Transcripts For CNBC Closing Bell 20240714

World cut rates. China weakening the currency again overnight. A perfect guest to discussion the swings in the market, former treasury secretary jack lew joining us thats coming up on closing bell. First right to the market action, joining us for the hour is josh brown. Whats turning things around here oh, my god, this is like what we live for, right it was pretty dire this morning. In the last five days, i have shift fred bearish back to bullish, then bearish, then superbearish. I was lutheran for a minute now i know youre joking. I am personally highly susceptible. I know this about myself, and every investor should think about their own behaviors. Im hidely susceptible to the lines i see in front of me not that i will react to all of them, but if youre not going through that, maybe check your pulse, that is what markets are designed to do, and i think the people that radically shift their views based on price act are the people who end up paying the volatility tax what led the comeback, reits, and Home Builders exploding, and the ongoing rally in precious metals, but tech came back, health care came back, what still is lagging, the banking still look terrible. Energy has looked terrible for most of my adult life, still today. Those are your laggards, but i think its notable this is not a market that from one minute to the next is pondering recession or not i think its people saying am i positioned right for this huge change in rates . A lot to discuss. Lets drill down Steve Liesman has details. Rick santelli is tracking the plunge in bond yeels bob pisani is here at the exchange but steve, lets begin with you. Thanks, wilf. A signal heard around the world as they cut Interest Rates, that was part of what send bond yields careening downward, eventually taking stocks with them possibly a race to the bottom on rates leer in fact, President Trump encouraged the fed to match rate cuts today theyve been cutting rates and doing so since at least april and some even earlier than that. The fed knows it cant maintain a rate so far apart, but the problem is if it cuts other Central Banks could cut even more Steve Liesman, thank you. Tenyear bond yields falling to the lowest levels since 2016. 30year yields closing in on record lows. Rick santelli has more. If theres any sector or specific part of the markets that should get a fist bump today is this next chart ready to challenge the 210 all time, low close that was established in july of 2016, same month the tenyear notes had the Double Bottom at 136, but it was avoided were close to 220 now, really took the pressure off. Twoday tens the minutes went guns hot, meaning the low established the day before, it certainly went wild theres a lot of income iing wi back to you. Rick, has the u. S. Moved more than others in the last week or so listen, the last week or so has a breathtaking move. Ive seen a lot of breathtaking moves, i think especially when you look at just a few days ago under 295, you got paid off with 30something basis points. Yes, 135 Double Bottom from 2012 and 2016 in tens it could be a possibility if we get tenyear or 30year bond yields anywhere under 209 to 10, maybe a threetick slippage. Rick, thank you very much for that turning to the broader market, a massive midday reversal after plunging nearly 600 points bob pisani has all of the intraday moves. The stock market is moving in lockstep with the bond market. Take a look at this chart. Bottomed around 10 00 a. M. Eastern time thats when the stock market market bottomed. The yield started moving aggressive, and then the stock market started coming offer the lows the rallies initially was largely defensive names. Cocacola, for example. Lacking the rally here a few select technologies, apple, for example went positive. And its about time, just about five or six trading days or so now to mike santoli. Sara, if theres one thing that unifies all four of these elements, its part of the market that is sitting near off beleaguered banks, though. A look at the regional banks. The kre, this is the forward p. E. , so this is basically regional banks getting progressively cheaper against the markets to the point right now where they traded about 630 of the markets forward multiple, clearly priced for bad things or no growth, or maybe a recession down the road. Now look at this this is the same etf, but the dividend yield relative to the s p 500. Obviously its just the inverse of this, compounded by the fats that could banks are basically pushing a 3 dividend yield. Look at how its so dramatically increased. Its given you essential 140 or 150 of the s ps yield right now. Is it ever going to matter these guys would benefit, but also they sort of trade like theyre a disrupted group, essential, you know, the growth is happening outside of the banks themselves at some point cheapbecomes too cheap. Well see where that is, guys. Mike, just to expand on that, just a bit, the selloff, of course, sparked by trade ward fears. If we look at the banks exposure to asia pacific, its that the highest is 21 , the likes of wells fargo below even 1 , so the exposure not that high of course, thelinks to the yield curve here is the Net Interest Income is a percentage of revenue that paints a story. It moves the bond mark and there are the exposure the ones that stand out, of course, are the investment banks, only about 10 of their earnings of their revenue is net interest if you can be bullish that the rate cuts deliver more economic activity, theyre the ones with less exposure. I wonder how much there is over at these banks about whats happening in europe, in japan, crushing those banks systems, because of those net incomes. If the u. S. Were able to stay in positive territory, and the economy continues to grow, long term the suffering of the deutsche banks of this world probably has helped jpmorgan over the last decade, but again in the short term, the reaction, of course, is to tell she is things. Mike hinted at something that ive been thinking about for a long time. He said they look like a disruptive group, meaning they had a pretty good economy the last ten years with the handful of exceptions, most of the banks in this sector have not done well, relative to how theyve done in prior economic expansions. Some of that is technological. Its not a guarantee that a 20yearold now opening their First Bank Account is going to do so at a branch in their local town with a marble lobby and columns out front. Youve got intense amounts of disruption coming for this group from all sides from appbased to different type of lenders. I think thats showing up inned multiples. These stocks are selling at one time book value. The reason is nobody values the assets in that book value. Its more than just a rate story. Today its a rate story, but i think longer term, people are looking at this group the same way they started to look at northerly companies, theyre saying, is this really the future im a little surprised you put that spin on it. Were your recent trades was jpmorgan, was it u. S. Bank so i think you can hold two opposing ideas in your head at the same time. The first is what i said about technical disruption other areas have become extinct or disappeared i think its reasonable to say that jpmorgan is spending more money on technology, probably goldman too than any of their peers and they are poised, i think, to capture a large part of that future consumer. Lets look at the regionals, can they get into a technical arms race can you think of any bank with the financial wherewithal that they can actually compete . Probably not it aint going to be everybody lets continue the discussion with these market moves, john miller ahead of municipals and mellon investment management, very good afternoon to both of you john, this massive move in yields, do you think it makes sense that the u. S. Is following in terms of the moves when ted already cut rates last week. Does that make sense well, i think the u. S. Fundamental Economic Data is holding up much better, so it does it is confounding to see 3. 