tv Squawk on the Street CNBC October 29, 2020 9:00am-11:00am EDT
s&p 500 up by 9 1/2. the nasdaq up by 73. don't take your eyes off this market today make sure you're watching through the day and make sure you join us back here tomorrow right now time for "squawk on the street." good thursday morning. welcome to "squawk on the street." i'm carl quinkeen quintanilla w cramer and david faber new lockdowns ahead of q3 earnings q3 gdp sets up a record, and claims keep their 7 handle road map begins with the economic bounceback coming off the worst quarter in history third quarter u.s. gdp roars back, not enough to wipe out q2's loss. >> covid versus earnings as virus cases surge around the world. it is the busiest day for corporate results and what has been a strong season so far. we'll have the ceos of service
now, and yum join us this hour and we have another major chip deal second this week marvel technologies buying inphi. the price tag close to $10 billion in cash and stock. carl >> all right jim, heard you talking a moment ago about faang, most of faang reporting tonight. how are we thinking about the role of q3 earnings now when we have larger die n er dynamics a. >> look at the stronger trends that can influence things. katy huberty out with a note from morgan stanley. the estimates are too low for the new 5g phone that's something that has legs i think that when you think about amazon, they're going to be able to tell a fantastic holiday story because, why dr. fauci last night telling us we're in a bad place it is good for amazon. i think that alphabet, they have to worry about telling too good a story, they're under the gun in washington. that setup is a pretty good setup. maybe the best of all is facebook
i know people are saying that point te pinterest took a lot of business because of the boycott against facebook i think that that will -- i love pinterest and think it is terrific, if there was a boycott, it will not take a day's worth of earnings off of zuckerberg by the way, i like the tenor of what we're hearing for after the bell, but i'm wary of the fact that microsoft was probably best and they crashed it. so let's see whether people can fight the blue wave, david, a blue wave means for a lot of people, short, and cover whenever election night really ends because there is a lot of stocks in a blue wave that would be crimped or despised by a hijack of the far left. >> which you mentioned that on "squawk. is that your new thing are you concerned about that >> yes have to be >> okay. hijacked by the far left that's the language of the republicans. >> it is a narrative
it is not -- look, david, it is a narrative. i go with what i'm going to hear all day from people. they say it is hijacked by the far left >> going to happen right away or -- >> we don't know who knows when west election counted. you short the manage care stocks, into a blue wave, the managed care stocks drop 10% and you buy the managed care stocks, leading with centene and united health i gave you your game plan. pfizer goes down to 32 ahead of the election, drops to 31 1/2, people think they made a lot of money you buy pfizer this is what you do. i gave it to you you can go do your thing, i don't know, whatever it is that you do tiffany. >> i don't do the tiffany and the other -- whatever. >> i have just given you how to make real money. >> real money. thank you, i'm going to watch for hijacking, scary we don't have a clue how the election will turn out, jim. there is plenty of people despite the polls who believe that the republican -- that trump is going to win. >> i just -- i'm saying that
the -- the current zeitgeist is to bet blue wave i've learned enough, carl, what did i learn in 2016? you don't know what you're talking about if you're predicting particularly because the way to get a hold of voters when you're polling is gone. it is not like you dial the home number anymore >> yeah. i mean, jpmorgan had a note yesterday talking not about blue wave or no blue wave, but whether it is a light blue wave or a dark blue wave, and part of the point was that undecideds at this point are 3%, in 2016, it was 11% at this stage. it is the lowest number since the 40s. so joyce chang's desk, their argument is the polls are not going to be any worse of a predictor than they were four years ago. >> cerulian blue there is a whole other cohort of people who say come tuesday night, bunch of us will stay late and won't mean anything because pennsylvania just got
permission to vote whenever it wants to and pennsylvania is obviously -- >> whenever it wants to. >> did you see the supreme court? >> i did everything has to be postmarked prior to election day. >> there is more leeway than we ever had. >> did you have a bunch of conversations this morning with some of your friends in d.c. >> i always talk to people in d.c. >> talk to jack nicklaus, jim? >> i'm going to stop giving him a hard time. did you see pinterest? >> they used to work for me -- >> when did you ha >> what did you have for breakfast this morning it is extraordinarily strong it is is it in some way reflective of the continued move away from traditional advertising and is it perhaps therefore a good sign for facebook or not? >> i think it is everyone is glooming on to that one line they used the word boycott. gut the fabut the fact is it is
as the kinder, gentler website, but i think facebook has got this initiative to do small stores, you look at shopify's numbers, you know the instagram shops is just going to be on fire how do you reach people? it is just all cpg now going into these guys and pinterest was a remarkable quarter it is a delight to hear kind of like disney programming. especially when disney is closing parks and -- >> yeah, unfortunately, having to close in france, right? >> yeah. how is the comcast. >> theme parks is very tough comcast among so many that reported earnings this morning we'll keep an eye on the stock the conference call began at 8:30 we'll share anything of interest from our parent company that you hear broadband continues to be the engine in many ways. see the stock is rebounding a bit. it was hit hard yesterday as well just in the general downturn in the market broadband with 633,000 high speed internet customers, that's a record, but jim's point, theme parks basically aren't open, if
they are, they're barely having much attendance and so the revenue number there, the attendance number, everything, down dramatically. not to mention as we know, theaters, movie production, so in a number of areas, things were hit hard, not unexpected, hence why you see the stock perform quite well >> did you like sky? >> in all seriousness, jim, i haven't had a chance to really get a great sense for it i don't have an answer i'm sorry. i was overwhelmed this morning >> you know what i like, carl? he just did the one thing you never are supposed to do i don't have an answer didn't cuff it, just said i didn't have an answer. maybe you go -- i don't know >> well -- >> bett eter that than say something that's not true. >> you never want to do that peacock 22 million 2x in three months
nbc ebitda, financial discipline to your point about just the liability of parks around the world, disney land, paris, as you said, a few moments ago, will close end of day, october 29th, which is today latest direction from french authorities, jim. >> movie stocks into the vaccine column so in the barbell there is consumer spend now but there is vaccine and we just keep hearing them talking about the idea of three vaccines, now regeneron got that good news last night, completely lost in the shuffle that you could be out of the hospital very quickly, like the president did. we're in no mood to hear anything good about covid because the case load is beginning to go higher my point is, every day it goes higher, are we going to go lower. if that's the case, we go to minus five that's in the not going to happ. same point, we're not going to
