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tv   Squawk Box  CNBC  October 22, 2020 6:00am-9:00am EDT

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straight profitable quarter, we'll big through the results with the biggest tesla bear on wall street. and people have been using the pandemic lockdown apply to straighten out their smiles. i invisali invisalign's parent company's stock soaring. "squawk box" beginning right now. welcome to "squawk box." we're watching the u.s. equity futures this morning it has been a rough week for the markets, carrying out once again this morning the dow futures are down by almost 50 points s&p futures off by a little over 5 and the nasdaq is up by about 3 points if you have been looking at what has been happening all week though, the dow and s&p have
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be been down five out of the last seven sessions all of the major averages are on track for a losing week, a bit of a turn in the tide because we had been looking the dow and s&p up for three weeks in a row, nasdaq up for four weeks in a row. you can see yields continue to remain a little elevated compared to what we've seen recently 0.811% for the ten year. you do have jobless claims coming out at 8:30 and that could be a mover for the treasury and equities market and you have at&t coming, coca-cola, dow and american airlines and we'll bring you those numbers as soon as they hit the wires. >> meantime let's bring you an update on the stimulus -- i'm calling it the stimulus saga at this point nancy pelosi and steve mnuchin continuing negotiations yesterday but failing to reach an agreement they say they plan to speak again today. meantime the senate trying to
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approve a $500 billion aid plan but democrats blocked it in a party line vote. unclear even if pelosi and mnuchin do reach a deal whether the senate and mcconnell and the rest of them will go along with that so we got that going for us, joe. >> well, we'll see been that way for a while. and i see posturing from both sides when i look at either our network our othr other cable nes they are both pointing fingers i don't know what will finally happen this was bizarre, a dire warning last night from u.s. national security officials, they say iran and russia obtained information about american voter registrations and are trying to influence the public about the upcoming election. eamon javers is joining us with more i shouldn't get my news from twitter. in the iran case, both sides
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are -- if one side says they were trying to favor have not biden and then the other side said no, they are trying to favor trump. and then even people doubt ratcliffe at this point. they don't believe anything that the trump administration officials say about thinking so i don't know. will you tell us what the truth is you usually do >> i'll try. you're right, this news conference last night was hastily scheduled, we got about half an hour's notice that this was going to happen. and it landed in the middle of an intensely partisan election season and immediately people on both sides were sort of ripping each other about what the intent was here but let me tell you what the officials told us and then we can walk through some of the reaction to it what officials said is that iran and russia have obtained voter registration information, they say that iran september faknt f
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intimidating emails to voter, some appeared to come from proud boys, and instructed people mostly democrats to vote for trump and said we're watching you and things like that very intimidating to receive that iran the officials said produced a fake video intended to scare voters about voter manipulation. but nonetheless even though officials didn't answer any questions and didn't explain sort of the russian piece of all this in the press conference christopher wray sought to reassure voters that the democratic process is in-tablgtintacintact >> you should be confident that your vote counts early unverified claims to the contrary should be viewed with a healthy dose of skepticism >> and after that, google came out with a statement late last night saying that they had seen a portion of this, they say we and others have seen evidence that an operation linked to iran event is in-authentic emails to
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people in the united states over the past 24 hours. for g-mail users, our automated spam filter stopped 90% of the approximately 25,000 emails sent so basically this is obtained voter registration information which is not all that hard to get and a spam operation designed to send these spoof emails making it looks like the proud boys were sending intimidating emails. so what were the iranians trying to accomplish, was it just to sow discord? that is what chuck schumer said last night on television, that he did not see any indication that this was designed to help or hurt one candidate or the other, but john ratcliffe the director of national intelligence said this was an effort by the iranians designed to hurt trump by linking him to this far right group the proud boys and therefore tarnishing his name in effect and that is the question that got so much action on social media and twitter, was that the
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appropriate attribution of intent on the part of iranians or was this just throwing some static into the u.s. election. and that is a question that we won't be able to resolve, we'll need more information. officials as i say didn't answer any of the many questions. how did they figure it out, how were they able to attribute it so fast, some of these e-mails just went out on tuesday. and partisan fighting is just starting >> and i think they are trying to sow discord and question whether the democratic process works. i appreciate the words i heard last night, but what about comments internally, our own politicians who where maare makg comments that the vote won't be
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real because if you are voting by mail, it is filled with fraud? >> look, that has been a running theme of president trump's out on the campaign trail, that there will be fraud in this election, that vote by mail is inherently unstable and open to fraud. the president has been trying to cast doubt on this process for months now and that has been part of his theme. even as we see millions of americans, astonishing number of americans voting by mail and voting early in this election, the turnout so far has beaeeen enormous the president is trying to suggest that there is the potential for fraud here and that gives him window after the election, if there is any kind of disputed situation to he go back and point to that and say that is where this thing went off the rails.go bac and point to that and say that is where this thing went off the rails. and that is just internal, not foreign interference >> so a debatbate tonight, migh
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hear about it there. and apparently people have been getting their teeth fixed during the pandemic i haven't done that. and they have been getting a bunch of gardening stuff from tractor supply apparently. so we'll talk about that >> i did did some gardening. >> you didn't get your teeth fixed. maybe you don't need it. but i did go to chipotle >> my teeth are beyond help. >> i just wear ties that match my yellow teeth. look anyway -- >> gist change tjust change thee camera, you'll be fine >> exactly did you know teeth were this important when you were young ie camera, you'll be fine >> exactly did you know teeth were this important when you were young n in you have to keep them your whole life let's get to andrew. thank, joe when we come back, we'll talk about tesla shares rising after a 50s straight profitable
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quarter, we'll talk about the bear right after the break and take a look at shares of chipotle earnings beating estimates. the chain says its shift in delivery orders increasing costs and led to reduced drink sales in the third quarter, that dragged down net income.
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we really aim to make the car that is delivered better than the car that is unveiled. it would really drive me crazy car companies would unveil these awesome looking cars, and you are like great, can't wait until i make that and the car they actually make is like much worse and it is really disappointing >> tesla out with its third quarter numbers last night, reporting its fifth consecutive quarterly profit elon musk calling it the best quarter in history other highlights include nearly $9 billion in revenue and remaining on pace for its pre-pandemic delivery target of 500,000 in 2020. joining us is wall street's biggest tesla bear, gordon
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johnson. you look at these numbers and, i don't know, are you going to shake your head? i know you've had a bearish view about this company for a long time and yet the profits continue to roll in. i know we can dig through those because i know you have questions about how they get to some of those profits. but they are still profits >> thanks for having me. i think what is important, this is the fourth consecutive quarter excluding credit sales that tesla has seen losses and gaap income. keep in mind these credit sales are finite, even tesla xwins th defines them as one time in nature fca has said that they would spend roughly a billion dollars of credit sales as of june and tesla has recognized nearly all of that. we only think there is about $500 million left through 2023 so we think the ability to
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recognize credit sales is ending imminently and we think that then they will start to lose money on the net income line >> so play that out. get out a calendar and tell me when you think that is going to hit. >> sure, that is a great question if you think about what happened this quarter, if you take out the credit sales, they lost about $66 million excluding credit sales but if you also adjust for elon musk's stock base comp, that is a one time charge as well. so if you adjust for both, annualized that is 40 cents. at $450, that means that it is trading over a thousand times applies to earnings basis. no stock is trading at that level. and what it means, investors are saying they will grow earnings every year on an anualized basis at 1,000%. but if you look at what is happening in europe, year to date through the third quarter,
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eb sales excluding tesla are 106% but tesla's e investment sav sa% so they are losing share and seeing their sales decline in china, sales have stayed flat since may at about 11,000 cars and now they are shipping cars made in china to europe because there is not enough demand so you ha so we think that they will have problems seeing the growth and they are trading at a very high growth multiple. >> let me just play out the bullish case to you. the bullish case would be, sure, they get these credits right now. that those credits are allowing them or giving them runway to continue to innovate in their business to a degree perhaps in the future that they continue to outpace their competition, that
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the business unto itself should not be valued strictly as a car company, we've had people come on the program and say think about it not as a classic automaker, think about it the potential for this being a major effectively energy company five to ten years out what do you say to that investor watching this morning who thinks that >> again, roughly all of their credit sales are to fiat or fca. fca has said that they will spend about 800 million euros through 2023 over the next three years. tesla has essentially recognized all of that revenue already. we only think there is about 500 million left so next year they won't have the credit sales that they have right now. they won't do 400 million in credit sales they guided last quarter that they were going to do about 200 million credit sales this quarter, q3, and they did about 400 million.
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and this isn't cash based credit sales. this is credit sales they are pulling forward from future years. you can see receivables are up by a similar a with respect to them being a bunch of different businesses, look at their energy division. revenues are up roughly 200 million, but so is cost to goods sold their r&d spend is not increasing, it is dropping as a percent of revenue so we think that next year we think that they will go back into structural losses and every single -- the only question that should have been asked on the earnings call last night wharkts is your cred night, what is your credit sales in q4. if it is 200 million, they could potentially lose money they are not making more money that they are selling in credit. so you can say a lot of things you want to say about tesla, but the reality is, you are talking about a company that is valued at 1,000 times earnings where you are seeing growth decline in europe, growth talled stalled ia
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and they are seeing significant competition next year. keep in mind, they just introduced new guidance where they said that it would be tough to do 500,000 cars in deliveries this year. they are saying their capacity 860,000 cars right now so they are not everyone able to sell off their existing capacity and they are talking about ramping additional factories last night they pushed out berlin 12 months so i think there are problems that people aren't focused on. >> we have to leave it there, but one final question and just tell me a number and be generous. fair value of tesla in your mind >> probably about $40 to $50 per share. and i know you may laugh at that, but look at what happened to -- >> i'm not laughing. >> we've seen these types of moves before when reality hits >> we'll continue this conversation it has been a saga and debate. we appreciate you joining us
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this morning straight over to becky because she has breaking news. >> yeah, we've been waiting for at&t and it is just out with its quarterly numbers. and adjusted earnings on this came in at 76 cents a share, matching street's expectations revenue at $42.3 billion versus the $41.5 billion that the street was expecting at&t says that the pandemic did impact revenue across all of its businesses, but it also said it saw strong wireless growth and that sub be sub be descriptions are ahead of dess are ahead of projections free cash flow, $8.3 billion and as a result of that, they do say that they are increasing their dividends by 50% wireless came in with their best quarter in years, more than 1 million post paid additions, that includes 645,000 post paid
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phones for the quarter also talking about fiber increased additions of 357,000 one thing we should note, these numbers are very big, subscribers were very big, but part of that is because in the last quarter at&t took out any of the subscribers who weren't paying they had kept those people on the lines just trying to make sure that during the pandemic people didn't lose those a lot of them came back. they had 155,000 customers net that started paying again. so those came back into it but even when you strip that out, these numbers are better than they have seen in years i believe. on hbo max, they say 28.7 million paying subscribers with 8.6 million activations. and they have cut these deals with charter and other places where if you pay for hbo, you will be getting hbo max for free it is part of the paid sub descriptions that they get ultimate of that, but not everybody has chosen to activate it.ultimate of that, but not
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everybody has chosen to activate it but if you add it you will up a, hbo and hbo max has gasoline to 348 mi 38 million they had hoped by the end of 2021 to be at 36 million combined so they are running ahead of those numbers. they are working on roku and amazon deals and they are also giving a global number for hbo max and hbo baseline as they start to roll this out beyond the united states right now they have 57 million global subscribers for hbo and hbo max. you can see the stock is up by about 2% this morning. a gain of more than 70 cents to 27.47. joe. >> thanks, beck. a lot of info. are sork sorkin, see if you remember. the 52 week low on tesla is 50 and i don't remember him being bullish -- i don't remember him thinking that was fair value
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he was pretty short then too, was he not so now 50 is the -- you know what i mean? i think he was thinking 5 when it was at 50 and now he is thinking 50 when it is at 500 or 400 or something >> it is a hard one. the credits are an issue and i don't know what to make of the credits. i don't know what to do with the credits. >> you can't say 50 was fair when it was at 50 and he thought 5 was fair >> i put him in the category of just lower >> i have to correct something on at&t. i said increased by the dividends by 50% the dividends payout will increase to the high 50% from 45% where it is now. >> that would be something if they were going to increase the dividends 50% when it is at 7% coming up, i've been sitting at home with these teeth and i could have been doing something.