7 unemployment rate, new hiring very steady with a big domestic base. I think we have the advantage in this trade war scenario. Having said that, the Federal Reserve doesnt necessarily want to stay out of step with global Central Banks, because that can strengthen the dollar too much in addition, the inverted yield curve is a fairly good reliable forecasters of a recession, and you have the fiveyear yield at about a 1. 5. So thats inverted out to five years. So thats a little bit of a that is a bit of a concern clearly the rest of the u. S. Treasure rip curve is anticipating that the fed is going to cut two, three more times this year. So currencies and bonds are in the drivers seat what do you tell Equity Investor toss do in that environment . What happened today, which i think is the rational thing, the s p is still yielding. If im a rational investor and i dont think were going to have a recession, the u. S. Fundamental story is Still Holding up you want a different yield thats going to pay more than a bond and you have upside opportunity in stock if were not heading to the toilet here, stocks makes a lot more sense. Josh, are you drawn to any i agree with everything that liz just said. Im in verizon ive got a couple reits i add to ahmet time these are areas that really do not require the economy to be any better than its been all this time. Were at 2 gdp growth im not looking at companies that need 3 or 4 growth. Its not happening think of verizon as an example of that, and when you look at some of the reits, Invitation Homes is singlefamily rent homes. Thats what you said where 73 millennial are forming households and dont have the down payment to buy a 700,000 house, but they want to live that way its run by some of the most experienced private equity executives who have ever been involved in real estate. Thats a great, growing yield, i would add. Thats the type of name that should work, historically, i know everyone thinking gold is this great inflation hedge, it turns out its not reits are the number one inflation hedge over time. Youre not putting your money to sleep. Youre not saying im going to accept 2 lets find businesses that can thrive. You it would make sense no not because it spelled recession or spelled collapse. Two different ways to answer that the market watches the inversion at the threemonth tenyear. That put fear into the market. The rye session indicator is the twoyear ten year, which hasnt happened the market will be afraid if theres an inversion at all. What we got was a tenyears at about 136. We could get there again if we break through that and stay below it, then i think its more of a negative signal. Im watching the beyond meat inversion. I would like to see birk shy outperform beyond for a couple days, as people calm down. Two days . Yeah. Well keep an eye on that. I have a patent on that index. You cant use it without asking. Thank you both for joining us still ahead a big interviews with former treasury secretary jack lew well talk about the decision to designate china as a currency manipula manipulator. And as we head to break, a check on our data tracker today. Mortgage applications rising 5. 3 last week, refinances up 12 . But industrial output sell by 1. 5 , in june far more than expected, the decline economists are looking for . Closing bell will be right back dow is down 83 lets go back to Steve Liesman. September 100 chance of a rate cut, october 73 , and we apologized we had some bad wire data the last month, but this is the outlook for three cuts, better than 50 , therefore some chances or bets, wilf, for basic rate cuts, but these are the oddson bets so far. Energy sector getting slammed today, as Oil Prices Slip seema mody has a closer look. Oil prices star of the session, lower on the week Industrial Production data, losses and acsit rated around 10 30 a. M. Now demand growth has already been a big concern over the heightened trade dispute, more Central Banks cutting rates. Oil prices now down about 34 from the 52week high. In response, chevron, bp among other later Energy Producer are now trading down today, and now down about 7 8 , unclear where we go from here. You would think that Central Banks cutting rates would reassure the market, but instead its resurrecting the global fears. Deeper into bear markets. Seema, thanks. Dont miss an interview tomorrow, an exclusive with carl icahn, joining the Halftime Report following a vote over the occidental deal. Gold hitting the highest level since april 2013, and so far in year, gold outperforming the s p 500. Year to date up 18 , while the s p 500 up just 14 . 18 to , relative performance. When we come back, cvs has been outperforming, even when the market was tanking were going to speak with the companys ceo in an exclusive interview next. President trump making comments today about increased tensions in the china trade war. China would like an anchor on us the people that allowed that to happen are a disgrace. Ahead, well speak with jack lew, treasury secretary under president obama about the state of the trade war, and the decision to label china as a currency manipulator bu bu back in a couple minutes lower carbs. Lower calories. Higher expectations. The light beer youve been waiting for has arrived. Corona premier. I really want to give you pictures of how extreme the moves have been in bondland we talked about their yield and buyers accepting it. S the longterm treasury etf, and how far above the 50day averages right here, these are shown tore an overbought extreme, at least on a shortterm basis finally sentiment, daily sentiment index. This is a futures traders, a daily indication of whether theyre bullish or not 100 yesterday now, this is very, very extreme, it shows theyre very overbought, however, this has not been a great indicator of major bottoms in yields, but it has shown that the moves have moderated, and threat vulnerable you like Technical Analysis i mean, how would you describe this massive rush into bonds right now . And if someone asked you below usual keep buying with the tlt its i think its a different kind of market than the one i grew up in, where people could pull the trigger really easily, people who are not sophisticated traders or predominantly using etfs back in the day maybe you are buys futures, but now i think its more of a retail phenomenon not that theres unless specifically wrong with that, i just wouldnt read too much into that activity tlt is ago going to have blowoff tops 30year bonds, nobody is buying them as longterm investment, though they do appear in Asset Allocation these types of moving, these retail traders. Back in the day of the original days. I go that far, if you can believe it. I know. You have selfishly talking about that at the break, and i dont know what youre talking about. After the break, cvss ceo join us about the state of at naranmu me. Or thsext. lively music [student] my degree from snhu has helped me tremendously. The flexible class schedules allow me to run my catering business and be a mom and parent. Breakthrough at snhu. Edu. I felt completely helpless. Trashed online. My entire career and business were in jeopardy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. Welcome back to closing bell. We did see dow touch positive. The key thing being we are some 600 points higher than the lows of the session in the first 20 minutes or so. Quite a recovery. Sue has the update. Heres whats happening at this hour, everyone. Puerto ricos Supreme Court has overturned the swearing in as the islands governor. This clears the way for the treasury secretary Wanda Vazquez to take over the post. A few tanker that overturned on a Southern California freeway during the morning rush hour has forced an hourslong shutdown and massive backups. The loads driver was not injured. Forte is recalling nearly 20,000 2020 they may be missing the manual parks recover. The National Library announcing plans to release the man uscripts, therapy in israels custody after it won a battle for ownership of the jewish novelists literary estate i cant wait to