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tv   Worldwide Exchange  CNBC  July 9, 2020 5:00am-6:00am EDT

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sure that hate speech is taken off quickly. >> one of the things that organizations do is investing in minority start ups and giving opportunities to give facebook some competition. >> what is their next move i believe all the brands and their consumers are looking and paying attention to what facebook is doing. i don't think they have long it's 5:00 a.m. and here are your top stories stocks look to get back on track as markets rebound as markets climb to another new high. the rebound coming amid new warnings about the state of the economy amid the covid-19 surge. and the rise of recreational vehicles as covid lockdowns continue we'll talk about the growing demand that sector is seeing as more americans hit the open road it's thursday, july 9th. you're watching cnbc good morning i'm franc
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holla -- frank holland. stock futures are hovering arnt flat after a late-day rally yesterday as investors brushed off continued increases in covid-19 cases around the u.s. the nasdaq leading the charge rising nearly 1.5% to close. it's the 25th record close for the index this year. take a quick look at the bond market, the 10-year yield trading around .65%. we'll go worldwide now karen cho is in the london news room with the overseas action. we'll get to karen in just a minute we'll get worldwide in just a minute first, let's get a check on this morning's top stories. of course, a lot going on with the economy. covid-19 openings and reclosings we'll continue to keep a close eye. right now our leslie picker is here to join us with more. >> good morning.
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walt disney world will resume selling theme park tickets and taking hotel reservations today. the company announced the move yesterday after suspending the sales amid the coronavirus outbreak disney will open the magic kingdom and animal kingdoms this weekend followed by epcot next week airbus hit a 16-year low the company said from january to june, deliveries fell by 49% so 196 planes compared with 389 within year ago. airbus faces an average 40% drop in business over the next two years. the head of the boston fed sees more american businesses needing rescued by the financial bank covid-19 outbreaks will drive a ramp up in demand for the fed's $600 billion lending program to
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help businesses weather the pandemic. >> we'll go worldwide now. a look at the overseas action. a lot of concern about covid-19 cases rising look t looks like a lot of green on the board. >> yeah. investors are focussed on the earnings today it's a patchy day on the board the uk stock market actually moving south today despite more stimulus measures announced yesterday following the uk treasury what we've got on the dax is 1.2% bounce. s.a.p. the software producers coming up with the numbers today the french stock market up .02 so clearly a little bit of a cautious trade taking place. the dax you can see the extent of the gains the exports are bounding in the month of may so we did see a bump up of 9% on the export side. that's been encouraging. diving into the numbers, you can
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see merk one of the big movers around potential covid treatments that's accelerating the big pharmaceutical stock i want to get to s.a.p it's moving in the technology space. the company updated on the quarterly numbers and effectively seen the recovery in some of the numbers. cloud revenues have been up. software licenses down we have seen the trend as more businesses have moved toward the cloud. that stock continues to accelerate it was up about 6% on opening and clipped to 7% and now 8.2% total revenue up 2% but it's encouraging as we look for some of the big technology names in europe to keep pace with the big names in silicon valley. >> karen, thank you very much. we appreciate it now turning to some u.s. news the president of the st. louis fed is offering a wit of a mixed take on the state of the economy. speaking with cnbc yesterday, james bullard expressed optimism on the recovery but he warned that some hurdles they do remain. >> we have to be careful it's a time of high risk for the
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u.s. economy you could get into a financial crisis you could even get into a depression scenario. again, if that happens, you'll get even worse you'll be worse on both dimensions you'll have a worse economy and worse outcome. so, you know, that's why we have to be careful in this situation cotry to get back to work here. >> and for more, we're joined by bill stone, president and chief investment at stone investment officers thank you for waking up with us. speaking of optimism a surprisingly strong june jobs report what are you looking forward to this week? what could surprise you or give you more confidence in the market >> so, i mean, for the rest of the week, i think the big one is really initial jobless claims. this morning that ties in with the june payrolls report