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obviously people were at home thinking hey, i'm not going out, i might as women put that stuff in my mouth. the pandemic, we'll talk about invisalign but first, i'm going west, young man. too crowded out there. nobody goes there anymore. anyway, the flights of the wealthy from new york to the hamptons has been well documented and now we can quantities guy, robert frank has eye popping real estate numbers next when things do open up out there, how are you going to get a table at one of those foo-foo restaurants? you xwee to the engine you go to the jersey shore, so we're together on this and here is a look at the gainers. align technology leading the way after record shipments of its invisalign orthodontics. earnings came in more than four times above analyst expectations before we talk about tax-smart investing, what's new?
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we'd be closer to the twins. change in plans. at fidelity, a change in plans is always part of the plan.
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welcome back some wild real estate numbers for the hamptons as many of the wealthy fled to the beautiful. the one and only robert frank, wealth editor, joining us with the details. only robert would have them. great to see you >> great to see you, andrew. good morning hamptons real estate prices hitting record highs as the wealthy fled manhattan and they continue to be buying on the beach. the median sales price hitting
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$1.2 million, and that is higher than manhattan's median right now of $1.1 million. the number of sales soaring 50%, that is the biggest jump in over 7 years. the deals are happening at all levels from under a million to over 20 million. the share of homes selling in bidding wars has doubled over the historical average remember we had all this talk about oversupply in the hamptons and now we have a shortage the number of luxury homes lied for sale falling 42% in the quarter, there are now waiting lists for new homes and brokers say that this shows no signs of slowing right now. there are more contracts and closings in the pipeline right now they say than ever before s and the biggest sale in the quarter was this 3 acre spread in east hampton with a tennis court, 8,000 square foot home and this sold for $24 million.
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and you drew, i know you heard elliott management also announcing plans to move its headquarters to west palm beach from new york. so that will add to this notion of the wealthy flight from new york they will keep a few hundred jobs in new york city and a lot of their real estate, but again, this urban flight, this flight of wealth out of new york city changing the real estate markets and a lot of the way these companies work >> so you've made the point over and over again about the tax situation. what percentage of those folks either that fled to the hampton, buying new homes or just going to their homes down end up trying not to pay new york city taxes this year and what does that ultimately look like, how many stories will be producing 12, 18 months from now when there is all sorts of christ he irs headlines? >> the word now is co-primary residence where you have your primary residence in manhattan
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but it is not a second home, it is your co-primary residence a lot of these families don't even know if they are coming back to new york and if they do, whether they will avoid the city income taxes in new york city or stay in the hamptons so i think that is a big question you can guarantee that unless you have sold your manhattan apartment and moved everything out to the 456rhamptons, new yok city tax collectors will come after you. but i'm sure there will be in people that decide to stay out there now that they can remote work and avoid the 3.8% tax in new york city. >> robert frank, appreciate it by the way, i assume the folks in the hamptons meaning the local officials want the tax dollars themselves because they need the infrastructure which needed to be built out just to keep a place that wasn't really planning to have so many people there to begin with. thanks, robert
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>> when we can back, a big swing and big miss for quibi, it is shutting down after just sex mont 60s mon six months >> and let's take a look at yesterday's winners and losers ms >> and let's take a look at yesterday's winners and losers 5g just got real.
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good morning check out the u.s. equity futures, they have been pairing their losses the s&p is almost at break e evn nasdaq up about 22 and dow down but only about 8 1/2 points right now. something that they have been doing throughout the morning session, improving as we go closer but it has been a rough week for the markets. nasdaq has been down for six out of the last seven sessions so we'll see where things go
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in the meantime, short form entertainment service quibi announcing that it is shutting down, that is just about six months after it launched the company was founded by jeffr jeffrey c jeffrey katzenberg and meg whitman. and it featured short form videos and quick bites obviously people weren't watching but investors include disney, at&t and our parent company comcast. quibi says it will return remaining funds to investors we'll have an interview with them at 1 #:1:00 definitely will want to hear more >> andrew, i was
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talked about succession before and i don't know if it was based on the murdochs, but didn't fox have an investment hit it is sexy, it is digital, like we don't want these legacy assets i'll jump on anything that seems like it might be like new age and sexy and i think that they are shutting it down to have something to give these people back, aren't they? >> yes, but the truth of it, and it is sort of underreported what has really happened here a lot of the big media companies including our parent company as you said disney, so many of the other big hollywood companies that got involved in this, for the most part they were the equivalent of what are called round trip deals they would invest $25 million in the company, but at the same time, there was a content production arrangement on the other side of it so that they would effectively get back in some cases more than $25 million in terms of content deals. so for the most part, the media
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companies are not the ones that are the big losers here. in fact, they were probably either net gainers or come out sort of at par, if you will. the major losers are actually some of the big banks that put money into ali baba came in late. and what really happened, you had all the media companies giving i think a misimpression to the pin and possibublic and e other investors just how sexy this really was knowing that they would make money as content players and they were rooting for this to succeed, they would all love if it made money as a company so their equity would have value, because if it succeeded, they would buy a lot of content from hollywood. >> do we now think that watching, you know, a short snippet on your cellphone is -- is that not something that will catch on i mean, i'm not ready -- i have
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no interest in that. but what happened? if anybody could pull this off, it would have been -- at least that was the thinking. >> i think there was an execution issue. i watched it, the content i don't think -- the quality of it was not where you wanted to be i'm not necessarily believer of the pandemic was ultimately the problem unto itself. i think people watch short form stuff, but not necessarily drama or comedy short form stuff they will watch news short form stuff the way youtube works. >> okay. i don't know anyway, not for me cool name. quibi. it is open, it is available no somebody to do something else. sounds like a submarine sandwich place, isn't it? no, that is quizno's southwest reporting they lost $1.99 a share, smaller than what analysts were expecting
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and also revenue was barely above -- a little above wall street forecasts as well you can see the stock, that is not a v, but it is sort of trending higher. up a little bit today. beck and when we come back, we'll talk more about what is moving markets this morning as stimulus talks make slight progress, probably emphasis on slight, not on progress. you can check out the s&p sectors lacking this week led lower by energy. and plus we're awaiting results from american airlines we will have an exclusive interview with the company ceo after the numbers hit. doug parker will be joining us, so stick around. at calvert, we know responsible investing is hard.
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stimulus talks inch closer, but they may fail to reach a deal before the election joining us to talk about what it means for the markets is gabrielle santos from jpmorgan
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and welcome. we try to explain every day why the market is up by 100 points, down by 100 points and it almost has to do where the stimulus lately. you are looking through all of that noise right now and say it is not a question of if there is going to be more stimulus, just a question of when, right? >> exactly i think that if we try to focus on the day to day movement of stimulus talks, we'll get whiplash, so we should just look forward to where we're eventually going, which is that we will get more fiscal support, it is a matter of when not if. and beyond fiscal assumsupport,i think we're also in for fiscal stimulus the next few years. there is no appetite for fiscal austerity anywhere on capitol hill, honestly anywhere in the world. even the imf has encouraged more spending by developed countries. and so here this is a kind of setup where we can get higher
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no nominal growth just need to get through the uncertainty first of the next couple of months and be positioned in portfolios already for that bounce that we expect in cyclical sectors over the next few quarters. >> jim, you are sort of in the same credit. you are looking at the credit market, but you say don't get too distracted by the stimulus talks or the election. you like credit. there is a lot of places that you see beneficial places for investors to be. >> absolutely. and i agreegabrielle, short term there will be focus on the side, the composition, the timing but as gabrielle said, i completely agree, we are moving forward where there is an enormous amount of stimulus already in the market, from central bank policy, we will see post the election to more fiscal stimulus, so when you look through over the next couple years, you know, we do think that you will continue to see a rebound in consumption, you will see a rebound in investment from
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corporate standpoint and when you look through that on that recovery over the next couple years, that dispersion that you see today, i think that you will see that grind with the recovery of a lot of these sectors as you see improvement with regards to testing, treatment and vaccines around the virus and at the same time some of these industries that obviously had a pretty severe down turn in 2020 start to recover and when you look at the valuations in credit and equity, and you think about the excess returns that you are going to get, you are sitting in fixed income rates with cash near zero and even the ten year at 70 basis points, i think quit i dids and credits still look pretty attractive. >> are you suggesting that people should get into the hardest hit area, the hotel, airline, look at some of the credit offerings there >> i do. i think that you have to be selective. obviously the downturn will be extended for some of those industries
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and some of the weaker structures and balance sheets may have to go through some form of restructuring but he at the end of the day, i think some of these industries will start to recover and i think that there is value that you can find across a lot of different entries. and i certainly think if you have the time horizon over the next couple years, there are attractive valuations that you can find in some of these more distressed sectors >> gabrielle, you mentioned the cyclicals. where would you tell people to put their money when it comes to the equities market? >> i think that we have these extremes we have the virtual world which has been leading and then we have the services sectors that are still in existential crisis in our view and the cyclicals are expected to get a bounce and here we're thinking about industrials, consumer discretionary, as well as financials. and one thing i'll say is this is not just a u.s. theme there is also a way to play this
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regionally there are regions outside the u.s. that are much more exposed to cyclical sectors that also have moss storiey positive stors so we want to be geographically diverse pd and that is europe xuk >> thank you both. and so tractor supply, guys. we'll talk to them now strong demand during the pandemic stock near all-time highs up nearly 100% since march lows so 1900 stores in 49 states, becky and andrew which state would you figure that they don't have a store >> i know indiana -- oh -- >> not 52 yet. still only 50. which one, sorkin?
