantly. the numbers on the 10-yearu.s. treasury at 1.6, currency hedged u.s. treasury yields for japanese investors now 109 basis points that's a flip. that's a flip. highest in five years. more importantly, analysis points out that even against the 30-year jgb you get u.s. treasury yields 40 basis points higher than that and higher than

hedged european yields so all of this together, mohamed, have you seen numbers like that that make these -- suddenly at 160 you can't believe that's a great yield but when you look at it globally, that could attract assets here, flow here and could strengthen the dollar, weaken the yen which also has its own effects, positive effects on our markets here >> yes, joe. the 10-year differential is up to 190 basis points. it was 110 a few weeks ago we've seen major moves in relative yields that favor the u.s. and that is why the dollar index is over 90 today it is all consistent, right? there are self-correcting flows in there and the liabilitymat terse so those of us who look at flows are seeing that the u.s. is much more attractive right now, but i

want to stress, i don't know if you asked him, what is david's call on the fed? because that is really important here the fed has been the biggest buyer of u.s. treasuries what the fed signals is going to be really critical >> i was actually -- i'm in touch with him trying to figure out how we're doing on this, and it's funny i guess he anticipated your question he says unless markets go down and financial conditions tighten, i'm going asleep on the fed. wake me up in september. >> okay. so -- >> he thinks -- yeah go ahead >> so, joe, that is a critical call if you think the fed just goes to sleep, stays as is, doesn't indicate any concern about overheating, then david's absolutely right i think this is a really tough position for the fed i've said over and over again be careful of the lose-lose

position for the fed and that's where it is now. because the other side of this is that the u.s. economy, especially after the jobs report, after personal income, after manufacturing is really kicking on a lot of cylinders right now. we're putting another 1.9 trillion plus the second fiscal package. can the fed really just continue as is? if i was in the fed, i would not but this fed has surprised me over and over again. >> so here's the question for you, mohamed you know, i don't know if they will physically go this year or do it virtually, but there's always jackson hole every summer where jay powell has to give a speech he'll give other speeches between now and then do you think -- where are you? do you think that he basically says nothing until labor day >> so the speech he should give is the following, we're having an economic regime change.

it is meaningful we are, therefore, going to have a policy regime change a lot less monitoring, much more fiscal and because of that we worried about the markets that have been long conditioned to be us to be the buyer of first resort because of that we're increasing macro measures that's the speech he should give it's a really tricky balance so i suspect that they will wait and wait and wait and see how much of the heavy lifting is done by the market if this relative repricing continues and is dorn in ordinary fashion, they'll be really happy >> hey, andrew -- >> yup >> -- this is funny, isn't it? it reminds me of broadcast news. you say it here and it comes out there. addressing your question, tepper points out unless unemployment

plummets, doesn't expect the fed to do anything before december so that would probably -- so i -- when is jackson hole? >> august. >> late july, early august. >> late august it's late august >> late august. >> and if the -- what's nfw mean >> fon farm -- >> don't say that aloud, joe >> i know. nfw before jackson hole. so he's -- this is hilarious anyway, that's the answer to that one anything else? you want to know -- >> hold on, has he extended his. >> go ahead. >> ask him has he extended his prediction until september. >> i tried i tried. >> now he's going to december. >> he said, i'm better at being him than he is i have to do this. i wanted him to call in obviously but it's good.

when i said how many months do you expect this to be range bound he would only give me several, which could be two, but these guys are agile i mean, if something were to change, if unemployment were to plummet, something like that, we would need an update i don't know if we'd get one, you know what i mean i don't know if he ever called and said he was off that horse last time, right >> right >> it definitely flies in the face all the other guests were making bold calls he's not saying that, right, mohamed? it's hard to go against him. you can't be right all the time either believe me, i know it was great to have mohamed here, was it not awesome. >> perfect perfect. mohamed, thank you for joining us joe, i don't flow if you're going to stick around or not

i know you have to sleep in because that oprah special last night went late so -- >> i saw some of that. >> we appreciate -- >> i saw some of that. i have a daughter home my son. you really think we're not going to be watching that? i saw some of it i did. i also -- a lot of hoops a lot of hoops a lot of hoops i did okay yesterday as well is this still -- i took a vacation day does this get reversed, becky? what would you ask for >> i think you do. the breaking news i thought was that you were going to show up i knew why you took off and what you guys were doing. maybe but -- >> i know. >> really good job. >> if you have chipotle, you need margaritas, right >> right >> yeah. >> i'm going to see what he has to say about all of this stuff then i'm definitely gone then i'm not going to be -- i'm not doing any -- >> so you still need me to stick around is what you're saying, joe?

