Transcripts For CNBC Closing Bell 20240712

Unemployment claims last week, but we are seeing sectors most sensitive to economic reopening. Sharply hire American Airlines rilgt now, trade iing up some 45 wilfred. Its actually pared some of those gains. About 43 . Ahead on todays show, tim ryan has a six step plan outlining his companys pledge to support black lives and it goes well beyond cash donations. Hell join us with his message plus, a key question for millions of newly unemployed americans. What happens when federal stimulus programs run out . Lets focus though on the big stories were watching today first of all mike is tracking the Market Action phil lebeau is watching a huge surge for airlines before the pullback and Courtney Reagan covering a battle between landlords and retailers, but mike, lets start with you and the broader markets. Hard to make too much of this headline softness after such a sprint that the market has had take a look at the two year chart the s p has had. We did see today mostly, the nasdaq 100, clicking a new record high then giving way to profit taking so the big cap techs that are down. Rest of the market is holding its own and bank stocks up some 4 31. 30 is the level that was b e basically hit yesterday. Markets stopped on a kim in the afternoon, pulled back a bit todays morning high around 31. 29. Maybe theres rell raevance to s levels or the machines deciding thats where a bit of this burst can cu it had a r similar kind of flatten bing out of the rally then gave way to this period over the summer months, so not to say things have to match up patternwise, but wouldnt be that shocking if we did Something Like that now as different as the circumstances on the ground are. Sentiment, its a bit of a contentious matter here whether people are still bearish or getting more bullish just as national oesuation of active Investment Managers tactical Investment Managers, so they really try to seize on all the different market moves this is their equity exposure. Its come up about 91 on this scale here pretty high on the chart t getting a level where its the upper end of the range however, main street mom and pop investors not really buying it still more bears than bulls in this poll. It has improved. Its more or less 5050, but at this point, still not fully b buyibu buying into it and whether they are trying to position to caps to upside or still cautious i guess the other thing that stands out today is the move in bond yields particularly longerr and the tenyear above the. 8 handle and quite a nice steepening of the curve, which is one of the reasons the banks are rallying so much in light of a falling rest of the market and certainly encouraging macro signal following the ecb move tenyear treasuries released thats been pretty much a high so that measure is a good macro signal the to see how much stocks ran because bond yields have been stagnant even as the market on the equity side gives out. See you soon. Airline stocks soaring as carriers add hundreds of flights to their schedules american air in particular phil with the details. Phil when you look at whats happening with the Airline Stocks, its all in large part because the investor is looking at the schedules for june and july and theyre saying look, if theyre adding flights, they must be anticipating more people will go back in the air and thats why you see the toks moving higher. Overall, delta, united, american, southwest, their schedules in june compared to may with are up 27 and then when you look at july, american out with its july schedule this morning, saying it will only be down 60 compared to the same month a year ago most of the increase is going be because of domestic flights. Heres doug parker talking about the additional flights were starting to add flight bac back not all. Domestic is going to be 55 of what it was, down only 45 so travelers are coming back t thats good news and thats lit a fire under all the Airline Stocks today but one thing to keep if mind, passenger levels the people who the tsa are screening, theyre still down about 80 so it remains to be seen whether or not we see the cust omers to fill these flight. Sxwl up 40 . We also talked about with the civil unrest in america, of course you have the story about the moment that he shared with the Flight Attendant last week that quickly spread viral on social media what did he say about it well he retold the story and essentially, this was a story of him going on a southwest flight because the american flight was booked on the way to panama city and there you see him with the floigt attendanlt and she approached him and they discussed black and white relations in america because of the book he was reading. White fragility and the conversation had an impression on him when he talked about today there are just barriers that exist that are not as evidence to those of us who benefit as they are to those who are, who dont benefit. And you can talk about it, preeappreciate them. So look, i think as ceos, we need to start first, look within our own companies. And make sure were doing everything which i think we want to do. I know we all want to do that. That will make a huge difference we employ millions of people but then to collectively, i think business, needs to Work Together to help you know make change in the country. Doug parker with candid comments not only about american needing to do more, but Corporate America as well when it comes to relations between black employees, white employees and ta conversation that can be painful, but needs to take place. Phil, i couldnt adwrgree mo. Very powerful comments well discuss it later with the pwc chairman i want to pivot back to the share prices, up some 40 . Up 103 from its lows so its doubled, but the thing i guess that stands out is it takes his year to date performance to till down about 40 which then puts it more in line with some of the other airlines and i guess it shows that american had been the one beaten up most aggressively none is less, amazing that just saying a couple more flights coming back online in the next month allows quite such a big rally. Gl the reason that american was beat up more than the other Airline Stocks when they were all down at their lows, three, four weeks ago, maybe a little longer is because of the debt levels people looked and said wow, if theres an airline thats going to struggle to make it, its american because of those debt levels and nobodys saying theyre out of the woods yet because they still have that debt, but the fact they are adding these flights along with other Airlines Adding Flights is giving some investors that perhaps the road might be back faster than anticipated. Zoom video, which could be traded a little bit, down 7 today. Now to the impact of the coronavirus pandemic, Simon Property turning up the on gap suing the company over missed rent payments. So gap to be far a from the only retailer behind on the rent payments, but it is Simon Propertys biggest tenant and they want to get paid so theyre suing gap inc for 66 million in missed rent. Gap in krrkc said it hadnt madt payments and it is just starting to reopen some of those stores in a statement to cnbc, they say we remain committed to working directly with our landlord or agreeable solutions and fair rent terms just as our hundreds of industry and government partners have sat with us in good faith to shape the post ko landscape. Ious are everywhere. Victorias secret, foot locker, their working on negotiating some retailers take one to two months for merchandise, theyre not paying them for about six months some Shopping Center owners have collected as little as quarter, others close o 70 all trickling down to commercial real estate. The retail delean quincy rate is spiking 6. 5 Percentage Points from april to more than 10 in the month of may according to trip commercial real estate data wilf, back to you. Courtney, last week, the pushman and wakefield ceo told us only 30 of his retail tenants right now are paying rent, which just adds to what youve reported there. Im wondering if the courts are likely to side with the Shopping Center owners or with the stores because for gap and so many of o the other tailers, they dont have any cash flow coming in what are they supposed to do exactly they dont have any cash flow coming in, but i dont know if the Shopping Centers have a lot of leverage either in what are they going to do kick them out. Probably arent a lot of people lining up to fill those spaces so i think its going to keep the lawyers busy and its probably going to be to be bought contract by contract. I think all the parties are going to have to come to the table and be honest with their financial situation, market by market i think its probably not going to be a one size fits all solution for the retail across the fleet. Or for what many of these Shopping Centers are willing to accept i know you mentioned the one Real Estate Property that had collected about 30 . Cbl. Some time ago, said they only collected about a quarter, but others have collected up to about 70 of rent. So its going the vary wildly. Many retailers say were in the process of figuring this out a lot of retail Shopping Centers say abatements arent on the table for some of these large guys we expect to get paid but i think this fight is going to drag out a bit weve got just under 50 minutes left of the session. Now down 0. 