see that. Back downtown to you. Sioux, thank you. Cvs is one bright spot on this roll till market day, raising the fullyear forecast as well. Strong performance coming at competitor wall greens close it would close 200 of its stores as part of a costcutting plan larry merlo, welcome. Great to be here. I understand the two of you are celebrating your birthdays cvs to you. You just had a beat in raise amid a skepticism about the execution of your deal you feel vindicated here you know what its been a good day back in june, you know, we outlined the strategy. We talked about the plan that brings that strategy to life you know, today is about the work that 300,000 of our colleagues are doing across communities across the country bringing that point to life. Higher drug price inflation, talk about how youre seeing that affect the business its a little counterintuitive. One of the things that our pbm has been actively working on is how do we deduce the net costs of the pharmaceuticals you know, were seeing pharmacy inflation moderating we havent seen a dramatic change from what we saw last year however were seeing more clients adopt what we referred to as a standard form laformula. Do you fear a big political rebuke, and do you feel like the political pressure is higher than ever at the moment . Wilf, its really not the higher drug prices that drove the results. Its the actions we have taken to lower drug prices and keep people more adherence to the medications that theyre taking, and what we absolutely agree with the administrations goal of reducing health care costs, reducing drug prices, and reducing the consumers out of pocket, and were working hard every day to execute against that strategy. Also i noticed that sales at the front of the store outside of prescriptions did better, what is driving that spending . Just a better consumer environment . It is a better consumer environment, but we have been investing in our Extracare Loyalty Program for several years now, and being able to deliver value to our customers in a very individual personalized way those strategies are taking hold, and were see the benefits of that. Tell us about the health hubs, and whether you plan to roll that out more widely. Earlier this year, we put our first in the houston market, and what we have seen, the consumer feedback has been terrific, the net promoter scores are 900 points ahead of the chain average. What its telling us is our beliefs and our strategy is exactly what the consumer is looking for. Were excited to be able to go to three more metropolitan areas later this year. We announced the plan two months ago to have 1500 health hubs across the country by the end of 2021 you must have been relieved to see the administration pulled back from the rebate rule, which would have hurt your pbm business what are you expecting from President Trump . Kellyanne conway said today a major overall to be announced in september. Theres a lot of proposals in both chambers of congress. You know, we have developed what we believe are policies that can in fact, you know, reduce the cost of drugs and, you know, the outofpocket expense for consumer we certainly advocate for those. I think it remains to be seen in terms of what is the next step in terms of what happens in washington. Have the democratic debates scared you when youve watched though, with some of the proposals for the Health Care Industry i think the question youre asking, youre talking about medicare for all, what is medicare for all i think the important question is, what is the role of private sector in health care . Weve been able to demonstrate time after time that private sector competition, innovation has been ability to be an important part of the solution Medicare Part d, that program was scored more than 12 years ago, and today its costing the government about 40 of that original scoring when you look at beneficiary premiums, over the last ten years, theyve grown by less than a dollar each year. So i think it does point to the fact that the private sector can bring Meaningful Solutions thats the work that we need to continue to do. I mentioned the walgreens youre slowing the pace of the expansion. Are there just too many drug stores in this country what is driving that there was a dramatic, you know, expansion of your corner drugstore for probably the better part of the last ten, 15 years. Theres no question that that is beginning to slow. We have pulled back on our store openings i will say that our fleet of now 9900 cvs pharmacies is extremely productive, and its something we look at, and we have about 500 stores that come up for lee renewal every year. How do you seize the amazon threat in your space as we think about competition, our challenge is how do we meet the unmet needs of consumers how do we make sure were not leaving any white space. Youve seen us take a number of actions in terms of additional ways for them, whether its home delivery, delivery to the office, earlier this week we announced our care pass program, which is a subscription service. Its been terrific. You paid down 2. 5 billion in the most recent quarter and youre targeting three times leverage ratio by 2020 how much does that target change based on where rates are and when you see a dramatic fall that we have seen in the last couple days, does that make you think we can allow it higher no, wilf, we are very committed to the plan. We took our cash flow guidance up this morning, and were very confident in the plan that we have to achieve that goal. We wanted to ask you about the opioid legislation obviously Drug Companies and distributors are at the center of this. You and some of your competitors are named as we head into what could be the biggest civil trial in history how much are you expecting to be liable here . You think about the role of pharmacies, you know, pharmacies dispense a prescription in response to the prescription being written by a licensed prescriber, the physician, the dentist. You know we have made many investments in technology and analytics that support our pharmacists in terms of executing their professional role on what we call corresponding responsibility, ensuring, you know, that that prescription written by a licensed prescriber is in fact for a medical intent and not illegitimate use so we have done a noumber of things so you dont believe youre on the hook . We do not believe were on the hook well defend the actions vigorously if we have to go through prescription by prescription one at a time, in fact we will do that. Larry, thank you for coming by cvs healths ceo. Up next, what hes watching in the crazy day of the bond mark. And jack lew will join us to talk about everything from china to President Trumps latt es tweets closing bell is back in just a couple minutes welcome back to 17 minutes left of trade. We are just lower on the dow, s p, and on the nasdaq, u. S. Treasury yields hitting lows mark is here with us with rate strategies very good afternoon to you thanks for joining us. Thanks for having me. What are the key levels youre watching on is the rates curve as to whether were likely to see a significant break higher or lower from here . Well, weve been breaching a lot of delevels. We broke last week after the risk hit with regard to china. We were down near 160 on the tenyear, and we subsequently backed up a bit. Weve been through a number of key Technical Levels i think what the market is really reacting to are uncertainties with regard to trade, what it means for currency wars, and what the fed is going to do in the face of uncertain uncertainty. I think the bias is to expect lower rates as oppose to do higher rates at least until some of these uncertainties are cleared up. Pimco put out a note this weekend that we could expect negative rates in this country is that something you are contemplating there . Its certainly not our base case scenario, but i dont think its a risk we can completely rule out. How the global back drop evolves, its not crazy to think you could be looking at that type of environment. Thats not our base case, but the