learn to live with it, some people have to learn it die with it, which is impossible. there is going to come a level, a day, where we say, you have covid, okay, covid, and i know that sounds callous, but that's what happens, carl we're not going to go down every day because the case load goes up it just won't happen like that >> yeah. to your broader point, jim, it seems like it comes back to masks. tom lee's note this morning is emphasizing in those wave three states, looking at mask preference data on facebook, reaching areas where people are starting to mask up. he sees that as a positive and even ken frazier of merck talking about the timeline of vaccines and therapeutics this morning on "squawk" said it didn't ameliorate the need for masks in the shorter term. take a listen. >> i don't see the therapeutics that we have or the vaccines that are coming as a silver bullet i think for the foreseeable future, we're still going to
have to practice basic mask wearing, social distancing, hygiene, i think that's with us for a while. and i would say certainly well into 2021, we'll still be trying to observe the public health measures i'm very optimistic that we're going to have therapeutics and vaccines i think it is a mistake to tell people it is a silver bullet and overnight we're going to be able to vaccinate enough people, treat enough people. >> seems like it always comes back to it. >> look, i did my initiative with ex-prize, nonprofit, ex-prize.org/mask, i was surprised to see who stepped up to develop what we're trying to do as a community mask where people would like the mask and can actually help you and help the other person and most importantly is more comfortable. at 3m, honeywell, autodesk, under armour i'm thinking business is going
to take the lead the national association of manufacturers playing a big role, getting together with scientists, because of aerosol, which is the issue so i think that companies around the country are saying, you know what, we got to step up. the federal government is advocating, we have states that are pro bars you listen to dr. gottlieb, he makes so much sense. he says things like, schools aren't the problem, it is bars >> he's a very linear thinker. >> what does that mean >> he moves down the line. right? >> i always thought that alyn r a-linear was better than linear. what are you getting at? >> stravinsky's right of spring riot or something? >> it was l.a. that really got -- >> we're only getting started here i don't know what's going on, but, it is, you know. >> coltrane, coltrane, big use of atonal -- >> coltrane, not far from me. >> carl has forgotten more music
than you or i or either one of us know. >> sheets of sound, david. >> guys, we'll take a break. so much to get to in the way of earnings shopify, spotify, dunkin', ual, ford, lvmh and tiffany we'll talk about this split picture we have this morning with dow futures down. s&p up ba ia nu ckn mite ♪ ♪ ♪ ♪
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united announcing it is piloting a covid-19 petesting program from november 16 through december 11th. every passenger over 2 years old receives a free rapid test, comes two weeks after united introduced testing on its flights from san francisco to hawaii jim, you were just making the point that companies themselves are saying we may have to do a lot of this on our own. >> i think that there is a realization that there is no cavalry from the government coming they're just not going to take that role. they don't think that they should play that role. states obviously can't play a role in interstate commerce like airlines so in a lay laissez-faire govern we say what are we going to do abbott thought they would play a big role in this with their app. i'm not hearing that i'm hearing another way to make money. we know the nfl tests before a
game so we know we use -- here we have a turn around pcr very quickly. what we're discovering is that we can very quickly tell if -- to a great degree whether you have covid the airlines taking it -- what is the matter -- >> i'm looking them stick that thing up that guy's nose. >> come on it is not like -- >> it is not bad, we have it done once a week, we appreciate it we find out our results today. >> you can do it yourself, it is an excellent service, insurance pays for it. i'm not hyping labcorp, but the fact was just -- the company put a number up that was extraordinary. and you can test yourself all the time, which is what i do >> if this can -- have people avoid having to be quarantined and therefore results and more people being willing to mack a trip between new york and london, you can understand why united would want to try it. but. >> what happens when you get there. what -- we had a terrific report with dom's show, nice person from germany, one of our people,
said merkel said she bans it she bans social life >> yeah. >> no more social life. >> that's it >> for you, that's nothing for some of us it is a big deal. >> i said you were one yesterday. don't throw that back at me. >> don't go out. for me -- >> i love socializing. >> i like to meet people it is a little different for david. and for this, to ban social life for me is -- it is an issue. >> yeah. i know >> never gets old. >> yeah. never gets old. >> david, introverts must love a good pandemic. >> i guess so. i don't know i go out every night still while it is still warm enough. >> you're, like, staying in your house somewhere and lets people -- >> he said, jim, you were making so much of this pandemic, it is painful. it is not even going to happen
>> all i can say is i can't wait for five years when we have your next big birthday and i can make fun of myself. looking forward to that. >> last night all three of us were happy, that's for sure. >> yes >> when we come back, restaurants and the pandemic, we'll talk to the ceo of yum brands, record digital sales, kfc up nine, pizza hut up six. don't go anywhere. i searched and found sofi and applied for a personal loan.
warmed up on considerably. >> jimmy car-car, that's what they call him growing up, jim farley, he crossed the country in a ford when he was 14, breok a lot of rules when he did that, yesterday he broke a lot of rules in the book, by reporting a number that was great, number one, but two, no if it was this and that -- no, f 150, can't stock it, out of control, love, ev coming, the bronco coming, selling all the -- only selling the good vehicles now. and then, david, a determination, this is quite different from ford, he wants to make money >> right you said that. >> it is rather radical. you listen to him, it sounds look a lot of other companies. he's talking about sass. software is a service, david this thing -- this was such a great quarter. and what did he do, beat himself up, weren't there yet, don't have the right cars, the warranties are too high. this is a blessing this man is a blessing
grandfather worked for ford. at the big plant and he's a ford guy all the way. he loves the mustang, they have a new mustang coming out, very excited about the bronco compared to the jeep the f 150 is -- maybe -- talking about maybe the greatest product ever than something that apple has put out in terms of sales. you can't get them remember there was two months where everything was shut in this country so now there is a big inventory problem. there is not enough. and when that happens, david, even the used ones, go look at a used one, you'll see one tricked out for 62,000 tricked out means it is -- >> understood. >> really? >> there is a couple in the parking lot here. >> i was going to give one to my wife for her birthday. sharing is caring. but she said, no, she wanted something she liked. a necklace >> nice. yeah can't drive that. >> no, you can't you got to talk to farley. >> a nice column. >> you got to talk to farley
>> still hanging in there. >> more than ever. i'm taking farley back to 11. >> you heard it there. opening bell a few minutes away for you. don't forget, bill mcdermott will join us, service now ceo after that company reports earnings as well we're not going to ask him about sap, right we'll see. woman: after covid, my hours got cut. so we can't pay our bills. and now our family budget is gonna be hit hard with prop 15. the yes on 15 ads say it only raises taxes on big corporations. that's not true - we're all going to pay. $11 billion in new property taxes will get passed on to small businesses and farms. they'll raise prices... ...higher gas, health care, food...even day care. we can't make ends meet now. families can't afford 15.