>> what's that, mike >> so i still should stick around for 45 minutes or not >> you should, yeah. yeah you want to leave -- >> no, no, we're good. >> i think four is a charm four is a charm. >> all right >> it's lucky. four leaf clover. >> coming up, the u.s. is on track to vaccinate all adults who want the shot this spring, but is that the best way to end the pandemic when some countries don't have nearly enough plus, we have an upcoming interview with kyle bass it is all ahead. as we head to break, take a look at shares of gamestop. here we go again they are popping on news the company is forming a strategic planning and capitol allocation committee. ryan cohn will serve as chair of that group the committee is aimed at leading a shift from the chief

commerce officer hiring two execs to lead customer care. searching for a cfo ecommerce experience we see the stock up 11%. stay tuned, you're watching "squawk box" on cnbc

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welcome back to "squawk box. we all know the right tweet from the right person can be valuable robert frank joins us with a story of a 7-figure tweet in the growing world of digital collectibles robert >> good morning, andrew. this is all part of the new craze for nfts or nonfundable tokens jack dorsey offering the first ever published tweet from 2006 just setting up my twitter getting a bid of 2.5 million from a malaysian crypto entrepreneur the record for an nft was shattered last week. it was flipped for 6.6 million that could be broken this week when one of his works auctioned at christie's is closing thursday top bid just under $4 million.

the market for nfts is now over 400 million. most of that just over the past month. you have songs, music, videos, memes, tweets of lindsay lohan's face becoming nfts grime selling nearly $6 million in videos and music with one video going for $390,000 now nba highlight videos called top shots, they are the big mover accounting for nearly half of the nft market with lebron james holding the record with a jump shot selling for $208,000 andrew >> robert frank. we should sell this segment. we should see how much this segment can actually go for. i don't know if cnbc gets the revenue, you get the revenue i don't know how it's going to work we'll see in the new world of nfts when we come back, signs that the american public is getting ady reto start traveling

again. talk about that and so much more when we come back.

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while the u.s. is on track to have enough vaccines for every american adult by may, other countries will have to wait a while longer. there are questions whether that's the best strategy to end the pandemic meg tirrell joins us now. >> reporter: mike, that is the

issue that has been a worry since the beginning of the m pandemic it's known as vaccine nationalism. it could prolong the pandemic around the world what we are seeing is that as the united states is expected to have 500 million doses by the end of may, if you compare that with the number of doses expected by that time from the cou covax facility to get vaccines to poorer and middle income countries, they expect to have 237 million doses of astrazeneca for 142 countries by that time that's just one example of the sort of inequities we're seeing in vaccine access right now. rich countries representing about 16% of the world's population have bought more than half of all covid-19 vaccine doses. you can see here what they're estimating that the upper middle and high income countries are

just purchasing most of the vaccine doses. we talked with a professor from south africa, geneticist, are saying the variants are making the problem more dire. here's what he said. >> we hope this covid variants is a wake-up call that you should not leave any country behind because otherwise we also have the chance that a country cannot control the pandemic and develop new variants that easily can be produced in other countries. >> reporter: so, guys, even if we protect the population in the united states or in other countries, if other countries aren't protected, you can see the economist is predicting africa may not have coverage until 2023 or even later, that the variants can circulate posing more risks to around the world. it's not being nice it's in everybody's self-interest to

protect the world. becky, back to you. >> meg, thank you. meg tirrell. joining us is dr. scott gottleib in his latest op ed in the wall street journal he says while we won't fully eliminate covid in the near future, we can make sure hospitalizations and deaths won't continue to recur. let's talk about meg's report. we touched on this last week when you suggested we should help mexico as soon as we've vaccinated everyone here this brings up questions we knew there was going to be vaccine nationalism happening. we've seen it play out in italy where the e. usaid vaccines manufactured there won't be sent to australia what should we do? if we haven't stopped it around the globe, it's still going to be circulating it seems it would be pretty difficult for any u.s. politician to say let's send what we have to other countries

before we have every adult here. >> look, in 2009 with h1n1 we had vaccine being manufactured against the flu in australia and canada australia and canada wouldn't allow the doses destined for the united states shipped to america until they had satisfied their local needs. on the flip side of that, we were manufacturing vaccines in the united states for the u.k. and at glaxosmithkline facility and we wouldn't let that vaccine leave the country. so this is not a new issue in the setting of a public health crisis, you're going to see the nations take actions to protect themselves and make sure the local needs are satisfied before they allow critical medical supplies look at regeneron, one in ireland and one in new york. they moved all of the drugs they are manufacturing in their new york facility for ireland.