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think of the gardening that needs to be in hawaii. it is alaska so kind of makes sense i thought hawaii too, but then i thought wait a minutes, you need to garden. alaska is the answer just said it we'll talk to him. before we talk about tax-smart investing, what's new? -audrey's expecting... -twins! ♪ we'd be closer to the twins. change in plans. at fidelity, a change in plans is always part of the plan. to a world that must keep turning. the world can't stop, so neither can we. because the things we make,
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help make the world go round. they make it cleaner, healthier, and more connected. it's what we build that keeps things moving forward. so with every turn, we'll keep building a world that works. 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. iphone 12 and iphone 12 proary are here on verizon 5g kids (announcer) 5g just got real. with the coverage of 5g nationwide, and, in more and more cities, the performance of 5g ultra wideband. get iphone 12 on us when you switch. only on verizon.
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the pandemic has consumers focused on home and farm and home supplier tractor suppliers stock has soared the retailer up 59%, reported better than earnings revenue for the latest quarter, eye popping
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same store sales and overall sales. let's welcome hal lotten, tractor supply company ceo i just, i like talking about tractor supply i should recuse myself 80 years old, based in nashville, 1,900 stores, 40,000 associates, as you call them in 49 states. we were just talking about that, not in alaska, which i figure you could use one in alaska. but you do have them in hawaii, right? >> that's right, thanks, joe, for having me on i would like to thank our 40,000 plus team members for efforts in kwo q3 who knows, we've got 6, 700 more stores to build against our long-term guidance on store count. you never know. >> i was thinking also people are at home, they want a garden, they go out to your stores, and i guess it's digital or maybe curbside because during
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the pandemic, it still was hard to go in and shop, but i guess you had a way to deal with that. i was also wondering, given a lot of your rural areas, was the pandemic not as big a deal in some of those areas where tractor supply has stores? >> yeah, to your point, first off, we participate in a very attractive market. it's fragmented, it's needs based, demand driven, and the coronavirus is really either exacerbated many of the trends that were already out there or created new ones, and we have been fortunate enough to benefit, really from almost all of those, pet adoptions being at all time highs and the humanization around your pets, being at home, working from home, living at home more, so you're spending more money on your home, and as it relates to rural, you know, one of the things, and you had a segment earlier on about the hamptons. there's really been a rural revitalization in america. people moving from dense, urban areas out into the suburbs and
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rural areas and we benefitted from that. we certainly invested in technology adds well we have launched a number of capabilities over the last six months, curbside pickup, same day, next day delivery our first mobile app, we relaunched our web site, so we think a lot of those things are helping us gain share. there's no doubt it's an attractive market with a lot of tail winds now >> same store sales, 26.8% that's nuts. just year over year. definitely benefitting from the pandemic i like that you're in in wi-fi thing. you're in an alliance to get everybody -- and it's self-serving you do do stuff on digital quite a bit at this point. that's a great alliance. tell us about that and who's in it with you? >> yeah, we're really pleased to be part of the rural broad band coalition with companies like
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land o'lakes, microsoft and others there's no doubt the coronavirus has exacerbated the digital divide over a third of rural homes, households in america, don't have access to broadband to support the virtual schooling for their children we live in those communities we serve those communities, and part of our mission revolves around giving back to those communities. joining this coalition has been right in line with our mission and values, and to that end, we committed initially up front to provide a million dollars of donations to the cause, and then also recently this quarter, we provided 3,000 chrome laptops to our team members who had children who needed those laptops to support their virtual schooling. this is near and dear to our heart. we live in these communities, serve these communities and are committed to giving back to them. >> we like having you on, and we got to run but we'll have you on again. in hawaii, do you sell like the
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flannel shirts or do you sell, like, flannel hawaiian shirts? real quick, is your product mix different in the hawaii stores >> we tailer our products state by state, and store by store there's nuances we tailer to hawaii >> i think alaska, you got to go anyway, thank you, appreciate your time. thanks for what you're doing with broad band and we'll see you hopefully soon. we've got news just crossings tape coca-cola reporting, adjusted quarterly profit coming in at about $0.55 per share, compares to $0.46 revenue coming in above estimates. a lot more in just f aew minutes. you're looking at that stock up marginally on the back of that news "squawk" returns right after
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good morning welcome back to "squawk box," i'm andrew ross sorkin along with becky quick and joe kernen let's show you u.s. equity futures at this hour we've got a ton of news crossing the wire that may move these numbers around nasdaq up about 21 points. the s&p 500 off about a point and a quarter right now. joe. >> i think you just mentioned it, andrew, but coke earnings report out a short time ago. sara eisen joins us with coke's results and comments from the company. good morning, sara. >> this was better than analysts expected both on the bottom line and the top line the revenue 8.65 analysts were expecting 8.36 organic revenue growth important for consumer staples, down 6%. the expectation was down 8 1/2%. coke is a tale of two
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businesses half of its business is away from home, restaurant, bars, movie theaters, stadiums, that's still getting hurt very badly. half of the business is at home, which is humming, and they're continuing to grow share there brands like coke ca-cola growin, coke zero growing throughout the pandemic the home business is weighing on that result. james quincy, he says clearly things are getting better and you see that in the sales. the earnings beat he attributes to three main factors, number one, he says revenues were better, which i just reported. number two, the bottlers are doing better, and number three, they took cost control in other words, they trimmed marketing expenses and targeted their marketing around brands that were working. i will note the company is not providing guidance unlike a number of companies we're starting to hear from this earnings season. i asked him about that, why can't you see into the future. it's not a projection of
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optimism, and pessimism, it's the fact we do not know where this virus is going. and coca-cola is highly leveraged to the case loads. as soon as in europe they start do minor lock downs of bars and restaurants, coca-cola feels that in their business what's also interesting is the commentary i got around the away from home business, and how it's recovering but it's a very lumpy recovery they have got categories like leisure and hospitality, hotels, for instance, that are still down 70% from normal levels. while in the u.s. in particular, quincy called out food service, the quick service like mcdonald's for instance, which we know had good comps as doing better in terms of the recovery, thanks in part to the fact they do drive throughs, they do digital. that's overall helping their results. he says it's not going to get as bad as it was in april no question about that. they're not confident about that in terms of what they see in the future, given the fact that they are so dependent on that away
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from home business i'll give you a comparison, the biggest rival, pepsico, that stock is up 2% on the year they have been helped by food and more business at home. coca-cola still down 8%, and guys, a lot of people are treating the stock as a vaccine stock, and quincy's conversation to me this morning really affirmed that it is very much dependent on the recovery story of the virus >> hey, sara, you mentioned they are cutting back on the marketing on the advertising, just advertising for the brands that actually work i think i saw in the last week or two, they're getting rid of tab. what does that say about which brands are working, which ones aren't, which are they advertising and are there other brands they're thinking of just stopping completely? s >> so, yes, they're getting rid of 200 brands, half of their portfolio. this follows a strategy that quincy talked about a few quarters ago he called them the zombie brands
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that require focus from instinct, and attention and marketing spend, and yet contribute very little, i think in total they contribute .5 to the operating results, operating earnings, so there are brands that are just no longer worth it, basically to invest in, and part of it is due to the crisis, and they have to focus on the brands that are working right now. part of it is part of a larger rethink and reorganization of coke so when they get out of the crisis, they will feel like they're there with the best brands that work and they can invest around that, and the brands that are working, you know, coca-cola doing well i would say the seltzer doing well, they're going to launch hard topochipo next year and the orange juices are doing well, and the fair life milk brands that's also been a few of the priorities there >> that stock is up by almost 1%
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this morning. american airlines out with quarterly results, just hitting those numbers, and phil lebeau has the results. what do you see? >> these are a little better than expected. let's keep in mind these are terrible results adjusting for excludeing items, the net loss was 2$2.8 billion the estimate was a loss of 586 revenue better than expected at 3.71 billion the analysts were expecting 2.8 billion in revenue it's about liquidity and cash burn not only for american but all airlines they end the quarter with $13.6 billion in liquidity the daily cash burn which is the metric most people have been focused on, they brought it down to $44 million a day in the third quarter from $58 million a day in the second quarter. the expectation from american in their release, they say they expect to get down to 25 to $30 million of daily cash burn in the 4th quarter and to end the 4th quarter with $13 billion
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of liquidity if you do not want to miss what ceo doug parker has to say not only about the third quarter but more importantly where do they go in the 4th quarter and the first quarter when we know that business is traditionally slow for the airlines a little better than expected results from american, nothing to write home about given the fact that they lost $2.8 billion >> phil, thank you for that. we've got a lot more coming up on "squawk box" this morning at&t reporting just minutes ago. we'll run you through those numbers. talk about the future of the company with a top ranked analyst, the stock declined yet again yesterday, knocking its longest losing streak in more than 18 years. before we head to a break let's get a check on markets, show you where things stand as these numbers come over the tape this morning. dow off close to 5 points, nasdaq looking to open 23 points higher, s&p 500 up a point squawk returns with a lot more after this it's moving day. and while her friends
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go online to transfer your services in about a minute. get started today. welcome back to "squawk box. at&t out with it quarterly numbers, adjusted earnings coming to $0.76 per share, and revenue came in boabove estimat. at&t did say the pandemic interacted revenues across all businesses and did say that
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strong wireless growth, the subscription for hbo and max service are ahead of its own projections. let's try to find out whether they're ahead of wall street's projections. craig mofette, founder and senior analyst at mofette, good morning to you craig, what's your headline? how do you rate it here? >> well, look, i think the unit numbers are actually quite good. they did very well with wireless units. they did very well with broadband units, the challenge here or the problem here is cash flow and ebita, and in particular, the leverage ratio because they're so indebted. look, at&t will rise or fall from here based on what the risk is to the dividends. the market has clearly the dividend is not absolutely assured anymore. every day the dividend gets riskier, the stock will go down. any day they get less risky, the
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stock goes up. right now, we are sort of balanced on the knife edge. >> in terms of what you think the fair value for the company is right now, you would say it is what? >> it's probably about $24 you know, that was probably a call back when it was in the mid 30s than it is now but we said, look, you know, it's a funny thing because usually companies trade for particularly conglomerates like at&t is now. 10 to trade at a discount to their sum of the barts. some of its parts worth about $24. >> so you know, you think about elliot management getting involved in this company has this been a service or disservice to the company? >> well, it certainly was a head scratcher in the sense that usually when you see an activist get involved in a company, it's because they think that there's
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a fairly quick route to unlocking value, and often that is breaking the company up and selling the pieces you know, look, right now at&t is trying to sell anything that's not nailed down they're shopping the directv business, they're shopping their video game business from inside warner media, warner brothers entertainment, they're shopping the latin america business, their advanced business. there's talk they may be shopping some of the cable networks, like cartoon network, but they haven't found buyers for any of them, at least at a value that's interesting, and in part, because they're so highly levered, unless you can sell the pieces for meaningfully in excess excess of the leverage ratio, it leaves them in exactly the same bind they're in before they started. there were reports a couple of weeks ago they might sell directv for 3 1/2 times ebita. that's fair leverage ratio once
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you adjust for the operating lease. >> craig -- >> you can't do that. >> craig, when randall bought time warner, part of the calculus, and john stanky talked about it, was turning hbo into the next netflix that's what they argued over over again do you think that's still possible >> well, i suppose look, they're meeting and slightly exceeding their own targets. their own targets to be fair aren't very aggressive they have added a couple million subscriptions to hbo in aggregate. that is nothing compared to what disney has done, for example but, yeah, look, hbo was okay. the core of warner media was turner networks and the overall ebita of warner media is down