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welcome back finally there is peace in the high end jewelry business. lvmh and tiffany as we indicated a couple of days ago were talking. about trying to get something done and the late last night, early this morning, however you want to call it, they got it done, which we have been telling you would be the case. $131.50. closer to 132 in many ways they're done and the expectation is there is not going to be any problems between now and close. you need shareholder votes again on each side you have the s.e.c., will they choose to review it or not
that could end up delaying it if they want to do that they're working with early let's call it to mid-january, maybe later in the month, as a close on a deal, of course, that we have been talking about, for months, because bernardo had buyers remorse, five, $10 worth. not that he ever really thought about not buying tiffany, but he was never happy with quite how much he paid now he can feel a little bit better maybe it soothed him psychologically to feel like, hey, you know what, i got my couple of bucks off, remember it was 135, now 131.50, paying that dividend as well they could have closed this months ago, probably could have saved him a couple of dividends. not clear that any of this was worth it and as i reported many times, it didn't appear they had a particularly good case going into delaware court as they were planning to. that said, if you are tiffany, you probably want the certainty that comes with the slightly reduced deal, and get to move on into a new future together
that is the plan here. there was a thought you might get a tender offer that would have alolowed them t close much more quickly. remember that letter that came in that said we would not look happily -- i'm paraphrasing here, all about well, you should or does that mean we have to not close the deal before january 5th because of the trade dispute between france and the u.s they don't want you to remember the letter not mentioned anywhere in the press release. but that's why you didn't get a tender that's why this thing is going to close after january 5th, so they make sure that they didn't have to get somebody to retract the letter or deal with the letter or talk about the letter. i like talking about the letter. that was the most fascinating part of the whole thing, where that came from with the french foreign ministry tiffany will get -- end up being owned by lvmh. >> you speak to the ceo of ralph
lauren, they want to go personalization and direct to consumer how do you do that for tiffany that's a big issue for me. i don't know how to personalize tiffany and i don't know how to do direct to consumer. >> and given where we are now and the winter ahead, it is not clear that traffic trends will get better in the holiday season they have been reporting numbers that they said were far, far off from anything remotely looking like a material adverse change or effect in their business. this is not going to -- if covid cases keep rising the way they are, you imagine it is going to be tougher to get a very strong holiday. >> and going to tiffany destination is not what people are going to do. people aren't flying to new york i totally understand why you want to pay less for it. that said, carl, the brand is still a good one, the -- the robin egg's nest box still matters, just that that's not the way people are selling things anymore that people are selling things personalized, and it comes to your house and i think that you have to
be -- if you got to have at least one of those in order to succeed in this environment. >> it is well said, jim, we'll talk about things like etsy and pins after the bell here we see a little more stable picture than we saw yesterday. we get the opening bell at the nyse and the nasdaq. david mentions dividends exxon forgoes a hike for the first time since 1982. closed 12 cents above its march low yesterday. and we got oil down again today. i wonder how much your radar is tuned to that. >> royal dutch going the other direction, royal dutch the old rival to exxon, some good things and raised the dividend, which is antithetical to the moment. royal dutch has some good cost controls, after doing some things that were too aggressive. look, this group, you listen to the ford call, jim farley, car guy, says over and over, ev, ev, ev, this is the -- this is one
of those moments where you're in the oil business you got to pivot rapidly. you're in the car business, it just doesn't do any good to talk about combustible engines. everyone talks about europe and how you got to deliver and california and how you have to deliver. it is a nightmare to be in the oil business and i just think that we have -- maybe natural gas a little bit better it is still the bridge fuel. we're not hydrogen yet and yesterday ge did have a good number when it came to turbines. i just think that oil stocks -- >> move down in oil is pretty significant. >> it is >> that's going to be a long bridge, though, jim. >> bridge to nowhere. >> that bridge between now and the renewables future where it really represents the significant percentage, i know electricity generation it will, but for powering automobiles >> is it over the river kawhi or the st. louis ray, which bridge? no bridge that goes across.
>> does that mean you can't buy oil stocks or it will be jeer s to come. >> yes, chief. how many times do i have to say -- how is occidental doing >> my occidental i haven't locked your chevron is not doing so great. >> the only -- now i said the only investable one is pioneer buying parsley, i think that works. occi at $8 that's a pivotful hetiful giante saw one. >> the transcript if you look at the transcript of the show, it says cramer says it is sustainable. online, people say, they cut it, cramer loved it. you can't really be sustained -- you can't be ironic in tv.