why would they do that why didn't they make that covid antibody in their irish facility they knew if they manufactured it there, they wouldn't be able to bring all of it back into the united states. it would have been held on to. we have long known there would be nationalistic magss and the bottom line is there is a tremendous amount of supply coming on, including pfizer. that vaccine is going to be made available around the world in terms of satisfying the entire global demand this year with what's going to be available, it's going to be tough. we would have had to motte ball and make available much more manufacturing capacity than we had available at the time the crisis came. we didn't plan for this. we didn't have the infrastructure and idol capacity to be able to surge production of so many biologics to satisfy a global need.

>> yeah. i think it's a non-starter to think the u.s. would ship vaccines it's purchased outside of the united states before, again, the end of may before every adult can get the vaccine. the next question is what do they do with the manufacturing that is done after every adult has gotten it? the question is would you need a booster shot from a second j&j shot something more coming from pfizer and moderna whether and when you can vaccinate people below the able of 16. do we hoard that >> i think we're going to stockpile some of it, but i don't think the stockpiling is the issue. we're talking about a global demand that's billions of doses and we're talking about the u.s. holding on to tens of millions of doses there are two facilities that pfizer is operating, one in europe, one in the u.s the u.s. facility is satisfying

u.s. needs it will be satisfying other country needs as well. our allies, their needs are going to be met out of that facility also. the european facility is satisfying their needs that's the situation with a lot of companies where they're operating multiple manufacturing sites in the u.s. and europe and they're trying to satisfy a distributed production system. there just isn't enough. it's not a question of what the u.s. is holding on to and what we're stockpiling, the amount we're going to use and hold on to is a small amount compared to the global need. the bigger problem is we just don't have a global manufacturing enterprise and able to scale up quickly enough to satisfy that global need this year we'll satisfy a good chunk of it, but not the entire global need >> hey, scott, i'm curious i don't know if you read the cover story of "business week" about the ceo of pfizer and all of the machinations behind the

scenes of the last couple of months if not the past year to get this vaccine in people's hands, but one of the things that the piece seems to point out is the idea that pfizer ultimately, perhaps even more so than moderna will make a meaningful profit as a result of this and positioning itself to make more profit from vaccines in the future. that's relative to a johnson & johnson which has taken a different approach which is to say they're doing the vaccination work at cost astrazeneca similarly is not going to make nearly the same kind of money that pfizer is how do you, as somebody who's on the board, think about that? but also somebody who lives in the world of health care and talks about trying to come up with equitable solutions >> yeah. i mean, you have to separate revenue and profit, and you know that, andrew i think the figures that have been announced by other companies are higher than what pfizer has so far stated in terms of what they think their estimates are going to be.

the bottom line is pfizer is a single company that didn't take money in advance from any government to offset the costs of developing this product, the risk of developing this product. i was at the board meeting when we voted to allocate $1 billion to buy machines before we knew we were going to have a product. ultimately the company ended up spending $2 billion in advance of having a problem to scale up the vaccine. pfizer did not take any money. they did this on their own dime because they knew that was going to be the most efficient way to bring this prices offset some of the costs and the risk they took the pricing is commensurate with the pricing of a flu vaccine i think we want to make sure we leave some margin in for these products right now we have to develop second generation vaccines, new variant vaccines you want continued generation.