8 . Over 1 on the nasdaq. Coming up, tim ryan will join us with the detailed plan his company has to address Racial Injustice and its about much more than just monetary donations. Youre watching closing bell on cnbc right now is a time for action. Thats why usaa is giving Payment Relief options to eligible members so they can pay for things like groceries before they worry about their insurance or credit card bills. Discover all the ways were helping members today. Totally against them and now im starting to really investigate and think about whether this would be helpful and let me tell you the reason why. If you are left to selfpolice yourself forever and you fail continuously, then you may earn the roll, you may earn the, you may invite supervision and so what i think we have to do is make sure that companies are on the call that if they dont make an improvement of this area, representation, like the communities and the customers that they have like the world, if they dont have representation, that they will be subject to forced injection of a process to get more representation powerful message yesterday from urs ula burns, the first black female ceo of a fortune 500 company at xerox about how Corporate America needs to step up and put those targets in place to fight Racial Injustice. Pwc establishing a diversity and inclusion officer. Sharing with employees annually and giving all employs one week of paid time off each year to volunteer with nonprofit organizations and a twoyear fellow hip program for employees to help advance Public Policy on this issue joining us now for more is the u. S. Chair, tim ryan what really stood out here was that this wasnt just another sort of thoughts and prayers statement of support and donation to the cause. That youre really putting in place some measures to tackle this issue head on talk about how this came together yes its a pleasure to be here on such an important topic. The reality is seeing people hurt quite a bit over the last week, i heard from over 5,000 employees directly. The emails, texts or conversations, everyone and people are angry theyre upset. Theyre exhausted. And they want action they want a heck of a lot more than just saying we condemn. George floyd or many others and they want to say as we read those emails and as i read them, it was clear that our people wanted a say in how we shape our future and instead of being defensive, were going to listen to our folks and thats why we formed this counsel, which is going to advise us on what anchoctions t take its a major step because theyll tell us the way Going Forward and as you mentioned in your opening comments, sharing our annual plan transparently, the good and bad for improving with our people, thats how well get the sustainable action and thats really what this is about. Its not just having a good speech or word or statement. But moving beyond action that would drive the outcomes she was just talking about and tim, what weve seen in the u. S. Tragically has firsthand experience of the worst outcomes weve sadly witnessed again in the last couple of weeks. What is so disappointing is we are in a moment right now in 2020 with george floyd and many others, but unfortunately we know these killings happened over and over again. In 2018, we lost our associate who was watching tv in his apartment was shot by a Dallas Police officer in 2016, we had shootings in dallas in 2017, we had charlottesville. As a Business Community and as our elected officials, we have to Work Together to get a sustainable solution im proud of how our country is rallying now, but we need a sustainable solution which is a Real Foundation between American Employees who are going to give 30 individuals the opportunity to spend two years working with nonprofits, working Public Policymakers to shape a sustainable solution and were going to invite business ceo action and diversity and inclusion but also give their people the opportunity for fellowship and get an answer for the longterm. Tim, i looked at your Management Team on your website and it is certainly diverse and you have a number of black representatives there. What about your workforce overall in i believe you employ over 275,000 people. How diverse is it . Yeah, so in the last where we had 55,000 people, as you point out, we have one of the most diverse issue of teams, the mos in our history and country, our board is also diverse. Just had a record recruiting year and tomorrow im expected to tell you we have 213 partners and 50 will be women. I want to be clear we have a long way to go which is why 5,000 people reached out to me in the last eight days so im proud of the progress and outcomes its clear to me we have a long way to go as does every company out there. You consult with thousands of Companies Across the country i wonder how you feel theyre doing and in fact, whether or not the coronavirus makes those racial inequalities even worse yeah, so thank you. We have the privilege of working with hundreds of Companies Across the u. S. And we speak with hundreds of them on a weekly basis it is clear that coronavirus has been very challenging for them but whats remarkable to us is how well work is still being performed. Office work, multiknowledgeable. Essential workers are still getting their work done. One of the key messages from ceos is that work will never look the way it did 14 weeks ago and its not going to look the way it does today. Were seeing Many Companies reimagined what the future work looks like and that gives us a massive opportunity to improve diversity in the workplace so we can create better environments, dealing with children, so as we look to see work here imagined with the companies were working with are making it imaginable. We start wd a sound bite from ursula burns talking agent quotas and targets i wonder, tim, if this is something we could eventually build into an audit . A diversity audit and how that would work because you know as she said, selfpolicing these kind of issues for Corporate America has not gotten us that far. Whats clear is accountability measurements play a huge role. In the step weve taken, that going to make the plan available the our people and well present it to them to discuss. We believe that transparency will be a major catalyst to action one of the reasons we want to show that today, we think its a really Good Practice for many organizations, which will then drive more action. I believe most Companies Report accurate data, but an audit will be another way once you get that transparency in the data out there, which is how were going to build trust in society. Tim ryan, thank you for joining us thank you very much keep us posted as we roll out those numbers. Weve got under 40 minutes left to go before the closing bell. Take a look at stocks. Weav were hovering around session lows the first down day in the last five dows down 115 down about 174 a few moments ago. S p 500 down about three quarters of a percent. Financials going strong. Nasdaq down 1 still ahead, online betting markets giving jobz the edge in the 2020 election. Well look ahead to november when we come back. The covid19 pandemic is creating Food Insecurity on a scale not seen in decades. An estimated 54 million americans will struggle with hunger. With 200 food banks and 60,000 meal programs, feeding america is the largest hungerrelief organization in the country. Join Morgan Stanley in supporting feeding america and your local Community Food bank. 35 minutes left of trade ch heres a check on the markets. Dows down about 115 tech getting hit today nasdaq down a percent. Lets check in on some video market movers. Zoom soaring in its nasdaq debut today, mark iing the first tech ipo since the coronavirus pandemic the Company Pricing at 21 per share yesterday after raising the range between 19 and 20. Its trading up 66 to almost 35 a share. Shares of jm smucker falling the company says it expects to see a sales decline over the next year thanks to weakness in its away from home business. Still, they did report a beat o the top and bottom lines the ceo will be on mad money tonight. 6 00 p. M and i mentioned earlier how maybe people were selling zoom video because of the airlines rising but maybe it was a zoom for zoom trade which clearly is taking place today always confusing. I know. Well theres going to be, it bet there are some people who have those two companies confused still ahead, the nasdaq 100 hitting an all time high today with names like apple, microsoft and alphabet now firmly in the green for the year, but theyve slipped since hitting that high. Coming up, well focus on the outlook for apple in particular and other tech names with tech expert tony as we head to break, a check in on bonds. Tenyear about 0. 8 . Thats helping the banks, which remain the best performing sector back in a couple as business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will you can rely on the people and the network of at t. To help keep your business connected. Woi felt completely helpless. Hed online. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Exactly 30 minutes left of the session. Two sectors holding ton to gree. Financials and industrials because of the airlines. Predominantly utilities, health care, all down comfortably more than 1 . Weve softened throughout the session. We were down about 140 points or so on the dow moments ago. Down 100 now 0. 7 on the s p 500. As i said just under 30 minutes left heres whats driving the action the cdc says its very concerned the public isnt taking its advice as the number of u. S. Coronavirus cases begins to rise again. New job loss data continues to be sobering with millions more americans unemployed but we are seeing sectors most sensitive to economic reopening higher at American Airlines, up 45 at the high. Now 41. 5 . Time now to get a cnbc news update with sue. Hi, sue. Hello, everyone heres whats happening at this hour three Minneapolis Police officers are facing up to 40 years in prison after being charged with aiding and abetting in the murder of george floyd. Bail has been set at 1 million apiece Defense Attorneys are seeking reduced bail the attorney for lane says it was that officers fourth day on the job. In michigan, governor wh whitmere and mike duggan joining a protest against the death of george floyd whitmere calling for a united effort for rer form. I think right now in our nation, its critical that we come together. Not just black and brown communities, but everyone who sees the historic inequities that are playing out in a Tipping Point in this country. It is on all of us to be a part of healing, of solving problems and thats why i wanted to be here senator grassley has put on hold some of the trump nominations until the white house explains the termination of the termination nart grassley says the lack of explanation is not good for the presidency or Government Accountability you are up to date ill see you next hour back to you. All right, see you then thank you. Weve got just about half an hour left of trading 27 minutes left. Heres where we stand. Were off session lows weve started to recover a little bit only down 60 points and we tarted the show at the top of the hour, down about 170 s p 500 down half a percent. Also an improvement just in the last few moments and off the lows as well we look at where the strength is continues to be in banks and industrials today. Financials and industrials are confident. After the break, nearly 2 million more americans filing jobless claims make iing this committee more crucial what happens to those workers and the overall economy when the governments additional benefits end in were going to discuss with peter orszag, next. First up is this exquisite bowl of french onion dip. Im going to start the bidding at 5. Thank you, sir. Looking for 6. 