tv does not allow you to be ironic this is a tv lesson, edward r. murrow over there. >> you know, fracking, which is so important, and by the way, led to actually less carbon as a result of natural gas replacing coal as the main fuel for electricity generation, nonetheless, if you start to stop fracking, wouldn't that actually result in higher oil prices it would be good >> thank you rusty brazil comes on "mad money" regularly i think the expert in oil and gas, and really amazing. he said that trump sewed the seeds of the industry's destruction by making it so that there is a lot of guys, all they know is to drill remember, he lets you drill wherever you want to and there is just always too much oil and the guys are addicted. they can't stop. i remember the late mcclinton telling me when you give an oil man a drill, he's not looking at -- he, accidental she, not
looking at the price of oil, produce as much as you can we have been producing way too much, this is what you get there has to be consolidation. david's right, he said, you know, jim, you like that chevron, i was trying to pick one that i know has a decent balance sheet. i know i'll regret it. >> no, you have given it a shot. >> mike reports this week. >> i want to get to a deal we mentioned at the top of the show $8 billion cash and stock, marvell inquiring inphi. >> 10. >> it is not >> well, it is 8.2 you got to throw in debt it is around 8.2 but were it to open 156, i haven't taken a look at marvell. right there, in front of me. it is not worth what it was. it is 66 and cash and 2.323 shares of marvell. there is matt murphy going to join us in the 11:00
carl, he'll be with you. this is data center related. >> it is data center it is the way you get it out of nvidia and gpu moving it to memory. >> more reliable data delivery and incredibly high speeds. >> i had performanhigh performae the only one left. you do the arm nvidia, $30 billion for xilinx, amd, now we got 10, now 8 billion. and the thing i would tell you, david, my travel trust fund owns marvell it is accretive, it gives you a break. sport. >> you sported me too. sport. sunshine >> chief is my favorite. why don't we go -- you know what we ought to do, segue into something else, kernconcern col. yum brands, helped by a rise in online orders and taco bell
chains i got to tell you, it is not easy to make money the restaurant business when restaurants are closed joining us now first on cnbc, yum brands ceo david gibbs i don't know, you took this job, did you expect the fact that you're not supposed to have any people inside your stores? >> this is not the way i expected my first year to go, jim. but good morning, thank you for having me. >> i am kind of amazed that some of these businesses, taco bell, let's just call it on fire to the point where you would think that there is no pandemic. how is that possible >> well, it certainly looks that way at the top line. but beneath the surface, there is alot of work going on with the taco bell team to pivot the business in this environment and meet consumers' new needs wherever they need them. we increased our delivery business at taco bell, dining rooms closed, our drive throughs have become even more critical, and the really big story coming out of q3 is around tech you saw our digital sales at yum
were up a billion dollars in the quarter for the second consecutive quarter. never has that been more true than a brand like taco bell where they are embracing delivery, rolling out a loyalty program, improvements to their app and customers are loving it. >> why don't you talk about what the grub state did, i believe that your company, look, everybody's first pandemic, not that you saw a pandemic coming, but it is really changed the -- the way people eat and you were well ahead of the game >> we thought it was important as aggregators emerged to form a partnership, get a board seat at a company like grub where we understand what is going on the front lines with aggregators and that's how that worked out as you saw, we divested of that stake and we made a little profit on it but most importantly we really understand what is going on in the aggregator space, have formed good partnerships with a number of partners and that's helping fuel the business. it is not just aggregator driven this is all about the dine-in business, you know, drying up,
and this environment, and how we pivoted all around the world to delivery, drive through, carry out and really you saw in the numbers, our system sales grew in the quarter our profit was up. and our sales at stores that are open, same store sales were flat for the quarter. and amazing pivot when you think we had about over $4 billion of sales typically in dine in during a quarter like this, and that number, you know, we lost about $3 billion of it and able to make all of it up. >> david, you know, we keep seeing these renderings of the fast food restaurant of the future, where it is walk up service, multiple lane drive throughs, can you give investors a sense of what kind of capex is backing that up and what is the calendar on renovating or adding new restaurants that would look like that? >> yeah, the asset base is another example of -- a lot of people talk about in this environment, trends in the industry accelerating.
we have been moving to an off premise model over time all around the world as you go to more of an off premise model that represents opportunities in the base, where you shrink the footprint, we have some stores for kfc in australia that have five drive through lanes, we rolled out over a year ago. so we have been on this trend for a while, working on new asset formats, they'll be smaller, they'll be more designed for delivery, and for contactless curb side pickup, a big part of this with dollars tight and customers wanting to maximize their spending money, a great option is to just do contactless, curb side pickup at our restaurants, and we're going to design assets to do that so that's going it reduce the capex for our franchisees and produce stronger economic returns for them and we think it will fuel unit investment around the world. >> i'm glad you mentioned that i was very worried about your franchisees and pizza hut. there were some concerns about balance sheets, these are hard
working people, built a tremendous -- really great achievements over time i saw the pizza hut number and i'm trying to figure out, to me, it was good, i see the stock going down the stock may be going down because the market is really soggy. but can i call it a turn yet at pizza hut? >> absolutely. as we have been talking about with pizza hut for the last few years, we need to pivot more to the delivery carry out business. it started as a dine in business and we're in the middle of that pivot. when you saw in the quarter is incredibly encouraging for a turn around. delivery carry out sales at pizza hut in the u.s., when you exclude dine in and express, up 21%. up midteens all around the world. that is strong growth and a really great sign for the future of that business as you mentioned, you know, we have some great franchisees, some started working in the first pizza hut that was ever built and still franchisees in our system, and they're making the pivot to delivery, carry out, and balance sheets are getting stronger with growth
like that. profitable growth. >> last question people forget you're in -- you're around the world, you're reading about covid all over the world. france, you have a big operation in europe. what do you think about what is going to happen when you hear macron deciding whether people can go out and merkel deciding they don't >> we know more about the virus and the environment today than we did when it first hit i think one of the things that is generally been recognized around the world is that getting food from our restaurants is a safe, affordable, convenient solution for consumer and we can play an important part of the recovery and getting through this in the communities that we operate in we didn't know that when it first hit. there was a lot of uncertainty there. it is possible we'll see dining rooms re close in europe and france but we know that the other means of access for our assets can really make up for that loss of
dining room sales i talked about earlier. and we can get through this. the thing i'm most impressed about from the -- the third quarter results is how our teams have pivoted around the world and embraced this new environment. that gives me confidence, our resilient business can continue to pivot and embrace whatever challenges are thrown our way. >> well, really magnificent versus what you had to deal with and i really think that in many ways the pivot is happening. and you've done a good job, david gibbs, who is the ceo of yum brands stock that is down right now, but don't make the stock be indicative of how the company did. that's the wrong way to think. the stock is being brought down by the futures carl, back to you. >> all right, jim, thank you for that good stuff dow down 200 oil below 35, lowest since june. to rick santelli, hey, rick. >> good morning, carl. we are watching the soft equities, not only domestically but globally the data we received, initial continuing claims, pretty much as expected.