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36% year over year, with weakness at film studio because of the difficult release of tenet into theaters and then advertising. so hbo is probably the best part, but it's not the biggest part of warner media. >> we've got about a minute, which means we need to talk about quibi for a second i'm curious about your take, meg whitman going to be on "squawk alley" later today they managed to tear through 1 1/2 billion dollars in the course of six months at what point, jeffrey katzenberg blamed it on covid and the pandemic, others have blamed it on execution and the quality of the product and content unto itself, which do you ascribe the problem to >> i think probably more to the concept. you know, i think it's
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interesting, jeffrey comes from the traditional world of great talent creates great content, and there's no question that that's right compare it to tiktok tiktok said we're not going to try to curate what viewers consume. we're going to let viewers curate what they consume, and we're going to use algorithms to lift up whatever is trending, identify somebody's interests and feed it to them, and quibi got snowballed by this giant pool of user generated content that's impossible to compete with hundreds of millions of videos being up loaded, the best few have won out with people in hollywood deciding this is what we think you should watch. >> do you look at this, investors in this, all the
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hollywood studios got snowed, the big banks got snowed or a worthy bet somehow ahead of its time >> i think it was a worthy bet that was behind its time, unfortunately. i think what you're watching here is the battle of two worlds, the curated world that hollywood came from and the technology and user world that we're in now i think if anything it's going to accelerate, and so i think the problem that quibi had is it was a business model that was actually behind it time. >> craig moffett, always great to see you and get your perspective on all of it appreciate it. >> great to see you. >> you bet, becky. thanks, andrew when we come back, the doj laying out its case against google's search monopoly john ford is searching for the
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answers. he's going to join us with a few different answers after the break. we're watching the shares of chipotle, earnings beating estimates, net sales up by 14%, and comp store sales up 8.3% for the quarter. digital sales tripled for the second straight quarter, of course you know why. delivery orders increase cost and that led to reduced drink sales. that dragged net income down, actually stock is down by about 3.8% this morning. "squawk box" will be right back. time now for today's aflac trivia question. what was the most watched show on netflix in 2019 the answer when cnbc's "squawk box" continues aflac! now tell me, what does aflac do? aflac pays you money directly to help with unexpected medical bills. and is aflac health insurance? no, but it can help with expenses health insurance doesn't cover! that's right. are there any questions? -coach! -yes? can i get one of those cool blue blazers? you know i can't play favorites. alright let's talk coverage. it's go time!
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the justice department in eleven states filed suit against google this week accusing it of abusing its monopoly power jon fortt joins us with his either/or nebraska eulus, nevema real decision. there is no right or wrong. >> there is. but which is it? the government's case is airtight, google protected its search monopoly by paying off device makers and building a mote around its search with the chrome operating system. google created a great search project. nothing wrong with that. after it got monopoly power, it hooked u.s. consumers on other products whose sole business purpose is to protect that monopoly google's chrome browser doesn't make money google android doesn't make money, they're part of a search
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sharecropping system where google gives away products but gets a big share of the attention, data and revenue from u.s. search consumers and advertisers that no one else will own a big farm. that's bad for competition, innovation and consumers, joe. >> that's just too airtight. i don't want to hear the other side because there was too good. eric schmidt says there's a difference between dominance and excellence. >> well, you know, he might have a point, joe, you know, on the other hand this case would have made a lot more sense ten years ago he's got three big strikes against it, amazon, apple and facebook, three other giants that are also in the government's antitrust cross hairs, by the way, they are all competing with google in search. amen amazon's ad business is pulling in, what, $4 billion a quarter apple has its own app store search, its own map search, and
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siri facebook has a personalized internet service where google search can't crawl including facebook, instagram, and messaging apps amazon, apple, facebook are making hundreds of millions if not billions of dollars in their own corners of search, and their growing, so the doj's case isn't open and shut. we don't need government to solve this problem. >> would this be the first time something free, you're trying to control a market with something free that makes no sense. the courts need to move into the digital age. it's not even a product. it's not some physical thing, it's like search it does help, john, doesn't it i mean, i have tried bing, i would rather use, you know, there needs to be real competition to feel like they're controlling it through a monopoly. >> i try to use bing too, and
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sometimes i find myself going back to google for certain searches because it's often just better you're right, if you look at the consumer side of it, this looks like it's free but really the customer in this case is the advertiser it's certainly not free for them, but this is a lot muddier than that microsoft case where it was like poor little net scape and big bold microsoft who are the victims here, microsoft, it's kind of hard to feel sorry for a trillion plus dollar companies, guys. >> although, it's not free it's not free. you're giving up your privacy, which is something americans seem very willing to do, by the way, i have tried the other services too, and i have always come back to google. it's not free though. >> it's not free, but so much of the internet economy has been based on this idea of giving up elements of privacy, whether it's how maps get used, you know, the whole idea -- >> why don't regulators focus on that, focus on privacy.
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>> it seems like political campaigns are based on the same thing. one wonders who will end up standing up for the citizen and the consumer >> but, john, talking about free, to me, and i don't know if this is going to surprise you or not, i'm on the side of google or what seems like the side of google because i think i'm on the side of the consumer the ultimate -- what's going to happen here if google does not prevail is it's going to cost consumers more full stop, end of discussion, the fact of the matter is the telephone, your iphone is going to cost you more right now, google effectively is subsidizing your phone i could turn the whole argument around by the way and tell you that apple is the one that's extracting and using its power over google to charge them the fees that it's charging them, but if you said, okay, google, you can't pay for this, it's not clear that apple is going to run to bing and say pay us money and
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put your inferior product on our phone. i don't think that's going to happen we saw that with fire fox, and they stopped doing it because customers were unhappy. >> that's how the capitalism is supposed to work, big giants are supposed to fight to extract value from each other, and consumers are supposed to end up benefitting. some of the smaller third parties, including advertisers, and services that need to get visible on the search engine, are they getting crushed >> john, we appreciate it. on both hands, on all hands. we will see you very soon, and we'll find out what else is on your mind on the other hand. still to come on "squawk box" this morning american airlines ceo doug parker is going to join us on the airline's latest quarter, a conversation you don't want to miss "squawk box" returns right after this
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american airlines reporting its quarterly numbers earlier this morning it was a big loss but less than expected phil lebeau joins us right now he's got a special guest. >> let's bring in doug parker,
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the ceo of american airlines, joining us from the headquarters in fort worth, texas we talked about the numbers at the top of the hour, you lost $2.8 billion a little less than some people were expecting but still a brutal quarter give me your sense of the outlook right now for the 4th quarter and then going into the first quarter for american >> more of the same, you know, gradual recovery, these results, you're right, are not good they're driven entirely by a drop off in demand for travel, driven by the pandemic they're better than the second quarter was, revenues down 73% in the third quarter that's improved from being down around 85% in the second quarter and we expect it to be down around 65% in the 4th quarter, so gradual improvement, and certainly not the kind of improvement we need to get back to where we're generating cash we're happy to see where we have ended up in terms of liquidity in the quarter, the reduction in the cash earn is encouraging our team is doing a fantastic
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job. we're getting through all of this, but absolutely difficult times in our business. >> let's talk about the cash burn you went from burning 58 million a day in the second quarter. you just reported burning 44 million a day in the 3rd quarter, expected to get down to 25 to 30 million in the 4th quarter. when do you hit break even >> that depends on when demand comes back those numbers are getting better primarily because more people are flying we have done virtually everything we can as a results to cost in our business. that number will get to a positive number when more people are flying that will happen at some point, you know, sometime in 2021, i'm certain. i don't know exactly when, but anyway, we're prepared for that. we all need to get back to where we're not talking about cash burn numbers, we're talking about profits and the things we used to talk about we're not there at this point but we will as demand returns. gradual recovery, we're seeing that looking forward to really the difference is going to be when business travelers start
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hitting the airways again. something that's modestly starting but really is nothing close to what we need to get the economy moving again. >> we'll talk about demand in just a bit i want to talk about liquidity, you have authorized or the board has authorized you guys to raise another billion dollars in capital. you have net debt of 33 billion in debt. is it your sense this is the end of the capital raises or is it likely we could see more in the first quarter and as we go into next year? >> that billion is at the market equity it's not more debt it would allow us to celeksell t at market. capital we have raised this month in $16 billion in liquidity. that's far more than this airline has had, double than
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what we started the year with. a huge amount of liquidity, and the cash burn rates as you noted are getting to be a third of what they used to be so we feel good about where we are in terms of what we have raised if we need to raise more of course we can. we have significant ability to raise more if needed i feel as though we've got enough to weather any sort of storm that lies ahead. >> doug i want to ask you about something you just mentioned you said you're not going to be in a position of being profitable until business travellers come back we have heard from so many companies that they're not going to ask their workers to come back into the office until next summer and beyond. i mean, is that just the case, you can't make money in this business unless you have business travelers traveling >> we certainly can't make what we used to make without business travelers traveling. we have all done a lot to reduce costs. i'm not saying we can't be profitable at some level in this
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kind of environment, but yeah, obviously we need people to be flying again that includes the business community. that will happen at some point we're seeing it in certain sectors now. people are returning to work, starting to get back on the road it's going to be a while, and we're prepared for that. >> doug, what's slowing down the demand from coming back? is it the concern that corporations may have, and i'm talking about business travel, about sending people out on the road, is the fact that theby sa, look, we can get close to making our numbers with telecalls, zoom calls, whatever you want to do, or is it the fact that as you see shut downs or lock downs or quarantines not only here in the u.s. but europe, if there's overseas travel, companies are saying, we're not sending people out if there's a chance they'll be going into a hot spot >> it's all of those things, phil it's all of those things together, and i can't tell you exactly, it varies by
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organization i'm certain, but primarily, it's just a lack of anywhere -- of something to do at the other end of the travel. you know, we just i'm here in our headquarters, but, you know, there are -- we don't have the full team here, and we don't have a lot of people coming to visit just yet that will happen we're dpegt mogetting more of t again, as time passes, it's going it take really, you know, much more willingness amongst business to get back on the road again, i know that will happen at some point. i don't know what actually drives it. it may have to be a vaccine, but at some point, you know, business needs to travel it will travel i'm not particularly worried about zoom calls being the future generally anything that makes the world smaller, results in more demand for air travel i think that will be the case as we move forward. right now, we're continuing to weather the storm when business travelers are ready to travel, we're going to be here for them. >> doug, what's american airline's position on
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quarantines, for example, state quarantines and the way people like the governor of this state, andrew cuomo is approaching this i think there's 40 states on the quarantine list which would make it virtually impossible for almost any new york business to send their employees out in the field, if you will, right now because their ability to come back means that they can't go anywhere effectively for two weeks. have you had conversations with various governors about this, and is there a way to do it in a precise or precision oriented way potentially using testing? i don't know how you've thought about that >> we have we've had conversations and we talked about testing and again, those are up to individual states to decide they certainly have a negative impact on travel people aren't going to travel, as you noted, if they have to quarantine when they arrive, certainly for business trips they have a depressing impact.