fact we have seen rates fall as much as they have recently suggests that that lowprobability event is increasing even though the odds are still low, but increasing risk that the market i think will have a harder and harder time discounting in the spring of 2016 rates had put in a bottom. It was just an Much Negative and there is now, and all of a sudden things changed on a dime. To the point where last summer, the consensus was for three rate highs throughout the court of 0 2019, dont you great that a lot of 9 commentary is just a function of whats happening with prices, and the narrative changes just as swiftly . Isnt there a lot of that appearing today . And most of it stems from trade and trade policy here. If you lets say theyre supposed to strike a deal, even if thats a status quo with think that rates would be higher 2 wee reasonable and all the news flow seems to be suggesting trade could get worse. If thats the case, youre going to have more of what you say overnight. The lbnz cut more than expected. The rate to the bottom, so to speak, then if that happens, Interest Rates keep moving lower. You can see longend rates and the curve potentially to flatten in the u. S i hear what youre saying, maybe the market is a little overdone, but it needs something to help itself believe there would be an end to the uncertainly, and at least no longer a worsening, and hopefully a questioned that sounds more responsive i do think the fed and that powell did not sound as dovish, is fueling a bit of the curve flattening that we are seeing, and certainly the decline in breakevens. It sounds like the fed is not as responsive as some of the market had anticipated. Thank you for joining us. I think theres a happy birthday in order Michelle Meyer just testified me its your birthday, too, which i thought was a joke, but i guess its not no. Happy birthday to both of you. And to you, mark. Thats crazy. Many happy returns. There we go. If charlie is watching, to him as well. A regular guest. 11 minutes left of trade of course, even though the dow is negative, well off the lows, down b589 y points down b589 y points up next, weve got your and you should be mad at people who take unnecessary risks. How dare you, hes my emotional support snake. But youre not mad, because you have e trade, lastchance trade, 11 minutes left on an options trade its a paste. Its not liquid or a gel. And even explore whatif scenarios. Wheres gate 87 . Dont get mad. Get e trade and start trading today. Welcome back to closing bell. Eight minutes to the trade josh brown, what do you have for us you know i like these breakouts. Im giving you one before it happens, but it looks pretty good itb, this is Home Construction index. Its not a huge etf, but its got 55 holdings. This things is right on the cusp 40 is i think where the price action changes in favor of the bulls. Its been consulting below those levels when you look at rates, and you look at google searches for things like refinancing activity, mortgages, that type of activity bodes well for this group. The best name, if you want to pick a name instead of an etf, dr shortening technically that one has already broken out. The whole question is the low rate play. Is it just spurring a bunch of refinancing. Home construction, remodeling this is what the stocks trade on, the affordability of buying homes, renovating. Ive got other things inside of here youve got home renovation plays as well. Were down 50 points or so, well off the session lows, up next well cover automatic angles. 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Time for the closing countdown herb morgan joins us herb, it did not look like we might have gotten a positive close earlier in the day when the dow is down as much as 589 points what does this tell you . It just tells me we had a couple Central Banks cut, two bigger than expected last night. Other than the initial telloff theres accumulation going on. The president ance of the Economic News is very strong were thinking all equities are the place to be. And then on the foreign side, you have great valuations, a bit of a manufacturing issue, but with the dollar being up for u. S. Investors, why not accumulate emerging markets at this level as well herb. Thank you very much for joining us. To mike for the third installment of the market dashboard. Part of the story is some buffers in the form of valuation. Lets look at the relative valuation. Now yield more than the tenyear treasury yield thats the highest in memory obviously some yield support in this market, and then on a sentiment basis, a lot of put buying, a lot of hedging going on, you see the trend in put call ratios, higher in december, but it seems like you have a bit of anxiety in there thats usually fuel for at least some support. A big wrap upin fixed income from rick santelli. A wild day indeed, mike the vix was close to 6 1 2 this morning, it could have been the highest volumetively level since early 2017, intraday now at 223. Unchanged on the day after trading down to 211. One takeaway from alltime lows. The tenyear yield is up a basis point. Bertha what a rebound in the nasdaq. And apple was the beginning of the reversal here just to hard to figure youll. Well hear from sky works this afternoon. They are getting hit hard. The dow is now 589 points, this is the both of them moved at more than 3 range today. Thats pretty unusual. Pat, 3m generally did not participate. What a comeback here close just fractionally negative, down 21 points, s p 500 positive on the day. Welcome, everyone, to closing bell. Were alongside mike santoli. Lets check in on how the markets close. The dow did finish negative, but only by eight basis points or 22 points the low of the session, 589 in negative territory a massive comeback s p finished positive, russell was positive for most of that final half hour, as for the sectors again, real estate staples were the best performers, financials really didnt take much part, the yield story there, of course, very important. And the yield story on the s p, real estate staple it is, utilities, all higher. You know, when youre getting super low on the tenyear, it becomes more and more appealing to buy these stocks, whether its josh browns reits or the Consumer Staples banks i guess are an exception there, because they get hit by the lower yield. Some of the china specific sectors did fine oil had a big turnaround, it was down more than 5 , it finished down 2 the dollar staying pretty flat it hasnt led to a dramatic weakening of the dollar, of course its at 97. 6. Full Team Coverage today for you. Plus were on earnings watch. Later, jack lew joins us on its impact on the economy, really interested to hear his up thoughts on that josh brown is still with us, but first, mike, your take on this massive swing closing positive on the s p . I think you see both sides of the implications of an acceleration lowering in global yield. On the one hand investors say its a little destabilizing. Central banks dont have control, or big growth stocks, does it make them look more attractive even at the lows this morning, we didnt get lower, and then certainly not as low as we were overnight into yesterday, and in the future it seems like the market showing a bit of stabilization here. It always is going to look like its a bit touchandgo when you have these recovery attempts its whippy out there. I think you do have to keep in mind josh was saying this earlier. At the lows, yeah, it makes sense. And you see the recoveries, it says, i get it, right . Thats the toggle suralways riding. In terms of we talked about the treasury yield cup what happens to credit and highyield credit, especially high yield the yields are just not going to necessarily track tick for tick with treasury yields at these very low levels while you have the volatility index but its not blowing out its not showing distress building in that market. What kind of feel are you getting . You know, my opinion, sara, i feel pretty strongly its not a recession signal for the United States i think it is a signal that our short rates are