Transcripts For CNBC Closing Bell 20240712

Theyre all moving lower put on the positive side, a report that china will accelerate agriculture purchases from the u. S. Which could deescalate some trade tensions and were set for a particularly volatile final hour of trade this is the s p 500s first major options and futures rebalancing day of the year. We have 59 minutes left. Were down just over. 5 sara coming up on todays show, pressure mounting on apple over the treatment of App Developers weeshgs going to speak with Roger Mcnamee ahead of the Developers Conference plus, david kenny holds not only the companys ceo title but also the chief diversity officer. Hell discuss neilsens recognition of juneteenth and how they can push for more diversity in the workforce and can figure out a way to measure it as well lets get straight to the market another volatile session to close out the week on wall street one that is headed for another upweek mike santoli is tracking the down action weve seen this afternoon. Yeah. A little fatigue the apple headlines did not help did mention yesterday that on this exploration friday, there may be a little graphtational pull towards the 3100 area that is not magic. Thats the way these things go the there are often clusters in the morning, hugging 3150 you got that news. It dropped the soccer ball moves and the crowd clusters around it, but more broadly, it takes you back again towards that area of from early march stuck under the past three days, four days actually the market made a run to 3150. Seems heavy. That pullback last week has minor after shocks its been a defensive move since then its been the big Growth Stocks not really the cyclicals and the value stocks take a look at this etf. I highlighted it before. Rwcd the reason to highlight is it is a direct trade on the cyclical stocks over the defensive stocks so if you believe that youre going to be playing an economic recovery, this will be good. A similar uptrend to what we saw in the s p 500 on the other hand, also stuck below the highs. Its telling us a similar story. But it is maybe a little stalled out here as we try to reassess and figure out exactly if the market is already priced in the likely pace of reopening big turn. Well discuss in more detail in just a moment. First, apple lets dive into. That moving lower after the company said they would reclose some stores in the u. S. Where we are seeing cases spike we have the details. Josh so as apple started reopening stores here in the u. S. , they always made it clear, listen, they were going to follow the data, follow the advice and guidance of Health Care Experts and temporarily close the stores if necessary and thats what they decided to do here. So starting tomorrow, apple saying theyre going to close 11 stores in four states. Thats florida, north carolina, south carolina, arizona. And still does mean that more than 200 of the 271 apple Stores Remain open in the u. S remember, when we say open, many of the stores are open only for curb side pickup at this point apple does not break out revenue for the stores analyst estimate at least before the pandemic, before the lockdowns, they accounted for about 10 of sales so one question for investors is whether the strong online sales can make up the difference with the ceo spoke to cnbc, he said the online sales did remain very strong guys, back to you. Josh, katie huberty, the analyst that covers apple for morgue an stanley W Morgan Stanley said not so much a negative for apple the more pent up demand, that will be better as they get closer and closer to the release cycle. Is that sort of how analysts are thinking about it . Yeah. Certainly i heard katies interview was great. The i think that bulls are pitting a lot of hope as she does on that expected 5g enabled phone coming later this year i think she told cnbc this quarter or next quarter. Certainly there is a lot of excitement about that. I think one question investors are going to have is what will demand look like with the Economic Outlook so uncertain or people going to be willing to shell out for that new 5g phone . Well see, sara. Josh, thank you very much the point i was going to add is the fact that we even still talk about stores for apple highlights that they have a long way to go before theyre really truly a Services Company but seven aware of that the iphone is still the key part of the earnings its a long process for them ahead. Notable investors are raising the red flag in a letter today they said the odds arent in it investors favorites. Bridgewaters boss out with a note environment warning of a possible lost decade for investors. And we were told earlier this week that it is the fourth real mccoy bubble of his career joining us for more, tom lee, cofounder and head of research at Global Advisors tom, im pretty sure youll hav the polar opposite view. Are you concerned about the spikes and cases were seeing around the u. S. Or were you expecting them and it doesnt draw you away from your positive inequities Everyone Needs to be watching the Health Care Time frame and the time line and case improvements rising cases is not a good thing. I think its healthy and positive that a lot of cities and states are course correcting and requiring masks. Cases are rising and historically cases rose in tandem with deaths and hospitalizations that is not taking place what about news today that apple has to close stores in the hot spots . Its not a huge revenue driver or anything like that but psychologically for the market, when you see companies that have been there, done that like apple and starbucks, they did it in china, theyve done it in europe. And now they reopened in the u. S. , they have to a step back does that make you wonder about the shape of the economic recovery in this country well, i mean, i think its healthy. Id rather see everybody operate as if everything is uncertain and i think if we can take steps to sort of slow the spread, thats good. Once consumers have freedom, there is say lot of pentup demand the these are not great to see but i dont see how this makes 2021 any less a recovery year. So, you know, i dont think stocks worried about that and i think its much more about a po bona fide sustained recovery if we see states and cities reverse wlg you have to wear a mass is being one thing. If we did see some reverse afl the economic reopening measures that we have seen over the last couple months, would that dr drastically change your outlooks on equities . I think that is a policy question in theory, if you shut comet down again, thats not good news but thats really in the hands of policymakers. I would say i think course correct and masks is really wise you know, to me, the timing of the cases outbreak coincides with, you know, being roughly 2 1 2 weeks after all the nationwide protests. I dont think this is a case spread because of the economy opening. I think this is case spread because we had tens of thousands of people in, you know, out for several weeks and really densely situations so i dont think its the economy thats causing the spike, especially because its really among young people as well tom, didnt apple prove its not about shutting down the entire economy again and that its not just a federal policy or word from the Trump Administration its businesses. Its consumers and whether they decide to come out municipalities of different counties and states. It doesnt just take the president saying, you know, stay at home to be safe this already started to happen in small places in this country. Thats right. Think when you look at texas, the idea of mandating masks is actually happening at the municipal level, not at the state level. Apple can make the decisions because they still have a very robust Online Business and existing relationship with customers. Apple, im sure, is already exercising a lot of social distance in the stores so to me, its, you know, i would say i think were trying to, you know, extrapolate a lot of things from just a couple of data points. And so i just would say, again, future is uncertain. St to me what is happening the next couple weeks is less important to markets than what happens in 2021. We ran out the week, were noticeably behind asia and europe in terms of performance but perhaps its more stark how far behind asia and europe we are for the month as a where we currently stand. Are people starting to look for valuati valuation multiples again . Im not sure if that is the source of that it really depends on your starting point about a month ago is when even the u. S. Market inflekted actedr value. So maybe that does link up with exactly what was going on. Thats when you have the moves towards fis stimulus in europe and other measures that made it seem as if it wasnt just kind of haven United States type trades all that stuff worked together dollar was weakening and things like that as well. So, tom, well leave that question to you finally. Growth versus value . Small caps versus large caps which matches up a little bit, that chart with the growth versus value trade yeah. I think one of the interesting take aways is, you know, post covid19, a lot of the Cyclical Companies which represent the value