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the june payrolls report really ended taking that data before the covid cases in the u.s. started really spiking up again. so i think that will be the one to watch, really, probably for the whole week we did get ism nonmanufacturing that was good. i think continues to show at least the v-move off the bottom for the economy. but i think as, you know, you've been talking about, which is really where it goes from here, it gets a little tougher it's easier in the sense that you bount out of a whole but then things get a little more challenging. >> bill, you're looking, also, at nontraditional data to help inform the state of the economy during the shut down and the subsequent reopenings. what does it tell you with regard to, you know, the strength of the economy amid some of this uptick in coronavirus cases? >> so the interesting thing is you're seeing part of what i think has been reflected in the
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market is that clearly it's getting better you've got that v-shaped going up but i think more recently, though, what you've seen is with the covid cases picking up again you've seen some of the measures of transit usage, certainly the place where i saw it first was, you know, open table dining. so clearly going back to restaurants has been, you know, i guess, delayed a little bit again. that will certainly show up on the margin in economic data. the tsa numbers getting better but slowing a bit from the strong improvements that we've been seeing. so, you know, that's some of the things i think we'll have to watch how they play out from here. >> so, bill, the last month or so, the s&p has been trading within range what does it say about investor confidence despite watching the nasdaq hit all time highs? >> i think it's when you look at it, it's the have and have not
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so since june 8th, when you had the peak or the recent peak, i should say, in the s&p 500, it has been all of the growth stocks all technology doing well and up during that period but the values side of the equation is down significantly it's like a 14 percentage point difference between the two between growth and value to me, that's telling you the market is worried about growth going forward. it's gone back or at least continue to stay in the areas that at least either suffer less in covid cases or benefit from some extent, you know, again relatively speaking from the any sort of pick up in that department. >> some people we've spoken with have kind of characterized this by forindication between growth and value as one hand you have the growth stocks that tend to do better during the shut owns you know, companies like amazon
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and facebook and so forth. on the other hand, you have value, which tends to lag during the shutdown do you see the divergence is an indication that people believe that we will remain kind of subdued in our consumer behavior for quite some time as we stick around in our homes? >> i think that's showing up at the moment i think that's -- i think you can clearly, at least in my view, see that, you know, this covid infections picked up again. you saw value fall off but, you know, use your difference i think you're right on with it being the ones that hold up better in technology, et. cetera, that, like you said, held up better or even, you know, benefit from some of this to an extent that you had seen. >> bill, one last question you've been talking about the shape of the economy i think everybody has been talking about it it sounds like a v-shape is what you think we're looking at is there a catalyst that can make it happen faster or slower?
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>> it's been v-so far. i don't think we're necessarily going to continue the v indefinitely i think it's likely to level off. hopefully continuing with some sort of an upward pace i think the key is not going into complete lockdown and that's w that's, obviously, why people are watching so closely in terms of the infections. frankly, beyond the infections the death numbers to see if it picks up that would end up forcing us i don't think policy makers want to go -- none of us, you know, we don't want to go back into lockdown but the fact is something like that and it finally showed up there would drive it there so that's why i watch a lot of these, you know, nontraditional indicators and the covid numbers like a lot of other people because i think that's where you've got to look now. >> all right
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bill stone from stone investment partners thank you for joining us we appreciate it when we come back, shares of bed bath and beyond getting crushed after dismal quarterly results. china's foreign minister out with new comments on the relationship with the u.s. we'll go live to beijing for the latest and a potential crisis brewing for the country's renters. the new troubles taking shape. a busyoustl ea hr ilahd for when "the "worldwide exchange"" returns. you say that customers make their own rules.