6 over there do i hear 7 . 7 in the front 7 going once. Going twice. Sold to the onion lover in the front row next up is lot number 17, a spinach and artichoke dip, beautifully set in a hollowedout loaf of sourdough bread. Dont get mad get e trade and get more than just trading investing. Banking. Guidance. Get e trade and get more than just trading ever somethings gone mogotten into the office. M, i hear you. Feels like theres no barriers between departments now. Servicenow. The smarter way to workflow. I opened a sofi money account and it was the first time that i realized i could be earning interest back on my money. I just discovered sofi, and im an investor with a diversified portfolio. Who am i . i refinanced my Student Loans with sofi because of their low Interest Rates. Thanks sofi for helping us get our money right. Welcome back the United States reporting more than 14,000 new covid19 cases raising concerns that the protests of the death of george floyd and reopening of certain counties are helping spread the illness. Arizona, utah, oregon and texas seeing their daily average cases week over week surge between 50 and 110 , however, daily average cases for West Virginia and illinois are trending down more than 30 overall, they are coming off of much lower number, especially in the rest of the country and nobodys sounding the alarm quite yet in terms of the protests and spread, but we are watch iing those numbers to see where we are in this pandemic. As tom lee pointed out by the middle of this month, its going to be a good test given the delays it takes to manifest in this virus if the protests dont lead to quite a notable pick up, that might be a small positive that can be drawn from it all. We have to wait and see. Though remember those pool parties in the ozarks all over social media, that was over two weeks ago. Havent seen a huge spike in cases there yet, so well see. Well see fingers crossed. S p 500 is down 0. 6 25 minutes left a host of government stimulus programs are set to expire and receive loans on june 30th available through to july 31st the mortgage relief ticking clock. Plus, the Treasury Department and irs announced yesterday that everyone with eligible information on file. What happens when these programs start to dry up . Joining us now, peter orszag, laza lazards ceo of financial advisory, served under president obama. Very good afternoon. Thanks for joining us. Good to be with you its a big debate going on in terms of how quickly people who are currently furloughed will come back the work how much people will suffer when some of those benefits we just mentioned are removed. Where do you stand on that i think this is a looming problem. The economy is going to remain weak for a long period of time three quarters of the impact from the cares act, three quarter of the economic effect from the cares act ends as of september so theres a big hold that would need to be fixed or filled in order to avoid waves of bankruptcy and a lot of unnecessary economic pain. But i think theres also an important question here, which is the cares act basically was preserving the past. It was trying to keep people attached to their current jobs as much possible help out people who are unemployed and so on, theres a question about how much as we continue to provide some additional government assistance, how much we want to be preseving the past versus investing in the future because it would be a shame all we did is try to do kind of a deep freeze on the way things were as opposed to making some investments for a Brighter Future what do you have in mind and what kind of trillions of dollars are we looking at . Well, look, Interest Rates are low, so yes, theres a significant cost involved here, but there are a whole variety of things that we could be using this moment to do to leapfrog and invest in a Brighter Future. Everything from the military if you read the new book the kill chain, there are a whole series of different types of systems that our military should and kocould use. So hardening our infrastructure. You go down the list and there are lots of things that we could be doing now when Interest Rates are low and where we need some jumpstarts to Economic Activity that would be hugely beneficial and we should be debating how much of that we should be doing versus just trying to kind of keep in place exactly what we had before the problem is peter, in a way, the market has come back. Weve seen this incredible rise and so the stimulus debate is kind of quiet right now and weve gone back to partisan bickering and they cant even agree on whether to extend the 600 bump that Unemployment Benefits get so where are we, actually, on any of this . I think people are ignoring what will happen if we dont provide some additional support. In other words, weve got an Unemployment Rate that may well hit 20 tomorrow even with massive Government Intervention you take that government assistance out of the equation an xwroul see a significant air pocket that doesnt mean everythings exactly the way it should be, so you mentioned the Unemployment Benefits Congressional Budget Office came out today with an analysis suggesting that five out of six people receiving the additional benefit receive more income with the benefit than at their job. That probably needs to be adjusted but we absolutely need to be extending assistance of some form even if we modify it somewhat and redesign it a bit peter, i totally get the argument that Interest Rates are low and we should seize that opportunity to spend on longterm investment programs and infrastructure and like. Where do you u stand on the argument as to whether much, much higher debt levels will come back to bite one day in i mean, are you suggesting that if we do those programs, we should issue debt thats super long in its maturity or is that not even necessary . Well i think right now, the higher debt levels are not our biggest concern or problem, but this is also why it makes a lot, if were going to be running up the debt and trying to both benefit the economy now but also generate longer Term Economic effects, its much better to be spending the money on things that have those longterm benefits as opposed to just Cash Payments that are, that also raise the debt but dont have that longTerm Economic return thats one of the other reasons for trying to think of this as a combination of shortterm assistance, but also investment for the future the more we do that, the less we should worry about, even if you are worried, the less we should worry about the debt effect because theres an economic asset associated with that we were just showing the results of a poll that cnbc has with change. Org about this idea of the return to work bonus. In other words, using the extra relief money to incentivisenty e people to return to work 70 of republicans we found would prefer to get that kind of bonus than the bonus remaining on unemployment, 90 of democrats would rather get the unemployment money which makes more sense here for the economy were looking at well we need to be doing a bit of both and this is why the design of that initial unemployment benefit is off a bit. You dont want to be providing much higher benefits while unemployed than your earnings while on the job so the first step before we even get to those harder questions, the first step is lets extend the expanded Unemployment Benefits but adjust the design so that five out of six people are receiving unemployment benefit for their earnings that doesnt make that much sense. But the pirs most important thing is to extend something because i dont care what kind of provisions you put in place, t there are going to be a lot of Unemployed People at the end of july its going to be a lot of hardship for those families and a negative for the economy because again, it will create that air pocket that we were talk iing about earlier. That poll was change research, not change. Org thank you. We appreciate the insight. Thanks for having me. Up next, the lights come back on in las vegas. And ebay pops on an upbeat outlook. Dows down 74 points and weve got 17 minutes left of trade you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. 13 minutes left in the trading day. Joining us now for our last chance trade is stephanie link welcome back what are you choosing today . Hi. So Stanley Black and decker, one of my favorites at this moment right now. A play on two important themes its a stay at home stock. Also a reopen stock. Its a stay at home stock because 70 of total revenues come from tools and storage and we know theyll benefit from the diy trend. 35 of their business is home depot and lowes so thats a theme i like the its also a reopen stock because they sell products to really beaten down industries, energy, manufacturing and auto so i think as the economy recovers, these end markets will recover for them they have excellent Product Innovation digital is everywhere. I think thats going to lead the market share gains when we come back and i think theyll be able to see a normalized organic plus they have comparisons coming up. They had a restructuring announcement in april. They expect to see a billion in cost saves so that should help as well. Trades up 16 types earnings. Next years are going to thrgro2 to 30 up about 3 today weve got 11 and a half minutes and were now in the closing bell market zone commercial free coverage of all the action heading into the close. Were down 0. 