index should have been obliterated. The fact they survived i think is kind of bodes well i think it shows you that theyre not only unkillable, their credits performed well i think theyll get rerated. So, you know, if value is turning chit does look like it does, it would explain why theyre outperforming. Those are value indexed as well. Tom, one more how do you feel like investors are positioned and what do you draw from that i think that most fundamental investors that are earnings focused and that is pretty much explained 80 of active managers for the last decade really focus on earnings. The they have not liked this market because, you know, they dont have earnings visibility but if someone was more, you know, asset based looking at where credit is trading or Monetary Policy or really the incredible resilience of markets, you know that is a smaller segment, they like this market and, you know, i think its really great to see the outperformance of some of the Retail Investors through robinhood. You know, i would say theyre more fearless but also, you know, earnings revision wasnt always like the way money was managed. But it was sort of working the last decade. I think were just potentially seeing a regime change tom lee, sticking to your bullish guns youve become quite a hero on on the bullish market. Still ahead, amc is aboutface the Company Quickly reversing course after criticism for initially saying guests would not be required to wear masks when the theaters reopen were going to discuss the challenge thats companies are facing as they look to get back to business with former fda commissioner scott gottlieb. Youre watching closing bell here on cnbc after my dvt blood clot. I wondered. Could another come around the corner . Or could it play out differently . I wanted to help protect myself. My doctor recommended eliquis. Eliquis is proven to treat and help prevent another dvt or pe blood clot. Almost 98 percent of patients on eliquis didnt experience another. And eliquis has significantly less major bleeding than the standard treatment. Eliquis is fdaapproved and has both. Dont stop eliquis unless your doctor tells you to. Eliquis can cause serious and in rare cases fatal bleeding. Dont take eliquis if you have an artificial heart valve or abnormal bleeding. If you had a spinal injection while on eliquis call your doctor right away if you have tingling, numbness, or muscle weakness. While taking eliquis, you may bruise more easily and it may take longer than usual for bleeding to stop. Seek immediate medical care for sudden signs of bleeding, like unusual bruising. Eliquis may increase your bleeding risk if you take certain medicines. Tell your doctor about all planned medical or dental procedures. Whats around the corner could be your moment. Ask your doctor about eliquis. Whats around the corner could be your moment. 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. Iredefined the wordng thschool this year. Its why, at xfinity, were committed to helping kids keep learning through the summer. And help College Students studying at home stay connected through our university program. Were providing affordable Internet Access to low income families through our internet essentials program. And this summer, xfinity is creating a Virtual Summer camp for kids at home all on xfinity x1. Were committed to helping all families stay connected. Learn more at xfinity. Com education. Welcome back cruise stocks under serious pressure after a suspension of operations from u. S. Ports seema mody has the details. Cruise industries suspending salgz from u. S. Ports until september 15th now that means the cruise lines will miss out on the peak Summer Season carnival and royal originally had plans to restart some sailings in august cruise industry spokesperson says at decisional time will allow us to consult with the cdc on measures that are appropriate for the eventual resumption of cruise operations. In the meantime, all three cruise operators are burning cash as much as 650 million a month for carnival dont be surprised, sara and wilf if the grucruise lines go k to the debt market to raise more money. They already raise the 6. 6 billion in debt and equity. Now theyre in the zero revenue environment for a considerable amount of time back to you. Yeah. Well, luckily for them, the debt market has been wide open. Thanks to the fed. Thank you. Amc reversing its earlier decision to not require customers to wear masks. Previously saying, we did not want to be drawn into a political controversy. The Movie Theater operator plans to reopen on july 15th with about 450 locations. This comes as were seeing cases rising in states like arizona which saw a new single day record of more than 3200 cases joining us now is former fda commissioner and cnbc contributor, scott gottlieb. He also sits on the boards of pfizer and ilumina first on the masks, why arent all governors just requiring masks in all states at this point . Well, they should be. I think they will. There is not much that we can do if were not going to do the sort of Population Based mitigation shutting down businesses and schools and things like that to try to control outbreaks. Some of the states truly are in epidemics right now. There is a limited toolbox that we have. One thing we can do is require people to wear masks it does cut the rate of transmission there is enough evidence to demonstrate that i think youll see a lot of governors and mayors now try to implement that, recognizing that there is not much left in the toolbox short of, you know, universal masking and selective mitigation, selective closures in places where you know the virus is spreading the most. How concerned have you been about some of the spiking rates in the last couple of weeks, the last couple of days in particular and will implementing requirements to wear masks change direction of the spikes you have to be concerned right now. You look at states like arizona, florida, texas, california, south carolina, alabama, that the rate of growth in cases is pretty significant now youre not seeing hospitalizations go up significantly in most of the states arizona is pressed right now they have 40 of the beds and hospitals filled with covid19 patients florida hospitals were reporting nine large hospitals say that icus are full. Youre seeing some strain on the Health Care System there is still excess capacity that can change going into next week if the cases continue to build because there is a delay between diagnosis and time to hospitalization. More people being diagnosed will get hospitalized and the case numbers are going up to your question about the masks, you know, the question is it too late . Have we gotten too far down the field in terms of this outbreak for Something Like that to really have the intended effect to try to quell this and it might be. We dont know yet. Were going to see but if they dont aggressively try to enforce masking rules in Public Places and do tracking and tracing, trying to get people who are sick, isolated, get more people diagnosed, trace sick contacts, they can lose control of this the question whether they have yet already, im not sure all right well sounds like they should implement the policies what do we know about the age of those that are getting hontiz hospitalized in the hot spots f theyre younger as the evidence presents, wouldnt you expect lower mortality rates than saw in the early part of the disease in places like new york . Were going to see lower mortality rates for sure were Getting Better at treating this also people that are vulnerable, older people, people with preexisting medical conditions are protecting themselves better were protecting nursings homes better, for example. If you look at the age distribution in texas, for example, 25 of the people who are hospitalized are again the age of 20 and 30 almost half of the people who are being diagnosed are under the age of 30. So its a much younger cohort than the first time. The older people are doing a better job protecting themselves its going to change the death rate but also were going to preserve life because were just better at treating this disease right now. The death rate will come down. Whether or not that changes the psychology of the virus, people are less worried about it because they see hospitalization rates and death rates coming down, hard to tell in some respects, that is a doubleedged sword if if people become more complaisant, theyll do less to protect themselves that can cause if infections to spike again. Really quickly, how do you prove that someone that has recovered from covid19 or tested positive from the Antibody Test is immune for some period of time and why hasnt this been able to be done at this point . The short answer is you cant. We havent seen large numbers of people who have been infected getting reinfected we should presume there is a period of immunity here. It could last up to a year, maybe longer in some people. But people who get infected on the whole will have a period of immunity we know that if it wasnt the case and we would be seeing people getting reinfected were just not seeing that dr. Gottlieb, i have a different tone, foenl questiina. With the steroid that theyve been testing did help reduce mortality rates, does it change our perspective that ventilators were the thing to be using as was broadly used in the past our perspective already changed on use of ventilators. Theyre being far less aggressive about intubating patients as much as possible what were finding is that ear intubation was doing more harm than good. Doctors are now holding off. The steroids will make another very big difference. Top line results were very robust so that is going to have an impact on outcomes as well. Dr. Gottlieb, thank you for joining us great to see you as always. Thanks a lot. Still ahead, in person shopping returns to the big apple next week. The city enters the next phase of the reopening plan. Well speak with toys r us ceo jerry storch the s p 500 recovered a little bit. It is now flat with 37 minutes after e ssn. Thseio ll you go fir . Wherever you make go, lexus will welcome you back with exceptional offers. Get zero percent financing and make no payments for up to 90 days on all 2020 lexus models. Experience amazing at your lexus dealer. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Welcome back the dow is now down only by 30 or 40 points or sofrment the s p 500 is flat. The nasdaq is higher on pace for the sixth positive day in a row. Time for a cnbc update here is your cnbc update at this hour. Former Baltimore Mayor is pleading guilty to perjury this is related to a self published Childrens Book she sold to city schools under the plea deal she is being sentenced to six months in prison 1,000 people marched through Downtown Chicago to celebrate juneteenth it is one of several marches scheduled around the city with many more happening across the country. The top human rights body for the United Nations is commissioning a report on systemic racism and discrimination against africans and people of african dissent by law enforcement. So an initial proposal would have focused on the u. S. But they didnt name specific nations. And that is your cnbc update at this hour. Ill send it back to you thank you after the break, neilsen ceo david kenny joins us exclusively to discuss the role ceos should play in creating a more diverse workforce. And heres a check on bonds. Yields holding steady. Ten year hovering right b above. 7 . Forever the most part, the mood is better in the markets the man has gone into stocks this week. Fourth week of the last five that were looking at a higher close for stocks well be right back here on closing bell. Storey in an effort toward making greater strides in their diversity and inclusion commitments, neilsen is recognizing juneteenth as a poid holiday in the offices along with another of notable companies doing that this year joining us now is david kenny, the ceo of neilsen who holds the title of chief diversity officer. Thank you for joining us why did you decide to appoint yourself chief diversity officer as well as ceo and not someone that is diverse . Well, thank you, sara thats a really good question. My team encouraged me to take the title on there are three reasons for now it made sense. One ispower. There is no more powerful position than the ceo. And honestly this isnt going to change if the people with power dont use that power to change it the second is culture. To make sure that were talking about inclusion at every level, equality at every level. And that it is front and center in the board room and in the management and accountability, the fact we can set hard targets for ourselves and make the transparent to the board and measure them the same way we measure other outcomes as financial results. I believe you took on this extra title will over a year ago. What hard targets did you set then and how many of them have you hit already . So we set a couple that were important. One is to make sure that weve got good representation at every level. Were lucky that were at 38. 7 of our total population in america where we measure racial diversity and people of color. And that has improved. But we also have targets at every level. Were getting close to those targets at my level. There are levels we need to work on the senior positions are filled by women obviously that is 50 and so were, you know, we got continue to work there as well david, you guys and your business measure everything. I mean, i go there every friday for some Consumer Staples during this pandemic numbers. Can we measure this . I mean, can you do a cross industry, Cross Company metric where you can actually track the diversity numbers and the gender numbers to make sure that companies are holding up their promises its measurable, the question is what degree are companies willing to share it transparently. And i think were, you know, certainly encouraging that i would say you have to make sure you measure it right and independently and transparently like the other things we do. Were working with presenters and studios and advertising to really make sure that media is doing all it can to help change the culture and the dynamic and the conversation in america and the world. David, stepping away for a moment from the equality debate. I want to dive a little bit into the trends youre seeing in media. Has the coronavirus locked down accentuated the shift from traditional broadcasts to over the top services certainly the coronavirus is causing everybody to watch a lot more television. And everything is up including broadcasts i would say that were at the point now that 76 of households in america have connected devices. And that gives them the ability to stream. Theyre certainly finding new streaming services at scale. Many of those streaming services are connected to the broadcaster and some of them are News Services as well david, finally, its good to see a lot of Companies Give employees juneteenth offer any discussion about giving election day as a holiday . We certainly want to make sure that every employee has the ability to vote. Were looking at whether we need to give the whole day off or a part of the day. But, you know, we certainly are going to make it very easy for our people to vote and honestly, were looking at where theyre going to vote in person and where theyre going to vote in mail. I would say not just our employees, were taking a public stand. We want to make sure that every american votes this year its an important year for elections. David kenny, thank you so much for joining us. Good to be with you thank you. Up next, stick with spotify. The stock climbing 30 this week after they inked a number of high profile deals well speak with an analyst who set a street high price target on that stock. Its up 3 again today [squeaky shopping cart] [sniffing] is the salmon wildcaught . She only eats wild caught. [cash register beeps] uh, i need a price check on honey. Dont get mad. Get e trade and get more than just trading. Investing. Banking. Guidance. And their financial wellbeing. Since our beginning, our. Business has been people. Its evident in good times, with decisions focused on the longterm. And crucial when circumstances become difficult. That continued emphasis on people our advisors, associates, clients and communities gives us purpose, strength and a way forward. Today. And always. 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. Spotify shares rup 3 , 29 in just one week yesterday they announced a new deal with Kim Kardashianwest and they got more bullish. They set a 275 price target that is the highest among all analysts joining us is the analyst that made that call thank you for joining us my pleasure how are you . Very well, thanks very well. So whats the key in terms of the latest runup clearly theyre pushing more into exclusive podcast content do we consider podcast listeners the same as the traditional music listeners . Actually, no. But it is certainly an emerging new medium podcast industry is still relatively nacent relative to music. I think with spotify is doing is leveraging the massive global base to move this industry on their own. So this is sort of a build it and they will come strategy. And last four exclusives that they signed, i think they have came pretty fast and furious here and i think the stock is reacting to a pace that probably wasnt expected. And i think its a pace that was probably expect to see continue. Did you upgrade the stock on the Kim Kardashian deal, mark . No. I had had a buy on the stock since i started covering it. So we just raised up the target im sorry i did. I upped the target based on the pace of these new exclusives the so the two they just added were Kim Kardashians Innocence Project as well as Warner Brothers and d. C. Comics but that was right off the backs of joe rogan and the Sports Network the ringer which is bill Simmons Network he came from espn. These are four that weve did some much deeper work on, i would say, to just sort of think about the monetization does this mean you have to be less constructive on apple music . No, not necessarily the i think apple music, you know, spotify and apple butt heads, have been for some time in, you know, in the u. S they both have buyer estimates, you know, roughly 30, 35 share. That will continue i think spotify has a much better position in offense outside of the u. S and thats where i think spotify really shines. As it relates to the exclusive genre, i think theyll step up a little less enthusiastic about apples, you know, moves in the content space which weve seen elsewhere. Mark, to what extent is spotify a stay at home, work from home stock . What happened to usage since the pandemic came on us and the shutdown started yeah. Great question certainly were hurt by the lack of commute so they get a large part of their listenership via commute which obviously weve seen cut back in the home, id say it has improved i would say generally speaking amazon music has done quite well in the home with the echo device i think thats an area that spot spotify can improve on if you think about, you know, music and the cost of it which is, you know, really small for most people that have had it budgeted for some time at 9. 