some companies are one and done. their goal was to develop a single vaccine, respond to the pandemic, that was their aspiration and then there's some companies that believe there's going to be a sustained effort here that we're going to need to innovate the vaccines and bring new vaccines to the market pfizer is in this for the long run. the view is this is a sustained effort and we have to continue to innovate. >> dr. gottleib, thank you much more to discuss with you. we'll get to it later this week. we'll see you soon. >> thank you. >> thanks a lot. when we come back, investor kyle bass will join us live. he'll help us make sense of the wild market moves we saw last week plus the breaking comments that joe got from vidad tepper just a few minutes ago stay tuned girl ♪ ♪ it's outrageous how this flavour got em shook like ♪ ♪ hold up ♪ ♪ work work work it out ♪ ♪ ah ha ♪ ♪ i hit it back with a brand new style ♪ ♪ like woah ♪ ♪ bring it up into the fold get wild ♪

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americans are ready to travel and airlines and airports look like they are about to get a lot more crowded phil lebeau joins us now with more on that front phil, good morning. >> good morning, becky are you ready for the summer surge? the airlines are take a look at the data compiled by oag they track all of the seats available or added look at the increase in may. this is from april up 30% 36% in june. by july there will be 41% more seats being added for domestic flights here in the united states take a look at the airline stocks over the last six months. we've talked about how the airline stocks have moved up

fairly steadily over the last couple of months the interesting thing to keep in mind is that these guys are adding staff as they head into the summer surge and the expectation for some of them that they could hit break-even by this summer nobody's guaranteeing that but that is the expectation for some of the air lines what about you as a traveler have you made your reservation yet? if you haven't, take a look at what the airfares are doing. hopper, which tracks airfares, and then puts out a forecast is expecting the summer domestic average airfare round trip to be $225 and then every month from here on out all the way through june they're going to go up about 6% if you have not made your reservation, be prepared they are going up. i've heard from people saying, what, i thought these fairres we going to be cheap forever. look at shares of mesa this is an airline, a regional

airline that basically works with united and american this stock has had a heck of a move because there is more regional jets that are in demand for domestic flights what we're seeing in the airline industry is an interesting couple of months here, becky if you have not made your reservation yet, some people are saying, i'm not sure if it's going to be open, you have a rare window where the airlines will change your tickets that's not going to last forever. that's going to change at some point in the future as demand comes back be forewarned. if you have not made your reservation, you will pay for it >> awesome higher prices, more jammed planes can't wait thanks, phil we'll see you later. >> you bet when we come back, david tepper says he's getting bullish on stocks. joe's going to explain he'll join us with what the famed investor told him. plus, we'll get reaction from kyle bass stay tuned, u'yore watching "squawk box" and this is cnbc.

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billionaire investor david tepper getting bull in he told joe that the selling of u.s. treasuries is likely over, and that he can't be bearish on stocks joe's here he's got more of his conversation with tepper joe, take it away. >> thanks. when you go to the airport and you know the daily parking, if you like, you know, you stay two days, if you were three minutes over, like on the next

day, they charge you for another day, where am i on the day off thing, do you think, with the vacation, you know what i'm saying >> you get it back >> really? >> i don't call the shots around here sure. >> i know you don't. i'm in negotiations. no, i don't care really don't i like to view this just for the good of humanity i like to do this just for the good of humanity basic thesis, becky, as we said earlier for people who weren't watching, is that rates may have temporarily made the most of the move that they're going to see, near-term, as a result they could be more stable in the next few months. >> as a result that makes it safer to be in stocks for now. a lot of this is prediction. a lot of this is based on news out of japan on friday which wasn't totally new u.s. treasuries have been getting more attractive versus the rest of the world in recent

months as rates have been going up but when it was said on friday, they won't widen the range and they have a range of 40 basis points on the zero anchor for the japanese government bonds and they didn't widen that range, let's talk to someone who i know he follows all this stuff, very closely, famed investor kyle bass, chief investment officer of damon capital management while the rest of us were fixated, kyle, on the jobs report, which tepper actually pointed out, was not that great, but this news happening in japan, was that significant that corona, at least in his own opinion said that they weren't going to widen that ban and they are going to stay tethered to zero. >> yeah, i mean given the amount of debt that the bank of japan owns, let's put it in perspective, joe, the bank of japan owns more than 100% of japanese gdp of the bond, and if you look at the list in the etf

market, the bank of japan owns 890% of every e -- 80% of every etf listed in japan a top five holder of some of the largest companies in japan that's where we're headed, joe and tepper's right, if we're going to pass a trillion nine now for an additional spending bill and the very next thing we're going to see is somewhere between a 2 and $3 trillion infrastructure bill, you have to remember that one institution that is tasked with inflation, is the only institution that can actually cause inflation in the united states. >> so you can confirm, or you've noticed that for five or six years, the japanese have been net sellers of u.s. treasuries do you expect that to flip and they become aggressive in taking advantage of the yield differential that they can get now, since apparently currency-related hedges and the cost of those have dropped to the point where now they can make the 100 basis points on an