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we have talked to a number of governors and others about actually having testing, which would help a lot we think that can certainly help, again, those quarantine restrictions are starting to fall away in many cases. the sooner the better as far as we're concerned because they're a big restriction on demand for air travel. >> doug, back of the envelope, what are you seeing in terms of thanksgiving and then christmas holiday travel demand? >> it's relatively strong. i mean, certainly relatively, nothing like it has been in the past, but look, we're carrying at american airlines, we're carrying 250,000 passengers a day, about a third of the american traffic our people are doing a great job of taking care of dmcustomers, doing it safely, more traveling over the holidays. people are getting out and traveling. it's leisure based it's certain destination based, but people are traveling, people are flying there's going to be more of that
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over the holidays and our team is doing a fantastic job of making sure it's done safely. >> doug parker, ceo of american airlines, joining us exclusively on "squawk box." on a day they reported a massive loss we're seeing this from all the airlines, all reporting a massive loss the focus is it's bringing downs cash burn and getting through the next stretch all the way through the first quarter which is again traditionally the slowest part of the year for the airlines. >> phil lebeau, thank you for bringing us that interview appreciate it very very much. meantime, when we come back, the washington football team wants voters to get in the game. we're going to speak to the team's president about their initiative to turn ed fedexfield. and rcruo mao biis going to join us to discuss stimulus and the latest out of washington 5g just got real.
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welcome back to "squawk box," the futures have improved from the worst levels but it actually had been positive at one point. the dow is now down as you can see about 7 points and nasdaq is in the green, up 22. s&p down a point tesla was out with earnings last
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night. the auto maker earned an adjusted $0.76 for the third quarter. revenue also beat estimates. it was the fifth consecutive quarterly profit for tesla which said it remains on target to deliver 500,000 vehicles for 2020 becky. >> thanks, joe when we come back, washington football team president jason wright on encouraging fans in the d.c. area to vote. we'll talk to him about covid, what they are seeing in the nfl, what might happen with the super bowl that interview is next. in the meantime, check out shares of at&t, the company reporting a short time ago, adjusted earnings at $0.76 a share matched the street's expectation, revenues came above estimates. stock is up by 2.3% after notching its longest losing streak, ten straight days. "squawk box" will be right back.
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we live with at&t and we are well past the honeocupado tom. at&t, what's this i hear about you advertising a 100% fiber network? only like a fraction of my customers can get that. that's it?!? you have such a glass half-empty attitude. the glass is more than half-empty! you need to relax tom. oh! tom, you need a little tom time. a little tt. stop living with at&t. xfinity delivers gig speeds to more homes than anyone. i decided that i wanted to go for electrical engineering and you need to go to college for that.
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if i didn't have internet in the home i would have to give up more time with my kids. which is the main reason i left the military. everybody wants more for their kids, but i feel like with my kids, they measurably get more than i ever got. and i get to do that. i get to provide that for them. this weekend's nfl match up between the washington football team and the dallas cowboys is being dugged the dm votes game part of the washington campaign to encourage voter registration this election cycle. joining us now is jason wright, the president of the washington football team, and jason, it's
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good to see you again. how are you doing? >> it's a pleasure to be here again, becky, i'm great. >> you know, i think about all the things you have on your plate right now, trying to do the nfl season through covid, trying to figure out what happens with a lot of the cultural issues on the team, even trying to come up with a new name why are you taking on this initiative in the middle of all of that? >> it's important that right from jump we signal the new culture we want to build by being real investors in our community. it's unambiguously good and nonpartisan to help people exercise their voice it's part of our push on equity. we're trying to lead by example, and i'm excited to announce that 100% of our play skpeers and co are registered to vote, and they're starting to send in their ballots. i'm proud of what we have done so far. >> in terms of getting out the vote in the community, dm vote, dc, maryland, virginia, how are you doing that in the arena, what will you be doing to
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encourage others to vote >> we have our reach as an nfl team and our assets. we've got our stadium, and we have been using it to register people to vote turn out tuesdays every week leading up to the election we had a good moment this week when the virginia registering system went down, and we were present to be able to get people to register. that was important for the area, and we will also be a super polling site on election day >> super polling site meaning what, people can show skpup and vote. >> yeah, we can have up to 30,000 people come in and vote we have it socially distanced, volunteer poll work skpeers and meeting the needs of folks that make it difficult to vote, so we are providing vouchers through lyft, and world central kitchen. we are providing food for folks waiting in line, and need some grub so they can wait it out and vote. >> you know it would be something if you saw 30,000 people who came through the
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stadium to vote because you're not going to see that with the fans the governor of maryland has said that you could have up to 10% of the stadium's capacity there for the games but you guys are sticking with the idea you want friends and family. there will be no additional fins the stadium. >> we are eager to get fans back in the stadium, but eagerness is not -- we're not going to be in a rush we're not going to be in a rush. but i'm excited that we have more leeway. we're going to take it on a week by week basis, and i hope we can have fans back in after our bye week, and we're working closely with prince george's county and the governor's office to make that happen. so stay tuned. >> what are you using as metrics for that, local community spread, are you watching the transmission factors that are there? how do you figure out whether it's going to be safe to have people back in or what standards you'll be using? >> there's at least three broad factors, one is our partnership
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with the government. they have realtime insights into how rates are ticking up, and they have good views on leading indicators, and that's what governor's and county's guidance come from. one is staying in close communication with them. the second is us watching rates. the third is assessing our own internal association, how is our team doing on it how have we been doing on protocols. we've got unique situations here, a head coach that's going through cancer treatments. we have to be prudent object what we do and bring into the stadium. we look at all of those factors and we'll make a decision. >> what can you tell us just about how things have been going trying to watch the covid situation when it comes to the nfl. some teams, not yours have had high numbers, what do you think you have been doing differently or are you just lucky? >> i don't think we're doing anything differently it comes down to individual behaviors and luck, frankly. the nfl is at a scale that some
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of these other sports aren't at, the size of the roster, the complexity it was inevitable that things would happen i actually think the response has been good, the contact tracing technology we use is excellent, and they have been able to quickly identify folks that need to be quarantined, and so i think the response has been excellent. and i think the trickiness as things may continue to pop up across the fall is in scheduling and the league office is doing their best to run algorithms and manage scheduling. we have the advantage of fewer games. i think one way or another, we'll get through the season in a safe way, and we'll all feel good at the end of it. >> great rivalry on sunday, s a jason. it kills me that dak got hurt and i'm from cincinnati. i'm taking washington. because i've seen. >> i'll take that. i'll take that >> who's washington going to start at quarterback >> i think coach has been clear
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that kyle allen is our starter at quarterback so unless something changes, that's the case. again, i'm on the business side so i know as much as you do. you google it, i'll google it and we'll know. >> i liked going for that. i hope you didn't get too much grief. did you as a business guy and as a football guy, what did you think? >> as a former player, it's always easy to put the hat on and be a fan,and be a fairly informed fan as a former player. why i liked about it, irrespective about how you feel about the coal is coach rivera has a strategy, he's called river boat ron for a region. there's a strategy to how he plays the game it is aggressive it is forward leaning, and he's trying to bring that culture to the team, and i think when you're trying to establish a strategy and a way of being, you have to be decisive and roll with it. agree or disagree from my vantage point doesn't matter what i love is he as a leader role modeled what's important, and i need to do that on the
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business side, be super clear about what our strategy is, and the culture we're going to set and make decisive moves behind it, and own it if it doesn't go well, and keep powering forward. >> it's pick them, what should i do . >> you got to play on us you know, we're going to win this game. >> you did help the giants out they needed that for the first win. >> too soon. too soon >> too soon to talk about it andrew. >> jason, i have a tv rights question for you for a very long time, we've sort of speculated about whether ultimately you're going to start seeing football like sunday night football, for example, or monday night on an amazon, on a you tube, in a meaningful way, and effectively taken away from the traditional linear networks. how much closer to that day do you think we are now
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>> that's a really good question i'm not as tapped in yet to the league wide conversations on media and broadcasting at the legal level which is what you're talking about, the games and streaming of games i know there's been innovation with our broadcast partners already across the league to provide more games and alternative times, provide all 22 replays to provide things on streaming. but what i do know about is what we're innovating on internally, and i'm quite proud of what our media and content creation folks are doing. they're trying to take an innovative approach to create more content, relative in different ways melding football with fashion, melding football with gaming, and we have partners that we're working with in fact, in gaming, we have anto the boss, who is a famous gamer, a host of one of our social programs, and so i think we're trying to innovate at the team level, and i think the league is trying to inevacuate, and i'll
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learn more the longer i'm in this role. i think you'll see changes soon. one of the things you have been working on is trying to come up with a new name for the washington football team i read recently that it might stick around that name may be a place holder for the 2021 season, too, what can you tell us about that >> as you know, in the business world, these things take time. more than it just being a business decision that requires research and all of that stuff, it's also a really important one. you know, this is the identity that will shape the next hundred years of this franchise, and it's really important that we not just engage our fans through digital social media, we need to understand not what they want but why they want it, and i don't think we understand our fans well enough that's one of my observations coming into this role. we need to know them better. we need to reestablish trust and understand the why of what they want behind the name and identity we're actually going to take the time to do this right, and speak with them. not just virtually, you know, not just through social media
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engagement, but really speak and understand in order to do all of that right, and the process stuff, and copy rights, it's going to take time. that's all we have been communicating. >> yeah, hard to do that when there's no fans in the stadium do you have any front runner names, anything you like the best >> you trying to catch me up no no, there's no front runner. there's no favorite. and i know it's hard for our fans to believe that but this is honest, if i'm one thing, i'm honest, we are really starting from a blank slate, and trying to engage them in the process. >> okay. if there's nothing you like the best, what's the one you hate the most so far? >> see, let's see. you know, i haven't seen any that i absolutely decembspise, u know what, let's roll with it. >> can't do the hogs. >> i have seen that one. that one might be tough. >> really not that bad
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i'm used to it already, it's kind of cool >> it's like the country club, there's a golf course, if it's called the country club t must be pretty damn good. if you're called the football team, it must be pretty good maybe just keep it, right? >> i love it you all are doing the work for me, so send me. >> all right jason, great to see you. thank you for joining us, and we'll see you again soon, okay >> like wise. >> take care andrew. coming up, another big hour straight ahead, marco rubio, senator marco rubio will be with us right after this with the latest out of washington on ckn mostul tks ba ia ment everyone wakes up every morning to a world that must keep turning. the world can't stop, so neither can we. because the things we make, help make the world go round. they make it cleaner, healthier, and more connected. it's what we build that keeps things moving forward.