99 with a high utility, i think the pace of listenership of spotify in the home picked up and as were getting back out on the roads now, i think youre going to start to see their engagement follow mark, thank you for joining us my pleasure thank you for having me. Up another 3 after the break, a new test for the banks and surprising outperformance for one part of the market those stories and much more when we go inside the market zone. Less than 20 minutes left of trade. You can always watch or listen on the go on the cnbc app. Closing bell will be right back with the dow down. 3 you doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. But a resilient business you cacan be ready for it. Re. A Digital Foundation from vmware helps you redefine whats possible. Now. From the hospital shifting to remote patient care in just 48 hours. To the university moving hundreds of apps quickly to the cloud. Or the City Government Going Digital to keep Critical Services running. You are creating the future on the fly. And we are helping you do it. Vmware. Realize whats possible. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Just under 15 minutes left were now in the market zone, commercial free action until the close. Today we have j. P. Morgan private banks analyst with us. Lets chikick things off with te broader markets. A volatile trading day as coronavirus cases spike across the u. S. Weighing on investor sentiment. In fact, just over 600 points peak trough. Were down. 2 the nasdaq is recovered to be in positive territory set for the sixth positive day the s p 500 is flat. Quite a big intraday selloff but clearly a lot higher than where we were last thursday. And up 2 or so for the week. Yeah. For the last six or seven trading days, really six trading days, the markets been buffered by a reassertion of strength in those defensive quality Growth Stocks if you look at the average cyclical stock and the banks, the industrials, the equal weighted s p 500 before that thursday selloff, theyre down 8 off the highs theyve been consolidating theyve been correcting. The market aggressively priced in right ahead ofthe fed meeting. And then it pulled back hard today you have biotech very Strong Software is very strong. So its this sort of kind of handing off of the baton that held the market together even as it kind of becomes a little more defensive and investors rethink the expectations for how smooth and strong and reopening is going to be. What part of the market do you want to be exposed to given that backdrop mike laid out . Reopening stocks or more defensive places as we look to worrisome headlines about the virus cases . I think there was a time to be exposed to the reopening stocks and that timing is in the rearview mirror. It was clear that mid may we were look ting at the reopening the momentum on reopening was picking up it makes sense that things like hotels and airlines and Consumer Services were picking up that played out very well. When you think about the situation we have now, now there is quite a bit of optimism on the reopening front and unfortunately, the reality on the ground is starting to look a little different so because of that, i think some of the momentum behind the underperformance is going to fade and so i would be rotating out of the hotels and airlines and Consumer Services. And i would be looking to reenter some of the sectors that we like like biotech, Like Technology so i think that is really going to be the space to think about for the second half of the year. The other thing id say is the consumer is on net pretty strong here personal savings rate is high. Unemployment rate is starting to come down. I would say there is step changes in it how were going to spend as consumers and a lot the step changes are digital theyre online and so even if we turn up at restaurants, i still think that those digital spending patterns are here to stay theyll be higher levels than they were precovid. Well get to that lets get to bob pisani for a look at how the rebalancing is impacting trading volumes and volatility bob, what does it mean of course, that quadrupequal witch is the Stock Options and stock and index futures. Four things happening. A lot of volume. Typically biggest volume days of the year the four days and also there is an s p 500 rebalancing. So some stocks are coming out of the s p 500 as well. Heres three big names no longer going to be in the s p 500 as of the close. Harleydavidson and in ord harleydavidson and nordstrom coming out three others are going in. But those are big famous names they just have smaller market caps over the last couple of years. Were getting a rebalancing. Some companies are floating more stock and theyre so increasing the weight in the s p 500. Today, increasing weight at the close. Amazon, salesforce, Morgan Stanley and edison theyre floating more shares, increasing weight. A number of companies that continue to buy back shares. The buyback story is not dead. Apple is beginning to buy back alphabet, microsoft is buying back shares. And so are the earlier banks earlier in the First Quarter buying back stocks like j. P. Morgan and bank of america theyre going to see the weightings reduced in the s p 500, guys. All of this happens right at the close and normally a lot of volume keep an eye on that back to you all right bob, thank you mike santoli, anything important for investors to take away here as far as the rebalancing and what it might mean for them . In terms of weightings, you want to know your bet if youre owning the index and usually it is relative to exactly what the float changes are. I will say mechanically with the expiration going on right now, you know, you have the s p 500 just sticking around that 3100 area and that is something that just sort of often happens around these round numbers with the clusters of expiring options and futures. The other pattern has been the week after the june expiration has on net been relatively weak. Much its another one of these eb and flow type indicators. It doesnt mean next week has to be weak. It is all else being equal it has created some pressure when you have that spillover after the expiration next thursday during closing bell well get results of the feds annual stress test for the banks. Today fed vice chair for supervision confirmed there will be an extra coronavirus related aspect to the test that will layer in the possibility of a v, u, and w shaped recovery quarrels says the sensitivity analysis, will help us judge whether banks would have enough capital if economic and financial conditions were to worsen its been seen as increasingly likelihood that the fed may try to limit banks ability to pay dividends. In recent years its been a question of how much stock each bank could buy back on top of their relatively small dividends which are always in the past seen as all but guaranteed 9 turn around happen the turn around happened right after the open his speech wasnt until noon whether they continue or not, that is the no the key for the long Term Investment case for the stocks but in the short term, it is a marginal factor. And just having stress tests next week is something they need to get through before they can spur higher again. Yeah. I think that is the correct read and, you know, the interpretation of whether the tests will be, you know, used as a bit of a cover story to restrict the cash return is the big one. Its interesting prior rounds of stress test, it was thought that the assumptions were onerous in terms of the gdp declines the banks were supposed to have weathered. Now they have to revise it because of the extraordinary circumstances. It is a little bit telling although i dont think anybody really worries about the ultimate ability of the banks to weather through. Anastasia, anything for Bank Investors to worry about into the stress test . No, i think bank invistors a investors are positioned remember how resilient the capital ratios are this time that is a pillar of strength i would say versus other parts of the economy. I think Bank Dividends should by and large be in good shape maybe there is a few exceptions. By and large in good shape and, you know, well see where the actual assumptions are on the stress case for the coronavirus. But we are already seeing a pretty