the whisper number for gdp was probably a little higher than 33.1 that is still a good number. what we haven't talked about personal consumption, just under 41%, that's the best since 1947, all time high, as is gdp the point here is look at an intraday of 10s. it doesn't look very good. we're basically on the low yields but you put it on a one week chart, this is important, we're not on the lows. we have lost some ground but the fact that yesterday and today were unchanged basically in the long dated treasuries is important. let's look at bunds. they're hovering at the lowest closing level since march. ecb didn't do anything maybe that was the issue euro versus dollar, here is a two week chart, we're at two week intraday lows if we should close here, we're flirting very close to the lowest levels on euro versus dollar since may 1st carl, jim, david, back to you. >> all right, rick, we'll talk to you in a bit. rick santelli. later on this morning, service
something's up, and it deserves to be service now. jumping after third quarter revenue, the shares doubling in the past year. we know why that is. it is because a person by the name of bill mcdermott came in, the service now ceo, he turned this company into a company that is integral to the organization. and not just the public -- the private sector, but also the government with some fabulous va contracts this quarter really just an impressive quarter. bill, it is so great to see you. and congratulations for just hitting the ball out of the park >> thank you very much, jim. the team did a great job and thanks to our customers they have been so loyal to us >> 31% growth, 41 transactions over 1 million strong momentum declared
raising growth rate, these typically do not happen to a large company, bill. these are small companies that have these numbers so what are you doing to transform this company that you can get small company growth from what is a very large $100 billion company? >> the now platform has become the standard for digital transformation and business today, jim if you think about most of these companies, they're now grappling with the future of work. they have to accommodate their employees, they have very distributive workforces, how are they going to get them the tools they need on board them properly and in some cases they never meet the people they hire. and manage the experience they have, digitally. this also extends to the customer how do you go direct to the consumer how do you make sure you give them a great service so they stay lyle to yo stay loyal to you. more and more developers are
building new innovation on the fly, on the now platform, so what i can tell you today, jim, is that now platform has become a standard for largent prizes around the world, and the echo system and the network effect building on that is truly sensational and we're extremely fired up because we want to make work, work better for people all over the world >> in some ways, bill, you're too humble some of the customers are not the kind of customers we expect. want to read some of these, so people understand the breadth of your company u.s. air force, army, u.s. department of veteran affairs, u.s. senate. >> what we're trying to do is get to the essence of everything, so we think about the veteran affairs, you know, really one of the great customers that we have in the world, we want to get it down to really caring about that veteran. and making sure they have the
best possible experience if you think about the u.s. air force, and their digital future, they have a vision of what that digital future in space is going to be. and they're building it on the now platform u.s. senate, state of tennessee, state of alaska, schools in san jose, schools in toronto how do you keep teachers safe, students safe. jim, i know you are a big sports fan. think about the nba and wnba we are the work flow sponsor for both we helped adam silver manage the bubble just think that it was done on the now platform >> adam silva could choose anybody. he chose you you took this job and explore
your rolodex sap did not record a good number i think it is time to reassess this whole digital technology. the covid has re5:0 celebrated everybody, including you this is your time now. >> you know, digital transformation before covid. with covid all the issues. people not getting things done in teams, not realizing that 75% of the work force by 2025 will be medium millennial people.
before covid, they didn't want to be told to go back to a cubical. do you think after all of this, they'll want to go into a cubical? no they'll be digital and they'll expect their employer to give them the best tools. if you want to give a customer a michelin 3 experience, you have to fuse the customer experience on a platform. this way it is on a self-service basis but the things that can't can be work flow ordered with the right person at the right place with the right skill set at the right time. that's what we do. that's why this is a thrilling moment >> hey, bill this is david. to end on that, you mentioned the future of work and the benefits of your product what are you hearing from ceos what percentage of these companies are going to be
working remotely >> it is going to be a hybrid world. i would say it is half and half. depending on the industry and the role you have. some people if you are manufacturing on an assembly line, you are going to go in people are already preparing for working from home through 2021 even if you do get a vaccine, you are not going to get through the global population for a year to year and a half from now. this is the reality we are living with and the distributed work force for the presence. we are never going back to the way the world once was that world is gone this is a whole new world you have to transform to win >> your kids will be telling their bosses, take a hike. i work from meho
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in the northeast with all of the urban flight and the rest of the region all up significantly year over year we must note they bumped slightly higher. we rarely see buyers hit that affordability wall with price rates accelerating with the pending home sales. carl >> after that new home surprise earlier, fascinating thaur thank you very much. welcome to "sqwawk on the street." got some whip saw action the dow had a swoosh lower
watching hospitalization records and of court that q 3 gdp number which steve liesman has more >> that gdp third quarter followed the greater and historically greater second quarter decline leaving growth well looking at what the government does or does not do dow 31% in the second quarter, up 33% in the third. not enough to make up for the decline. it would have had to have risen 35%. annualizing it down 7.4 in the third. we are 3.5% below the level before the pandemic as bad as
any recession, which is why they write a record but nothing like enough of a record how we got here. consumer surging by 34% helped very much but up 70% housing up 75% you've heard all of the reasons why that's happening low mortgage rates as well as the urban flight situation you are seeing the weakness and the strains. the federal government falling off after the big surge. estimates for the third quarter range from the low single digits to double digits 10 or 11%. inventory rebuilding trade, the consumer and the virus whether the government provides relief stimulus writing after the number came out with coronavirus infections hitting a record high and any
additional fiscal stimulus unlikely to arrive further progress will be much slower politically both sides will have a case not a complete rebound and will wreak pain on both sides of the aisle. >> let's stay with the economic outlook and bring in james mcdonald, ceo at hercules investments. >> we have a sentiment bound to happen we were just waiting on some bad news to enter the market we've seen some rally since march and the pause last month the big elephant in the room is the absence of the stimulus
package. we saw clues indicated when president trump gave them the tweet. markets sold off aggressively. they came off when they back pedalled on that the market had a muted reaction. this to me indicated that the worst was coming we are going to continue to go down we've seen over the past 50 years that eight days prior to the election, the market rallied. we've seen some of that tendency here i do not think gdp here matters very much. we have an impacted number from the coronavirus. we are paying closer attention to how the ecb guides intent to stimulus in europe a lot of data coming in around the world, china's plan will emphasize the sector we'll have prour here irrespective of the economic data >> that is a pretty big call you say.