too high were probably the only country in the world or developed country in the world that has a positive real yield policy rate. And i think its admirable the fed wanted to normalize rates, but the problem, of course, is that if the rest of the world has negative real rates, its very difficult to chart your own path it risks financial instability i dont think its a recession signal for the u. S by the same token, it does suggest you may need more fed easing unfortunately by the fed. Josh, do you think it leads to more fed easing does that alter your view on whether u. S. Equities are attractive or not . I think it does lead to more fed easing, and, listen, stocks are if stocks are a function of future cash flows and longterm Interest Rates, you can you can support a much higher multiple at these rate levels yeah. I would just add to that, i think if youre having this internal dialogue with yourself, if theres another 25 basis points rate hike, i want to own stocks, and if there isnt i dont. You shouldnt be managing your own portfolio. The fed expectations do drive. Fed expectations is a mood ring thats nonsense. As i mentioned in the last block, last year the 23 gabanks had a concession for three hikes in 2019. Were not cutting. But almost 20 gains so far, until this recent lout of volume activity you have to say out there is fedex expectations for easing. I think it brings us back from the abyss its a function of coming back from what had been inflicted so youre right to that point, but again, i think you have to focus on some of the things that replain in place, regardless of what the fed does. One of the things is buybacks. Were coming through the earnings period. Youre going to see company that is have the flexibility in buyback authorizations announced and active, come in and buy some of their stocks. That is something thats continued quarter after quarter. Well probably do a trillion in buybacks by the end of this year that is going to happen, regardless of the feds next move whats not going to happen are the massive cap ex programs that probably should, so if youre heavily invested that require faster global growth, that is not a portfolio thats been working for you, and probably not a portfolio that will work for you. The only area where people are making money in materials is gold that probably will not change either i think being realistic about where we are and understanding you have no control over what the fed does in september and december, and that it probably doesnt really matter after that much in terms of the outlook of global difference by portfolio more of the macro to discuss in just a moment lets briefly touch into the micro. Lyfts quarterlies are out the first of the Rideshare Company toss report, and lyft seeing big beats across the the stock is surging in extended trade, adjusted loss per share of 68 cents, 1. 74 was expected, i. E. Those rider discounts revenue significantly better than expected of 876 million v. The 809 million the street was expected thats an increase of more than 70 , active riders 21. 8 million. Nearly there 2 better than forecast guidance, which is likely fueling these huge gains in the afterhours, the street was expecting revenue of 841 million in q3. Lyft is forecasting revenue between 915 million. Raising revenue guidance and lowering adjusted ebitda losses, this is what the street wanted to here. Just spoke with the kreismt fo Brian Roberts, who called this quarter a milestone and said theyre actually seeing an accelerated pall to profitability. I will dig further into the report and have more in a bit. It looks like investors agree, the stock surging, roku results out as well. Eric hemmy chemy a beat on the top and the bottom line. The earnings per share actually a loss per share of only eight cents, the street was looking at 22. A much narrower loss user metrics also strong, the number the actification accounts were better than expected. Theaverage revenue per using also better than expected, and the q3 guidance, fullyear guidance both those numbers above what had been estimated. Back to you. , eric, thanks very much for that. A big move in uber, by the way. Its a much bigger market cap. As to whether this is going to be good for uber or bad. The immediate takeaway is more rational competition is happening in this market, at least by lyfts guidance which is true when you get better revenue per user, but thats not just where they beat expectations, sees active riders gain ahead of expectation as well, which might be at the expense of uber . It remains to be seen. I do think of to basically look at roku and lyft numbers and think maybe theyre going to fall back in love with Disruptive Tech players, and everybody can win for alternates while. Obviously, you know, these stocks, lyft and uber, have been under pressure so i think right now its going to be a pleasant surprise. Lyft is beating substantially lower expectations, because they blew it last time. If you look at a stock price, so today is fine if youre long, but if youve been long, youre like, all right, thats great, because you really havent gone anywhere. On the opposite side, if youve been long roku, youve been a big winner, the run up to earnings up 53 , and yet popping 5 on another big beat this is the streaming play, right . I dont want to get intoed bias area, but i think its a great Consumer Product active accounts year or year, up to 30. 5, and average revenue per users growing fast as well it is the way to play in ott Services Without having to pay for expensive content. If you think that the cordcutting trend is just getting started, you dont want to short the Cable Companies they pay huge different, this is a better way to go this is a Company Offering an alternative, and the consumer is clearly in love with it. I know you cant talk specific stocks, but in general the appetite right now for Disruptive Companies Tech Companies new ipos if they continue to prove themselves with public reports there havent been that many of them its very different to buy your traditional stocks, the economy is slowing, and you have so much macro uncertainty. So its become cliche now, but what works are highdividend paying stocks and very growthy stocks it seems like thats going likely the i wouldnt assistant in front of any of these stocks yet. I bought a bit of uber shortly after it became public on the first drop. Then there was a second drop that nobody told me about in advance. Im not like wildly bullish on it it forces me to play close attention to it i think its either an incredible growth story and have a lot more going on or were all kidding ourselves and people will stop funding this Business Model and it would just sink, and ultimately youll get google cars driving everyone around so from that perspective, i am paying close attention. What about roku for a small nobody on roku, still a 10 short business theres still a feeling that maybe its a bit of a Transitional Technology . Im not saying thats what the results tell you, but theres a bit of a wall of worry around the stock. Its they used to say that about netflix, too, and then it became bigger than that. It still relies. At the moment. Our country is doing incredibly well. China is not doing well, if you look at the trade situation, china just thia mitted yes, sir theyve been a currency manipulator. First time theyve ever been called out coming up, former treasury secretary jack lew tells you whether labeling then as a currency manipulator was the right move, and why the Obama Administration never did it. And more on how investors should be trading amid this volatility do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Here, hello starts with hi mple. How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Volatile afterhours session here, shares of lyft and roku spiking after Strong Revenue growth up 8 apiece, it looks like. An earnings alert on interactive. Julia boorstin has that. Theyre announcing theyll explore the possibility of splitting off the interests in match group and Angi Homeservices they did beat expectation, and