sharp rebound of Economic Activity so i think the Federal Reserve will will start to think about that as well as part of the projections. Last but not least, there is so much Government Support that has been put into the economy. So i think it has offset what could have been really drastic and really meaningful that is not likely to be the case this time around. So i think banks should be in good shape however, the bigger question is the shape of the economic recovery and really the shape of the yield curve. Right airlines, we mentioned, getting hit hard today especially hard. Phil lebeau with the details on that group not a good day for the airlines theyre all down anywhere between 3 and 6 . You saw them moving down with the market around the middle of the day. All of this is because theyre moving lower on the coronavirus concerns will the reopening of the economy slow down . And for the airlines this is particularly sensitive given the fact that they are starting to see more people flying theyre still way off from where they were a year ago yesterday 576,000 passengers highest since march 20th but look at that last stat there. Still down 79 compared to the same day last year one specific airline note, you know, we talked to you about deltas ceo saying that about 500 Staff Members had contracted the coronavirus. He is out with a note saying that, look, they looked at the infection rate of those employees who deal with customers and its one fifth the infection rate of the overall population in the United States. Delta is resuming flights to china own thursday we havent had an Airline Flying into china since back in january. The dealt why flights resume on thursday back to you. I remember when they all came out and called it off. And they did so, phil, until april. We thought april thats so far away why are they doing it for that long and here we are in middle of june unbelievable thank you. Im curious to see how many people are going you bet. Agree agree. Anastasia, thank you so you said its too late to buy the Airlines Even if you think were going to continue to see a rebound in travel activity i want to be cautious on airlines here. The reason i said that is i think there is some initial pickup in activity but the reality is it is going to be a while until we go back to the new normal of traveling there is a lot of restriction thats are still in place. And there is 14 day quarantine so for the most part, i think consumers, even if they wish to travel, they have to Stay Grounded for the time being. Within that sort of subsector or that thought process at the most geared to an economic reopening, what would you want to expose sure to if its not an airline . I think anything to do with consumer spending. But we have to that is local. That is local and that is really geared for the patterns of spending that we should be expecting of the world where we are living with covid19 as i mentioned, we may be venturing back out to the restaurants with outdoor seating over the summer time we have to be balancing for maybe the next year. The convenience of digital, the safety of digital versus the threat of the coronavirus. I think things like food delivery, for example, and stay at home, work out at home type of apps, theyre going to continue to be prominent in our lives even if the broader economies open up. The other thing were thinking about is housing youve seen this in the housing numbers. Youve seen a significant uptick in housing activity. I think there is more to come tow. That take a look at how cheeap the Interest Rates are at the same time, the Consumers Want to covid19 proof their lives. They want to have more space they want to upgrade the they want to remodel it and want to be able to entertain at home the last thing i mention is if the Consumers Want all that and the theyre going to be owning all of this digitally, every store, small, large, somewhere in between will have to deliver an omni channel presence one thing that is interesting is the Big Tech Companies have been the big winners. Some of the smaller names that are providing Digital Payments and digital shopping experiences, theyre the ones that are going to be benefiting this environment as well one place that looks like consumers are going to be spending more in this environment, mike, is etsy take a look at shares having a strong day today up 9 . To me this is the mask trade this is bullish masks. Dr. Scott gottlieb told us that governors, every state governor should be requiring masks. We did start we did see that decision come down in california all of the a lot of etsy vendors are making masks there are a lot of cool ones out. There i even got a mask necklace which is what im calling the fall must have accessory if were going to go out and the reopening is going to continue, mike, and the Health Officials are going to tell us to wear masks, heres one place to look. More strength in it that name. I would definitely not doubt that in the least. But also its the Online Shopping variety in other words, you can get necessities and people are kind of have fatigue in going through the same ecommerce sites for the same things. Etsy is shopping potentially as opposed to just, you know, ordering necessities for the house. By the way, it is also up up 93. 5 . It was doing well into the pandemic what you are seeing in the internals . Weakness. You know, the overall indices firnled firmed up here you see well over 21 down side volume to up side volume and then if you want to take a look at some of the sectors as well, here we have the kind of entertainment and leisure is the reopening trade. You see on a week to date basis. That underperformed after having a great run. The vix is easing back a little bit. It is staying in the low 30s so its kind of going in the right direction. Begrudgingly i made the lows in the mid 20s last week. Crazy intraday swings if we have the dow intraday, you see the high of the session is up 371. The low was down 312 theyre down. 5 the nasdaq is just fractionally positive which will be enough for a sixth positive day in a row for the tech heavy index as for the s p 500 sectors, only health care is in the green. The other ten sectors of the 11 in the red industrials, energy, utilities at the bottom. Energy is surprisingly towards the bottom given that oil prices are higher 1. 8 higher. Gold also higher today by healthy 1. 5 the dollar is also higher today, up 0. 2 . A strong week for the dollar at the bell, were lower by. 5 on the s p 500 up nearly 2 for the week as a whole for the s p 500. The dow is down 0. 8 the nasdaq slipping into the red there at the close, sara no, ba back into the green. Declines for the s p 500 and dow. A weakish close to end out what was an up week for stocks welcome back, everyone if youre just joining us on closing bell, im sara eisen and wilfred frost and mike santoli. Take a look at how we finished the dow slipped into the close, down 200 points. The big slide came after some headlines earlier that apple was going to reclose some of the stores that had reopened the s p 500 ending the day lower by. 5 for the week though, it did get a gain of 1. 86 . The nasdaq was the big winner on the week and day closed flat today. Up almost 4 for the week. The russell 2,000 index losing. 6 overall this is the fourth week out of the last five that we have seen gains for stocks the uptrend is very much intact. Lets talk about this weaker close in a bit well ask Roger Mcnamee about the site with developers as well as whether he thinks internet strikes are at risk from the justice departments crackdown on protections will big story of the week joining us to talk about the market though, j. P. Morgan private bank still here. And luke Capital Markets Courtney Gibson joins the conversation first you to, mike what stood out and sort of a sluggish way to end. What was overall a positive week it was a positive week. Used to be one of the down side reversals. It was bate of a negative omen going ahead. The patterns and rules have not had much traction lately the market has been able to preserve that general uptrend. You know, a week ago thursday we had that one big day drop. It hasnt proved to be a real Inflection Point definitely was a turn. The s p 500 down 4 . The average stock down twice as much in a sense, its done an easy way. Even if there is a defensive cast to the market than we have about ten days ago. You are closer to taking profits or buying more stocks . You know, its interesting. Im not taking any profits right now. Im adding on names that i think are down a bit much that im interested in as we think about coming out on the other side of covid19 which we will. You know, again, we have a resilient economy. I added a little bit there i pulled a little off the table on some things that i have that were a little more tied towards consumer im sorry, not consumer, towards commercial real estate. It is more heavily weighted towards that our clients at luke capital, however, have tended to be very, very balanced especially today on a far reaching day into the close almost 50 50 buys to sells. Anastasia, what you are seeing in terms of your clients positioning now and how might that be having an impact