6 on the s p 17 points on the dow weve bounced quite nicely in the last 20 minutes. Which was down 187 on the dow and lets kick it off with the broader markets. Financial, industrials, materials, utilities and real estate at the bottom and mike, we saw a nice bounce sort of this morning in the futures markets when we got the ecb news then its going to be quite choppy throughout the rest of the day, but i guess all in perspective were up a couple of percent for the week up 38 and over the past 58 trading days hard to get too excited. Everyone gets excited about this rotation and everyone seems to embrace the idea ta were going to rotate from the big familiar growth stocks. Well this is kind of what could happen to the headline index if that dynamic really starts to take hold. You have the nasdaq 100 tag almost to the penny then pull back by almost 1 . Seems like the rally yesterday was a little bit of a grab, a chase, and maybe in the shortterm and yet right now, the avrnl stock is basically flattish in the market so that rotational action can be constructive without it helping the big cap indexes. And we are seeing a bit of that continue today. Financials, industrials and now materials popping green. Stephanie, is that an investment theme that youve been par it pating in . Yeah. Ive been saying if you want to have f a bit of a barbell since march, i think you definitely want to have some technology, health care, some quality growth, secular growth, but you wanted to have some cyclical ideas because they were beaten down hard. Theyre still down hard. Some down 20, 30, 40 . So thats where youre going to get the pop if you believe youre going to see the economy rebound. I think this is all about ly quid ty, guys. Weve talked about i the ecb on board again and adding to their program now. Global, fiscal and monetary policies are 27 u. S. Is now at 44 of gdp. This is how long and potential, a huge potential tail wind for risk on stocks but you have the reopenings happening and it looks like its successful so far. Well keep an eye on that and the economics data is not good, but its getting incrementally better and thats important. Plus youre hearing Companies Like ebay and general moe tors saying things are absolutely opening up in may versus april so therefore youve seen the worst behind us and all these policy moves can help stocks Going Forward, so yeah, i think that does help the value trade at this point. Well speaking of reopening, las vegas taking a major step in the path forward from the pandemic today casinos opening their doors on the strip with extra precautions in place Contessa Brewer has been monitoring that story for us hi there. Yeah, considering all that las vegas has been through in the last few months, Strong Demand surprised a lot of people. The doors opened to enthusiastic crowds, temperatures checked and screened the dealers are decked out in their ppe. And analysts think its a lot of pent up demand investors though seem bullish. Take a look at shares this week of mgm up 25 look at wynn and eldorado. Moodys is sour on these stocks though forecasting a 70 drop in industry earnings compared to 2019 because of those capacity caps and because of hits to Discretionary Income through high unemployment. Wilf i have a question, contessa, on the safety precautions. Yes can they sterilize slot machines in between uses and cards . How do they deal with those high touch activities theyre doing a lot of increased sanitizing of the slot machines and remember, theyre shutting off certain machines so they can create social distance between the slot machines while they are accommodating players there. The cards get turned over more frequently and the chips get sanitized more often as well the slot machines wont be the problem because youre doing that on your own it would be the crowding around the tables or bars that would presumably lead to the most contact. And those are limited yeah theyre not let iting in crowds like they used to so people are going to have more elbow room. Sounds almost ideal, but almost i guess the operative word thank you very much for that lets get to a few analyst calls on the Banks Deutsche Bank downgrading to hold saying while the stock has been the best performing bank among peer, a lot of good news is priced ain and Deutsche Bank upgrading wells fargo to buy saying it believes most risks for the stock have been priced in meanwhile, barren suggests it might be time to look at value opportunities and highlighted three deep plays citigroup, morgan tstanley and Goldman Sachs topping that list for them i think the interesting thing is that ooempb though Morgan Stanley and Goldman Sachs are down 5 and 7 respectively year to date of the big cap banks on a price to book multiple, theyre still pretty cheap because of course the investment banks are cheaper on that multiple compared to some of the commercial banks so it fits that deep value play in the way that barren books says, but you can understand the Deutsche Bank call if youre just looking at relative percentage performance year to date that selling goldman and buying wells fargo would maybe sense. Still down 44 year to date. I think the segment was made for me and you mike and sara, you can go home first and foremost, i own Morgan Stanley i prefer it over Goldman Sachs theyre kind of trading at the same valuations but you have to make a bet on whether you think this e trade deal is a big one for Morgan Stanley, which i do and if you like Goldman Sachs, you have to think theyre getting into consumer businesses so i would rather have e trade. More Wealth Management and thats why i like morgan wells, you know this is, i have totally understand this callment i mean wells is down 44 year to date and as you mentioned, goldman down about 5, so the valuations are not that crazy. I mean wells is at. 76 times book and goldman at. 9 so its not huge, but i do like the story of wells because of you have the new ceo, the turn around that the ceo can reduce a 68 official efficiency ratio. Peaking even 65. He wants to get it down to probably 60. Thats huge ultimately its not going to come overnight but i think that you also have a catalyst with the asset cap getting removed at some point so theres a lot to think especially with the stock down so much and capital levels still strong you guys have reached your max on banks im going to move on to ebay shares now sharply higher after the Company Raised guidance. Diedra with a details. Hey, sara ebay paring earlier gains, but still up more than 5 as we head into the close the company upped its q2 and full year earnings and Revenue Growth and that all important gmv gross merchandise volume met rirk rick, which was expected to decline for a second Straight Year previously. Now todays surge brings ebays gains to about 35 and that pon par with amazon and closer to some other e commerce plays like sho shop shop shopify, etsy and wayfair. It should be surging as it surges a spark in online shopping, but this is a bit of catch up here for ebay back to you. Thank you mike, encouraging for broader industry, consume r spending or an e ebay story . Its largely i think an ebay story and obviously e commerce it was sort of an ongoing turn around at e bay. Also, its a cheap stock so its unlike the other e commerce plays where you have to hold your nose. Its been dead money for so long and was considered to be nonoperating for so long that it still has a low valuation when you think it was good or bad for an e Commerce Company seems to be benefitting from this repricing higher because it had the potential to do that it was obviously you know, the value name in e commerce mike, weve just got a little over two minutes left of trading. Were seeing a pretty nice recovery here. The dow now only down 15 points, could go positive. Whats driving the rebound its unclear if theres anything in particular its been these kind of waves of rotation going through the ma markets going in and out of the big cap groups but the volume split has been positive all day the average stock in the market has been outperforming so you have positive breadth. About 31 there. Then take a look at the equal weighted s p 500 against the market cap week to date. Sill outperforming, so it tells you theres rotation from the megacaps and Everything Else volatility index this morning, finally it started to give way its unchanged now did trade below 25 theres starting to be an unclinching action as the market has made a new high, but here we go not sure if at this point the overall indexes maybe are going to start to hit a little bit of a soft ceiling because theyve come so far in a hurry just under one minute the dow only fractionally negative, down what, 14 points, having been down at the low 187 points s p down 0. 4 . Nasdaq down 0. 75 . Financials, industrials, materials, the three positive sector banks in particular leading the way. The bank index up about 3. 8 utilities, real estate, both down close to 2 today weve got a weak dollar down about half a percent today the euro particular lly strong today even though the ecb announced a bigger expansion of its ambulance sheet. Gold rallying again. Again, expansion of Balance Sheet plays into that. The dow has just turned positive as the bell goes it is up by two basis points or five points. S p 500 now down only a third of one percent and nasdaq down 0. 7 the russell pushing to go positive at the close but till fractionally negative by one basis point. The doe at close up 13 pints or 0 0. 05 . Not a lot, but quite a comeback that has marked just in the last hour of trade we were down almost 200 about an our ago. Welcome back take a look at how we finished up the day on wall street. The dow actually closing higher. Just barely. 12 points. Boeing leading a charge and a nice recovery there in the final hour of trade, dow is up more than 3 now r for the week s p 500 did break its fourday win streak and close lower but there were some pockets of strength that we noted like the banks and the airlines the three biggest gainers on the s p today, american air, united and delta. The nasdaq closing down about. 