it follows match, sending shares up about 24 today, also lifting iat shares, right now you see iac shares of. Back over to you, dont miss joey levin tomorrow squawk box, 6 40 a. M stocks staged a make comback today. Bob, lets start with you. We were down 589 points just before 10 00 a. M. Eastern time we came back almost to flat. This is one of the best comebacks in years, certainly this year, but this month hag awful. Generally a huge disparity between the nontraderelated names and traderelated names. Just in the last five trading session this months, unrelated names less economically sensitive, Consumer Staples, more traderelated names, energy, financials, technology, industrial names when you get a 9 sweep, that is an enormous move guys, back to you. Bob, thanks the nasdaq outperforming Bertha Coombs has the details. Apple was definitely the big catalyst its still down for the week, the damage is done from what we saw on monday. Chips were fairly strong as well today. Microchip had a good outlook, but qualcomm is trading higher thats one of the high different failures here. Weve got a few of them, most of them like kraft heinz, theyre yielding quite a bit these days. Back over to you. Bertha, thank you very much. Orb next guest predicted a correction in stocks just a few weeks ago on this network, and he joins us now. Tony, a very good afternoon to you. Good afternoon, wilf, thanks for the invite. What did you make of the pullback, and to throw in, a congratulations, but b, a caveat are you surprised to get the support the last few days . The whole reason for the pullback wasnt fundamental. I love to see corrections only seem natural, normal and healthy until you actually get them people love to say i think its going to correct and ill buy that correction. By definition, when you begin to correct, its because there were too many buyers already. This was a market looking for an execution. Ultimately i think theyre still just excuses without an inversion of the 210 curve is extraordinarily stimulative. We agreed with the bears, the economy was going to slow, the whole bull story to get on our 3350 in 2020 as a reacceleration because of these lower rates. What is happening with earnings estimates, as all of this global volatility and escalation in the trade war continues . We do these myth buster pieces, we did one on the earnings revision mist buster. Everybody is saying the estimate is too high. When it comes down, its going to lead to a multiple compression. The streets at 184, and im looking for multiple expansion that sounds insane then if you actually look at the data, the only two years this cycle where youve seen a multiple com pretty and a down performance has been when you had upward earnings provision. Its all about Interest Rates and what is not just happening at the fed level, but whats happening in the market rates. Now that we have this shakeout, depending on the index, what are you looking for tactically to say, okay, its run its course mike, as you know, you have four keep tactical indicators. One has to be to where 90 or below the tenday moving average you can check that box the vix has to get above 20, check that box what you havent checked is the weekly stochastic indicator. Typically what you get is this feeling, wow, that was too fast, im not going to give up yet some stability and a bit of a bounce, volatility as spiked, so mashed happen now in our view is maybe another up day or two, and then text that recent low on lower vix, so lower volatility, but you have this drift lower in stocks i think that will set the too edge for that next leg higher. Again it comes down to relieves some of these interspeed terms overbought have we learned that rates cut doesnt help ownership gent we dont have enough yet its a lag knecht the treasury yields have come down we made a generational call on how the fed perceives inflation, where it struck me, when he was doing the Humphrey Hawkins testimony, jerome poly, he said we want to avoid when he was asked, why are you you this are thinking of actually cutting rates, when the economy is good and youre at full employment. He said because Inflation Expectations can drive down yields over the long term, and we have to avoid being japan and now europe basically what he said is we cant go to negative rates like they are in europe it wasnt just japan that brought in negative rates. Theyre going to get aggressive. Back when he thought in december they were going to cut by the summertime, i believe the fed will be a lot more aggressive than the street thinking you have full employment, higher averages earnings, and inflation, and if you want 2 , you have to do something different, and i think thats what the treasury yields are telling you. Tony, well leave it there. Thank you very much for joining us. Thanks for having me. Have a great day. Still ahead, dont miss the teiewi fmer treasury secretary jack lew were back in a couple minutes dont go anywhere. I dont know whats going on. Ive done all sorts of research, read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with td ameritrade. Welcome back, shares of lyft high on earnings, well off the best levels. Lets get back to dee with more comments. Certainly coming down a lot i do have more comments from Brian Roberts on the back of that beat. Profitability, he told me peak losses were actually last year, and theyre going to update wall street later this year in terms of a breakeven date he said theyre still making Big Investments in ebikes and scooter. He said theyre preparing also for the possibility that the california gigeconomy bill passes, which would make it harder for them to classify drivers as contractors take a look at this, uber getting a bump on the back of lyfts result, up about 2 , so coming down as well back to you. Lyft just turned negative dee, thank you. Time to get a cnbc news update with sue herera. Hell ox everyone. Secretary of state mike pompeo says the Trump Administration will pursue a free trait agreement with britain as soon as possible if britain leaves the european union, this at a News Conference with visiting secretary dominic robb we support the united kingdoms sovereign choice, however brexit ultimately and well be on the doorstep pen in hand, to sign an agreement at the earlier possible time. Police say they found two bodies they believe were charged with the killing of a College Lecture you are they had been on the run for nearly three weeks autopsies will be needed to confirm the two. The fda says its now received a total of 127 reports of users experiencing seizures after vaping over the last ten years the majority were young adults, and it launched that investigation back in april. You are up to date thats the news update back downtown to you. Sue, thank you just watching the turnaround in lyft shares, what looked to be a pretty solid report send the stock up 8 . Its not gone negative some attention on the lockup period for people who owned the stock might be coming due august 19th this may have been not been in the ipo prospectus sort of reminds you of the risk. Up next former treasury secretary jack lew discusses the potential economic fallout from acontrade war, giving you reti to china being labeled a currency manipulator and more. A currency manipulator and more. Well be right back. Fun fact 1 in 4 of us millennials have debt we might die with. And most of that debt is actually from credit cards. Its just not right. But with sofi, you can get your credit cards right by consolidating your Credit Card Debt into one monthly payment. You can get your Interest Rate right by locking in a fixed low rate today. And you can get your money right. With sofi. Check your rate in 2 minutes or less. Get a nofee personal loan up to 100k. Who used expedia to book the Vacation Rental that led to the ride which took them to the place where they discovered that sometimes a little down time can lift you right up. Flights, hotels, cars, activities, Vacation Rentals. Expedia. Everything you need to go. Your daily dashboard from fidelity. A visual snapshot of your