on the a . A lot of clients look to the durable trends and they point to tech and health care there is a lot of appetite to look for growth and look for double digit growth. The reason why tech and biotech have been so resilient is because they do have this above benchmark Earnings Growth potential. So im not surprised to see that any pullback that you get in the tech sector, in semiconductors is bought and im encouraged to see that biotech is breaking out to the upside. We had quite a bit of interest in biotech its been stuck in a long term trading range. But just in the last several months, it broke out of that range and i think there is a lot more to come so our clients are looking at Health Care Innovation we expect a lot more drugs to be approved not just for covid19 but for other issues as well and all of this means upside to earnings expectations. Even above and beyond what is priced in. Were looking at Earnings Growth for the next 20 years of 27 on average. So thats why it is up and thats why its up as much as it is this quarter. The recent ipo index hitting a new high during session today. We have the details on that. The hi, leslie if you invested in the ipoetf three months ago, youd be up almost 80 this week alone, that etf surged 11 . Ever since april, really the etf which tracks the returns of recent ipos has broken out and the last six months it outperformed the s p 500 by more than 30 now a big part of the story here is tech. Spotify is largest olding wi10 weighting. That stock is up 29 this week all of the top holdings in the etf are all of the three top holdings are in the green over the last five trading days investors may be excited about this announcement starting monday the underlying index for the ipoetf is adding royalty pharma, warner music and other names. Booting out older ipos. Just remind us. How long can a ipo still be considered recent . And how quickly do they often get out of there warner obviously was quite a recent ipo but if its only being added just yet, you missed the initial jump exactly thats that is the key point here, wilf spotify went public i think about two years ago, maybe three years ago if i recall. Im getting my dates confused. But you can be an ipo in that index for years at least docusign, same thing you see different ipos that may not be considered ipos of recent memory still in the index but they do cycle through, you know, every so often it is, you know, in terms of people who maybe interested in buying this etf an important sign that theyre adding ipos that took place just in the past few weeks alone. And theyve done well much leslie picker, thank you. Courtney, what does the performance tell you were incredibly excited about what is going on on two fronts one, showing that clients are putting capital and companies are coming public. You saw the filing for albertsons and the Grocery Stores i think its a hot time for them to come public at this point as you do add the warners and others into the mix, ipos are coming back. There is capital that needs to be put to work and we cover Institutional Investors only at luke Capital Markets and were just seeing the beginning of a lot of the ipos is were bringing them to market as well. So its been very nice to see companies decide to dip their toes in the water again and clients on the other side supporting companies that are poised to do well in the future. It certainly a risk seeking measure. It also is investors want stocks that are not in their benchmark. And i think it does benefit from that as well by the way, 5 of the ipo index, the etf is also madirna. It gen gets to be a large weighg it has a momentum aspect to it it starts out with an equal weighted portfolio and then the best performing ones become the bigger weights that was another wild week for stocks overall bob pisani has a look back to all the biggest movers and the main parts of the action over the last week. Bob . Hello flat day today the s p 500 is up 2 for the week nasdaq another big winner. Just want to show you its been very choppy trading. Thursday, mike was mentioning bottom and weve offered that particularly on the cyclicals like caterpillar you see it was only one big day on the upside. Side ways for the rest of the week not bad. At least not going down anymore. Mega cap though, theyre still the leader, far and away we had a modest drop in microsoft thursday and friday last week. But that was not a trend were back right near historic highs for microsoft. Leslie mentioned the ipoetf the limit for ipo is about two years. Spotify is right about the limit. Docusign, zoom all strong. Albertsons going to go public that will be a big one for the year banks still not doing much this is your territory j. P. Morgan is down 2 banks are facing a low Net Interest Margin and high defaults and the stress tests next week. My vote for the stock of the week im going with netflix up 8 . I dont know if its recessionproof or not. Were right back near the historic highs after a couple months where its a little bit in doubt whether thats wh was gg to be a big leader have a good weekend. You too anastasia, why dont we dive in on netflix clearly beneficiary of recent trends but also incredibly expensive. Yeah, i think that might be the case with a lot of the larger tech names that were looking at i think the top and bottom line is going to benefit as we work from home and entertain from home when i think about big tech names, i think there is a little bit of susceptibility to them going into the second half if you think about it, they have been the halves in this economy. Now there say lot of regulatory pressure focusing on parts of big tech i think that is a risk to watch for sure thats why some of the opportunities that were finding are actually down the market cap. Some of them are in that renaissance etf. That is raily important one to look at. It gives you a lot of ideas of what this new economy that is so well positioned for the living with covid19 world with the stocks like new economy are doing. I would be focusing on those versus the larger cap names at this point we are getting some news related to disturbing story about robinhood. Kate rooney has details. Kate hey, sara robinhood is updating the platform this is in the wake of a customer suicide last week the company saying that its changing the way they do options trading. Three announcements here first eligibility. The considering additional criteria and education for customers looking for level three options trading and adding educational resource and changing the user interface. Theyre rolling out improvements for in app mess efrpging and oo messaging and ooems. The company donating 250,000 to the american for Suicide Prevention sorry. Fund here as well. This came in the wake of, as i said, the customer suicide last week the family had questions about why the trader was able to rack up the amount of losses that he did. It raised questions over if robinhood was going to change it they did so within the week. So, guys, interesting update there. Back to you. Yeah. Kate rooney, thank you mike, this was a really sad story. That suicide note citing some confusion about the debt and the leverage that this person had taken on robinhood bringing light to some questions. Do the measures outlined by kate address any of that . It would seem to address it just to make sure people understand what theyre exposures are, what even the statement balance means because i think in this case there was some suggestion that in fact it wasnt even, you know, his perception of the did he ever it is was not what it was so i do think it addresses some of the things. Obviously the question is this was a very much a Silicon Valley approach to launching a Brokerage Firm which was it was about user interface, giving it away for free. It was not about know your customer it was not about making sure people are educated to do what theyre doing to do. We talked about it a while back. They kind of delivered on unlimited leverage to traders based on a glitch. So obviously this rectifies some of the issues. But its an on going process it didnt happen from the outset. This sounds like a small step in the right direction i think for all the debate weve had in recent weeks about whether its a good thing that more people are becoming investors at an earlier age. We have to clearly define what is going on. You have investing you have short term trading and then you have gambling and i dont know exactly where on that spectrum this is but if we were talking specifically about gambling, it comes with clear education it comes with clear warnings and a clear understanding by the user that what youre going is ultimately fool hearty and addictive. And i dont think we have the same thing when it comes to new people entering into the stock market mayor they are long term educated investors i dont think every single one of them are. We have to be careful about how much you celebrate that move into investing if in fact its more of a closer to gambling than investing you have to come with the appropriate warnings were out of time on that story, tragic story last week and the full story is on cnbc. Com with the latest update from