continuing to go down to the down side risk we've got all the moving pieces and the election i think the market is really focused on the restrictions and measures especially after what we saw in march and the fatigue going on right now how are you weighing all of these factors. >> if somebody hires me today, i've got to make money for them. we've been long volatility as to the contraction and general market keep in mind context just before the pandemic, the market, bull market since 2009 we've got right back there from the promise of stimulus one and an end to this virus we were looking at q 4 potential vaccines, q 4 abatement of the spread the vaccine nor do we have
abatement of infections. they are going up. this is double whammy. we'll bring markets back to earnings levels. we are at the tech market. it is just too high relative to the risk if we can see some clarity around the election and policies if we can see some guidance from the ecb and how europe is going to do a stimulus for this -- i don't know whether to call it a second or third or fourth round of cron corona. there is certainly no solution in sight for corona or stimulus that we know of right now. we simply don't have a vaccine that will come on line anytime soon >> and against that back drop, tech valuations have risen you have some recent stock picks in beyond meat, zoom, docusign
and teledoc death. those are doubled as people are seeing more of working from home, being environmentally conscious, more health services online you think there is more room to grow here as we look to the wave >> someone hires me today, they are not hiring me to make money next week or next month, they are hiring me to make money over the long term. all of those things you mention are generational opportunities similar to how microsoft was in the 1990 contracting market or the 2001 contracting market. it was still a great company what we see here is irrespective of the pressure in the market, these names are transformational businesses and they are catching the tail wind of corona. they'll increase their revenue, profits and customer bases
of course, we'll have pressure on these names as we will get in the entire market as with any market we are just in the beginning of seeing in earnest. >> thank you for sharing that perspective. talk to you soon later on, we'll get the white house reaction to the q 3 gdp number with ler ty goodspeed. don't go away.
shares of carrier are up this morning also a raise of its guidance as well joining us for the first time, president and ceo, david thank you for joining us give us a run down on the world right now. you talked about orders in europe having gained traction. it is a new wave of course but are you concerned? >> you know, we are keeping a close eye on europe. the most encouraging thing is frankly in the united states and our residential business our hvac had the highest revenue cases. very encouraging signs there china has been particularly strong, up 10% showing strength
across our portfolio europe is returning to flat. that was before a lot of the shutdowns. we've shown we can manage our way through curfews. on the demand side, we'll have to keep a close eye as some of these tuck in. showing a good trend even in october amid the most recent shut downs >> your earnings in your call, you talk about a number of different things that are so-called the carrier way including tenacious cost reduction. kind of scarey, dave what does that mean? tenacious cost reduction >> exactly that. a focus on taking cost out on a continuous improving basis when we had started a few months back, we said we would take over
a million in cost down we would call that a carrier 600 to carrier 700 what we mean by tenacious is being incredibly disciplined by everything we do whether really looking at g&a and relationships with 6,000 suppliers which should really be about half of that and looking at improvements in our factory our customers demand from us we are taking cost out and taking out the expansion which we said we would improve we will be tenacious on the cost >> you say you are focused on that and your share holders. years ago, there was a focus given the indiana plant and jobs that would be lost manufacturing are a huge issue
this trend will only continue as you continue to focus on cost as other competitors do as well are you going to continue to pair your work force on the factory floor? >> we've been so focused on growth, we've been able to add factory workers. in indiana, we are at 1,600 employees strong that's the area we make our furnaces for resent business we've been adding employees. same in collierville, tennessee and charlotte. whether the united states or mexico or globally, our focus is on growth so we can put help wanted signs outside many of our factories around the world to continue to be there for the world which has a full cycle of being there. >> not just talking about vaccines but the way we are
being transported and this partnership with amazon web services, can you talk about what challenges remain and what advances have been made so far >> today, 50% of the global population gets a flu shot and usually is distributed in a four-month period in the fall. we should all expect a higher take rate. there will be demand of course in the united states globally. it won't be over a four-month period but a shorter time. you'll not only need more capacity but you'll need more data our partnership with aws is really transformational. in any cold chain distribution, there is usually 10 to 12 hand offs to get a vaccine distributed, there is usually 6 to 12 hand
offs to keep it cold and then administered once it hits room temperature. we want to make sure we position ourselves at the hub of that entire eco system. >> dave, as mentioned earlier, your company has been in the crosshairs with the trump administration how are you thinking about your business if there is a potential for this blue wave people are talking about. what does that mean for wages and tariffs and the tax rate for carrier? >> we've worked successfully with the trump administration. and carrier was developed whether teddy roosevelt was president. we've continued to work with every administration and will continue to do so. we care about every issue
including corporate taxes and fair and free trade. the one we are more fixed on is infrastructure spend our big focus is healthy safe and sustainable solutions. covid has shined a light on the criticality of making sure indoor air environments where people spend 90% of their time indoors is safe. we'll work with any administration to make sure that is a key focus >> looking at your stock price which is a strong performer since being spun off you ever call your old boss and say, hey, too bad you are not doing as well as we are? >> no. that is not our style. we are very encouraged i can tell you it is nice any time our customers are pleased we look forward and not backwards.
despite the stock appreciation, we've seen a discount from some of our key peers we are encouraged by what's happened but more encouraged by what is ahead. >> thank you, dave time for etf spotlight looking at the dow jones internet ticker fund with a slew of stocks on the move. check out pintrest that stock up more than 37%. up around 250% for the year. after the bell, amazon, po tirok, alphabet all set to rerthe respective results. we'll be right back within "sqwawk on the street. don't go away.