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good morning, a foggy outlook for a new coronavirus stimulus deal in washington. is there now a chance to see an agreement after the presidential election we're going to ask florida senator marco rubio about that and the new warning that iran and russia are trying to influence the 2020 vote. and earnings coming in fast this morning, reports from at&t, coca-cola and two big airlines we've got details on the way. and a "squawk box" exclusive
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with legendary investor, paul tudor jones. he's going to share his views on the market, the election, bitcoin, and so much more. the final hour of "squawk box" begins right now ♪ >> good morning, and welcome to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin now we're actually up, u.s. equity futures and the dow have turned positive about 17 points as you can see the nasdaq started first in the green, kind of, up about 36 points right now that's acdc, i'm trying to figure out why we played that. >> back in the green, back in the black. >> nothing to do with tesla. anyway, the treasury yield is 8. oh, my god, 8.
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wow, batting down the hatches, we could be at 1% some day is this me yeah we have a big final hour of the show with three big guests, florida senator marco, becky, marco. >> polo. >> no. >> never mind. never mind >> rubio. >> marco rubio, tesla analyst, to tony, and billionaire investor, paul tudor jones next time i'm going to ask andrew you know, you can't -- go ahead. this is you. >> lots of corporate earnings out this morning let's run you through some of the numbers that we have already been talking about this morning. at&t's third quarter profit matching the street's expectations, sales actually beating expectations the company says that the pandemic impacted revenue across all of its businesses but it said it saw strong wireless
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growth in hbo and max subscriptions ahead of internal projections. american airlines posting a big but smaller than expected loss also bringing its cash burn rate down by $14 million a day from the second quarter to the third quarter. still, you are talking about a burn rate of $44 million a day, and that's a lot ceo doug parker joined us on the show just a little bit earlier >> we have done virtually everything we can as it results to cost in our business. that number will get to a positive number when more people are flying that will happen at some point. >> meantime, southwest airlines also posting a smaller than expected adjusted third quarter loss and revenue that was slightly above expectations. you saw american airlines shares down by 2% southwest air up by about .6%. don't miss gary kelly on "squawk on the street" at 9:30 eastern time. coca-cola topping estimates
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on the top and bottom line the partial reopening of theaters and restaurants did help results, and organic sales decline of 6% was improvement over the prior quarter's drop of 26%. 10 eastern time, that dow component up by about 2.7% joe. house speaker nancy pelosi, treasury secretary steven mnuchin making more progress towards the next coronavirus stimulus deal, but even saying it, it's hard to really, you know meanwhile, a smaller relief bill failed to garner enough votes in the senate joining us marco rubio of florida, he chairs the committee on small business and entrepreneurship, and senator, thanks for joining us once again, and i have seen some of
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your colleagues on other networks, just in so many words say this is very pessimistic about the prmospects for this, because the speaker is not ready to give a win to president trump, but then, you know, the other side would point out that leader mcconnell probably doesn't have the wherewithal to go through with what the president would want, anyway is anything going to happen in your view? >> first i'm still getting through the trauma i grew up with marco polo game the fact that you opened with it, it took me a minute to compose myself the stimulus thing, i think the fundamental is the cost, the dollar figure. there are republicans that will not vote for a deal that goes 1.6, $1.8 trillion, i'm not happy the with cost associated
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with it. but i think the cost of not doing something is potentially higher, especially since some of that money that we're talking about in the 1.6 whatever number they arrive at is re-purposed money like the ppe money that was unused it's not new spending. in the end, i think we run the risk here of structural damage to components of our economy if we don't do something. i also think we haven't seen the worst yet from some cities and counties i'm not talking about cities and counties that ran up big debts on their pension plans prior to the pandemic but some of the things going on, for example, with local option taxes. that's money that's bonded against for infrastructure spending, they're going to have to pull funds from a general revenue if the bed taxes go down we have housing issues around the country as well, and look, the small business piece is really important, and it's something, i have a meeting this morning with the chair in the house and the vice chair in the house, along with senator carden, my counter part, we're going to talk about this i have more optimism that we're going to have a deal on
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stimulus i don't know if it will be before the election, just simply because of the calendar, and some of the time constraints we face, but whether it's right now or early november, i wish it had been yesterday, three months ago, but we do need to do more. >> do you think if there weren't political considerations that a half trillion would have been palatable to speaker pelosi in terms of it -- obviously it's not everything that she wants but there are positive and helpful things in the half trillion, and to have a choice of either taking it or leaving it, i mean, you could take it, and then work on all the other things later if you weren't using it as a leverage or cynically as something for political reasons, why -- what would preclude you from saying let's do that and get this out, and then we'll start arguing again. >> let me pull back the curtain
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on that. three months ago their position was let's come up with something we know they'll never take nothing will happen. the economy will get bad the president will get blamed for it, and republicans will lose the election. i think what happened in the interim is rank and file members started pressuring the speaker because it's their districts and the economy and their homes that were being hurt, and so that's where she kind of came out of that position. i think she probably and they probably prefer a deal post election, but even if it's preelection, it will be too late to have an impact on the economy. if we weren't in an election season, i think there would have been obstacles, but it certainly would have been easier and that's why i think a post election situation but even that's not a guarantee, depending how the election turns out, some people may calculate they could get a better deal in january. we'll see, look, i'm cautiously optimistic but we have already seen this thing take a lot of twists and turns it's really unfortunate, especially for small businesses that are getting crushed out there and the jobs that are going to be lost because of
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this >> hey, senator, let me just ask a question about this. we have had a couple of democratic sfa democratic senators who have been on and sit on the small business committee, and have been concerned about this. i have been pointed in asking them, if there wasn't a deal that could get done by pelosi and mnuchin, would they go ahead and vote to release some of the ppe existing funds, just to make sure the small businesses are taken care of. let me ask you the flip side of that, if something happens that there's a deal between pelosi and mnuchin, would you go ahead and vote for that anyway just to get the funds out? >> i'm pretty open in order to pass something here, and i think we have to remind people of this all the time, the only way you pass a law here is you have to have it passed by a democratic house, a republican senator where you still need democratic votes and, signed by a republican president no one is going to get everything they want here, and from my perspective, that means the bill on this probably going to be higher than i want it to
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be, and i'm very uncomfortable with that. that said, i think the price of not doing something is higher. as long as it's limited in some way. as long as it's not crazy, i'm willing to be flexible about it because i think it's that important. i think the damage to our economy is much greater than the benefit of not doing anything would ever be in terms of the debt so as i have said before, i'm willing to vote for things i'm not in favor of, in order to pass things for our country within reason. >> senator, i wanted to ask you, there's about $9 billion that was earmarked for testing that is still being apparently withheld by the u.s. department of health and human services under direction from the white house talking about trying to bring the economy back, testing is such a vital, important part of that, of course, in addition to the health of americans, do you support distributing that $9 billion for testing right now? >> well, i do, but, again, i don't know all the detail behind
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why it is or if they're holding it back. i will say this, the kind of testing, we need a new kind of testing. we need point of care, rapid testing at this point or greater expansion and distribution of that those aren't 100% accurate, you will catch enough cases to prevent wider spread i have been talking about the kind of tests you can administer, not just on a daily basis or nursing home or congregant living facility, but you could possiblily use y use n schools, if somebody comes up symptomatic, a teacher or somebody who works there, the ability to test them or send them home for a follow up pcr test, the newer kinds of testing that give you quicker results simply because that will allow us to take action. that can prevent, instead of three people being infected, you could wind up with 15 people being infected. >> senator, i'm trying to figure out the next, i'm looking forward now, even regardless of
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the election and what happens in terms of big tech and i'm thinking of the doj and google, and i'm thinking of the, you know, facebook and twitter with the disputed controversial laptop piece this is going to be on the plate of d.c and, you know, we always talk about the goose and the golden egg. i mean, it's a fine line to try to walk, but what do you think needs to be done on both of those subjects >> i think the fundamental question becomes and, this is a new creature our law is written for an era which was news was a television station, network, and now news is consumed through an aggregator, so the fundamental question is a tech company, are they a site that basically hosts the news content produced by other people or editors that decide what it is you and i can
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read and see and share with others that's the fundamental question here if they're going to be editors and publishers, they need to be treated as such for purposes of lib li li liability, and the second thing, free speeches and all of these things is a difficult con cement, but today i can argue i'm restricting access to disinformation or misinformation but tomorrow that could be used to restrict access to inconvenient information or something i claim is misinformation but actually is in the eye of beholder, and that becomes really problematic when it's about political speech, when it's about campaigns. so this is a very important issue and one we need to think through as a society and a country because in the end i think what we'll find out is the cost of blocking access to information and news is higher in a republic than the cost of not -- sorry, the cost of not
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restricting it is much lower than the cost of restricting it in terms of a society's ability to function as a republic. >> senator, short of an amendment to the constitution, do you think it's possible to legislate against court packing? i know you're thinking about it. that wouldn't hold up, would it? >> because it's a third branch of government. it would be questionable i do think we need some institutional stability. the one thing the country needs right now is to protect the stability of our institutions. one thing that has allowed us to survive as a republic of 200 years is the stability of institutions, good presidents, bad presidents, boring presidents, good members of congress, bad ones, and so forth and everything in between. that's what you get when you elect human beings to political office what has allowed us to sustain throughout this is that the institutions are durable, and that is particularly important when it comes to the court if we reach a point now where every four years or every two years, the party that wins doesn't like the outcomes coming
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from the judiciary to the supreme court, so they want to add new members to tip the balance, we'll wind up with 25, 35 medical examiner mbers of a t we'll have to build a new supreme court building, and look like a third world country we have to bring stability to that we have defined in the constitution how many members of congress there are, how many senators there are, two for every state. i think it's important we define for purposes of stability what the membership should be of the supreme court. >> yeah, how do you do that? short of a sgl-- >> it would have to be a constitutional amendment. >> the same people who want to pack the court are not going to be in favor of a constitutional amendment. that would be harder to get. >> at least they'll have to tell you where they are on the issue, which they refuse to say now. >> all right senator marco rubio, thank you, i dredge up that bad childhood memory. >> that's all right. i'm over it.