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welcome back a live look at hong kong where it's 5:00 p.m. there 12 hours ahead of us a bit of a cloudy start in hong kong that's kind of what the skyline looks like often on a normal day there. we'll get a check on the stocks on the move it's a tale of two retailers today. leslie is back with the details. >> that's right. bed bath & beyond revenue fell nearly 50% despite a jump in online sales the retailer, which owns bye bye baby, said will close roughly 200 locations over the next two years. costco, though, higher today after the company reported sales rose 12% in june to $16 billion. that was paced by an 86% jump in online sales costco got a boost in recent months from shoppers stockpiling
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items during lockdown periods in the u.s. el durado reports getting the green light to buy caesars it will create a gaming giant with 55 properties in 16 u.s. states and several countries the transaction needs approval from regulators in new jersey and indiana. now to big google news announcing pulling the plug for a cloud project for china called isolated region. they're not considering options to offer cloud platforms in the country. google shelved the project in china partly due to rising geopolitical tensions and the covid outbreak the search engine giant said the shutdown was not due to either of those new this morning, china's foreign min stir making comments overnight with relations with the u.s. saying the two sides should reconcile joining us now from beijing is
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eunice what is the latest >> well, you know, it was a candid assessment. a rare candid assessment by a top chinese official of just how bad relations have become between the u.s. and china for an event here in beijing, the foreign minister said that u.s./china ties are currently at their most severe challenge or facing their most severe challenge since being established in 1979. the foreign minister also said that the u.s. and china should review their red lines and respect them he said that china would be ready to reestablish and resume official talks with the u.s., if the u.s. called. now backdrop of this is that china has come under heavy criticism, not only from the u.s. but also from several other countries now over its new national security law in hong kong, its treatment of its minorities, tibetans as well as the muslim minority in the west,
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and business practices with trading parter ins to react, china has become more aggressive and combative in the diplomatic style in case you're wondering, franc, if this is a turning point in the way china is dealing with its neighbors as well as its international partners, the foreign minister criticized the u.s. for what he described as mccarthy-style paranoia and, also, during the event there wasn't a whole lot of reflection, i thought, or emission of china's contribution to the hostility we're seeing internationally toward it. i think that is a major problem for beijing. >> you know i don't know how the mccarthy era is viewed in china, but it doesn't sound like words of reconciliation to me. are there any pressing economic reasons for the words and the olive branch being extended? >> well, there are, actually, pressing economic reasons. one, the economy here, despite
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the kind of better slowly kind of, like, data that is showing that things are getting a little bit better, economically china is very concerned about what it sees so because of that, there is a thought that the trade deal is something that china wants to make sure. you know, continues to happen. you know, at the end of the day, it looks as though the u.s. decides to rip it up, china would deal with it china doesn't want anymore uncertainty than it's facing especially with the pandemic. >> muchly anticipated trade deal thank you. back here the u.s., we have more on deck including the troubles for u.s. airlines they continue to mount with united warning of major furloughs. we'll talk to one industry analyst about when a rebound could possibly take off. stay with us
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according to s&p dow jones that's the biggest decline since q 1 2009
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welcome back to "worldwide exchange." it's 5:21. a live look at new york's times square still pretty quiet as the city continues to recover from the covid-19 pandemic. let's get a check on this
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morning's other headlines. nbc's francis rivera is in new york with the latest. >> good morning. good to see you. we start off with a top health official in tulsa who said president trump's rally likely contributed to a spike in covid cases. a few days before the event, the city recorded 89 cases in one day. then between monday and tuesday of this week, tulsa reported nearly 500 cases the president is set to hold another rally in new hampshire this weekend the supreme court is expected to rule today on the bitter battle over president trump's tax returns. justices will decide whether congress and the manhattan district attorney can see the president's financial records, which he has fought tirelessly to keep private. and the mets are packing the stands ahmed the pandemic with card board cutouts according to news day, the team will let fans pay to have their likeness to cheer on players the price is reportedly a free
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perk for season ticket holders. >> not quite being on the dance cam for the fans or kiss cam, but at least something at least the game is on. >> you can pay to have a card board cutout of yourself in the stands. >> in the stands yeah win for the players. they see somebody out there. for the fans, i guess if they cut away, they're there. >> i like 0 go to a game i don't know if a card board cutout of me would have as much fun. >> at least it's something. >> look forward to it. thank you very much. appreciate it. still ahead, a "worldwide exchange" the new head winds the battered restaurant industry is facing plus, a major retailer announces it's pulling merchandise for washington's football team off its website. monthae"s ckn ng iba i a me ♪ ♪