investment in u.s. treasuries so you expect them to become big buyers and hold down this recent rise we've seen in rates >> sure, i mean it just makes sense to any of the long-term institutional holders, you look at our 30-year, our 30-year is 230 today and it got as low as 1% back in june or july. and the japanese, their 30-year today, i think it is around 72 basis points and so net of hedging costs, if there's a positive return to them, they will engage in that kind of investing, and you know, tepper's going to be right, our ten-year is 160, and we have 21 trillion reasons why the fed can't allow that rate to move much higher. and can't allow short rates to move much. so i think tepper's right. i think we're going to see additional balance sheet expansion at the fed, and in a way that we've never seen before realize that today, 20% of the

money that's in our system today wasn't there a year ago. and that's never happened before and so i think we're going to see stocks move higher, i think we're going to see asset prices continue to move, maybe nonlinearly, i think we will see some really aggressive moves. >> i guess, kyle, we made a point in the past, gotta be great to just be able to stimulate forever, you know, throw a trillion there, a trillion here, 1.9 trillion here, 3 trillion here, and it would be great because it does help gdp, we're always worried about the chickens coming home to roost if we can sell our bonds, and they're that attractive, do we delay the eventual arrival of the chickens coming home to roost, so you can work and party like it's 1999 with the stimulus because we don't have to worry about rates going up, i think that's his point why it's tough to be bearish on stocks here.

>> that's right. i had breakfast with kuroda a few years ago and i said you guys own more than 100% of the kbp gdp of the bonds and not monetizing the deficit, and a big belly laugh, and said kyle, we're only monetizing the deficit when they tell us to monetize the deficit >> so we're all in this together so the central banks are never going to turn and decide to be fiscally conservative again. i mean, when is the last time you heard the words tea party? even under the republican administration, we just forgot that we needed to be fiscally conservative, so now we have, i think we're going to have ever-increasing deficits and what politicians have learned is deficits don't matter, the fed's going to be there for them and the fed has been engaging in extraordinary monetary policy for the last decade.

so it's not going to change any time soon. it's only going to get worse >> well, any time soon do i need to feel like i'm in the roaring '20s and we're closing in on 1929 i mean when do you see, i mean it gets bigger and bigger and bigger, what you're describing and we become less and less concerned as we go along do you expect the eventual comeuppance to be much worse based on that? or is there a way to spread it out, so that we work it off over time with growth it's hard to grow when you have that much debt though. >> you know, the last time the u.s. was at this debt level with gdp was after we deficit spent going into world war ii, but in 1946, we had about 106% of gdp but guess what, we won the war, and we reduced the productive capacity of two continents, and we ran a trade surplus with every single trading partner

that we had on the back end of world war ii and we were able to pay that debt down over call it the next 30 years, into a very low level. i actually don't think that's the case this time, clearly we're not engaged in a world war, and we're not running a trade surplus with almost anyone in the world, so you know, i actually think what the quote comeuppance here is going to be is further stretching of our call it social fabric in our country, right, that the rich are going to get much richer, again in a nonlinear way, the middle class won't be able to reach out to the next, because the income is not moving as fast as asset prices and the poor will stay poor so that wealth gap is going to continue to widen. and that with it, that is going to come more social unrest the fact that president biden's here now might be taking a breath and saying we're going to be back to unity, but this is a much deeper problem. the fed can't have its stake in it, too, and i think social

discord, or discourse, will happen. >> when you award people that own assets, with inflated asset prices, i don't know what you expect but that's what we're seeing kyle, great to have you here today to talk about all of this so smartly, i think we got somewhere. i think we got somewhere anyway, i appreciate it. thanks, kyle bass. i don't know i'll see you guys tomorrow i am coming in tomorrow. >> we'll see you tomorrow. >> mike, thanks for being here. >> thank you. >> i like that forward shot. make sure you join us. "squawk on the street" is next good monday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and morgan brennan cramer has the morning off futures improving here to start the week on the heels of david tepper's comments on rates which