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>> andrew. thanks coming up, when we return, one of the street's top analysts on tesla's fifth straight quarter of profits, and we're going to talk exclusively with billionaire investor, paul tudor jones, and as we head to a break, check out shares of dow, the chemical maker beating analysts on top and bottom lines for it latest quarter for a higher demand for chemicals used in consumer durable goods and construction materials don't miss dow's ceo in less than an hour he's going to hang out with the gang o"sn quawk on the street. stay tuned, you're watching "squawk box" on cnbc
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in about a minute. get started today. consecutive quarterly profit, and reviving its pre-pandemic goal of delivering 500,000 vehicles by the end of the year. elon musk putting forward
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another target on the earnings call if his company can reach it >> i'm not saying for sure we hit 20 million vehicles but it does seem like a good goal to have that would mean we're replacing 1% of the global fleet per year. >> joining is tony, has an under perform rating and $180 price target on tesla. that is well below where the stock is trading investors bid the stock up after what they heard yesterday, h$440 a share is where it's trading ri right now. did you hear or read anything that made you decide you may raise your price target? >> look, our target is set on a long-term view i think most encouraging last night was tesla's profitability improved more than we had anticipated and on a sequential basis. so car operating profits
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adjusted for credits were almost 5% relative to, you know, closer to 0% last quarter, so that was a significant improvement. but when we think about the valuation of tesla longer term, we think about how many cars they can deliver and ultimately at what level of profitability and the stock is basically saying this is a company that can not only be the highest volume car maker in the world going forward, but it can also be the most profitable and historically, those things are at opposite ends the more volume we have, ultimately the tougher it is to become highly profitable and the stock is effectively saying tesla can do both i'm not sure that a short-term improvement in profitability in q3 really changed our view on that. >> okay. let's talk about that for those who aren't familiar with the zero emission vehicle credits. in 2018, tesla had $418 million of vehicle credits they got from
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state or national authorities, rewarding them for being green 2019, the buyer credits were $594 million, and then this year, through just the third quarter it's $1.18 billion your point is they had been unprofitable without those credits until this quarter when they did see a 5% profit margin on it, correct >> that's exactly right. >> what can you anticipate about those regulatory credits going forward, are they going to run out? is it going to be harder what do you think happens? >> right so a lot of these credits are because emission standards in europe increased substantially this year. and they increase again next year and so if your fleet, your carbon emissions from your fleet is high, ie, you don't have a lot of electric vehicles, you pay a big fine in europe ultimately what companies are doing is bidding for tesla's credits, basically saying can i buy the credit of having made an electric vehicle that reduces my
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average carbon emission in europe, and therefore i have to pay a lower fine because the emission standards are higher in europe this year, you have had a bid up and a higher demand for these credits. i think that will likely occur for at least another year, but what will happen over time is as particularly the european oems come out with their own ev models, they will be closer to hitting that standard and so ultimately the need to buy these credits will go down and tesla's profits and revenues associated with them will go down. >> you look at tesla shares, just what's happened to them over the course of this year how difficult has it been to maintain your conviction on your $180 price target. >> well, look, we try and do it objectively. we have had a discounted cash flow that goes out to 2050 and assumes tesla is making 10 plus million cars by then, and we struggle to get to the
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valuation. look, our belief is at some point valuation matters and our contention is super high profitability in congress over the long-term. the market in the near term may believe tesla could do that. and we could be wrong. tesla is a highly innovative company, getting into new businesses like insurance, you know, they ultimately could run a robo taxi service. the jury is very much out, but we measure it in years, not ultimately in days or quarters >> all right tony, thank you, it's good to see you. >> thanks for having me, becky. coming up, a "squawk box" exclusive. legendary investor, paul tudor jones on the markets and where hesees the enocomy after election day, depending, i guess. stay tuned "squawk box" will be right back. flexshares may look simple on the outside. but inside every etf...
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welcome back to "squawk box," we have some breaking news our latest read on initial and continuing claims and there are some surprises here. under 800,000, it is not the 8th week in a row where we're between 800 and 900,000. 787,000. so that makes it officially the
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lowest levels since march when we were at 282,000 before the effects of covid started to affect the economy and jobs. if you look at continuing claims a big drop there as well from 10 million to 8,373,000 a big drop there as well and that would officially make that the lowest read going back to march as well when it was, oh, i'm sorry, yeah, march when it was 7,446,000 so both of these numbers better than expected and the revisions actually would have given us a hint if we had them a little earlier. we wentunder 10 million on the revision to last week's continuing claims. slightly over 10, it stands now around 9.4 million, and initial claims scaled back quite a bit, but of course these numbers take that a bit farther so we're going to definitely watch the markets to see how much impact this has
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interest rates were already falling from levels that we hasn't seen since june, especially on long dated treasuries, but they are coming back a bit, trading 160. now 161 in a 30 year, we're holding almost 81 basis points in a ten-year, and we want to keep a close eye on both of these and the yield curve, just the same as the lodge date, going back to june 66 on 10s minus 2. some surprising numbers for a change better than expected. back to you. >> hey, rick, the markets have barely budged on this. i mean, the dow and s&p are back in negative territory on this. are you surprised to see such little reaction in the market to numbers that are quite a bit better than expected or does this just tell you that people don't necessarily believe these numbers right now, they want to see more stuff >> i think in about an hour you'll see the markets assimilate this in a much more
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aggressive fashion at least that's my opinion >> why at the open? this is just the futures >> when new york opens officially, i think you're going to see a bigger appreciation for the better than expected number. let's be frank these numbers are not accurate, the bigger they were, the more the inaccuracies affected them, and not only that, it's the difference between state and federal with regard to benefits. some benefits running out, and maybe that's part of the interpretation that certain benefits have run out, so people aren't, of course, necessarily finding employment they're just not receiving benefits anymore there are some extensions on the federal side but all in all, even though it is a better number, there's many ways to approach this number just like on the jobs number or the dropping unemployment numbers where it's either people, you know, not showing up in the labor force or people not being able to get some of these programs because of course six months has run out on some of the state programs we'll continue to monitor.
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my guess is there as little bit of everything i described in this number, but still is better than expected. >> mushy, though rick, thank you. steve liesman is here, he has been reading through these numbers, and has a little bit more analysis on this. steve, what do you think >> yeah, i mean, i'm going to agree with rick broadly, the idea that the numbers are indeed better but i guess rick leaves it a little bit to me to give the bad part of the report, and he hinted at this, just to be fair, the idea that one of the reasons why you have this big drop in continuing claims is because in part people could be getting jobs as well but also you have the ending of benefits, the expiration of their benefits, so what we do in that case is look to a separate federal program, the pandemic emergency unemployment compensation, peuc for the wonks out there. and that's up by half a million. again, going with the theme, it's better than it was last week, which was up 800,000, but
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indeed, you do have this decline in the regular bfenefits progra and increase in the extended benefits program as people's benefits expire. it's good we're below 800,000. we don't know the extent to which people are not qualifying anymore. california is back, so they have something of a decline now they're reporting 25,000 i want to give you this quote from mike england from action economics, he wrote this before the report came out. i think it qualifies or standing for what is going on layoffs continue in industries that can't socially distance as firms are scrambling to rebuild inventory in the face of heightened demand. he goes on to say initial claims won't track net payroll, until reconfigures to post pandemic demands. we have a lot of churn in the labor force, i did the annual dinner last night, a key person
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there from fidelity, the head of the pen fed credit union, they're hiring they said thousands of people to meet demand that's out there at the same time you have other industries and this incredible churn going on in the jobs market and that right now is showing up in these jobless claims joe. >> steve, thank you. the latest, the thursday edition of lease mania i looked in the run down, whenever it says liesman, i think that's better, anyway, thank you, steve you agree. i know >> they're out on the streets, joe. they're out on the streets. >> the maniacs up next, a wide ranging interview with long time hedge manager paul tudor jones don't miss it. we'll be right back.