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investors are riding high after the nasdaq clenches the 25th record close of the year. why some states are bracing for a flood of evictions and what could be done to stop it plus, on the road again. rv sales continue to boom amid the covid-19 pandemic. it's thursday, july 9th, 2020. you're watching "worldwide exchange" on cnbc. welcome back
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i'm frank holland in for brian sullivan we're half way through the 5:00 a.m. hour. stocks futures are bit mixed the dow down about 60 points now looking at oil prices -- well, down slightly. not a complete surprise there as we know things can change dramatically as we enter the hours going into the market. asia closing higher with chinese stocks continuing to lead the way. european stocks are mixed. turning back to the u.s., talk housing and the economy for many americans, rent is due in their homes for a rising number, they're facing increasing trouble paying dianna breaks it down. >> it's a perfect storm for the rental after briefly reopening, some
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businesses are shuttering again due to rising covid cases. that all means that by the end of september, up to 23 million or 1 in 5 american renters could be evicted from their homes. that's according to ongoing analysis from the aspen institute. states hardest hit are arizona, california, nevada, indiana, utah, and wyoming they have the highest share of renters at risk you look at the actual number of renters, it's close to 4 million californians 1.5 million floridians more than 2 million texans, 1. 5 million new yorkers. aspen is factoring in renter household income, savings, and the cost of renting in the various states also looks at state unemployment insurance and factors in real time surveys on renter confidence from the census those numbers released just yesterday showed that in the last week of june, 76% of represente representers -- renters made their full june payments but 38% were highly confident they could make their july payments
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43% were slightly or moderately confident in they could pay. 12% had no confidence at all renters in single family homes appear to be doing better making their payments while renters in multifamily apartments are having a harder time now while legislation passed the house offering big renter relief and eviction bans, the senate has yet to crack its own plan and there's no timeline yet on when that could happen no help yet for renters. >> it's hard to not see the 23 million people in danger of not being able to pay their rent is close to the number of americans unemployed is it simply the covid-19 crisis >> well, look, rental affordability was not great going into this. you had a lot of hardshiping in the rental market because prices were so high prices are coming down a little bit now. it's about the pandemic and the unemployment numbers and people not able to pay their rent
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they've been asking the larger landlords have been giving concessions. they've been working with renters as well as the smaller mom and pops there's so long as they can go smaller landlord have to pay the mortgage on their homes, as well it's a perfect storm for everyone unless there's a relief, we're going it see potentially 23 million evictions by the end of september. >> thank you very much some concerning numbers there. thank you. all right. turning now the travel industry. airlines and hotels, well, they've been suffering greatly during the covid-19 pandemic one segment of the industry is seeing a sales boom adds americans are deciding to take the roads less traveled on their summer vacations demand for rvs has been soaring since april with a growing number of consumers making a purchase for the first time. let's talk more about the rv market and which companies are benefitting the most with catherine thompson
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thank you for waking up with us. >> good to be with you today. >> yeah. so let's get down to it. what is sparking this rv or recreation rally what companies are going to benefit the most from it >> this is the biggest change that we've seen from a consumer sentiment standpoint since post 9/11 we looked at what happened post 9/11 people radically rethought about how they spend their free time for the first time, it wasn't just the retires that were rving. you had a younger age set. you had the average age of motor home buyers go from 60 to 48 you had an entirely new type of segment being produced for younger buyers what it meant for the stocks post 9/11, the stocks moved up over 100% within 6 to 12 months of 9/11. when we fast forward to today what the rv dealers are telling us today, it's kind of the same type of thing perhaps even more
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magnified because the industry has further accommodated to the younger buyer. now they're doing it with fear of flying but fear of basic health there's a wholesale change in in terms of what people are doing i think you've seen a big increase in towable sales. you've seen a big increase in younger buyers, once again, average age coming down about another five years in terms of buyers seeing more female buyers. so the interest, we think, has likes. to top it off, there's more likes for some of the stocks as inventories are really low at dealer lots. that's a big difference between today and a post 9/11 world. >> let's talk about some of the stocks author the largest rv dealer in the nation -- i'm sorry, the manufacturer winnie b
