Skip to main content

tv   Squawk on the Street  CNBC  September 25, 2020 9:00am-11:00am EDT

9:00 am
back here and right now we will turn it over to "squawk on the street." >> tuesday is the debate ♪ good morning, and welcome to "squawk on the street," i'm david faber along with jim cramer carl has the morning off let's give you a look at futures as we get ready to wrap up the trading week when we begin a half hour from now as it turns 9:00 that does take us to our roadmap. it begins with, well, what you're seeing, another fall in futures, the s&p is on track for what would be its worst month since 2011 with stocks set to post what would be the fourth straight week of declines. and as often is the case at this time, there is some vaccine news, at least one candidate saying they will have a billion doses ready by early next year and later, a $22 billion public debut, what are we going to make of palantir's latest valuation as it gets ready for that direct listing.
9:01 am
we will begin, though, this morning with of course stocks, futures indicate an additional testing of that 3220 level on the s&p. we're also talking about the possibility, however remote it might seem, of a relief package coming out of congress,given some conversation, jim, between secretary mnuchin and speaker pelosi do you think there is a chance >> i know that they both care passionately about small business if you look at the testimony yesterday by secretary mnuchin, he mentioned restaurants a couple of times. that's where the yelp numbers that we get, yelp yikes is our vc, where the real damage s you're starting to talk about 50% of the bars and nightlife being closed in this country, that's way too big and i think that the secretary is really alluding to that david, do i think there will be a deal i think there is a sense that both sides feel a deal is bad for them, in other words, if they give -- if there's a stalemate, they will somehow do better at the election
9:02 am
i don't think that's true, but who am i david, in terms of the stock market you want the stimulus and a lot of this back and forth that makes it so this month has been the worst in nine years has to do with the fact that people have given up on washington and trying to get more money it's a good reason to sell, but it's almost over and how many more people need to be convinced there is no stimulus i think that, therefore, the market is -- it's probing the bottom. >> at this point it would be quite a surprise for the market one would expect if we were to get one. we should mention there's various reports of a new democratic effort in terms of a price tag between 2.2 and 2.4 trillion obviously that is down from the bill that was passed, jim. you know, we had mark meadows on, man, what is it, a couple weeks now. i mean, he did sound, the chief of staff, of course, for president trump, he did sound positive then. he almost had me convinced that they would be willing to sort of end up around a $2 trillion number which if these reports are correct you're certainly not that far from right now. >> look, i think we could
9:03 am
arrange a deal, david, you and i, we could go down there, hammer some heads and get a deal done great for the american people, great for small biz. there's probably ten firms today that upgraded or raised their numbers for darden, which is olive garden they don't say the truth the truth is that olive garden is a winner because they can afford to take the tables out for sit-down dining and be able to have disturb sighed pickup and all the small guys can't so by default we're all going to olive garden and i wish that somehow people would say -- although i like olive garden -- that that's not the way we want. >> you want to your point and what secretary mnuchin was talking about you want to target the aid and many people have been talking about that, to what you're talking about, jim, which is the smaller businesses, a lot of them are restaurants that are not chains that are dependent on people coming in or at least are sitting there right now, i mean, in new york right now it's nice because there's tables everywhere, all over the place
9:04 am
outside, but it's getting colder and soon enough it's unclear what people are going to be willing to do in terms of inside and many restaurants that are hanging on may not be able to make it through the winter. >> i do reference the fact that this morning for $3.99 you can get an incredible spiral flame warm heater for outside, $200 cheaper than amazon. >> where >> costco. >> oh, at costco. >> and what i would tell you is that costco -- >> do you have to assemble that? you have to assemble that, i think, right >> okay. well, come over and assemble mine. >> you come over and assemble mine. >> it's an allen wrench. toss allen. >> you are working on our new set. >> i have to get my phillip's head. >> jim has been helping put together the set. >> it's everybody's -- let's just say that the costco quarter
9:05 am
was, i think, the dominant thing last night and i loved it, costco goes down because we all knew, why, because they give us monthly. they spent a lot of money on covid and on their employees. >> you send me the link for that outdoor heater because i need one, too. >> you do? >> yeah, i need a couple if i can get them. >> okay. just go to costco. >> yeah. >> it's a clunky -- it is a clunky commerce site but they were still up 91%. >> i know. 91%. >> and just put in outside heater. >> okay. i will take care of that okay >> it's a bargain and, david, when you think about why the analysts are upset about costco, they're thinking that once the pandemic is solved, people will stop going there i think it's the opposite. once the pandemic is solved you will know exactly what a bargain really is and you won't go away from it. people like cheaper things you spend $281 million to keep your employees happy i think that's absolutely fine then you get the spiral flame
9:06 am
patio heater, david, spiral flame. >> spiral flame patio heater. >> $399 same heater amazon $599. amazon might be convenient but america likes a bargain. >> oftentimes if you do at least not just hit the immediate -- the buy button on amazon, you will find oftentimes the same product cheaper on other places. >> costco, i like the stock very much obviously there are institutions trying to offload it ever since it reported the number, right before the number they were selling, after an unbelievable call rich galaney -- >> stock is down a bit, but why after what you're describing is a strong quarter, 91% increase in e-commerce. >> they are still not got in e com by their own admission this is a typical pattern for costco, it goes down they have $30 billion in cash so there were some wags expecting a special dividend and were disappointed people are disappointed with costco, maybe they don't like the fact that they had to get
9:07 am
rid of some of the samples because of covid, but to be disappointed in costco is to be disappointed in the best retailer in the world. they are going to open two in china, they're opening one in spain despite covid, they're doing so many good things, but the analysts are never satisfied with costco, never i'm going to say it, they always think they overpay the employees, da i have had. >> he know. >> they are the highest paid retail employees in the country. >> the comparison is one we have made with walmart or home depot or any number of the other big guys out there walmart has obviously increased their pay, but costco has been ahead on this for years. they pay the most and they have the most generous benefits as well, don't they >> and that's why when you go to costco you see the same associates and you always have the same managers and you can talk to them and suggest this or suggest that look, i once said, look, to my manager, i think that your roasts are the best roasts i have ever had. then you go back the next time, hey, are you going to get a roast again? it's the kind of thing it
9:08 am
doesn't happen, david. it doesn't happen in safeway as much as i think that albertson's is too cheap, acme you go there they are not aware of what you buy. i found that at costco they always know that i like the crab legs always. >> back to the larger point here that you've made in so many different areas is the big are going to get bigger at the end of this. they already are and they are going to be even more dominant than they were going into the pandemic and costco is seemingly an example of this, right, david? >> two cards. >> they're up 91%, 120% if you include instacart in there and they have a long way to go so when they get on the other side of this with all the new members, membership was up 5.4% in the fourth quarter. >> that is in keeping. that's the level that they typically have. >> right. >> you're spot on. i mean, look, two cards, i mean their aisles are so wide that you can get two carts through it so you are much less fearful they were the first retailer to say you have to wear a mask. it caused some fights at the
9:09 am
beginning but turned out to be something that made it so it was safer. they credit that for one of the reasons they had double digit same store sales this is the second largest retailer in the world so you can get a really good read of things they used to rebel against the whole natural and organic move, david, and then they decided to get religion and now they are the dominant one and they first were reluctant or didn't really sense e-commerce and now they're going by their own admission they still have a lot to do. what number was not that great travel breaks, costco has great -- people don't even know that they have travel, they have cars, but travel has not been that strong and hearing aids and that's been a fantastic -- hearing aid business -- the hearing aids are so overpriced, costco has the best but they had a number tvs, electronics they were terrific, patios they managed to get that remember, people don't -- they buy homes and they don't want to entertain inside that's why i mentioned that particular heater for you to get so that you can get that when you're outside. >> thank you.