7 . Big tech cap trade did take a step back. That weighed on the nasdaq almost all day long. The russell 2000 closed pretty much unchanged investors are awaiting a trio of big earning from gap, broad com and slack. Well bring you results as soon as they are out. Plus, shipments are expected to fall a record 12 this fall, plus how that will impact the tech giants stock joining us to talk about the market today, stephanie link and Mohamed Elerian joins the conversation from allianz. A pretty nice recovery and the dow has gone for four days in a row of gains and importantly, when the s p took a tep back, it held on to recent gains, which has confounded a lot of people looking at the Economic Data and some of the risks that are out there. For the most part, it did it basically retained most of the upside i dont know if you want to make too much of the gyrations during the day. Just seems as if everyone is asking the question of has the reopening momentum been fully e reflected in these laggard groups thask leading the way are people getting over excited about the theme and what does it mean for the big stocks that drive the index and got us here. Yields get going higher again. Dollar down again, so it seeped as if there was this appetite for risk was still there credit seems fine. Just a matter of whether the indexes maybe stretched and of course we have a big jobs number tomorrow i dont know what the market wants to trade off of with regard to that number, but todays jobless claims data inside and on the headline wasnt actually that encouraging relative to some recent ones i wondered what you made of the ecb announcement this morning. Clearly increasing the bond by more than consensus. Ga gauge how big that program is relative to the u. S. And whether you knefeel things are fully prd in it was interesting to see a rally on the news and that faded quickly for both european and u. S. Stocks. So what didnt fade is the narrowing of spreads under peripherals. Italy, spain and that reflects what the market believes with, which is that the ecb is all in. And the ecb by almost doubling its focus program is telling you i dont care what the German Constitutional Court believes, i am going to continue doing what im doing, but importantly, and thats where the impact op the equity markets are r more muted, consumer said were not going to high yield unlike what the fed did. And its that refusal to go into high yield, which i think is the right call, that told equities be careful, youre not going to get the support of the ecb further down in the capital. Why is that the right call . Look what the fed has done when it comes to the credit market and the appetite for risk that people are take iing now in the u. S. Corporate bond market, the amount of issuance that we have seen and the ability for Big Corporation no matter how theyre rated, to raise money right now during a the tough time you said the key phrase there. No matter how theyre rated. When i see a central bank taking on default risk and believe it or not, the fed already has names in its portfolio because it bought the index. J. C. Penny, hertz, Niemann Marcus theyre all in bruf sankruptcy procedures so the minute you take on default risk by central bank, you start to sacrifice benefits for the longer term benefits we as a country, one of our secrets is we have a market based system and that market based system relies on price signal on markets being able to mobilize resources and allocate them in an efficient manner. The more you distort a capital structure, the more you distort pricing, the more you lose whats special about us so we end up in extreme zombie markets. Thats why im hesitant to say the move into high yield was a good one weve seen a reaction in the euro today the u. S. Dollar index down half a percent. Down 2. 5 almost over the quarter the last couple of months s. Is th is that a big positive tr stocks or more of a market correlations risk on risk off type thing in the moment well, i do think its positive lets watch what how the dollar does react thats one of the key things that i am watching because it will help Multinational Companies and the earnings copper has been outperforming xwo gold and the yield curve is steepening those signal risk on and better growth and theyre saying you want to own more cyclicals and less defensives. Its very, very important. In addition, im watching the Economic Data and listening to what companies have to say but the trends are interesting and i think people are still skeptical. Zpl optiozbl options trade are betting on a surge in volatility around the 2020 election as joe biden pulls ahead of trump, as President Trump as the likely winner of f the president ial race in the betting markets yet despite the slight pullback, stocks keep drifting higher. Mike, youve been looking at this and its clear theres a bit of election risk tarting to be priced in, but its not dragging down stocks as of yet not yet it seems as if on a daytoday basis, its a lit early for the market to be tacking in one direction. A loft the betting markets, oddsmaking outfits are showing it to be somewhat closer so the henling of f volatility risk around the election is kind of hedging the sus spence or idea there could be a close election or some surprise its not clear in any Election Year that the market ever particularly knows what it truly wants longterm out of an election its just about most elections in america, about 48 of or 49 of people end up disappointed and you therefore have the potential for some kind of reaction after the fact, but it seems as if right now, the market has other bigger issues to contend with before it w worries about exactly whos going to be the president january 20th of next year. Is it possible to make an investment thesis based around how these polls are going and how the Options Market is trading around who might be president . The bigger issues and thats whats dominating. If reopenings remain healthy because the market has embraced the notion on a healthy reopening accelerating and we are going to get lot of data over the next two weeks you know weve had a Massive National experiment accelerated with the protests. We now have very clear contrast between where you had konz tr e concentration of people and where you didnt so well have data to asasess whether or not e can have a healthy reopening dont estimate that this is a win, win mind set for the marketplace. You still win if you dont because the fed will come in so i think thats really important that these are the go big issues i think the election is a third. You said many weeks ago dont fight the fed and clearly, that was correct, the markets have rallied, but given the amount we have rallied, do we need the see ongoing strong reopening data . Is there an element of that now fully priced in . I think a lot is priced in for sure just given the moves, but again if you look at the stocks that have f lagged, the sectors that have lagged, cyclicals, economically sensitive names, some are still down 20, 30, 40 on the year and so if you b kobt to get support in terms of the economy doing better incrementally i mean 1. 9 million issued claims is terrible but better than the nine million from a couple of month ago so were going to watch that look at the isms, pmis mortgage applications. Theyre up seven weeks in a row so i think you have to Pay Attention to the data and then more importantly, you have listen to what some of these companies are saying and i think what theyre saying is yeah, may did improve from april can we keep the momentum going and thats going to depend on whether the going back to work and the reopening trade continues to show okay evidence. Better evidence. Yeah. Except tomorrow is jobs report is set to be a doozy lets get another check on how the airlines finished the day because it was a wild session. They were the three biggest winners in the s p 500 american air finished higher by 41 and a quarter percent on the day after seeing demand for domestic flights steph, where are you on this group . Its been quite a comeback oh, gosh. This is one cyclical group that i dont really plan to be honest with you i never like their Balance Sheets this is the extreme of cyclicality. Then you look at Something Like an American Airlines and they have 35 short interest. So i mean i think that you can trade these names certainly. Thats not my game but i do own boeing and thats the one that i am actually more encouraged about especially now that the 737 max production has restarted we have to still get certification but i think thats your next catalyst as well that bond deal was really the game changer though for me because they wouldnt have to come into the market and thinking people were nervous they were going to have to do something extreme so they didnt so im sticking with boeing. I have plenty of other cyclicals to be buying this is not a group i would do you got exposure there with boeing your bottom line feels like youre saying stick with the market because the fed is all in. Is that your advice to investors . First, im so happy that im not managing other peoples money because i wouldnt know what to do i would be so torn on the one hand, concerns about fundamentals i think that we are getting ahead of the reopenings and the airlines, an exam ol of that but on the other hand, respecting the feds support so im really glad i dont have to make that decision. For my own position, i have liked what i call the higher eququality names, the one that o well big tech was an example. I just dont want to bet on moral hazard thats my own preference i respect people who say not just follow the fed, which ill do all day long, but lead the fed because what the market has been doing its been leading the fed in terms of how much support theyre going to get from that central bank thank you both very much for joining us great to see you stephanie will be staying with us to break down some earnings results. Still ahead, gap and broadcome expected to report earnings coming up. This moment. This moment right now. This is our commencement. No, well not get a diploma or a degree of any kind. But we are entering a new chapter in our lives. Our confidence is shaken; our hearts cracked. The kind of a crack that comes from the loss of a job; from life plans falling apart. We didnt ask for it. But we are rising to meet it. And how far weve come isnt even close to how far we can go. We just have to remember how patient we were. How strong we can be. how strong you can be. and remember this; theres a crack in everything for a reason. How else can the light get in . Tomorrow starts today. The fraflt was for 188 thats 50 year over year growth there. The loss per share was smaller than expected. Expected to be six cents, came in at two cents and the gliuide look reasonable for the future quarters, q2 at 206 million revenue. The forecast was for 200 and for the full year, forecasting 855 to 870 where as expectation was 860 million in terms of revenue, so maybe that full year guide given the run rate in the First Quarter perhaps could have been a bit bigger and that might be what its reacting to. In terms of customers, were seeing now 122,000 paid customers at the end of the last quarter. It was 110,000 and 963 spending more than 100,000 annually at the end of the prior quarter it was 893 but either way, as you can see, the stocks down about 13 and slacks ceo will discuss those results tomorrow morning and diedra is able to join us with more color on perhaps why the stock the trading lower after hours. I think that full year guidance is a part of it but i think whats been really key to investors is its momentum, its adding paid users. Remember this is a stock up 40 in the last month alone. 