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seems people will continue buying rvs you wrapped ur yo dealer survey. what are your dealers telling you about the young term outlook for sales even after the summer time ends and people aren't taking the summer vacations. >> great question. we think there's a little bit more but not a lot more upside to the stocks. candidly, we would push buying the stocks much above 15 or 20%. dealer inventories dictate the manufacturing levels we have dealers tell us they're almost half of where they should be just to meet current demand so manufacturing still realicicrealic - realistically have a catch up. much above 20% is enough some of the names that will benefit we think the suppliers may be a little bit better play because you win either way those names would be libbert
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components and patrick industries. >> speaking of lippert we spoke to the ceo yesterday and his rv customers and marine customers are putting in orders and expecting to ramp up production is there something you could see that could dampen this rally >> you know, the consumer. once you get the euphoria is here the concern is here for safety you know, the real question you have to say is what happens once we get to next spring. it's a big question now but i'm fairly confident, though, in the near term there's going to be manufacturers trying to meet current demand now. >> very interesting. i know you cover rvs and an i speak quite a bit about rvs. marine stocks are rallying malibu and brunswick trading higher do americans just need to get out of the house is that what this is about >> yeah. a lot of it is in fact, if you go back to the ceo of lippert he wrapped up a
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motor home trip with his family going from elkheart, indiana seeing the rest of the u.s a lot is i have to get out of the house. but then there is a fair -- i think the difference between a marine industry and the rv industry units are being bought not just for vacationing but we're hearing a lot of instances where people getting it for family members as a second residence. >> all right catherine thompson, thank you so much for joining us. thank you for the insight on rvs. i think a lot of us like to be hitting the road or the water. we appreciate it. >> thank you turning now to political news, presumptive democratic nominee joe biden is rolling out his economic plan today. the agenda slogan is "build back better." he'll prioritize small business workers a workers. among the headlines biden's
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manufacturing initiative will call for directing $400 billion in federal procurement spending on american-made products, and investing $300 billion on research and development focussed on developing new technologies that could be marketed globally. we'll hear more about the plan from biden campaign surrogate pete buttigieg on "squawkbox." coming up here on word wide exchange airlines struggling to recover from the slump in the demand what is normally peak travel time the carriers one analyst said is likely to bounce back, first here is a look at the other top headlines this morning facebook said it removed a network of more than 100 accounts tied to roger stone amazon is pulling washington d redskins merchandise from the site as calls for the team to change their name and logo
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increases. sflnch . the ivy league cancelled fall sports. they'll reevaluate in january and open to starting the football season sometime in the spring
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welcome back a live look at the white house in the nation's capitol, you
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would imagine people are paying close to the words from chinese diplomats about reconciliation a quick check how the money is shaping this morning. leslie is back with more. >> good morning. stock futures facing some pressure this morning. a bit of a mixed bag you can see the s&p 500 and dow jonesed in the red slightly this morning. the nasdaq a beacon of strength still in the green today this, of course, after a late-day rally yesterday as investors brushed off continued increases in coronavirus cases across the country taking a look at the bond market, 10-year trading around 5.6% this morning. investors look for safety in those areas. back over to you turning from wall street to main street as covid-19 cases continue to spike around the country. new numbers show the impact the virus is having on the restaurant industry.
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kate rogers is here with more. >> hey, franc. good morning restaurant transaction data had been improving but over the past two weeks, we've seen a reversal in the course here new data from the npd group show overall tractinsactions at major restaurant chains ended 14%. last week's report showed transactions declining by 13%. full service restaurant transactions fell by 26% this, of course, makes sense as full service is most aligned with sitting con and eating and dining rooms we're seeing states pause reopening or roll back some of their plans to reopen dining rooms. even big restaurants like mcdonalds hitting pauds on reopening plans for several weeks. states with the biggest declines in full service transactions are louisiana, south carolina, texas, north carolina, georgia, and arizona where cases are rising earnings season kind of gets started next week for the
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restaurant industry and we've heard from a few big names most recently shake shack has seen sales fall by 49% likely more pain to come for more companies this quarter. there are outliers the best performers in the space for the year so far have been those with the most robust delivery and carryout systems. there's no surprise here our most recent cnbc polling shows that about 38% of people say at this point they're comfortable going in and eating in a restaurant in a dining room. so, you know, less than half of people that we spoke to said they would be willing to try it out now with everything going on back over to you. >> concerning for people that are restaurant owners. how does delivery play a big part in this can it help the restaurants bridge to the point where we feel more comfortable getting back in restaurants? >> you know, i think it's been a lifeline for some restaurants. we have to remember it's