9:10 am
>> you can continue to entertain. >> we are going to get on that immediately and, in fact, put it together over the weekend. i will do that. >> did you order it while i was talking? >> i didn't order it yet. >> you better. there's going to be a run on them. >> i foe >> rich galanty the cfo is ten times smarter than the analysts. sometimes he just has gun with them this whole concept of treating the highways well, he loves the fact that that's a good thing and the analysts want to save money. i mean, come on. think about what they've built here based on the fact that they pay top wages. >> yeah. it's textbook. >> right. >> and it's one that they study as well. jim, let's quickly check in on vaccine news we have headlines on potential vaccine candidates, both astrazeneca and novavax, let's go to meg tirrell, check in with her on what's going on. >> good morning, david novavax announcing yesterday afternoon it started its phase three vaccine trial in the uk
9:11 am
where it's going to enroll up to 10,000 participants ages 18 to 84 we talked with novavax's chief of research, dr. gregory glen yesterday about enrolling there in the uk. here is what he told us. >>. >> looks like the uk is going to have a massive surge in cases and we will be there so that's going to be the art, is getting enough cases, you know, to declare a success >> now, of course, guys, we are also seeing a surge in cases in the united states and novavax is on track in a few weeks to start its phase three trial here, that's expected in october some headlines on astrazeneca this morning, in a deal reached with the eu reported by reuters for the eu government to cover any potential liability from potential side effects from that vaccine if they arise, this in a deal to supply the vaccine at a lower price, reuters comparing this with a deal the government there struck with sant achlasana
9:12 am
four times as much for the dose and not provide that liability protection here in the united states this kind of protection is a regular thing, we have had this for decades in order to provide sort of cover for vaccine makers to feel like this is a good business to be in, just concerned about liability, however, guys, everybody developing these vaccines will emphasize they are not sacrificing safety for speed as they go through this process >> yeah, well, it's a key and it's a theme and a question that will continue to discuss, meg, given people's concerns about whether or not it is being rushed, despite what is, of course, what we get from the companies. meg, thank you jim, on the subject of vaccines, i know you had the co of santafi on last night let's listen to what he had to say in terms of their ability to produce a vaccine and how many dosages. >> again, to produce over a billion doses of vaccine
9:13 am
worldwide for covid-19 we are already in human studies, we're adding -- we're manufacturing doses pretty much right now and we will be available at some point early next year. >> a billion doses >> it's a vaccine company. sanofi they know vaccines and they are teamed up with glaxo which is the second big vaccine company. i wanted merck to be huge in vaccines because they're fantastic. sanofi understand how to do it when i said that level seemed fanciful to me paul hudson said, no, that's what we do. you have a lot of companies that are in the race for the vaccine. you've mentioned novavax, we know moderna, but i think you want to go with the guys who have done it for years this is study -- it's not like the j & j which is here, but i like what i hear from these guys and i like the fact that novavax is right you have to go where there is a resurgence of covid-19 in order to be able to have enough people
9:14 am
to be exposed so that the plas bo he has a difference from the actual vaccine yes, it's true, you should be doing your tests over there because they seem to have gotten sloppy, i think that's an okay word to use, some people would just say they've lost their discipline david, they have lost their discipline big over there. the uk wanted everyone to go back to work. >> i know, the uk is now coming out with significant restrictions, once again, on people's ability to go to work and a lot of other things, jim, which is being watched closely in terms of the impact it's going to have on that economy. when you hear somebody say it will allow us to be successful that is because they have so many more cases, you can find people for the trials. >> that's really the only positive i have heard about having more cases. >> i know. >> some of the countries the death rate versus the caseload is just terrible, too. i know we are all focused on the u.s., and of course we're here, but within of the things that i like about this abbott labs test is we might actually see once you start testing everybody that our rate isn't as bad. that's my hope
9:15 am
over in the uk let's just say they have lost control of covid-19 >> all right we'll take a quick break here. the opening bell of course about 15 minutes away. ayith us we're back in just a moment. yeah...uh... doug? [ding] never settle with power e*trade. it has easy-to-use tools and some of the lowest prices. don't get mad. get e*trade and start trading today.
9:16 am
9:17 am
9:18 am
another big public debut coming next week. "wall street journal" reporting as well palantir going to be valued at around $22 billion when it opens next wednesday i'm looking through one of my notebooks here because i've been talking to a number of the investors there sometime back, and, by the way, they were using the $20 billion number then, too. >> yeah. >> i'm not sure it was really news, but -- in some ways, but what i did learn from the journal actually which i did not know was this lack of governance i mean, if you want good governance, the idea that some of the largest shareholders can actually sell down but still keep if not increase their voting power that's a new one and then there's the lockup which that is what i've been talking to a couple of these large holders about in the past, where it was going to come down in terms of they were going to have this usual lockup on a regular ipo, yeah, you have a lockup but on a direct listing, which this is, that would be kind of -- it would have been a new feature, how
9:19 am
much of your shares could you actually sell and they are only going to let them sell the journal says 20% they've been debating where they were going to end up there, if they're correct that's a good number to key an eye on. we will see how the stock does we haven't had that many direct listings, spotify, slack are the two ones i can think of and, you know, it's always an interesting test to the market. >> spotify in retrospect was mispriced even though it went down from where they originally did because people didn't understand spotify's direction which was podcasts you started signing up very big people for the podcasts, you saw the explosion in listening to podcasts and the stock finally doubled. palantir when i read that they could sell down and have more votes, kind of a yonger state over there, a sucker is born every minute if you want that. david, a lot of people don't care about corporate governance, they are used to a and b shares, and companies where your vote means nothing that people don't even think
9:20 am
about it i think you and i think about it because we don't think it's fair, but -- >> they don't seem to care listen, i mean -- >> fairness got nothing to do with it. >> no. there are these voting structures that are in place not necessarily where you come down and creed up and voting power is your economics decline, but facebook obviously has special voting stock many of the companies we know very well have that and it hasn't seemed to impede their ability to attract new investors or more those that have a structure like with significant voting power that's not equal to economics going into an ipo, it hasn't affected their ability to sell the stock, either. >> no, look, i think that these are things where people say, okay, it's a company security cloud, it's got all the right buzzwords and then they look at it and they are going to say, look, that's an interesting stock, price comes around 10, of course, the actual dollar price means absolutely nothing except for the robin hood people. >> right well, you know, on that note, do you have any expectations here
9:21 am
again, it's a direct listing so it's not like there is a book here that they have got together of everybody who has put in their order and we're not talking about raising any primary capital for the company. it is selling shareholders, whether they be long-time investors, employees who have stock to be sell some of it as well, that's what's making the market so to speak and then it's going to be up to whoever steps up and what they want to pay. >> it's a very hot area and they have some truly -- let's mef size they have some -- a hold on the security for a lot of government which people really like, i think that's steadier business than you get from a crowd strike, a splunk, palo alto has some. palo alto valued very reachly but nowhere near as richly as i think we are going to be talking about this one it is the right niche and i think people willsell some of the great cybersecurity and analytics companies like a splunk that i had on last week to go buy palantir they are not going to look at that governance structure because it bores them.
9:22 am
maybe larry fink will say something. >> maybe maybe it won't fit their parameters i don't know i still haven't found them. >> are you going through your notes. >> i have all these notebooks filled with notes from months now and i know i had a lot of notes on palantir. i have a lot on ant financial, that's coming soon, just won't be listed here, jim. you don't want it any way, of course. >> no. >> why would you want at largest ipo of all time. >> you had me meet the alibaba people and the stock was at 80. >> yes 33% owned by alibaba they stopped getting that dividend but they have that 33% stake. another name we will be following closely despite the fact it will not be listed in the united states. here is a name we have also been following, nikola getting a boost today, up 2% after what has been a poor week for the stock, still down more than 40% since monday we will keep an eye on that. >> nikola. >> and we will keep an eye on
9:23 am
futures as we get you ready for an opening bell. stay with us who is usaa made for? it's made for him a veteran who honorably served and it's made for her she's serving now we also made usaa for military spouses and their kids become a member. get an insurance quote today. with the icon that does the same. the rx, crafted by lexus. lease the 2020 rx 350 for $409 a month for 36 months. experience amazing at your lexus dealer.