on paper, the numbers are fantastic. way above normal 20 points higher than normally the eefaverage beat is amazing. it has held up the entire way through the first half i was surprised to see that. the problem is this, wall street is yawning about these numbers we hit highs on october 12 the day before we are at 8%, 7% below where we started october 12 of the start of the earning season. good numbers are not being rewarded by better stock prices. three or four things the market is hitting here in the middle of earnings season. if we take a look, we've got no stimulus, a surge of
coronavirus. that's the biggest problem stocks are very richly priced. earnings reports not moving stocks up at all little or no guidance. ups saying we are not offering guidance we don't know what is happening due to coronavirus that's been a major problem. we've hit an avalanche of problems royal caribbean. an earnings loss of $5.62. take a look at revenues. negative 36.8 million. that's a negative. how do you have negative revenues apparently a reverse of bookings incorrectly recognized so people were making bookings they had to give man back. folks will go a long time before you see negative revenues on a company. tech earnings, a lot of people
putting hope on apple. they'll change the conversation and have great numbers overall remember something, we have had earnings disappointments remember what s&p had, people still argue whether s&p was company specific or not. a lot of differing opinions. they cut their full year guidance and reduce those at&t and samsung was down profits could fall in the coming quarter. i know everybody thinks apple will change the conversation let's be careful it has not been a perfect season for earnings back to you. >> thank you it will be one busy night with those reporting earnings after the break, tyler
because they're always on. another life-changing technology from abbott. so you don't wait for life. you live it. welcome back i'm sue herera france has gone to its highest terrorist alert after a man armed with a knife killed three people at a church in nice police have captured the attacker and leaders across europe have condemned that attack hurricane zeta kills lee and leaves millions without power. schools are closed or plan to
open late from the gulf coast to the carolinas. for the first time, the u.s. reports more than 80,000 new coronavirus cases in a single day. wednesday's death toll was just short of 1,000 in taiwan, the island nation has gone over 200 days without any domestically transmitted cases just seven deaths since the pandemic began another busy news day. i'll see you again in an hour. back to you. >> you said it it is very busy. take a look at the markets we are hanging on to some gains here at this level, largest gains since october 12 as we pay attention to the earnings. gdp growing at the fastest pace ever first on cnbc now on the council
of economic advisors, tyler goodspeed. >> good to be with you >> a lot of things at work that have paid off. i guess the question for our viewers is how much momentum do you see going into q 4 and do you need stim will us to make that happen? >> we were encouraged by the numbers that came out this morning. as you noted this is the biggest increase projecting a q 4 over q 4 decline and we'll repair that as much as two-thirds. definitely eyeing inventory
investment the change suggests there should be inventory rebuilding moving into the fourth quarter. we continue to see strength in-housing and consumer spending the latter is 70% of the u.s. economy. slower pace albeit in the fourth quarter. >> you mention housing any negative suradvises in new homes or existing homes give you pause whether it is supply or simply difficulty finding a home that some people can accord at this point is that a liability for q 4 gdp? >> when we look at housing, we are continuing to see strength in response to record low mortgage rates also following the unprecedented
fiscal response in march and april, which was a major factor in a ten u waiting the response this year. mind you, as i said, back in march and april, people were projecting an annual decline from july, the budget office was projecting q 3 growth of just 17% and an average unemployment rate and 14% instead we had 13.1% growth of the economy and unemployment rate finished at 7.9% nonetheless, the president and this administration is committed to support the recovery and the return to full employment as quickly as possible. that's why we remain committed to reloading the paycheck protection program, expanding the tax credit and a robust
economy and a second round of economic payments to households to support heading into the fourth quarter and make sure we have continued strength in-housing markets putting stimulus aside, we've heard a lot of president trump's record while in office we haven't heard much about his economic plan if he gets reelected axios pointing out he doesn't have a second term plan on his website which we found to be unique. what is his plan is it status quo or what can we expect >> certainly one can expect a contin continuation or expansion of the economic flows we've seen in the past few years unleashing independence and tax reform at the lower end of the wage, income and wealth distribution
eyeing the tax legislation scheduled to expire to include what we've done in terms of reduction and the full expensing of equipment we'd like to expand upon in addition to that, the president has a middle class tax cut and we've been working at details and further expanding rate reduction and consolidation in order to deliver targeted and tax rate across that income distribution and the
reproduction from the people's republic of china and for further investment i can say it looks easier to put the proposals out in the federal government because of a lot of agencies involved and necessary engagement on the hill >> tyler, even with the strong move up in the gdp, roughly economic output about 3.5% below where it was in the last prepandemic quarter. asking the question when are we going to get back to the economicout look and we do need stimulus to speed that up? >> there is no question that reload of the paycheck protection program and second round of the stimulus payments
that we introduced in the c.a.r.e.s. act as well as enhancement to unemployment, money to schools yes, below that level of 2019. less than half that spring and would further turn that loss that would be more than two thirds of mitigation no doubt, the president remains committed to support and make sure the recovery is a testament
to that that when congress failed to respond that the enhanced unemployment benefits, payroll tax relief to workers continuing to go to work and relief to student borrowers and those at risk of eviction. >> no doubt about the impact. the numbers are deep and thank you for discussing with us the last major data point ahead of tuesday's election. joining us to talk about that, other side of the campaign, former chief economist to then vice president joe biden good to see you. >> good to see you as well thanks for having me on. >> do you think five is doable
in the quarter with or without the stimulus >> no. i think what we see this morning is that gdp remains low. that is about the same as the worst point in the last recession, what we call the great recession. relative to where gdp is or $6,000 per household also important to reflect, a lot of inter cassies here a lot of jobs and down shifts here poverty is up 8 million since may. down 11 million jobs 23 million people are filing u.i. claims. one of the things we are finding
disconcerting as they are talking mission accomplished, roaring economy. this is many difficulties in it. >> the first time that was posed, how does taking it back create more jobs >> that's an increase for the top narrow slice of the income scale. you pay the corporate tax if you are highly property. if you are inprofitable or have losses, as reflected, you take losses the corporate tax rate and tax expert pointed this out is a counter cyclical tax you only pay if you are highly profitable i just heard listening to some
excellent reports on your station, there are some highly profit companies out there this helps raise some revenue for biden harris as well as not putting everything on a credit card so it is a pay for >> where would that revenue go would it be solely to fund more stimulus or targeted to getting economy back to where we were precrisis? >> that's a great question in my view i'm speaking to you as an economist and not so much as a formal advisor i think stimulus measures should be financed. you have these key economic variabilities and massive output gap that remains and report screaming at us to do a
stimulus by the way, i liked a lot of the things tyler was listing that should be in the package what i don't like is the absence of leadership from president trump getting that across the goal line. this is something that joe biden has deep muscle memory from the recovery act the more permanent agenda will be harder to sustain deep investments in child care, elder care, public housing without pay fors that will help sustain those programs over the long term. >> jared, we had the ceo of carrier join us earlier. according to the positives and negatives of a biden presidency and seemed enthused by the prospect of infrastructure spending we haven't seen a lot of it over the last four years and haven't seen a lot from the biden/obama
administration what chance is we'll see something significant? >> great question. a very important area. the chances are high, high, high, very high. i say that two fold. the biden/harris agenda is incredibly deep in this space. whether it is clean energy, electric vehicles and their charging stations. on shoring manufacturing jobs to help do some more traditional infrastructure, whether it is a grid, these are all measures in the proposal here is the other party think in many ways just as hopeful. i spent a lot of time on the hill i've heard democrats and republicans say with great intention that they want to do an infrastructure plan this is a bipartisan issue
what is missing is presidential leadership i've heard this from both sides of the aisle there never has been a plan. there has been these phoney infrastructure leaks but never a plan again, this is something joe biden has in his deep muscle memory you are right the recovery act did some significant especially in the clean energy space. >> jared, thanks so much david. thank you. take a look at shares of our parent company comcast adding 663,000 new broadband customers. sign ups reach 22 million but theme park performance continues to weigh on results.