investments. Key portfolio events. All in one place. Because when its decision time. You need decision tech. Only from fidelity. President trump taking aim at china again as a currency manipulator earlier today. China just admitted yesterday theyve been a currency manipulator, first time theyve ever been called out companies are moving out of china by the thousands our company is doing very well well see how it all works out somebody had to do this with china. They were taking hundreds of billions out of the United States and somebody had to make a stands former u. S. Treasury secretary jack lew joins us in a first on cnbc interview, as someone who could have made that call as a former treasury secretary, what was your Immediate Reaction when you saw this treasury secretary call china a currency manipulator. Lets just take a step back were after a dangerous moment where a trade war is escalating into currency responses,s the history is clear currency for many years was the hottest issue on the economic agenda when i was secretary for the first two years, it was the top of my list the last two years and since then, we addressed the problem for the last four years china has reversed itself, intervenin to defend its currency im proud we succeeded by engaging, by bringing the International Community together, and they changed their policy if you look at the last period of time, the facts dont support the claim of currency manipulation the designation isself, the power of it is weakened if you use it in a way that makes it not look serious but with all due respect, mr. Secretary, your actions and conversations didnt make them change their policy. Its just the freefloating rate changed and they want to do maintain a stability chet meant they were propping it up. I think what happened is they made a series of decisions under constant pressure. The pressure was if you want to sit at the table as one of the leaders of the global system, you have to play by the rules. You cant set a level thats going to devalue your currency they went first to raising the point they set, to changing the basket to being a global basket, to allow Market Forces to drive it more than setting of the rate they did intervene to defend, and i think we have to be clear, you know, that we have never criticized for them defending their occurrence is, which is to their disadvantage as a trade matter, but it prevents the valuation that could be destabilizing. Im not sure what happened this week, and frankly neither is anyone else. It may have been removing the defense of the currency and allowing the market to drive it down the point is for the last number of years, even in the treasurys even report, they recognized they topped doing the things they criticized them for doing. It was hurting them to do it we kept telling them its hurting them to do it. The fact they changed was really important. We had a whole list of things we engaged with china on intellectual property is incredibly important opening markets is incredibly important, not subsidizing industries is incredibly important. We should be engaging on that. You started off by saying were at a dangerous moment, now that this has escalated as to what nearly calling it a currency war, what do you mean when youre sitting with other finance minister and world leaders, and theyre thinking about doing things that would talk down or devalue your curren currency, the United States used to have the strongest voice at the table saying dont do that if do you that, it doesnt usually end well, and hand ended well before. I think what japan and europe going to do. Now chinas second day response was to say i think theres a moment where you can reset, but i think the war of words has to be toned down. They were adamant they didnt want to. Im sure they are feeling pressure, you know were feeling it in the farm sector trade wars are not good for either side. That kimsz you engaged its a complicated relationship it has to be rooted in an honest exchange. The context now, if you look at trade disputes, there does seem to be a retritei think th global system has led to stability. Going into a world where everyone is ute for their own without an eye on the whole is a dangerous move we have to Pay Attention to are the benefits of growth being shared are we dealing with domestic issues i think we all have in our economies responsibility for do that, and are others playing fair ive been and like and unfair subsidies. I think it currency issue is an old issue thats been brought back, but it was happily resolved for a number of years. And yell theres bipartisan support. If you look atment democrats trace. Where even joe biden said he wouldnt be on board with the version, so who is defending progrowth free trade . One of the reasons i accepted your invitation is i think those of us who have devoted decades for thinking about these issues, have to be willing to stand up and say what we believe, even if its not popular at the moment there was ever reason in the world to battle china on currency when they were doing things were at best questionable, at worst over the line i think its a mistake to take the Current Situation and look at it through that lens. Im not giving them a clean bill of health for the past im saying Going Forward you have to engage on those issue, hopefully with the World Community with you, not as a one on one, and i think we do better as a country when we lead the world, not disrupt the world. Can someone celebrate being socialist and win the election i think the best appeal will be the appeal to the brought spectrum of views which great on so many issues, and in the democratic party, and across the country, about having an economy that works for people, not just for big corporations, but having a Health Care System that works. I think the label of socialism being applied willy nilly to people, regardless of what they say. You have to look at what people are saying there are very few candidates who want to wear that label. Are you saying joe biden has a better chance of beating President Trump than elizabeth warning . Im saying the label is being used by opponents of democrats more than its being usedby democrats. Jack lew, thank you very much for joining us. A pleasure to be with us. Thank you, mr. Secretary. The s p 500 making its biggest comeback of the year today. Up next well lee at the potential problem that it implies for markets. How do you gauge the greatness of an suv . Is it to carry cargo. Or to carry on a legacy . Its show of strength. Or its sign of intelligence . In crossing harsh terrain. Or breaking new ground . This is the time to get an exceptional offer on the mercedes of your midsummer dreams at the mercedesbenz summer event, going on now. Lease the gla 250 suv for just 329 a month at the mercedesbenz summer event. Mercedesbenz. The best or nothing. [student] my degree from snhu has helped me tremendously. lively music the flexible class schedules allow me to run my catering business and be a mom and parent. Breakthrough at snhu. Edu. On a scale of one to five . Wait. One to five . When it comes to feelings, its more like five million. Theres everything from happy to extremely happy. Theres also angry. Im really angry, clive actually, really angry. Thank you. And seat 36b angry. Youre clive owen. And youre barefoot. Yeah. Theres also apprehension. Regret. Relief. Oh and theres empathy. Ah, i got this in zurich actually, whats the opposite of empathy . But what if your business could understand what your customers are feeling. And then do something about it. You can turn disappointment into gratitude. Clive, you got to try this. I cant im working. Turn problems into opportunities. Thanks drone. Change the future of your business. Change the whole experience. Alright who wants to go again . I do i do i have a really good feeling about this. Welcome back we have a market flash aditi roy has it. Broadcom is reportedly near ago deal to purchase sit m symantec shares are up broadcom shares are relatively flat right now talks reportedly began last week, and our own david