9:24 am
let's squeeze in a mad dash before we hit the opening bell the cruise lines got your
9:25 am
attention again. >> yes, well, we've already trashed some of the stocks that the robin hood crowd is in, too, but, david, they love cruise lines and you see them trading at 4:00 a.m. in the morning and when you watch our call. barclays says it's time. it's time. they hated them now you want to buy them why because in 2022 the so-called out years they are well above consensus and their view is the companies will be operating full fleet in 2022 inclusive of lucrative new ships so buy them all. now, before you buy them all let me just tell you that if this fellow -- i'm sorry, felicia hendricks if she's too aggressive, david, don't buy carnival, buy norweigian they raised the most money during the down days, they have two years, frank del rio. >> apparently you're going to need two years. >> i'm going to go with frank. i want to do the alaskan cruise oni bl tti. econ >>pengelonhe other
9:26 am
side of this break stay with us ♪
9:27 am
♪ ♪ ...i was just fighting an uphill battle in my career. so when i heard about the applied digital skills courses, i'm thinking i can become more marketable. you don't need to be a computer expert
9:28 am
to be great at this. these are skills lots of people can learn. i feel hopeful about the future now. ♪ >> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing.
9:29 am
i will just put a provocative thought in here, there's actually an outside chance that u.s. gdp could reach the 2019 average level by the end of 2020, you could call that a form of full recovery. i still expect way above normal growth in the fourth quarter of this year and first quarter, first half of next year and so on beyond that >> that was bullard, jim, talking about his expectations yesterday you remember goldman cut their gdp forecast largely because of the lack of expectation now for something coming out of congress, but in half, from 6 to 3. >> i think somewhere in between. bullard has been red hot in the last three, four years i've really liked what he had to say. that seems aggressive to me but there are a lot of companies,
9:30 am
david, if you talk to them, if you talk to horton and lennar, if you talk to costco, if you talk to walmart, david, they say, yeah, that's true >> sales are very strong >> yeah. >> remember david berman a couple weeks ago saying he has never seen anything like it. >> that was a great interview, david. >> here are the opening bells. this morning you can see realtime exchange, we're going to see we could put in what would be the worst september in quite some time. >> but, david, i said that the last ten days of september have historically been bad, it's going to be even worse this year and what this does and this is what's important to people getting very negative, it takes 1999 off the table, david, we never had this in the year leading up to the nasdaq crash. >> right you made that point yesterday, we've never had this significant of a pull back -- >> yeah, i made it yesterday, i think it's a sal yant point, you can make it twice. >> you can make it and i'm sure you will make it many times. >> why would you -- >> i say the same thing over
9:31 am
again every single day. >> you have that notebook. >> i have a lot of notebooks. >> i see your notebook i will bring up five notebooks. >> i will raise you a notebook. >> i make calls, too, that's something i do. >> i know. >> anyway, market looks bad, that's okay. >> all right >> and what's happening i think is, again, we're churning to find a bottom, but, david, one thing that is absolutely certain, trying to find a bottom in the financials, murky murky. >> yeah. we come back to the financials and, listen, we both know them well, we know many of the leadership at some of these banks well which is another reason why and here we are down again at the early going here at least. >> david, how can morgan stanley be valued at 8 times earnings with a 3% yield and more transactions than ever how is that possible how can it be down 5 points from a fantastic quarter? >> it is to be fair the best
9:32 am
performer of that group, so to speak, at least of what you want to call bigger cap, investment bank/commercial banks. but you're right i made the point many times that this is -- even though it's still larger than goldman sachs market cap-wise it's going to close that e-trade deal very soon. >> and that's a great deal. >> and they actually benefited a lot from the pandemic at e-trade as we know it's not just robin hood, we call them robin hood traders, but the number of new accounts opened in e-trade has been staggering and morgan stanley owns that business. >> and nobody cares. it's just lumped in. by the way, there was an upgrade yesterday of goldman on the heels of the incredible quarter from jefferies people bought into it. what are they doing today? of course they're elg selling it do you know how many people are trying to make a stand with wells fargo at 23? based on what? that it's down a lot >> the reason we also come back to these is because we have seen vicious rallies in the banks in the past. >> short squeezes.
9:33 am
>> i can remember one at the end -- the years now all -- there was -- was it the end of '18 or was it the end of '19, there was a big run. >> jpmorgan had its big run. >> yes what fueled that back then, the prospect firmly of higher rates? >> yes. >> we were obviously in the midst of a good economy that was continuing on a nice pace. >> it was about nim. now we try to care about whether the credit card dead is going to be bad city, with the citi with the tangible book value at 69 and the stock is at 41. >> you want to buy these, but you can't. >> no, because i'm afraid that the federal reserve, they see some loan losses maybe they say, guys, let's shelf knows dividends, people that bought them looking for fixed income -- look, i don't -- we have no idea this is going to happen, but we did see wells which has always had a remarkable dividend, we will you later. >> speaking of dividends, jim,
9:34 am
again, a sector that you have steered clear of -- >> are you doing oil >> you knew it take a look at exxonmobil, you know what the dividend yield is there, right it's 10.2%. >> unsustainable. >> my question to you, mr. corbat cramer, is is the market saying that exxonmobil stock is undervalued and therefore will go up as the dividend yield declines to a more reasonable level or is there more concern that it will be caught. >> you taught me to look at the credit side. they will have to cut. one of the finest companies, 50-year view, a few years ago it was the largest company in america. they have not replenished the way that they should they have been on some projects, paid way too much for, and it's now chevron that's king and conaco that's regarded as being -- which is upgraded today the best balance sheet who trusts these david, this is the other side of the tesla mania. if musk delivers a $25,000 car a lot of people are skeptical of that, then i think we're going
9:35 am
to say, wow, i mean, you have to get out of these if california is right as the leader of cars, then you have to get out of these and the demand has not come back, the permian is oversaturated. david, there is another company, they bought a company, i don't know if you're familiar with the company occidental, oxy. >> this is a joke, everybody. >> a single digit midget when this is over, that's what we used to say on the trading desk. socially that was bad. that's what they used to call them. >> yeah. >> and, david, the balance sheets, the balance sheets, the balance sheets. >> it's funny, they are coming closer now to its 52-week low after oxy rebounded a bit. >> the price of oil hasn't gone do un. >> yeah. >> it doesn't matter, they are not levered to the employees of oil, they're levered to the glut in america. >> jim, there was a good amount of press i think it was earlier this week, though, on the european majors versus the ones you just mentioned >> european majors trying to be -- >> yes, trying to be green
9:36 am
bp of course sort of really forging what they're going to try to be carbon neutral within the next 15 years. >> someone tell them they are an oil company. >> but they aren't, they are an energy company and that's what they seem to want to believe that they are and that's what they are now trying to execute on maybe that's not a bad path to go down. by the way, there is some data that shows if you are following an esg path your cost to capital will be lower, that's not a bad thing. >> why didn't anyone talk about big wind deal. ge is switching to wind and wind is going to be very reasonable brian sullivan yesterday had the ceo -- he had the head of ferk, they want people -- federal energy regulatory, they want you to return power to the system, it's certainly very retro grade policies of the president versus what ferc wants to do. >> he doesn't like wind mills at all. he's not particularly high on
9:37 am
silver. >> it is interesting the dichotomy between some of the big european companies and their decision making in terms of dealing with climate change, trying to have more of a green sheen as opposed to our guys. >> david, you know who is going to get very big into hid jen >> who nikola. >> bp. >> they were going to potentially, right, yeah the stations. >> but the hindenberg came along which was a zeppelin that frankly about half the people died, it was in lake hurst so that's the name of the research firm. >> those shares are up now over 6% this morning. >> nikola? >> yes. >> i guess people forgot about the bogus truck. now, look, we're probably -- here is what i bet we see that girsky bought a huge amount of stock, they are making a statement right here they're doing that, that's what i would be doing if i were those guys if they're believers. >> and they're buying stock
9:38 am
right now. >> i don't know that they are. >> no, i'm saying that's what i would do if i were them. that's how you have to prove it. milton prefer came in and bought stock and that didn't matter that's a joke because my father always said don't trust people with diverse names but that's been right. >> don't trust ones who wear bow toes and we both don't trust anybody who doesn't have a drink. >> exactly right hindenburg scratched the bp deal. >> you don't know what they might have been able to accomplish in terms of executing the vision, now it makes it more difficult. >> you could argue, wait a second, even if you think they are a total joke they had a deal with gm. >> still do. >> gm is going to be building trucks and they had a deal with bp which wants very much to get hydrogen down to a reasonable price. if would have been if it weren't for hindenburg, david, it would have been smooth sailing but they had to go and do their lake hurst act.