70 year the date so expectations were extremely high and the company said that it added 12,000 net new paid customers. Remember towards the end of march, the ceo in a tweet storm said they had added 9,000 paid customers with a month left in the quarter. At least some analysts were expecting a bigger number here hoping the pace would keep up perhaps 13,000 new paid customers or more, so 12,000 new paid customers is a a little bit less than expected and the key surrounding these work from home plays, we saw this earlier in the week with zoom, is whether it can keep up this momentum whether these work from home gains are sustainablesustainabl. In the case of zoom, it satisfied investors, at least not a big drawback in the share price but with slack down nearly 12 , perhaps theres a little disappointment these numbers werent better on the pay customers and full year guidance thanks for that steph, where do you stand on this as d points out, its had a phenomenal run year to date. Yeah, its up 123 from the lows of march so its really very High Expectations and i think diedras spot on in terms of f new customers and the additions there. 9,000 people got all excited about and you know it was up from the 7,000 that the company had released like a month beforehand, so we all thought the numbers would be extraordinary. But lets just keep this in perspective. They grew 22,000 new customers theyll do 17,000 in the first half of this year it looks like so i think its about expectations but the growth is till there this is classic work from home beneficiary. Let the dust settle. Not my kind of name, but if you want growth, they got it and a duopoly in the business. Butter field saying the longterm impact of working from home will have what he calls a generational magnitude impact on our lives. Looking forward to that interview tomorrow so despite todays pause, weve seen a rapid rally back from the march lows for more, lets get to ross. The u. S. Versus the rest of the world. This is a week where we also saw stimulus flowing from germany and the ecb stepping up in a bigger way than expected why do you want to be in the u. S. Versus other markets around the world . Well, i think it really comes down to what do you want to bet on and absolutely europes had a great week i think a lot of investors had an announcement today and its not that theyre not tactical opportunities in europe but were still in a period to state the obvious where theres a lot of economic uncertainty. Were dealing with a very uneven recovery and in that environment, looking at the next six to nine months, one of the scenes we want to lever to isty. Profitability. Low leverage, earnings con sis ensy e you see more exposure in the u. S. Market than any other place in the world russ, again, we saw a significant announcement by central bank today increasing a Balance Sheet. Does gold become attractive given all of those huge monetary stimulus plans that have happen nd the last couple of months i think it does and it depend depends on what you want i know investors think about gold as an inflation hedge i think the evidence on that is mixed. When we think about gold in the portfolio, we think of it as a risk mitt gantt. In order, something you own thats going to be negatively correlated with stocks thats going to help manage the volatility and portfolio having said that, the problem with gold is it doesnt always work in periods like 2013 during the temper tantrum, it worked against you. When it works is when rates are low, particularly real inflation adjusted rates thats the world were in today where Central Banks are keeping nominal rates at zero. Historically, thats been a Good Environment for gold are you concerned at all that the valuation on the u. S. Market is now the highest its been in years with so many Major Economic and earnings risks ahead of us . Its consideration and i think like everybody else, that we have been surprised by the magnitude, the speed of this rally. Its hard to remember how dire things looked a few months ago having said that, i think that the valuations look more reasonable when you think about looking at longterm earnings, obviously, any number you plug in for 2020, 21, is going the mixed stock expenses if you look at longterm cash flows, particularly when you adjust for a low discount rate, in other words, zero policy rates where we have today, a month and a half period of time, we do think this equities will be reasonably valued in this environment and that theyre probably going to be higher six to 12 months from now. Russ, as weather beve beedi theres been a big rotation into value. One has banks in the u. S. But youre more caution on those caution on those names, is that right . We are. Were underwaits financials but a lot of it has to do with banks that sounded the u. S a lot of our underweight is in places like australia, canada, europe there are banks in the u. S. We like so i wouldnt abandon the sector, but yes. If you think about it, we have expectations for recovery. But we dont think its going to be a v shaped recovery we think were in a low rate environment for a long period of time and were also in an environment where the yield curve is relatively flat and thats historically, a tough virnlt for the banks particularly banks in europe where not only is the yield curve flat, good parts of it are underwater russ. Thanks so much for joining us. Much appreciate it thank you weve got two retailers out with earnings. Gap and rh courtney so lets start with the gap for the First Quarter, the gap is reporting a loss of 2. 51 its not clear if this is comparable with analysts estimates. Revenues did fall shy. The street was looking for 2. 3 billion. No comparable numbers but theyre getting numbers, down 50 net sales. Old navy down 42 . Banana republic, down 40 and a athh athhelt down online sales up 40 in april and 100 in may. Gross margin of just 12. 7 gap shares are under pressure after theyve had a run here and we know that Simon Property group is suing them for 66 million in owed rent lets move on to rh. The furniture seller, which had a Strong Quarter putting up consensus of a doll r lar. The street was looking for 81 cents. Revenues up 483 million, also stronger than expegt cexpected they talk about a strong rebound in the second quarter. About 75 of galleries, 68 of outlets and 50 of restaurants rh does expect that the Business Trends will continue to improve and said the improved week over week starting in march throughout the quarter shares of rh are just higher by 2 but also had quite a run of about 75 over the course of just the last b month. Back to you. Courtney, thank you mike, we get a snapshot here of winners and losers in retail on gap, i mean if youre hook g i looking for r good news, online sales were up but down for gap and banana republic, a nonessential store that faced big challenges even before the pandemic yeah, you almost cant really use what theyve reported as a guide to what this facompany is worth, frankly and those percentage gains in e commerce sales are not absolute numbers we dont really know to xa degree its off set in dollar terms what theyve lost in physical stores, so this is one of those stocks that was just caught up in this mad chase for for reopening plays. It closed don friday below 9 a share. Theyre just kind of getting whipped around based on sort of the latest zeal for how aggressive you want to be in pricing in a more full reopening. Weve got broadcom numbers out as well. Josh lipton has them for us. Josh so wilf, broadcoms reporting q2 5. 14 revenue, 5. 74 billion. Last year at 5. 69 billion. Outlook, they provide quarterly guidance here. Q3, theyre looking for revenue of 5. 75 billion. Plus or minus 150 billion. In terms of their segments, semiconductor solutions, 4. 03 billion. Thats Wireless Communications storage and industrial other big segment is infrastructure software. 1. 7 billion. Thats in line with what analysts were looking for. Mostly enterprise. That stock had rallied up hard about 100 since its march low gl steph, where do you stand on this one i own it, actually. I still think its a really good value. At 14 times with a 4. 