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expensive, particularly for smaller companies. a lot of big players can afford to give a percentage of, you know, the sale they make to these aggregators or pay the delivery fees. smaller restaurant companies can't afford to give up 30, 40, 50% of whatever sale in order to team up with the players some have taken it on themselves but, you know, while i said it's been a lifeline, i don't know it makes up for only being able to operate on a delivery basis or open up with very limited capacity in dining rooms once again, the fear factor with customers are people ready and willing come in is another huge concern? i think there's more pain to come. >> kate rogers, thank you very much for that. we appreciate it well, in what is normally a busy travel season, airlines are finding themselves struggling to recover. united joining the likes of delta and american airlines in announcing potential furloughs warning the more than 36,000 employees that the layoffs may be on the horizon. but terms of the airline's
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federal payroll grant prohibit them from doing so until october 1st. it comes as a growing list of air carriers, including united, delta, southwest, and jetblue reach agreements with the treasury department to access additional federal loans joining me now is the senior equity research analyst and leslie picker rejoining us. >> good morning, thank you for having me. >> you think investors need to reassess the risk with airlines and take a closer look at the business models of the airlines. >>well, the risk is has changed in the last 100 days i think many equity analysts, many equity investors look at industry -- the conversations move from the typical metrics we look at like revenue and cost and we're talking almost
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exclusively about the level of cash monthly i think that's where the conversation is shifted. i think looking forward what we need to look more toward is a resize in the industry a industry that is a bit smaller going into 2021. >> often times when you hear the conversation shift to liquidity levels that indicates a distressed industry. one that may be looking for other strategic alternatives for their businesses is that what you're saying the airlines need to be doing now? >> not exactly i mean, i think what is happening is that i think in the quarter coming up, it's going to be probably the worst aviation -- i mean, the four majors probably something like 18 billion let's keep in mind in the meantime, they've been able to access even commercial markets and raise upwards of 50 billion and more they're saying more carriers so i think you have to think of it one or two ways
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is it a permanent industry or are we going to look beyond the void to recovery and what does it mean? and i would suggest looking at the balance sheets and how the capital structures of each of these companies is a way that investors have to look for. >> you know speaking of next week, delta reports next week. you're saying looking at the balance sheets and possibly discounting this quarter what things should we drill down into in this earnings period and what should we look to q3 and q 4 for as signs there's a recovery on the way or the slump will continue? >> yeah. i think it's a great -- it's an important time for the industry. the things to keep in mind, i think, in the context of some of this is backsliding in the net bookings one of the things the industry is looking for to regenerate some of the working capital, or some of the inflows from bookings, which, you know, much like the restaurant industry
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started. is delta wanting to go into q3 earning less than $30 million a day? how are they going to track toward their target of getting toward the end of december and sort of being generating some cash flow or being at least net neutral? those are the things to look at. >> how should investors look at any additional government support that comes into the sector do you see any moral hazard going on with regard to the investor base in airlines now? >> i mean, right now in the second where they have the $25 billion -- [ inaudible support, i mean, it's a last resort you can see that it's another thing they were going to look at with delta and whether they truly attempt to take that $4.6 billion and support. i would say moral hazard occurs in, you know, there's an -- to take back commercial actions
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i'm not seeing that. delta, for instance, is very active in raising the commercial markets. they're doing large sale transactions with their aircraft they're being active in -- so we're seeing lots of commercial lending, as well when that reaches up and turns only state support, i think you've got a moral hazard. i'm seeing it a little bit more in europe with air france. a lack of commercial lending options and going directly to the state as the sole source. >> the evacuations of airline stocks indicate they're under stress won't we eventually get back on airlines eventually won't the stocks rebound? what kind of horizon do you see? >> yeah. i think this is where the industry debate is