9:39 am
>> moving on, shares of tesla which we always like to hit are up 3% this morning you were very positive on apple yesterday. there was a decent tone there in the market yesterday it's down a bit, but nothing out of the ordinary. amazon shares were up after they introduced a lot of those products yesterday are you going to get that drove that flies around your house to check on your security inside? >> i'm pretty confident inside i once had a bat in my house, though, that was flying around i had to hit it with a -- i had to hit it with a lacrosse -- >> a lacrosse stick. >> it was awful. katie huberty on apple she says it's time, says it's cheap why? because store openings are beginning to accelerate. she likes that j bill which no one is talking about, reported good numbers, they do cellphone work for apple she's talking about the mac accelerating, usually doesn't matter that much, but i think she was a bit straining to come up with something good but the
9:40 am
stock is down 20% and i think it's a buy. >> i know you do. >> i think it's a buy. david, do you know what we never talk about >> what? >> the cannabis stocks. >> there was a period we discussed them a great deal. >> stick a fork in them, david, ever since aurora cannabis reported where they said business is going to be down people tend to not want to buy stocks where the numbers are going to be down next year holy cow, the numbers are hideous. >> what happened there, jim? >> glut. >> too much pot. >> too much flower. >> too much flower. >> it's a nightmare for investors. >> is it called flower >> a lot of robin hoodies are in there and aurora turned out to be far more important. the ceo is from the cbg business and he said, look, we're doing terrible that was my translation of the conference call, but i mention it only because that was an industry that was completely red hot as is gambling right now
9:41 am
i wonder how the penn national deal is going to take place with the 14 million shares already. we are a little murky on where it was priced, but gambling has replaced cannabis. >> and you obviously also saw the news on william hill. >> two. >> two. >> two bidders, not one but two. >> received separate cash proposals from apollo and caesars. yeah >> penn nat, surprised offering at 61, it's at 63. i happen to like penn nat very much look, we haven't mentioned portnoy yet. okay, portnoy. but i like penn national because they built an incredible network of physical casinos where they've actually figured out how to be able to do social distancing and still make money. like darden where they can have a restaurant that only has 25% seating and make money jay snowden it went the anti-macau way i'm over here. >> i know where you are.
9:42 am
jay snowden from penn national went the anti-macau way. >> he is a visionary is there a plaque? is there anything for him in vegas? >> no. >> why >> bugsy siegel. >> mo green. but you got it >> mo green or lansky? >> these are mythical characters. >> let's get to fixed number we're joined by rick santelli. good morning. >> good morning, david you know, we had some important data out this morning, but the issue with weak headline numbers for preliminary durable goods is that it's a volatile series on its final stages so these numbers are definitely going to change. the bright spot is having said that, that the proxy for capital spending in the form of capital goods orders nondefense aircraft was really a good number and there were positive revisions, but as you look at a two-day
9:43 am
chart of the longest duration on the treasury curve, 30-year bonds you will see the deterioration, briefly we traded under 139 so these are the new low yields, high prices of the week as a matter of fact, if you open it up to a month to date chart it's been three weeks since the 30-year bond has closed under 140, we want to pay very close attention and consider any of those lucky investors who bought any of the 155 billion record amount for the package of twos, fives and sevens at this point before settlement next week are in the money in terms of it rallied right through their prices that they purchased those securities at. if we look at foreign exchange, it's been a wild couple of weeks and most is because of the weakened euro and most of the weakened euro is because of covid spikes in europe look at a mid-july start to the euro versus dollar, basically it's at a two-month low, you all know what that means, basically the dollar index is at a two-month high, 57% of the dollar index is the euro, but it doesn't end there on euro
9:44 am
weakness, even the other major currency, the yen, the euro at the lowest level in more than two months, i believe the exact date is the 15th of july we want to continue to pay very close attention to these changing dynamics and possible flows from the european markets potentially into other markets and if we cool some of the spikes here maybe it will be our markets. david, jim, back to you. >> rick, thank you rick santelli with the bond report stocks are off to a bit of a soft start allow s&p is flat, nasdaq up a bit. we are, though, on pace for what would be four straight weeks in the red. stay with us we're back in two minutes. incomparable design makes it beautiful. state-of-the-art technology
9:45 am
makes it brilliant. the visionary lexus nx. lease the 2020 nx 300 for $339 a month for 36 months. experience amazing at your lexus dealer. experience amazing good job, michael! does. ok, lindsey now tell the class what your mommy does... my mom has super powers. it's like she can see the future. what?! it's like she time travels in a rocket ship. that's cool! and then she comes back saying "try this" or "try that." she helps everyone. she helps them feel less worried. wow! mommy, so what is it that you do? i'm a financial advisor. she is! aig proudly supports all the professionals taking care of our financial futures.
9:46 am
9:47 am
a reminder the preeminent investing conference of the year delivering alpha now just five days away and the lineup this year is bigger than ever alpha is now in its tenth season you are not going to want to miss it, go to if you want to learn more and of course register we're back in a moment ♪
9:48 am
9:49 am
xfinity is your home for the return of live sports. you're matching live
9:50 am
pictures from the u.s. capitol, that's the arrival of the casket of the late supreme cour of ruth bader ginsburg she will be the first woman to ever lie in state in the capitol. lawmakers are going to hold a formal ceremony in statuary hall to honor justice ginsburg.
9:51 am
9:52 am
>> we'll take a quick break and be back right after this the unmistakable lexus is. get zero percent financing on the 2020 is 300. experience amazing at your lexus dealer.
9:53 am
experience amazing t-mobile's new offer on iphone 11 pro is even better on our most powerful signal.
9:54 am
switch and get two new lines of unlimited for only $90 and 2 iphone 11 pro's on us. only at t-mobile. good morning, mr. sun. good morning, blair. [ chuckles ] whoo. i'm gonna grow big and strong. yes, you are. i'm gonna get this place all clean. i'll give you a hand. and i'm gonna put lisa on crutches! wait, what? said she's gonna need crutches. she fell pretty hard. you might want to clean that up, girl. excuse us. when owning a small business gets real, progressive helps protect what you built with customizable coverage. -and i'm gonna -- -eh, eh, eh. -donny, no. -oh.
9:55 am
welcome back let's get to stop trading. you keep wanting to come back to general mills? >> the analysts didn't seem to realize general mills is back. the dividend is getting bigger again. they have a fabulous stay-at-home offerings the dog food acquisition was well done. they didn't like it. i think because they thought the company overpaid for blue bluff and bought a lot of stock back higher i think they're going to be able to retain the customers they've gotten during this period. they've taken share and the algorithm of 2% sales growth and 6% earnings growth they say is intact this is a note buy credit sui e suisse i think general mills is back in the days when we called it generous mills and you can put it away and i think you'll do
9:56 am
fine and you can reinvest the dividend and you'll be a happy person >> you've used it in the past in multiples as to why other companies that are growing faster are actually a better investment even if they have a higher or equal multiple gis >> i agree, but i think in this era of low interest rates, there are always going to be people drawn to a 3.5% yield and want to know if the dividend is safe versus, would you say exxon? a 6% yield that i don't think is safe i think it's worth it to point out stocks that i think can give you a good yield viewers want to be able to get something they can get some money back >> we started the show talking about costco's earnings. i come back to it. it's down almost 3% after what you thought was a strong quarter. >> talk with management. it's typical of what happened. this was a great quarter
9:57 am
a lot of people feel spending $281 million on co-vid is overpay. they were disappointed they didn't return some capital i say come on. they're going to keep selling it all day. right now only 1.6 million shares have traded unlike yesterday sunw that's sun power i'm sorry. >> oh. the energy company i mentioned the other day? >> yes they took sunw symbol. this thing had 200 million shares traded. they only have a 16 million float. >> it was spi energy i mentioned. it was a tiny market cap, but the trading in that the other day was truly unreal >> is that the men in tights again? >> it could be it could be those. >> don't you get tired of the men in tights? >> i mean, you get tired of them in some way, but you welcome them in others >> yes and i'm referring you to robin
9:58 am
hood the 13 million new valuation. i welcome all of you aboard. and you ought to be thinking of owning a general mills along with the sun works >> all right heading into the weekend, boeing popped up a little bit that's not a name we talk about lately up 27% >> calhoun -- >> you think so? >> yeah. charming >> remember the days when we would talk about the max every day? >> i also remember the days when we had a 20-year order book. remember that? >> i do. >> put people on the moon, mars. race elon musk to mars how did elon musk get a better balance sheet than boeing? that's something >> that is something >> isn't it? >> yes >> ponder that over the weekend. >> okay. i'll add that to my list >> and get my space heater >> already sold out. >> they are? >> yeah. >> they'll replenish it's costco.