25 yield what i want to hear and see is just the Free Cash Flow because theyre levered at three times or at least at the end of last quarter, thats where theyre at so i want to see what the Free Cash Flow is i think expectation is fairly realistic because they have a good piece of the business in data terror, networking and infrastructure the wireless obviously is struggling and they had supply chain issues, too, but i like a lot of their business mix and lets see what they have to say about cash on the call steph, thanks so much for that and thanks for joining us as always thank you coming up, mike looks at how apple shares tend to perform in the months leading up to the lease of a new iphone. And we will ask a top rated analyst on wall street about why hes seeing huge Growth Potential for the apple watch and you can always watch or e bcpp to us live on the go on thcn awell be right back. Ves f, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will you can rely on the people and the network of at t. To help keep your business connected. Ever somethings gone mogotten into the office. M, i hear you. Feels like theres no barriers between departments now. Servicenow. The smarter way to workflow. Welcome back apple expected the launch its newest iphone in september as it does every year. Over to mike whos been look in at apples performance in these months leading up to an iphone launch yeah, this is a fun composite chart from Ned Davis Research shows apple stock relative to the s p 500 in the months surrounding a launch so the zero is the date of lawn. This is more than a dozen years worth of apple relative performance kind of bundled into one chart. What it shows you in the three months we are now three months before the expected launch in september. In the three months before, it has on average outperformed the s p by about ten points after which it kind of goes back before resuming. Its not obviously like this every year but it just shows you the general direction of the win when a launch is coming into play and so obviously i think its monday literally, june 8th, that would be three months ahead. Interesting for the atmospherics thank you for that. Lets stick with apple among the megacap Tech Companies outperforming, its up about 10 . New data says shipments could fall by 11. 9 in 2020 but our guest says the real Growth Opportunity from apple could be from its watch joining us now, tony great the see you as always. Before we get to the positive view on the watch, the statistic was globally in light of the pandemic how much on an issue is that for apple . Look, i dont think, i think thats relatively realistic. All Technology Spending is correlated with gdp and you know we expect global bgt could be town 5 or 10 this year. Thats worse than financial crisis during the financial crisis, we saw smart phones back then pcs would be a good analogy, fall 15 or 20 and so having a double digit decline in smart phones is not unrealistic. From the beginning of the year until right now, weve lowered our iphone estimate by about 13 . Its 13 lower than it was at the start of the year for physical 20. I think thats largely baked in the numbers. Investors realize that and as mike was pointingout with the chart before, they tend to be anticipatory particularly in advance of new product cycles. Why the watch, tony why are you so excited about the watch in particular . Doesnt make up a huge chunk of apples business and hasnt really been at least that we know of, a high growth area. So why now yeah, look, the watch, youre right. Its only about 4 of f apples revenues and so you know, really hasnt been a significant contributor. And i think our belief is that you know the watch actually could be something significant if it was repurposed and recast as a focused Health Monitoring device right now, the watch is an expensive appendage to the iphone its not that e is cy to use particularly for people who arent tech savvy, particularly perhaps for older people who arent as tech sa vi and whose eyesight isnt as good youre seeing all these health mettics now being built boot watch and forthcoming in other wearables, so right now, the watch can do detection, it can measure your heart rate and ecg but theres technologies to look at blood pressure. Blood oxygen saturation level. I think with the pandemic, people are becoming much more sensitive to their own health. And key metrics that might inform them in this case, whether they might have coronavirus, but might inform them about a medical condition and particularly with tell medicine becoming more important or a larger part of medicine Going Forward, we think theres an opportunity for apple to really take this technology and build a simple, less expensive purpose focused which would be almost like a doctor on your wrist. A Health Monitoring device and we think the Addressable Market would be hundreds of millions of units as opposed to 25 million that apple might sell today. Tony, i wanted to ask you what you think about the Balance Sheet and cash balance clearly, theres a search for yield at the moment likely to be there for the next five years sor o. Should they pivot more towards a regular, bigger dividend you know, apple is returning more than 100 of its cash flow generation right now and its paying you know, depending on where the stock level is, a dividend thats a little under 2 and a little under the s p. But it is returning more than 100 of its Free Cash Flow and thats coming in the form of share buybacks and its buying back between 5 to 7 of its shares per year. Theres a debate among investors about which would they prefer. Would they prefer a dividend or would they prefer a Share Repurchases and apple is weighted more towards Share Repurchases and we believe that you know if you buy back 5 to 7 of your shares per year, that boosts your eps by 5 to 7 per year and we think through a combination of Services Growth and buybacks, apple is grow double digits and along with a yield thats 1. 5 or 2 r, we think thats attractive. Clearly, there are yield focused investors that would prefer more of the cash comes in the form of a dividend rather than yield, but the important thing is that cash is coming back just happens to be in the buyback so tony, wrap it up for us. Where are you on the stock right now . Believe your target is a lot lower than the price that we are right now and what do you think will be the key driver into next earnings or product release . Yeah, so look, the markets run up a lot we dont change our target a lot. We last said it was above the per vailing price of apple stock so we are modestly positive on the name on one hand, the stock has had a tremendous run on the other hand, the Business Model is proving to be resilient, r particularly in a time of stress we think earnings will be flat so on balance, were constructive on apple. Theres a cyclicality to how the stock trades and we do have the big product cycle coming in either september, october, with 5g and because iphones were not great last year and because they were not great this year because of economic weakness, we think theres a potential to be very strong iphone sales in 21 and or 22 and the market largely anticipates that and will continue to. So we think the stock will continue to farewell ovir well e next several months. Then you need to raise your price target then from 285 again, we dont do it every week, so all in due course tony, thank you for joining us thanks for having me. Good to dauk to you coming u up, well squ the founder and ceo of walker and company which was acquired by proctor and gamble, about what companies and leaders can do beyond cash donations to address inequality in america and heres a look at the biggest movers most lower slack down 16 rh is the only winner. Restoration hardware closing bell will be right back. Welcome back time for a news update with sue. Hello, everyone a study that fueled concerns about hydroxychloroquine has been retracted by the journal that push lisched it he says hes not sure the data is accurate. Some trials of the drug as a covid19 were canceled after the study claimed patients used it and had a higher mortality rate and increased heart problems just a short time ago, a georgia judge ruled theres probably cause for the case against three white men in the case of ahmaud ar bury Bernie Madoff will not be released early a federal judge denied the question due to terminal Kidney Disease and the nba will resume its season on july 22nd with 22 teams in orlando, florida. The nhl playoffs alreawill be bo seven series under the leagues return to play format. Youre up to date. Back to you. Sue, thank you. Up next, fortune put him on their list of 50 of the worlds greatest leaders hes been usa todays person of the yearment well speak to Tristin Walker, the ceo of walker and company, which was bought by p and g and is making big trids to help people of color in the workplace and tonight at 7 00 p. M. , Chinese Students are cutting off a vital revenue stream what will it mean for colleges this fall and beyond plus, wall streets disconnect and the nba set to return. What will the rest of the season actually look like its all tonight at 7 00 p. M. With scott wapnerment well be right back on closing bell woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Americans across the country continue to protest the death of george floyd, demanding change from government and from corporations corporations answering that call in different ways, proctor and gamble bable announced this week its launching a fund with 5 million to help efforts that fight for justice and making more equitable they acquired walker and company in 2018. A health and Beauty Company focused specifically on people of color founded by Tristin Walker the ceo. Hes also on the board of foot locker and has been named to 50 greatest leaders and joins us now. The its great to see you m thank you for joining us as you see, do you see all these Companies Step up with statements, linked in posts, in many examples, what are your thoughts does that really move the needle on this issue . I think it does one thing im looking for in addition to donating is frequents. Are they acknowledging the trauma were hurting and angry x but its important to recognize heres a community thats experienced 400 plus years of physical and Emotional Trauma and that story needs to continue to be told so it can be fixed. Secondly, are they really mod ling the way is their statement in line with thevaluesthat they purport to their employees and consumers . And then third and this is what i tell my team, are they active. Its not enough to just do the donation whats your follow up look like . This pandemic has persisted and likely will persist and its important we step out and lead with our own action. What are you observations when we think about the Investment Community both equity, Venture Capital and bigger Public Investment vehicles what from your own experience in your own company in growing it were the Biggest Challenges you faced that youd like to