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welcome back to "sqwawk on the street." markets are holding on to gains this morning nearing highs of the session with technology in particular staging a rebound we are seeing a sector rotation with utilities one of the lagging performers today as investors step back from technology and away from those more defensive stocks. utilities among the notable decliners. keep an eye on that particular
the parent company of chili's rising after quarter he earnings beat the stock and now in positive territory for the year up 3.8% this morning joining us in an cnbc exclusive, the ceo. thank you for joining us the stock price certainly performing well off of these earnings you know, top line, bottom line doing better than expected that said, there's no way to, you know, look past this big elephant in the room, the pressure that the restaurant industry is facing as a result of the pandemic. what are your expectations for the fourth quarter as it pertains to the ban temperaturic and the potential for greater restriction onz restaurants a rerestrictions and when do you expect things to look more like
2019 normalcy? >> thanks for having me. we obviously were excited about the results we produced and delivered in our first quarter and we see the challenges ahead. this is what we've been dealing with throughout the summer and fall we're very adept at creating a safe environment so our team members and guests providing alternatives, obviously, to dining in through our takeout and delivery systems and what we've seen throughout the pandemic really is these regional outbreaks that are -- that create opportunities where we have to adjust to the case loads. things mover up and we're able to move forward.
always make shurg we're providing a safe and comfortable place for our team members to work and guests to dine. so we don't -- we see these, you know, right now the midwest may be heating up. we'll see some constriction in the business there overall, we don't see a national problem. >> a national problem meaning national shutdowns >> correct >> you see a wave of shutdowns across the country >> yeah. seems to be, again, if you look through -- this hasn't come in waves. it's been more geographic, right? there are maybe bigger spots right now. but i think wearing masks and distancing and doing the right things, we can get this thing back under control in these areas and then we move forward the consumer adjusts and we have shown that we've been able to continually grow our sales every month through the last quarter and even into october.
our comp sales have gotten better we're running almost very close to prior year levels magiano's is a more challenged model. the chili's model is working and calling calling is a bit more challenging. >> when you think about off premise sales, where is the top in terms of how much you would allow for that how much white space are you maybe still trying to build into that when do you have to start thinking about when a day that becomes a decreasing part of the business rather than increasing one? >> yeah. we let the consumer tell us. you know it's not -- i don't set -- we don't have a predetermined target we let the consumer tell us where they're comfortable and where -- what they want. and right now, i mean,
offerousobviousl when dining is closed, we didn't have an option they had to take it out or get it delivered what we learned now is there a higher level of that going forward even post pandemic we will see more people and more guests using that option and then we're excited about leaning into that. again with virtual brands, an alternative that gives us an opportunity to utilize our existing kitchens and tore bring more variety and different concepts to consumers who really want to take advantage of delivery or takeout. >> to what extent do you plan to lean into this it's just wings, very interesting concept. delivery only wings, curly fries, fried oreos, all things that seemingly sound very delicious here at 11:00 a.m. but, you know, especially as you look ahead, do you think delivery is a trend that will continue into the future and is
this something you plan to invest even more on potentially creating more concepts down the road >> yes and yes we think delivery is going to continue to be very popular among the populations. it's just so easy, right the number of people that have been exposed to getting food beyond pizza delivered to their house because of the pandemic has really accelerated that through. dwoent think that's going go back to prelevel so the desire for food, you know, eating at home from delivery or pickup at places that make it for you is going to continue to be a big growth vehicle. as far as virtual brands, we think with its just wings, we have a groet concept it works very well within our system and virtual brands are not easy to pull off. you have to have a couple of things going for you you have to have scale
you have to have kitchen that's have capacity. you have to have kitchen that's are well equipped and operators that can really handle increased complexity and we have those things we have an amazing operations team that is able to absorb this product and this brand and deliver it in a very high quality way. and then our partnership with door dash helped us get that to consumer we see that happening. we think will is potential to grow this brand as well as look at maybe a couple other brands. >> great >> we will be watching and looking forward to that thank you for joining us. >> thanks for having me. >> leslie and carl, i did want to focus viewers on apollo it's not a company we focus too much on. they have been under the microscope of late you can see the stock price is down in part because of the relationship between the founder, chairman, and ceo leon black jeffrey epstein. mr. black is the most low key of all the private equity titans.
you think of steve schwartzman that we see a lot or even k.k.r.'s henry kravis. it's something he began with a statement about his relationship with mr. epstein to clear up any misunderstanding that's are out. there he said by his nature he's a private person it runs counter to his nature to speak publicly about personal matters. and he pointed thought has been true ever since he lived through the press coverage of his father's suicide 45 years ago. but he did say, hey, this is affecting apollo and he went on to tell us exactly what his relationship was with mr. epstein. he said, it was a professional relationship in which epstein provided services to the family partnership and related family entities involving estate planning, tax structuring of art entities mr. black, one of the owners, largest owners of fine art in the country. and philanthropic advice that extended over a period of six years from 2012 to 2017, i
believe is when it was and he says, leslie, there's never been an allegation by anyone that i engaged in any wrongdoing because i did not but as you know, they've, of course, hired a law firm in part at mr. black's urging to examine his relationship and to report back to the board and to shareholders about that. the questions are whether apollo's fund-raising efforts will be hurt as a result of scrutiny of this relationship between black and epstein. >> that's the big question here much that's what would impact the stock price. that's what matters to apollo -- at least the public investors. we heard from peacers. they said they were freezing investments to apollo. cambridge associates which advices other investors on alternative investments. they said they may consider doing something similar to that. but a lot -- it's my understanding that the vast majority of appall low's capi l
apollo's capital is locked up f this goes on for an extended period of time that, capital could be in jeopardy another interesting aspect he pointed to on today's call is that he said suggestions of blackmail are categorically untrue so this is in response to that "new york times" article showing that $50 million payment that was made, he says that any concerns there was some kind of blackmail going on not true. so it will be interesting to see what the lawyer comes up with. back over to you, carl >> guys, fascinating thank you for that leslie, david, we'll see you later on good morning, it is 8:00 a.m. at pinterest headquarters in san francisco. 11:00 a.m. on wall street. "squawk alley" is live.