9:59 am
the best supply chain in the world. >> good. i'm going to order one i'm sure it will take me weeks to put together if it requires assembly >> i'll call can my wife not that i've seen her lately, but lisa is so handy handy with a drill >> you are going to see her this weekend? >> i'll check in >> in person >> yeah. the social distancing is -- >> no. america wanted to make sure. >> i social distanced from my wife i had to quarantine. >> it all. >> i've done it all. >> lisa doesn't know i have a show in the morning. >> speaking of the show at night she may be more aware of, what's on it? >> i have brunswick. lisa and i have a 17-foot boston whaler it's the best social distance. you're co-vid free on a brunswick. you're co-vid free on a brunswick. i just came up with their next sales pitch. >> you're okay there you're in the front, somebody in the back >> lisa knows how to pilot it.
10:00 am
i know how -- i can do a six she knows how to pilot do you know what a six is? you probably don't know what a six is >> no. >> six pack. >> oh. got it okay >> you're not water skiing, are you? >> no. i like to fish we'll go for stripers and throw everything back because they have to be about 48 inches to keep, but anyway, david, i want to wish you the best weekend in the world. >> i will try and have it, jim and to you as well >> good morning, everybody we're in the second hour of "squawk on the street. sara eisen is with us for that hour carl has the morning off >> hello >> hi, sara. >> hi, david good morning our road map this hour begins with stocks. on pace for their fourth straight weekly loss >> stimulus talks, they may be back on the table. house democrats reportedly preparing a smaller coronavirus aid package that could cut their old proposal by as much as over a trillion dollars
10:01 am
>> and finally, a new twist in the tiktok saga. a u.s. judge says the trump administration must delay a download ban or defend its case today. first up, we are going to take you back here to the u.s. capitol. take a pause as lawmakers hold a formal ceremony in statuary hall at the u.s. capitol. the late supreme court justice ruth bader ginsburg becoming the fir first woman ever to high llie ie at the capitol -- first woman ever to lie in state at the capitol.
10:02 am
>> forward, march.
10:03 am
10:04 am
>> please be seated. >> ruth bader ginsburg continuing to make history even after her death as she is laid in state in the state capitol. they'll be holding a memorial service day three of mourning of the late justice david, i was reading about the practice since 1852 only 38 people have been given this honor. and it's a decision decided by the house and senate and accepted by the deceased family. >> as we see house speaker pelosi starting to give remarks. the last person that was given the honor was fairly recently. of course, people may remember john lewis, civil rights icon also in statuary hall. we're going to stay in washington but go back to business news and stimulus eamon javers has the latest on
10:05 am
the move to perhaps get things moving again >> that's right. as you saw, nancy pelosi in the statuary hall in the capital, she's also behind the scenes with efforts to move forward with a new stimulus bill this might undue some of the log dam around the stimulus. at least that's the hope of some democratic leaders and what they're talking about is a $2.4 trillion bill as soon as next week on the house floor what's going to be in that bill? well, aids are telling us ppp funds for small businesses would be included. aid for articles aid for restaurants. enhanced unemployment benefits and direct checks for americans. no details yet on price points for any of those but how are they thinking about this here's the strategy speaking with an official familiar with this just this morning in terms of what they're hoping to accomplish here and what sources are telling me is they're striving for an agreement. they don't think this bill they're going to move next week is ultimately going to be the platform that gets passed and
10:06 am
signed into law by the president, but they're saying they're viewing this bill as sort of their negotiating. and if necessary, they say we can formalize the request by voting on it on the house floor. democrats are hoping to break this log jam and see if they can get republicans back to the table. the white house has been anxious to have those conversations as well but this bill is not where this debate is going to end necessarily. it may be where it begins. politically for the democrats, sara, one advantage of doing this is they can sort of shrug off that criticism they've been getting that they're the party blocking the stimulus. they want to be seen as the party that's actually doing something. there are a lot of democrats who fear that nancy pelosi's strategy has been backfiring to some degree because they look like the party that's blocking help when americans need it the most this strategy by passing something would put them back in the driver's seat at least politically, even if no bill is signed by the president.
10:07 am
>> but eamon, just to be clear, the skinny bill, the skimmed down bill, it's still what, more than $2 trillion right? >> yeah. 2.4 trillion >> massive >> the republicans skinny bill was a trillion this is a fatter skinny bill i don't know how you want to parse that necessarily, but you've got skinny skinny and fat skinny, and what democrats are going to pass next week is fat skinny, and maybe they'll end up somewhere between fat skinny and skinny skinny. >> i describe myself as fat skinny these days. more skinny fat. a rough go here. back to this the big obstacle seems to be between the senate and the house, aid to state and local municipalities do we have any sense in terms of -- i saw your list there, eamon. it didn't seem to include specifically aid of that sort in the new potential house bill >> right and officials have not told us that they're going to put aid to state and local in there, but
10:08 am
you'd imagine that they will and that's because that's their big e ask. the big sctumbling back is they haven't gotten the agreement -- the president views it as aid to democratic states which has not been responsible in the past and has nothing to do with the pandemic if that's your biggest ask if you're the democrats, you put it in and then water it down as you negotiate. i don't see them starting this without that in there. that said, we haven't been told it's in there yet. it's very much a moving picture. the leadership on the democratic side met with pelosi yesterday afternoon to begin to put this all together and how it's going to come together on the floor maybe as early as next week. >> and just to put that fat skinny bill in context, again, eamon, david rosenberg says it's triple the size of the obama infrastructure stimulus that was passed back in 2009 that caused
10:09 am
concern among republicans. eamon javers, thank you. >> let's start with our first panel. anthony ross and mark lehman are with us now. mark, to what extent do you think the bumps and fourth week of losses is tied to the fact that there's no stimulus movement in washington >> i think it's more to how far we've come in a short time obviously the highest growth and the highest market caps have been under severe pressure i think a stimulus bill would be good i think the market could get wrapped around september and october a tough month for the market i think this is a valuation contraction for now. not anything more to be feared of >> anthony, it sounds like
10:10 am
you're a little cautious on stocks right here. to what extent for you is that based on the fact that they can't pass a new stimulus which has uncertainty in terms of the economy in the fourth quarter and beyond >> i agree i think mark is correct, for sure, that the market was due for a correction it's never seen a rebound the way we saw over the summer from the spring into the fall at the same time, when you look at the impact of the withdrawal stimulus the start of july 31st on the real economy, we're starting to see concerning indicators on both the labor market and consumer activity that this withdrawal of stimulus is going to have a much more detrimental effect than the markets pricing into that. and specifically when you look at the number of permanent job losses, look at the fact that 20% of small businesses are permanently closed, and that the permanent job losses that we've seen are around 2.5 million
10:11 am
permanent job losses to put it into context in the great financial crisis, we had -- we're only four or five months into this and we're halfway to that number when you look at what the fed is trying to do, they're trying to engineer inflation since jackson hole break even rates in the tip market, which the market looks at as a leading indicator for gdp, we're down 20 basis point. a lot of the signals from the real economy are suggesting the withdrawal of stimulus is hurting main street much more deeply than the markets preer appreciate right now if we don't get a reversal of the fiscal cliff, so to speak, by the election or into next year, the economic pain is going to multiply and the markets are going to realize that and see it in the economic data as we get deeper into the year >> and do you think, anthony, that that will make its way to
10:12 am
some of the bigger tech names? i wonder we've been talking about the dichotomy in the country for some time in terms of the so-called real economy despite real support in the fed and for a while from congress. we've been talking about that and, of course, these huge mega-cap companies benefitting from the current environment under your scenario, does it finally creep up to them as well in terms of demand >> what's fascinating about the rebound we've seen in the leadership from this growth of tech names is the sense of convexity. these are names that can outperform both in a strong economic scenario and weak they're a hedge if we have deeper economic pain if we go back more to a co-vid shutdown scenario, because they benefit from that kind of economy due to the digital consumption that we've seen accelerated