see rectified for companies Going Forward . Yeah, i think that they should be a recognition of the power that folks of color have in the world the cultural influence the purchasing and buying power and these investors, these boards, are doing to recognize that impact. And because you know, if we can kind of economically help liberate this community, that helps this path forward in a really significant way i was one of the fortunate ones, but my story can still and it should should and were all dduo bound to make that stick you come from Silicon Valley from the likes of andreas horowitz how big is that opportunity gap and how hard is that for a black Business Owner to raise money right now . From Venture Capital out west . Yeah, its been tough and it continues to be. You know i think providing access now to Economic Empowerment for this audience is the greatest Economic Opportunity of my lifetime and when i think about black consumers, were the most cull can churly influenced demographic on the planet. Our purchasing power, up to a trillion doll alreadies in purchasing power you have an audience of folks who are not only hungry and to you know start really wonderful and great companies, but are consumer set that is willing to support companies that really respond well with their values to this audience and thats why i think when you think b about walker and company, weve been able to be so successful because the authenticity bleeds through everything we do its just in business. Right . This is not donation its not charitable. Its Good Business as you mentioned, tristin, your company, walker and company, targeted in particular to people of color are there sort of sectors out there where theres an opportunity to do that, both to provide better services, but as youre saying, to seize upon the purchasing power that exists look, lets think about it in this way you know folks of color are the majority of the world. Folks of color will be the majority of this country in 20 years. When i say its the kind of single greatest Economic Opportunity of my lifetime, for profit or not for profit, the numbers speak for themselves diversity yields kind of better professes when your ranks and with all the other things that i said as it relates to purchasing power, every single industry is going to be impacted by this when i think about the partners that we have in the proctor and gamble bab gamble, a company that serves 5 billion people around the world every single day, a majority of which look like me, i think these guys are stepping up trying to do the right things because they see a future that deserves to exist. If every industry is not looking at this, they are not going to succeed and i mean that with as much conviction in my being as i can muster what do you mean specifically what sort of actions do you want to see being taken at these organizations . Weve heard so many ideas this week im curious where you think that change actually begins i think this is simple. You know with diversity, with employee base, theres a diversity of your consumer base. At walker and company, were majority women of color and positions of leadership at my company reflecting diversity base of consumers we serve thats something all of us do. You do that at the corporate level, the board level representation and advertising critical you know we want to make sure that our voices are respected. And lastly, i think you know youve got to fund us. Right . Proctor and gamble was able to find a company like ours because we got chance. Again, my story can scale and it should and youll have the forward looking companie proctor and gamble that really understand that but those are really simple things that companying can do and they all know it. But the ones willing the act are the ones that are going to benefit from this over the longterm. Well see if anything comes from this moment on that front thank you. Thank you good luck to you. Still tristan walker. Still ahead, your earnings rundown, gap, slack and broadcom all reporting moments ago. Well break down those stock moves next and later, investing in your future the one big shift that can change the way you prepare for retirement closing bell back in a few minutes. Thanks for sharing your diy haircuts. Thanks for sharing your savage moves, and especially your awkward ones. Thanks for sharing your cute kids. And your adorable pets. Now its our turn to share. With the geico giveback. A 15 credit on car and motorcycle policies for both current and new customers. And because were committed for the long haul, the credit lasts your full policy term. So thanks again. One good share deserves another. Lets check on this afternoons earnings movers. Gap, slack and broadcom all trading lower. Slack in particular sliding some 15, 16 , of course its been a strong performer so far year to date up next, a big win for private equity u. S. Allowing pe investing in 401 k retirement plans. Well discuss how that mhtig impact your money and your decisions when closing bell comes right back this moment. This moment right now. This is our commencement. No, well not get a diploma or a degree of any kind. But we are entering a new chapter in our lives. Our confidence is shaken; our hearts cracked. The kind of a crack that comes from the loss of a job; from life plans falling apart. We didnt ask for it. But we are rising to meet it. And how far weve come isnt even close to how far we can go. We just have to remember how patient we were. How strong we can be. how strong you can be. and remember this; theres a crack in everything for a reason. How else can the light get in . Tomorrow starts today. Welcome back americans saving for retirement will now be able to invest in private equity funds as the Labor Department improved the inclusion of the asset class and defined Contribution Plans such as 401 k s the agency saying the Investment Options for consumers and let them access an asset class that can provide better earnings in stocks and bonds joining us to discuss, Sharon Epperson and mike santoli joining the conversation, as well sharon, talk us through exactly why this has come about and how much interest there likely is to be in this well, lets first talk about what is going to happen. This is not an opportunity for 401 k investors to invest in private equity as a stand alone investment option. This is an opportunity for private Equity Investments to be included in target date and target risk and balance funds within a defined Contribution Plan or 401 k , and what consumers need to know and investors need to know is that this is something that will be chosen for you by your plan sponsor. This is not something that you necessarily choose yourself. It will be in one of your funds and this is investing very differently than you would investing in mutual fund than invest in the Public Company youre not going to have enough transparency and riskier investments in terms of whether or not the winnings will be there, and the track record that you may expect is going to be there, and its something that consumers need to look at very carefully and investors, particularly those who are already using target date funds just because its a default option in the plan and you need to really Pay Attention now because there could be investments there that you could not understand and you have to be right for your financial goals. You have to be careful mike, sharon just outlined some of the risks that investors might face going into private equity in their 401 k s. The potential reward, private equity has historically had pretty nice returns. What do you make of it theyve had nice returns as they report them over nine cycles and it was a bigger asset class than it was before and conspicuous that you didnt have access to it in deferred Contribution Plans and i would point out, vanguard has partnered up to get into this business as well for its clients is so Many Companies are private and its staying private and theres corporate value thats outside the private market, and i do think initially this is the industry trying to find another distribution outletas opposed to the public kind of making a lot of noise because they want access to this asset class in fact, you know mike and sharon, thank you both sure. Go ahead, final word, sharon. No, i was just going to say the people who are probably going to access this or would want to in terms of more sophisticated investors, and people with higher net worth o a lot of money in their 401 k , this is not necessarily for them because again, its in the target date fund or a balance fund which may not be the fund of choice for someone who is a more seasoned investor got it. Good point Sharon Epperson, thank you very much sure. Secretary of state mike pompeo just tweeting moments ago i applaud nasdaqs actions to require all listed firms comply with the same auditing and inspection rules especially as it regards to Chinese Companies. Nasdaqs action should serve as a model for other exchanges in the United States and around the world, this in addition to a statement that just came in from the secretary of state which says in part that american investors should not be subjected to hidden and undue risks associated with Chinese Companies that do not abide by the same rules as u. S. Firms so clearly, nothing new here, just commending nasdaq for taking strengther action here against Chinese Companies, its part of the broader narrative right now. U. S. Versus china and clearly the stocks, the chinese stocks are on the state departments radar. One Pressure Point the administration has tried to hit and essentially is trying to change this loophole that some Chinese Companies seem to enjoy. We are out of time here the dow just finished and the nasdaq just lower. Thanks for watching closing bell. Fast money starts right now. Thanks, guys. Im melissa lee and this is fast money. Guy adami, tim seymour, Karen Finerman and dan nathan. Taking flight, airplane flights soar and when passengers are really ready to return to the skies and we are all over the afterhours moves and gap and slack and both Companies Just reporting results and well break down the latest highlights with the quarters, but we start tonight with this. Yep Viva Las Vegas after 7