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i mean, i think the consensus is around total industry revenue not touching 2019 levels since late -- possibly a bit earlier when you're talking about a -- you're talking about distance travel you know, it is about comfort. i would agree. the question is the speed of that recovery and the strength of balance sheets that are coming out of this period so early 2021 and late 2021, you know, how much is necessary. >> all right wrap down the conversation there. thank you. thank you for joining us this morning. still on deck on "worldwide exchange," who is in the driver's seat? the bulls or the bears sean schneider said investors are finding themselves in one or
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i don't see it. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ who is right the bulls or the bears? we've seen some stimulus who is right about the market and the economy? >> listen, in the long run, i usually think it's the bulls in this case now we're seeing it's sort of market trading sideways i think we're at a bit of a stalemate between the bulls and
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the bears. i kind of see it as one camp as don't fight the fed. the other camp is sort of don't fight covid-19 on the fed side on the bullish side, you look at the stimulus that come in the market. $6 trillion over a few months. maybe four months. if you look at it on a daily average, it's about $50 billion in stimulus a day. and bullish camp would say it's backstopping markets than limits the downside so far that has been absolutely right. on the don't fight the covid-19 side you have bearish camp look at market evacuations extremely high and look at the sharp rise in the number of infections. almost as sharp as the rise in the balance sheets and i think what could win out on the bearish side, eventually, if you see the recovery stall out and maybe we don't fully recover as well as the bullish camp thinks with the v-shaped recovery. >> all right we'll have you explain the lazy
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v in a moment don't the bears have more supporting evidence with the $600 million extra of unemployment payments expiring in the future where we don't know where the virus is going. >> right we got a report from the nber from this morning or yesterday saying that two-thirds of those unemployed are actually receiving income above their normal levels. when you get that extra $600 a week in unemployment insurance, it does two things one, it disincentivizes you to return to work, potentially. but also provides key income support. if you have two-thirds of people on unemployment now and receiving benefits greater than normal, that's keeping consumer confidence higher than what you would normally see with the unemployment rate where it is. so you have this risk of an income cliff at the end of the month, if congress doesn't extend the
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c.a.r.e.s. act, or h.e.r.o.s., that consumer may be being bolstered of the notion by the key income support if that gets removed and the infections continue to rise and people aren't able to return to work because their business aspect closed or the reopening has been stalled, i think it poses a risk that we're not fully considering yet. >> so, again, what is the lazy v? >> my definition of lazy v looks like the chart of the dow jones you showed or the hand symbol you make when you're asking for the check at a restaurant or you have a sharp down and then kind of a lazy recovery i think what happens when you have bars being closed, it's 400,000 people employed in bars in february. maybe it's not that important. but at the end of the day, arts, entertainment, sports complexes,
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all the things that may be delayed, employed about 1.5 million people then you look at weak airline transportation, which you had, you can't fully recover without those things until we beat the infection or it fades or we're able to have international tourism again and international flights, i can't imagine a scenario where we fully recover even though thus far the recovery has been sharper than a lot of people thought and if you look at the pmi data, definitely looks like a v. at the same time on the services side, the employment is a contraction. >> what stocks should investors be looking at? give us a sense in 30 seconds. >> sure. at the end of the day we ask the client do you think the economy will be better in 12 to 18 months now uniformly i think the answer is
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yes. if you think the economy is going to recover in 12 to 18 months, normally it's cyclical companies that tend to do better banks, industrials, small cap shares those are also the things that haven't fully recovered. >> we have to cut you off in the conversation thank you so much for joining us that does it for us on "worldwide exchange. ska "squawk box" is next you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. the xfinity voiceremote will find exactly that. happy stuff. if the groups happy, i'm happy. you can even say a famous movie quote and it will know the right movie.
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good morning the tech rally resuming. the nasdaq closing at a new high and the dow coming off its third positive session in the last four the nasdaq is solid again. a battle brewing some states and the trump administration about reopening schools. we have the latest timeline for new york state and its decision. just in the last half hour,
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the biden campaign out with a new jobs plan. we'll take you live to washington for the details thursday, july 9th already 2020 "squawk box" begins now. good morning everybody welcome to "squawk box" on cnbc. i'm becky quick along with andr andrew ross sorkin you saw the dow pushing back above 26,000 after falling below that the day before. nasdaq up by almost 1.5% apple and microsoft leading things as they have been doing so often lately. this morning we take a look at the u.s. equity futures. you'll see the dow futures are indicated down by about 340i7b9s the nasdaq i


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