10:13 am
at the same time, if things do well and we have a strong economy, then they may underperform the short-term as they say value, but over a longer term period that's where the future as an economy so those names if you look at one or three or five years are the leadership they're important to include in the portfolio and have them overweight to the techie growth areas. we need to be selective, but they do well in both scenarios >> mark, it sounds like overall on the market you're more constructive than anthony. would you agree you should be overweight, the big cap growth tech trades for the long run tech is down 10% month to date so maybe a little overcrowding there taken out. >> listen, anthony is correct. the fundamental performance of the stocks over the last few years and through the coronavirus has been extraordinary. the market share they're gaining is extraordinary you have to recognize this is part of your portfolio for a
10:14 am
long time. when they get overextended, you have to be mindful of that to think that those companies you have on your list, the facebooks, apples, googles are not part of your future i think is wrong i think you pick the value points you can enter the stocks. we've seen mutliples contract over times you put up the charts in march and april, they were down significantly. we have entry points over the course of the last one, three, and five years for the stocks that were incredible values. when you see a stock like facebook that's down from 300 to 250, or you see a stock like google which has relatively reasonable relative to the multiple, pay attention. and you want to see the valuation comparison between the stocks we've seen extraordinary multiples, snow flake and zoom outpacing the valuation of some of the top five names on the screen right now that's where i put more value in your portfolio as opposed to
10:15 am
reaching for names trading at 30 times revenue which is something i've never seen in my 30 years on wall street >> thank you both for joining us anthony and mark >> thank you the s&p is down about half a percent. >> yeah. weakening a bit as you note there, sara. coming up, it's tiktok for tiktok as a potential ban looms. we're going to tell you how it could impact the social stocks in your port fol-- portfolio stay with us all the ways natioe can help protect financial futures in peytonville. nationwide can help the greens get lifetime income because their son kyle is moving back home and could help set up a financial plan for mrs. garcia. and he explained how nationwide can help mr. paisley retire early and spend more time with his pal, peyton. and their new band. exactly! yeah. don't forget the band. i haven't.
10:16 am
10:17 am
xfinity is your home for the return of live sports.
10:18 am
another deadline looming for tic tok. julia has the latest for us. julia? >> good morning, david yesterday a federal judge told the trump administration that it has until 2:30 p.m. eastern today to delay a ban of down lodes of tiktok in the u.s the ban is set to go into effect sunday night if the administration doesn't issue a delay or if china and the u.s. don't sign off on the deal for byte dance to sell stakes, a report says they will determine sunday morning whether to temporarily halt the ban on the app. this court order in response to tiktok's request for an injunction to stop the ban filed on wednesday a source close tells me the sides are negotiating around the
10:19 am
national security agreement which is essential to the deal in that the expectation is that the deadline will likely be delayed again. now, if it's not, if the app is shut down, the company says it will have major impact on its operations in term tiktok said in a document filed with the court this week, that a tiktok ban, quote, harms us by destroying our ability to grow and maintain users, develop content, and attract and retain business partners and employees they are adding a ban would cause the user base to stagnate and then decline david, we'll be watching the 2:30 deadline. back to you. >> so much to keep track of. thank you. our next guests published reports on tiktok's impact on the social media landscape and what it means for competition. john, let me start with you.
10:20 am
let's get to the business of tiktok what are you seeing in terms of daily, monthly average users and how much time people spend on the platform >> tiktok has over 100 monthly users. the platform doubled users since october. given the rapid user growth, our count on proprietary data shows overlap between graham and youtube. in the second quarter 39 of people said they were both instagram and tiktok users tiktok's engagement has been huge in 2 q our data shows tiktok's 18 to 24-year-old user spent nearly an hour a day on the platform there appears to be room for everyone we saw instagram and snaps q 2 usage flat to up slightly. people spent more time at home
10:21 am
that helped engagement as we move into the back half of this year and into next year, we'll be monitoring the engagement across all the platforms as it is critical for monetizati monetization >> the question becomes if it does get shut down in some fashion, if the deal that has been negotiated is not approved by the chinese authorities, who are the beneficiaries? facebook may sit back and say don't look at us, but i've heard they were in congress getting people talking about the national security concerns around tiktok. does facebook and instagram benefit if it gets shut down >> totally all of them do instagram, snap, youtube they all benefit in the youngest cohort, 18 to 24-year-olds, if they're spending an hour on tiktok and it's shut down, maybe they spend more time on instagram or snap or facebook. they clearly benefit if it's
10:22 am
shut down, and the stocks will benefit as well. >> mark, interestingly, you mentioned facebook as a prime competitor i think you see google youtube as the most at risk if tiktok u.s. operations stay why? >> that's right. it's widely used if you think about social media, break it down further into connection versus consumption. and connection is what's quite strong on facebook and even instagram where you have the personal relationships on snap chat, you're talking to your friends. when you sit back and want to be entertained, that is consumption. that ice kais is identical to why we're watching youtube youtube launched their own tiktok competitor last week called shorts they're testing out. the other side of the coin is how they make money, and for now at least tiktok primarily earns their revenues off of brand advertisers. it's also the primary channel for now that youtube makes their
10:23 am
money. consumption-based platforms work well to attract brand advertisers. they're competing for the same pool of dollars and percentage of user time >> john, if the deal goes through as agreed to by treasury and byte dance and oracle. if the chinese approve it, does it change your view on tiktok in the u.s., the scale and scope and what it's able to do, the walmart participation, i think is an interesting question as well and what kind of competitor it will become? >> yeah. yeah assuming it goes through one thing i'd call out we heard tiktok's ad platform is sub par rather to other platforms. but it's early if they maintain the scale and engagement, i'm sure they'll figure it out. our data shows only about 60% of users saw an ad on the platform in q 2, but if the deal goes
10:24 am
through, they will really try to crank up the monetization, i'm sure, so yeah. so we'll have to see we're all kind of waiting. >> just the app itself, when you think about it compared to what is available in other areas, whether it's the power of the a.i. or not just video first, but really sole video. is there something that distinguishes tiktok from competitors that points to the future success >> you know, it does it's a better mouse trap for how we want to be entertained. partially it's algorithm driven, but you open the app and a video starts playing in you think about other platforms, i know my household spent quite a bit of time on netflix figuring out what to watch and we abandon the search. in time looking for content, you open ep tiktok and you're entertained. the algorithm helps. it keeps finding content think
10:25 am
they you're likely to enjoy. that's what makes it unique from pretty much anywhere elsewhere you have to make decisions and tk tiktok you effectively have to make no decisions >> thank you both. appreciate you taking time >> thank you >> thank you >> i think you should pose the last question to your daughter next time. a time now for our etf spotlight. looking at niticer iyc. led higher by amazon, home depot and costco the stock is down about a third of one percent right now despite a beat -- excuse me. costco is down a third of one percent despite a beat on the top and bottom lines more than $0.20 above estimates. comp store sales rising more than 11% and the company said digital sales jumped by 91% from a year earlier all around, it was a better
10:26 am
quarter than expected. the stock had a pretty nice runup into it. and has given back some of the gains. up5% 1 for the year. "squawk on the street" will be right back ♪ ♪ ♪ ♪ an extra 15% credit on car and motorcycle policies? that's great! that's 15% on top of what geico could already save you. so what are you waiting for? john stamos to knit you a scarf? all finished, jean. enjoy! thank you. i give. the stitch work is impeccable. it's just a double fleck pattern with a reverse garter stitch. no big deal. is your hair this soft? softer. geico. save an extra 15% when you switch by october 7th.