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welcome back to "squawk box," everybody. the futures this morning are in negative territory, and they turned down even after we got those weekly jobless claims that were much lower than had been anticipated. 787,000 was the number that came in the estimate had been for 875,000. still, the market not putting a whole lot of faith in that just yet. we'll see if that reaction changes later this morning as we get closer to the open the dow futures down by about 17 points s&p futures down by 3. the nasdaq is in positive territory, up by about 21 points andrew >> thanks, becky we have been talking volatility all day, and we have been talking a lot about what the uncertainty around the u.s. elections means for the market
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as the nation grapples with the health crisis. joining us now in an exclusive interview is paul tudor jones. chairman of just capital, and founder and board member of robin hood foundation, hosting its virtual investment conference, taking place next week we're going to get to that in a minute paul, you have tried to help us through really throughout this whole year you have come on at frankly really a specific and almost opportune times with great advice about where things stand. we're going to get a sense about where you think the markets are right now, and what you're doing about it, especially that we're now just less than two weeks away from the election >> well, i'm here obviously to talk about the robinhood investor conference next week which we timed to be something that was going to be really helpful to those people that choose to attend it. so i don't think the timing's
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anything other than something that we planned. the election is obviously a really big deal. it has a huge impact on the markets. i think there's so many things around it that i think there's a lot of false narratives around what will happen in the election in terms of the impact that it's going to have on markets and it's going to be really interesting to see if play out over the coming months i don't think i've ever seen a time when things are going to be as volatile as they could be over the next 6 to 12 months it's because of the huge amounts of numbers that are being thrown around, both in terms of the fiscal packages, and the monetary packages, so it's going to be a really really interesting time >> paul, you said false narratives, what do you mean by
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that what's the false piece of it in your mind? >> well, when i look at this election, and i'm assuming that we're going to have a biden victory, and a blue wave and maybe that's wrong, but i'm just looking at the odds, i'm looking at the polls, and clearly i could be wrong i think the markets believe that's going to be really good for stocks and i think the narrative around what will happen if we have that blue wave will be correct in the sense that next year you're going to get a massive fiscal stimulus you're going to get a big boost to the economy there's no doubt that main street, under this program is going to benefit, and you probably will have higher nominal profits. but the other side of that is what also happens to financial assets, and i think under a blue
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wave, and the biden tax plan, i think financial assets over the long run suffer a great deal if you kind of go back and look in history, there's an inverse relationship, and it's loose, but it's clearly there, there's an inverse relationship between stock multiples and capital gains tax. so we'll be the highest capital gains tax at 43% since 1922. and, again, if we just do just a very simple regression, and again there's great variability within that fit, but you can kind of say that for every 10 point increase in the capital gains tax, it probably subtracts somewhere between 2 and 5 multiples from the s&p, so with the s&p at 25 multiple right now, assuming that the tax hike
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stayed in place over many years, maybe 8 years, then you probably think over time you get multiple compression. you're clearly going to get margin compression in addition to the capital gains tax hike, you're going to get a corporate tax hike that probabliatiy takes off by itself, 13 or $14 from earnings next year. so i think the biden tax plan is actually going to do exactly what it's designed to, which is to help main street, help the average american, and it's going to come at the expense of the 1%, primarily whose wealth is encapsulated in the stock market, and financial assets and it's going to come at their expense and you're probably going to get a multiple compression, and you'll probably get some kind of mean reversion back to more normal, long-term stock averages
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so i look at the biden tax plan, and i know there's a variety of other people, and they may end up being right but i look at it as something that's going to cause multiple compression you can have a situation where you actually have higher profits in 2021, and yet the market's down because you have multiple come pleg compression. and that would be my central thesis >> paul, put -- >> go ahead. >> go ahead. >> the other narrative would be that these taxes aren't going to go into effect until 2022, and i think if you just kind of go through the logic on this, clearly these taxes are going to be retroactive to january 2nd. the last thing the democrats are going to do is impose a tax hike in 2022 in the year of an election there also would lose under that second stimulus plan a whole year's worth of revenue to put towards their fiscal spending
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programs, which are expansive. so i think you'll have the added whammy that will come to the realization over the course of the next 30 to 40 days that those tax hikes will be retroactive to january 2nd, and that you'll see a huge rush to harvest capital gains in this calendar year, at the 23% rate, rather than the 43% rate, and by our calculations, every 12 1/2 -- let's assume you're sitting on a long-term embedded capital gain how much of that are you going to harvest at a 23% rate, versus a 43% rate, and then we went through and did the math and looking at the investors that would have embedded long-term capital gains, for every 12 1/2% that a person -- for every 12 1/2% of capital gains that would be harvested out of the
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embedded capital gains in the stock market right now, it would probably create something like $100 billion worth of selling in the markets, so you be the judge. what do you think people with long-term capital gains, how much of that, they could be founders of tech companies or employees or long-term shareholders, how much of that will they liquify this year versus next year. >> paul, if you're right, what d do you do about it if you're an investor today, we haven't seen the selloff yet, maybe people are waiting to see what the election fportends, ho do you get ahead of it how do you trade it, if you will >> i have been unfortunately trying to get ahead of it for far too long in the past few
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weeks, and it's been wrong again, and the reason why i prefaced all of this by saying we're going to have so much volatility, you're going to also have passed at some point in the next six to eight weeks, 12 weeks, you're going to have the first stimulus package, which is going to be around 1.7 trillion. that will probably be effective sometime in the first quarter of next year, and sometime in february let's say, you're going to have $700 billion in february and march, the total package, let's say, will be 700 billion, that will ultimately end up in the bank accounts of americans, and we saw what happened when that happened last april and may. robin hood nation, the other robin hood nation, went crazy and bought stocks. and so you're going to have at some point in the first quarter next year, you're going to have
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a big move to the upside from whatever level that might be as people get cash from this first stimulus program, and they deploy that in a variety of financial assets, which could be stocks and bonds so it's going to be really tricky i could easily see a situation where the market sells off in the year end and then you have that typical beginning of the year rally that might ramp all the way through the end of the -- certainly into the mid part of the first quarter. all of that and -- >> paul, when we -- >> go ahead. >> i was just going to add on top of that, you know, the last time we talked to you, i don't know if it was the last time we talked to you, but back in may, you had told us that you were buying about 2% or putting 2% of your assets into bitcoin, which has been on a wild ride upward, especially even in the past 48 hours as pay pal has announced that it's going to allow bitcoin cryptocurrencys on to its
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platform, what do you do are you selling any right now? are you buying even more what's the thought >> well, bitcoin, remember, the reason that i like bitcoin and wrote about it to my investors was because back in march and april, it became really apparent, given the monetary policy that was being pursued by the fed, the incredible quantitative easing they were doing and other central banks were doing, that we were in an unprecedented time and that given the fact that we were going to try to monetize many of the negative issues, that covid brought, that one had to begin to think about how you defend yourself against inflation, with m2 growing at 25% annual rate. which we haven't seen in 80 years, by the way. the last time we saw that
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inflation was thr3, 4, 5% so the reason i recommend bitcoin is because it was one of many of inflation trades, like gold, like copper, like gsci, like being long the yield curve. and i came to the conclusion that bitcoin was going to be the best of inflation trades, the defensive trades that you would take because when you look at the overall market caps of all the rest of them and you look at all the characteristics, bitcoin had the advantage of being -- had a very small coterie of people investing in it, it was portable, it was liquid, had a variety of characteristics that made it a great inflation hedge. the one thing it didn't have is it didn't have integrity and long-term staying power which every day that goes by, of course, it gains on that it gains on credibility and
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integrity. but that i didn't appreciate and now i -- now i know what it must feel like, to be a tech investor, remember, i don't really trade individual stocks, i'm just a macro trader, but bitcoin has a lot of the characteristics of being an early investor in a tech company, and i can't realize it until after unfortunately i came on your show and got besieged by god knows how many different people on bitcoin and, again, i've got small single digit investment in bitcoin. that's it. i'm not a bitcoin flag bearer. but what i learned was, and what i was so surprised by is that bitcoin has this enormous contingent of really, really smart and sophisticated people who believe in it. and it is -- and now when i
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think of the menu of the inflation hedges, the thing that bitcoin has, again, like investing with steve jobs and apple, or investing in google early, you've got this group of -- by the way, crowd sourced all over the world that are dedicated to seeing bitcoin succeed in it becoming a commonplace store value and transactional to boot at a very basic level. so i never had an inflation hedge where you have a kicker that you also have great intellectual capital behind it so that makes me even more constructive on it if you think about it, if you're long two 30s, right, you're short the bond market. that's your inflation hedge. you are betting on the fallacy of mankind, rather than its
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engie ingenuity and entrepreneuri entrepreneurialism i like bitcoin now more than i can then i think we're in the first inning of bitcoin and it has a long way to go >> paul, we -- before we let go, we got to talk about this conference that you have coming up, you have huge names, ken griffin will be on the stage, stan druckenmiller on the stage, jared bernstein, lee ainsley and so many others what is the thing you want to find out next week >> well, look, i'm so exciteded, i've got three panels, one with ken griffin, maybe the best business builder in the financial world, so i want to talk to him about that and then we got stan druckenmiller, the greatest macro trader, who can frame the election and this fiscal and monday tare k monetary craziness better than anybody. we have this covid panel
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we have scott gottlieb, we're going to find out when we're all going to get that needle in our arm. we're going to hold him to a day that that's going to happen. so we'll learn everything about covid, we got best ideas from people that are up like 140, 120, 165%. last year if you had done our best, i visiteded this conferen conference, i think you were 85% on your portfolio. i'm kicking myself that i didn't do the best for our environmental panel last year, because they made an absolute killing both on the long side and the short side and the energy space it is going to be -- it is going to be an incredible two days it is going to be virtual. and all the money goes to helping people in need who are really being hurt by covid
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100% of your -- of the subscription price is going to be to help people in need. you can't think of a better way to get actual items that make you money at the same time do good >> paul, we wish you a lot of luck and we'll be watching this conference ourselves want to thank you for being with us, of course, as well and hope to talk to you very, very soon maybe on the other side of all of this volatility and the election we appreciate it very, very much >> thank you so much thank you so much. >> joe >> all right, to cnbc headquarters, jim cramer joins us now i just heard that live, i'm going to watch it again, on dvr, what paul tudor jones just said. >> look, i'm -- i did a panel last night for the -- his presentation for robin hood, it is just unbelievable the firepower, the virtual firepower and i think it is going to be the investment seminar
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won't be anything like it. i think it is going to take the place of everything that is going on because of the people that they have assembled we all feel so important, the cause is so important. was he saying that it would be retroactive under biden so that any capital gains we took this year would be -- >> i think he met january 2nd, 2021 is what i think he meant. >> holy cow. >> i know. i'm going to watch that part too. >> work in the, what, i don't know, robert frank said i don't work -- i don't get anything is that what he said i work but i get nothing the soviet union. >> you work until august >> i think i work until thanksgiving and then i start making money but you know what, we're fine with that. look, we mackke a lot of money. it is great. the robin hood conference is filled with people who make a lot of money. >> jim, i want to see you at 9:00 we'll watch that as well >> we'll be ready.
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thanks >> all right, just a little more than 30 minutes to the opening bell dom chu is here with big stocks on the move this morning what's up? >> big earnings day, becky a lot out this morning let's start off with shares of union pacific around 3.5%. premarket 10,000 shares of volume after america's biggest railroad operator by market value reported profits and revenues that missed consensus estimates. union pacific reported a drop in freight revenues across all its major segments over the same time last year but freight volumes increased 19% quarter over quarter, reflecting that rebound in the economy in the wake of the pandemic lows. so those shares off. next, shares of kimberly-clark, the consumer products companies known for kleenex tissues, it reported less than expected profits. they did raise its full year profit growth outlook, so those shares off 5%. and we're going to end on peloton. which is down again premarket by
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3.5%, roughly 200,000 shares of volume we have talked a lot about how much bullishness and upside momentum there has been in the maker of upscale equipment for exercising and fitness content that staggering run is enough for analysts like goldman sachs to say take profits. they downgraded the stock to neutral from buy, they say the long-term opportunity is still there. but the stock surge is pricing in all the near term positivity, this could be, becky, three down days in a row for peloton. back over to you >> dom, thank you. >> you got it. final check on the markets, you're going to see red arrows there as well. the dow indicated down by 20 points s&p 500 down by 3.5. the nasdaq is indicated positive this is a trend we have been watching for a while major averages have been down, dow and s&p 500 for five out of the last seven sessions. nasdaq down for six out of the last seven sessions. will see what happens as we get closer to the opening bell again this morning we did get those jobless
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numbers, 787,000 initial jobless claims for the last week that's down from last quarter, last week, when it was 898,000 and below the estimate too of 875,000. that does for us today joe, andrew, we'll all see you back here tomorrow right now, time for "squawk on the street." good thursday morning. welcome to "squawk on the street" i'm carl quintanilla with jim cramer and david faber. futures coming off their overnight lows as it is really a banner day for q3. tesla, coke, at&t airlines, dow, we'll get to all of that the final presidential debate tonight. pelosi on stimulus and claims better than expected road map begins with the earnin earnings >> kwiby is calling it quits six months after its debut why this streaming service struggled to fine


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