faber confirmed that this were in talk that later ended up breaking down its reported to be near a deal back to you guys all right aditi, thanks lyfts shares are pretty volume tiff beating sales expectation. The stock is way off its highing on, its not just barely positive it was up like 8 on the initial earnings new ro can u and booking holdings both jumps after beating the top and bottom lines, and trip adviser and monster beverage is lower. To bes stake a major comeback leslie picket joins us with more. The markets have stabilized today, but one key technical risk is in store for the second half of the year, lockup for the hordes that debuted. Usually about six months after a listing day. It also mean a massive amount of supply could come onto the market pressuring prices even further. A cnbc analysis found that an estimated 215 billion worth of stock will become available for trading, based on the 38 billion worth of stock listed in the u. S. In the first half of the year representing about 15 float on average, on the average ipo. While not all insiders will sell into the lockup, the potentially for this rush of supply already has people nervous some analysts have said the limited float has helped support the stock for the first half of the years, but once it starts unfollowing, that summer demand dynamic could shift. This could also be why ear shifting new ipos push up their timelines to september to beat the stock. Quickly just specifically on one name on lyft, what was the news today that the market wasnt aware of. Its very unique usually companies do abide by that sixmonth window. Lyft had something in their s1 that basically set if the lockup coincides with the blackout period, they actually can move the lockup Expiration Date forward Expiration Date forward instead of backward. Usually you see Companies Delay the lockup expiration, because one the expiration happens you tend to see on average the stock price decline. Now, lyft is saying were actually going to give insiders a chance to cash out earlier rather than later. Is that a bad sign, mike . It shows a little more urgency to let insiders get out. It is not great although it doesnt change the overall picture longer term, which is how much stock will be sold. Presumably they knew it was going to happen. They could easily have known when the blackout period likely was to be. It is a bit sneaky one way or another. Leslie, thank you very much. Up next, we will break down the charts to find out whether disney investo sulbershod worried about the media giants postearnings selloff today lets send it back to mike santoli, final dashboard of the day. Mike. Sara, this is what we call beauty versus beast, which can apply on so many levels right now. This is a look at disney and specifically how disney is valued relative to viacom cbs which is a Big Media Company that will be coming together a dramatic line, which you usually dont see in a relative valuation chart. It is a forward pe of disney and the other two stocks compared to the s p 500. Hey, what happened here . A couple of things the fox merger closed, the acquisition of fox assets closed which was expensive and somewhat dilutive but increased the market cap also the analyst day, the investor day in april where they laid out the directtoconsumer video offering and almost immediately the market revalued the company and declared success probably down the road for disneys approach right here you are seeing exactly the opposite here when it comes to cbs viacom, trading at less than half of the market valuation, people treating these companies as essentially orphaned or doomed in the new world. Whether it is true or not, it is very interesting it is almost game over in the markets view as to disney versus the rest of the industry, guys. Okay. Mike, great stuff. Thanks very much up next, we will have your preview of the trading day ahead. Were pretty different. Were all unique in our own ways. Somos muy diferentes. Muy diferentes. vo verizon knows everyone in your family is different. There are so many of us doing so many different things. vo thats why verizon lets everyone mix and match different unlimited plans. Sebastians the gamer. Sebastian. This is my office. vo and now with more plans, everyone gets what they need without paying for things they dont. New plans start at just 35. The plan is so reasonable, they could stay on for the rest of their lives. Aww, did you get that on camera . Thanks, dad vo the network more people rely on gives you more. Kevin, meet yourkeviner. Kevin Kevin Kevin Kevin Kevin Kevin Kevin kevin kevin trusted advice for life. Kevin, hows your mom . Life well planned. See what a Raymond James Financial Advisor can do for you. When come back to closing bell. Time for some final thoughts mike, in terms of the market turnaround, how important is it the last two days we have seen big intraday reversals in the middle of the session . It is better than the opposite it is betting than closing on the lows and good to see resilience i would look ahead and see what will drive the market besides technicals tomorrow but we have more to celebrate today. Thats what we want to do right now, is actually commemorate today. You know, i think you guys know that baking is one of my passions. Right. Did you bake for us as you are aware. So i think we have something on the way. And so i know it is your this is your dream job for both of you. Yes. But we sort of did the hypothetical, like what if you had to have another job, what might be, you know, a proper post for you. Oh, Federal Reserve, obviously. It is fed chair. Thats true. So you guys can share the cake. Im not sure sara would actually be bank of japan governor over Federal Reserve. I think i have to stick to my own country. Fed chair is pretty good. That makes sense. We considered the imf thing as well. I like where you went all right very powerful job thank you. I only had time to bake one cake, sorry. I understand, mike. We do have Something Else that you happy birthday, sara. You might be pleased to see and happy birthday to you both. What have we got for me im nervous. It is a giant cake. Oh, yes now, i want you to identify the figure whose face you might be on there. It is upside down which is a little tricky. These are amazing yeah. Amazing job. I think you might have gone for i mean it is impossible to guess i dont know who is it . I dont know. I have no idea. Oh, okay. I mean im completely either way, this is my ultimate dream, no question. No question. I am simply here to just say happy birthday. Thank you. It is great to be here every day with you. It is great for us. I cant believe we share everything, including a birthday. I know though mine happened first. It did, just. We should note theres no cake for bill griffeth. Love bill happy birthday, bill griffeth. It is the first day we have both been here, one of us usually takes it off happy birthday to you. Happy birthday to you. We should be thankful that the market didnt continue to tank. So we could have a celebration. The cakes, there was a lot of anxiety about that throughout the day. Now i get why our great team thank you, team, for the cakes was wrapping the jack liu interview earlier. My apologies to jack. We have to have our priorities. A big market day. We had a big day, of course no doubt coming were out of time. Thank you very much for watching. That does it for us fast money begins right now. Live from the Nasdaq Market site overlooking new york citys times square, this is fast money im melissa lee. Your traders on the desk are pete najarian, tim seymour, Karen Finerman and guy adami a wild wednesday on wall street, stocks tumbling early in the session only to stage a monster comeback we will find out what drove the big turnaround we are keeping an eye on shares of lyft. It has been a bumpy ride after session. We have full Team Coverage standing by to break down the big headlines but we begin with the markets roller coaster ride at one point the dow was down 589 points, but then came the turnaround yields started coming off the lows and stocks staged