10:27 am
every curve, every innovation, every feeling. a product of mastery. lease the 2020 es 350 for $359 a month for 36 months. experience amazing at your lexus dealer.
10:28 am
stocks are back up we've been up and down and all around another back and forth day on wall street.
10:29 am
time for a news update >> good morning. here's what's happening at this hour for the first time ever a woman lies in state in the u.s. capitol. justice ruth bader ginsburg's casket arriving ahead of a private ceremony that is still underway in paris two journalists injured in a knife attack near a newspaper where a dozen people were killed in 2015. two suspects have been arrested. paris police have opened a terrorism investigation. in london a rare shooting death of a police officer. officials say it happened inside this police station while a suspect was being detained that suspect then apparently shot himself he has been hospitalized and is in critical condition. and in australia, rescuers have saved nearly 100 stranded whales and they still hope to rescue about a dozen more. but despite their efforts, about 350 whales have died making it australia's deadliest mass
10:30 am
stranding every recorded you are up to date that's the news update sara, back to you. >> sue, thank you. as we head to break, check out shares of novavax. they're higher by almost 11% after news it would begin a late stage trial of the coronavirus vaccine in the uk. 10,000 participants between the ages of 18 and 84 expected to be enrolled having a positive impact on the stocks stocks are swinging between gains and losses we'll be right back.
10:31 am
(music) anncr: give customers access to precisely what they want, when they need it the most. with adyen, the payments platform that delivers convenience for all. adyen. business. not boundaries.
10:32 am
the s&p 500 keeps testing the 3220 mark. it's a level that's been trying. above it right now, what's the significance >> we are. market has been struggling to get traction the question is whether the 3220
10:33 am
area is a floor or landing on the way down when have we seen this before? you can go back 3220 was june th that was a excitable high. reopening hopes were peaking at that point and it takes us back to late july one thing correction does is takes prices down. it resets the clock a little bit. also it's basically where we started the year we've been hashing around this flat year to date level for quite some time. one interesting thing to note this morning is you're seeing the outperformance of the nasdaq, the tech stocks that led us up, down, and then trying to stabilize ahead of the broader tape that's something to watch at this point if, in fact, we're trying to get to some kind of extremes in sentiment and technicals that creates a rally potential. stock versus bonds this quarter, there was a big at least on paper, a big effective rebalancing out of equities into bonds simply because look at how much stocks outperformed the
10:34 am
total bond market index when you got back to late august. that has been whittled away by performance and rebalancing. this effect probably should wane or maybe has waned going into month-end. >> mike, thank you n. and we're going to stick with technicals and bring in a technical analyst. you heard mike talking about certain levels as well what are you keeping a close eye on when it comes to technical activity >> the s&p 3220 is a key level head and shoulders top on the s&p that makes a case it could be a landing to 3100 we think we can see continued downside volatility heading into the election >> so that's kind of what everyone is trying to figure out. if what we're seeing right now or what we've just seen is a
10:35 am
healthy correction or potentially something more ominous or dangerous given the outsized risks around election and the economy and the virus. you're saying there's more downside to -- from -- >> from a seasonal perspective, i think there's more downside into october and november, i think it's corrective against the trend we've seen since march. and even the longer-term secular bull market from the breakout we had in 2013. i think wherever we settle out, whether it's 3200 or 3100 to 3070, i think it's an opportunity to put money to work in equities, but i think on the back of this seasonality improves, entering november and i think the rally can continue, but my thought process is right here right now, it could come from lower levels. >> another thing people watching are correlations we saw the dollar really pick up some steam after a really long weak period.
10:36 am
that potentially has hurt stocks, but on the other hand, you might expect to see a much lower treasury yield when you see four weeks down of stocks. we haven't seen them budge much. what do you make of the stock, bond currency correlation picture and what does it tell us about the rush for safety? >> i mean, the ten-year note yield is pegged by the fed i think it makes sense to look at what break even yields have done, and my colleague put out a note talking about a head and shoulders top for break even i think what's going on right here, right now is that cyclical rotation that we've seen has taken a backseat and the break evens are a good indication that's happening. this could very well be just corrective i mean, if you look at the relative ratios for industrials, it hit a low that associated it with prior big relative lows for that sector, meaning as we come out of this correction, maybe it's not the tech names that are
10:37 am
leading. i mean, i still think they participate, but i think there could be other groups that do well once this correction is over look at where these relative lows have happened on industrials during recessions. the current recession, the one from the financial crisis, and then the dot com bubble peak saw lows it could be a rotational type of correction >> you've said in the past or recently you've cyclical life rotation as the life blood of a bull market. >> exactly >> are you saying it's not a good sign for a continued bull market >> no. no that's not what i'm saying at all. i think it is a good sign you're seeing more stocks working look at a lot of the industrial names. a technician would call big basis have that broken out of the up side. a couple weeks ago we flagged a chart for deere. it has an endearing track
10:38 am
pattern on deere the missing ingredient is financials haven't kicked in yet. that's what's going on break even is up ten-year note yield is not moving up along with the break evens. it's a better environment for cyclical groups than the groups that are tied more to financial assets >> yeah. and jim and i talked a lot about financials on the first hour of "squawk on the street" as well this morning thank you for being with us. appreciate it. >> yep >> thank you coming up next week, you're not going to want to miss this it's delivering alpha, the 10th year i know you have been keeping track. we've got a lot of guests including the treasury secretary. carla harris, and as well, you can see them all there elizabeth warren, joshua harris, i could go on and on but i'll let you check it out. by the way, it's next wednesday on september 30th. go to to learn more and regter iciswhh
10:39 am
you should and must do we're back after this.
10:40 am
10:41 am
as we were discussing at the end of the last segment, it has been a bad year for the banks, at least if you own them if you're short, it's been a good year. the major players are down substantially for the year dom has more on the rough period for financials >> the purple line wells fargo down 57% the worst performing stock in the entire s&p 500 financial
10:42 am
sector that's how bad it's been for the banks. jpmorgan, bank of america, citi, all losing between a third and about half their value over the course of 2020 and that particular theme plays out into what's happening with etfs take a look at these these two etfs track the bigger banks and the regional banks they're both down just around 40% to 50% at this stage while the ticker xlf is holding up better that's the dark line the reason why, those big banks are really underperforming but other parts of the financial sector are actually doing better insurance companies, index providers, exchanges, broker dealers, data companies have all been holding those things up relatively well, but it's important to note here, there are right now about a dozen stocks in the s&p financial index positive, but the combined market cap of all the 12 stocks is pretty much the same market
10:43 am
cap as just jpmorgan and bank of america combined that's how big of a deal the big banks are. back over to you >> yeah. why the index has gotten hit so hard dom, thank you we're going to turn back to stimulus talks in washington with a deal potentially back on the table, maybe, lifting stocks off the lows this morning. connecticut state treasurer shawn wooden who has overseen the state's $36 billion pension fund is back with us also here to talk about the coalition of ceos that he's formed to advance racial and economic justice we want to talk about that, treasurer wooden first on stimulus, and the pain that's being felt out there by states like connecticut, state and local governments is not at the top of the list it looks like even for the democrats in their new skinny bill. how badly is that needed >> that is -- first, good morning, sara. great to be back with you. but this is desperately needed it is something that i have talked about, our state has
10:44 am
talked about treasurers across the country have been pleading with congress for an additional stimulus package. the fact that state and local governments are not included, that is tragic there's a request that's outstanding for the prior money to be able to be used in a more flexible manner, but state and local government, it's not about government this is about critical services, sanitation workers, teachers, critically, critically needed. it's something that the democrats did include in the heros act that was passed in congress in may. but obviously the negotiations with the white house and the republican leadership, they pushed back strongly on that, but i would still strongly advocate for that to be a part of a package that is adopted >> i mean, it's no secret that many states including connecticut were struggling fiscally even before the
10:45 am
coronavirus crisis with unfunded pensions and all sorts of issues what's going to happen if they don't pass for aid what does that look like for a state like connecticut >> well, first to take a step back, connecticut just like states throughout the country, were hurting with that said, we've grown our rainy day fund to an historic high there's a statutory limit that exceeded 15% relative in terms of liquidity and cash flow in our immediate needs, we're in a strong position relative to most states in the country but we just closed the fiscal year with 30 plus million budget surplus rather than a 900 million deficit. with that said, we are anticipating a deficit in this current fiscal year in excess of $2 billion this aid is critically needed. and if washington doesn't come up with a package, we are going
10:46 am
to continue to hurt and suffer unemployment rates in connecticut and throughout the nation are still at record high levels, and i know there's a lot of talk about the markets right now which are also significantly impacted by a failure to have a stimulus package, but what i call the real economy, there are people who are really hurting, and if we don't get something out of washington that will both address kind of the needs of millions of americans that are hurting including in my state of connecticut, as well as reverse course on what's happening with our stock markets, we're just in a very, very bad downward spiral, and digging a hole deeper and deeper for us to eventually try to grow our way out of it. >> shawn, i'm curious. connecticut has benefitted,
10:47 am
hasn't it, from an influx, unfortunately for new york or new yorkers. i believe home prices are far higher than they've been in markets that have been hurt for years. property taxes are an important part of your revenues, i would assume, not to mention an influx of people who may be spending more money isn't there a benefit from some of the exodus we hear about from new york >> there is absolutely benefit and one of the things that i'm proud of our state is how we have handled covid-19. we are one of the lowest infection rates in the country and that has been a positive so we have benefitted from an influx of new york residents, and housing prices are rising, and the demand as a result of that so that's all a net positive which very grateful for. er the terrible circumstances, but on a macro level, we need to
10:48 am
deal with the structural issues in our economy and the markets in order to have long-term sustained growth and that's the mission that i'm very focussed on and interested in >> as much as people are leaving new york to go to connecticut potentially for more space, are you seeing hedge funds and other businesses leaving connecticut to go to places like florida to save taxes new jersey with millionaires tax, i think connecticut's legislature has floated a tax hike is that a concern for you for future tax revenues? >> well, just to be clear, i'm not aware of any tax hike on the legislative table at this point. but that's a story that we have heard for years. right? high tax, northeast jurisdictions and it's true. taxes are higher in the northeast than they are in
10:49 am
places like florida. but the quality of our schools are much better as well. so a case can be made that you get what you pay for with that said, where we are right now as you point out, connecticut, we actually have an influx connecticut from a management of this pandemic, we are one of the best performers in the country and so i'm pretty proud of our government even with all of the work that we have to do in issues such as taxes and our economy and job growth, but the issues you raise, that's been a narrative for the last decade or more >> well, with that in mind, we do want to talk about your diversity initiatives here, and specifically around financial services when i think of connecticut, i actually think of hedge funds. and you don't hear a lot from hedge funds. we hear from big banks on
10:50 am
pledges to have more diversity and hire more black employees and promote more black employees, but what are you seeing in the hedge fund industry, and how are you planning to engage them? >> just to be clear for viewers, this is my corporate call to action, and convening ceo ceos addressing racial diversity. in the workforce, from the corporate boardroom to the pipeline and development program. but just as important is what i call looking out at the mirror, and addressing racial disparities in america and looking outside of the window of the preparations into the communities throughout america. and with respect to that make-up, there are 14 ceos that have committed and are participating in the working group, including bridgewater associates speak of the hedge und, bridgewater associates, largest in the world, hit quartered here in connecticut
10:51 am
they are very much a part of this effort. and a number of other firms, and you've seen the list, that are very engaged in this work. and i anticipate more engagement and looking at financial issues and economic disparities, i'm very optimistic about the level of commitment that i'm seeing from these participants. towards bringing their intellectual and financial capital to the table, to address these issues >> shawn, wish you the best of luck in that effort. we appreciate you coming on to talk about that and much more. shawn wooden is the treasurer for the state of connecticut thank you. >> thank you, sarah. after this break, never return another online clothing purchase again we're going to talk to the company 3d scanning customers to find their perfect fit that's nt "ua oth reet."sqwkn e
10:52 am
t-mobile's new offer on iphone 11 pro is even better on our most powerful signal. switch and get two new lines of unlimited for only $90 and 2 iphone 11 pro's on us. only at t-mobile. with the icon that does the same. the rx, crafted by lexus. lease the 2020 rx 350 for $409 a month for 36 months. experience amazing
10:53 am
at your lexus dealer.
10:54 am
welcome back as the pandemic continues and more and more shoppers move online, clothing retailers are struggling with an influx of returns as consumers fail to order the correct sizes. a new startup company called fit match is trying to adjust that developing a 3d technology that actually scans your body and tells customers your exact size for various retailers. joining us the founder and ceo of fit match welcome to the show. this solves a very big problem which is trying on clothing.
10:55 am
tell us about the workshop which was a big deal >> yeah, thank you for having me on you're exactly right, your pinpoint is experienced by millions and millions of americans and people across the globe, which is how do i order something online for shopping for clothes. and have it fit and guarantee that it fits, when it arrives in the mail so our solution, as you correctly pointed out it leverages 3d technology and the latest artificial intelligence and what it does, it matches you to items of a brand assortment so your favorite brands. but what we do differently is we hide all of the items that are core fits for you that you should not purchase. and we zero in on those items that have the possibility of being 90% fits or better and so, how our solution works there, we set up a digital experience, contactless technology in your shopping centers across
10:56 am
the country. so our partnership with brookfield recently will be the first one that we'll be launching, one of many to come and shoppers come into this visual experience with a two-minute experience. they answer some questions on their phone. they take this 3d scan and essentially, we give them an i.d. where they can log into a brand directory. and that will have their matches from their favorite brand. >> so, just a quick question, i'm trying to imagine using this, different brands fit differently even though they're the same size. so, how do you account for that? >> yeah. that's a great question. that's part of the problem as well is that there's so much differences and complexities with fit, it's very hard for the average shopper, who's shopping in sometimes a compressed time to get it right. so what will our algorithms do,
10:57 am
it uses and leverages machine learning, and a lot of human fitting to take your body shape and your fit preferences and underlying information on the garment that you possibly don't know it goes deeper than sizing charts and it takes into consideration, things like stretch of the garment. and it basically recommends the likelihood that you will find this to be a perfect fit so it's both subjective, as well as sort of physical parameters that we use to predict what your size is. >> thank you very much we will keep an eye on your company and the deals that you make haniff brown of fit match. >> thank you so much for having me on. s&p is firmly positive here. it's up about .3 of 1% "squawk alley" will pick up the suffering on the other side of this break needles.
10:58 am
essential for sewing, but maybe not for people with certain inflammatory conditions. because there are options. like an "unjection™". xeljanz. the first and only pill of its kind that treats moderate to severe rheumatoid arthritis, psoriatic arthritis, or moderate to severe ulcerative colitis when other medicines have not helped enough. xeljanz can lower your ability to fight infections. before and during treatment, your doctor should check for infections, like tb and do blood tests. tell your doctor if you've had hepatitis b or c, have flu-like symptoms, or are prone to infections. serious, sometimes fatal infections, cancers including lymphoma, and blood clots have happened. taking a higher than recommended dose of xeljanz for ra may increase risk of death. tears in the stomach or intestines and serious allergic reactions have happened. needles. fine for some. but for you, there's a pill that may provide symptom relief. ask your doctor about the pill first prescribed for ra
10:59 am
more than seven years ago. xeljanz. an "unjection™".
11:00 am
good morning, it is 8:00 a.m. at amazon headquarters in seattle. 11:00 a.m. on wall street. and "squawk alley" is live ♪ ♪ that takes me back to high school good friday morning. welcome to "squawk." i'm jon fortt with julia and mike santoli carl has


info Stream Only

Uploaded by TV Archive on