robinhood. Thank you to anastasia and Courtney Gibson for joining us to discuss the Market Action we ended, as you know, down. 5 on the s p 500 now apple announcing they will reclose . Stores in areas with Coronavirus Infection spikes up next, well ask the former toys r us ceo jerry storch about the impact on the retail inst if re cpaesdurymoomni are forced to follow apples lead. Yeah yyeah yeah hey, hey wherever you may go, lexus will welcome you back with exceptional offers on exceptional vehicles. Get zero percent financing and make no payments for up to 90 days on all 2020 lexus models. Experience amazing at your lexus dealer. Retailers gearing up in new york city as phase two of reopening begins the sector is up 40 in the last three months outperforming the broader stock market earlier today, we heard from former best buy ceo on what retailers are facing and what they need to do right now. There is a pressure towards value. I think thats, you know, the environment is going to be different for the next two or three years even with the v shape or w and so its back to the reset of this is a moment to deeply rethink how the business has done so it can emerge as a winner the better the customer is, the better it will be. I wouldnt just hope has never been a good strategy joining us now is jerry storch, the ceo of storch advisors, former adviser of toys r us that is doing channel checks on the road looking at the state of retail. I didnt know we were getting video as well. Excellent. Jerry, where are you . What are you seeing . Well, im in chicago right now. But in the last few days, ive been on the road from florida up the entire eastern seaboard and then new jersey and now were across to chicago. And what i saw in the south was very crowded malls, outlet malls, stores, restaurants kind of the opposite of social distancing so im kind of not surprised that were seeing so many spikes in cases in those areas. Its much different as you get into the areas that have only reopened more recently like new jersey and then across to here. So i will say, you know, most of the stores reopened in excess of expectations its really off to a pretty solid start. So jerry, as you say with that solid start, there is quite a strong Consumer Sentiment to get out there and shop do you think it will be hard to derail the sentiment with a few stories of cases spiking again i think it will take more than that. You know, there is a combination of pent up demand from stir crazy shoppers, all this enormous fiscal stimulus and obviously the fact you had a healthy consumer at the start of all. This its going to take more than a few cases right now to lock down the country. I think its were going to have to find a way to operate through this both this retailers and as consumers and governments to find a way not to go back and to lock down where we were before i dont think can you put that genie back in the box anymore. So jerry, a lot of the stores that have to open are doing so with limited capacity as theyre trying to follow the rules of the various faces. The can retailers make money at 50 or 30 capacity even if theyre full at ththat point it depends on the retailer. A lot of retailers are going great, walmart, target of the worlds, costco, amazon, of course these companies are doing better the companies that are just reopening that have big problems, big issues they did before this start though and when they open though, even though theyre 30 , for example, below last year, it actually most of them are doing better than that right now. If they were 30 below which is what we saw in china, what they did last year, its still a lot better in the margin than not opening at all the real problem is many of the companies are highly leveraged the first thing they did when the pandemic hit was, of course, they drew down the line of credit they want to make sure they have cash but eventually all the bills will come due. Its better to be open to cover yo your marginal expenses companies that are highly leveraged, theyre going to be big issues, lots of banks and store closings not just this fall but especially after holiday those that dont do very well are going to be a massive shakedown in the industry, much more consolidation of market power in the hands of those that are successful and, of course, amazon jerry, are we past the peak of bankruptcies . We are nowhere near the peak of bankruptcies. The u. S. Probably is two to three times the retail Square Footage per capita that we actually need. A lot more is still going there are many, many more shoes to fall, particularly among Department Stores and Apparel Stores, especially mall based Apparel Stores this pandemic was the last thing they needed. They were already in trouble theyre trying to find a way out of it. A lot of them them turned to experience retailing theyre destination shoppers one thing i heard is even when traffic down, the average ticket is way up. Consumers are going in they know what they want they dont want to loiter. They dont want to hang around and impulse shop which is the way they were going before so their strategy wont work in the future and theyre in big trouble. Well, what should the balance be for retailer of how much business is online and how much business is in stores and how far are most retailers from achieving that well, you know, i think to be successful in the future, you have to have at least half your business come from either online or where you buy online and pick it up in the store which is a hybrid type of a model and, you know, most apparel based retailers, most Department Stores are far from that the theyre in kind of the 20 range. They go to the 30 range so theyre in big theyre a long way from where they have to be you see the furniture players, the Home Goods Stores that are closer to the numbers. Theyre doing far better you see walmart with that huge business that they developed where you buy online and pick it up in the store. Doing very well. And, of course, grocery delivery is the way of the future youve seen a huge increase in uptick there its going to keep growing so i think the people are doing well the people that were in trouble before theyre going to do a lot worse. Reopening is not a cure. Jerry storch, i appreciate that former toys r us ceo. Coming up next on closing bell, mike santoli taking a look at seasonal patterns and why history suggests we could be at the risk of a summer slump. You can always watch or listen live on the go on the cnbc app well be right back. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Yeah yyeah yeah hey, hey the dow fell 200 points into the close breaking a three day winning streak lets go back to mike santoli seeing whether there are seasonal headwinds as we go into summer, mike yeah, if form holds, you tend to expect there might be a little bit of friction in the markets as we get deeper into summer this is a composite chart of the s p 500 over the last 20 years so its essentially the average path that the s p 500 is taking over the course of a calendar year since 1999. Clearly not necessarily mimicking any exact single year. In election years, you want to get an added layer of specificity around august, things tend to kind of go into a stand still and you have a soft market so this is what you might tend to expect. Now one caveat is this year has looked nothing like this as we get past this mid june period, it tends to be a little slippery or range bound market perhaps. Thanks very much for that coming up next on closing bell, well ask the ceo of a Company Helping minority communities and the underbanked how his company is trying to fix financial inequality in the United States. Were back in a couple minutes need better sleep . Try natures bounty sleep3, a unique trilayer supplement that calms you, helps you fall asleep faster and stay asleep longer great sleep comes naturally with sleep3. Only from natures bounty. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Twhile the future of work professional or consultant remains a question mark, one thing is certain reopening will be a journey. Thats why salesforce created work. Com to help at every step of the process, with tools like manual Contact Tracing to help prevent one from becoming three and three from becoming more. While displaying Key Information in one place on a Customer Relationship platform you trust. Because heres one more thing were sure of. Relationships are the heart of business. So lets tackle this together. Black owned businesses are hit very hard by the coronavirus lockdown some have seen a comeback in sales amid the Racial Injustice protests across the country. Kate rogers tracking the details of this one for us kate hi, sara the number of working or black owned businesses fell by 41 from february to april that is an outsized number compared to 22 of businesses overall. What is more separate data shows that minority owned businesses were more likely to be nonemployer firms putting them at a disadvantage when it comes to accessing government Financial Aid programs like ppp simply for being smaller businesses the big fear is the increase in unemployment, the decrease in Small Business owners, the layoffs in jobs is going to create further inequality and longer term inequality now several businesses that we spoke to have a boost in sales as protests swept the nation over the killing of george floyd in Police Custody in minneapolis and business thats we talked to got really creative during the pandemic in order to stay afloat then saw some new customers coming their way amid this push to support black owned businesses, customer thats theyre hoping will stay with them past this time, guys back to you. Wonder, kate, youve done so much work in reporting on ppp and the Small Business relief that government handed out whether there was any sense that it was equitable in terms of diverse black owned businesses i know we dont know exactly everyone that got it because the administration has not released that. But i would think that is another reason to push for transparency here. There was a lot of talk with round one that did not happen. We heard a push from the administrator even just in the last week out to lenders making sure that theyre serving businesses across the board, smaller businesses, minority owned businesses, businesses that are owned by women as well. So there has been a lot of talk about this and potentially some new legislation coming down the line that could make sure that that happens and well certainly be on top of it. Kate, thanks so much for that now africanamericans also face inequality when it comes to the u. S. Banking system. According to a 2019 study from mckenzie, nonwhite majority m d neighborhoods have 27 banks compared to 41 our next guest is looking to close financial inequality gaps with the launch of the updated banking platform today for more were joined by founder and ceo of mochafy, a company focused on serving minority communities and those unbanked or underbanked a very good afternoon to you thank you so much for joining us tell us what your app does and the latest update you applied to it its great to he soo yee you today. What were trying to do is bring Financial Services to all americans who regardless of zip code and the statistics that you cited demonstrate a real gap in terms of access to products and services for some of the most vulnerable in our communities. The statistic is 50 to 55 of april africanamericans are unbanked or underbanked we want everyone to have access to a low cost, highly responsible banking product, fdic ensured and were doing something really innovative they can also withdraw cash from a free atm network some of us take that for granted in terms of a High Quality Bank account, low fee is now being made available through the mochafy platform to everyone across the country were really excited about that. Is it just for cash or can you do anything digitally for the community as well . Its all about the digital. The beautiful thing is were bringing mobile first platform to communities where they have the ability to provide their basic information in the app, enroll in the card and within a couple of minutes, they actually have their account number, routing number for their fdic insured account. They also have coming to them in the their mastercard debit card. A full demand deposit account. Then in the app, they have the ability, people have the ability to pay billers we can also issue checks on their behalf and then thats where we bring the ability to put cash into the account through the 80,000 stores that were partnering with and they can go into the app and take a picture of the check and they can get free Immediate Availability so we think we can really change the game for individuals if they get paid in cash, they can actually go to a store in the neighborhood, load the cash into the account and have Immediate Availability or, you know, there is a large number of people who get checks at the end of the week and we can either have them do demand direct depositor they can take a picture of the check and have access to the money so they can buy things on line or they can go out to the movies or what not. Do you feel like there is a lot of competition out there at the moment, a lot of other apps and companies kind of offering similar things to what youre offering you know, its interesting. One our premise is we want to do three things. We want to get people banked and a low cost responsible way the second thing is we want to help people build credit they can actually use the rent payments on our platform to have their credit score increase. We have seen some amazing results. And in the black community, 60 of the black community rents and those rent payments are not reported to the credit bureau. We want to close that gap. And in doing so, if you have a quality bank account, and if youre able to build your credit score, the third step is we want to provide a way to create and retain wealth in our communities. Were thinking about that from the perspective of homeownership, were thinking about that from the perspective of creating Small Businesses and what were finding is to answer your question, there arent a lot of other companies that are focused on a holistic approach our big strategy is we see a big problem and we think if you provide a high quality product to a large market, we can really reimagine banking for a part of the community that has really been overlooked. I think it says a lot about the need for diverse founders. Because individuals solve the problems that theyre familiar with and coming from my background and community, you know, we as africanamericans, we overindexed on utilization of the very expensive predatory products that can often be the only resource that is available. And i think that we have come to this problem with the unique lens where we see a big problem. Technology is wonderful in terms of this moment allows us to address that problem and we can do it in such a way that Everybody Wins and its interesting mckenzie has done a lot of really interesting analysis about the impact of bringing africanamericans in particular into the banking system. And they estimate that that market at a minimum is a 2 billion increased revenue market and if after cab americaricana engaged, thats a 50 billion market we see ourselves being well positioned to take advantage of that opportunity. Thank you so much for joining us the much appreciated thank you coming up next, apple under fire we will discuss with Roger Mcnamee whether a fight with developers over fees could end up hurting the stock where will you go first . Wherever you may go, lexus will welcome you back with exceptional offers on exceptional vehicles. Get zero percent financing and make no payments for up to 90 days on all 2020 lexus models. Experience amazing at your lexus dealer. Experience amazing what do you look for when i want free access to research. Yep, td ameritrades got that. Free access to every platform. Mhm, yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. Now offering zero commissions on online trades. We charge you less so you have more to invest. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Welcome back time to a cnbc update. Wilf, i do. Here is your cnbc update at this hour lets start in oklahoma. Its Supreme Court rejected a request to require masks and social distancing at president trumps rally in tulsa tomorrow. So the judges say that state has not made covid19 protections mandatory and the court cannot make their own rules simply to achieve a desired outcome. Nbc news reporting that key members of the Coronavirus Task force including dr. Anthony fou fauci are against holding that rally. There is a commercial service that provides anonymous cell phone location data. Thats according to the wall street journal. And finally, the navy says that the former captain of the Aircraft Carrier that suffered that coronavirus outbreak will not be given command of another ship the admiral leading the Carrier Strike group is having his promotion put on hold. And that is our cnbc update for this hour. Sara, back to you. Thank you up next, apple coming under fire apples annual developer conference set to kick off in monday on the face of blowback from the key developers. Roger mcnamee joins us with his take on what it could mean for the stock next derek, seems like your team is operating just fine remotely. Yeah, everything is running smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. We hope you find these Digital Solutions helpful to bank from almost anywhere. Deposit a check with your phone or tablet. Check balances, pay bills, and more. Send money to people you know and trust with zelle. Explore all you can do with our Digital Tools from almost anywhere. Pnc bank. From almost anywhere. I know that every time that i suit up, there is a chance that thats the last time. 300 miles an hour, thats where i feel normal. I might be crazy but im not stupid. Having an annuity tells me that im protected. During turbulent times, consider protected Lifetime Income from an annuity as part of your retirement plan. This can help you cover your essential monthly expenses. Learn more at protectedincome. Org. Tension between developers and april sl heating up after the tech giant rejected updates to email app pay saying it doesnt meet the requirements that users can pay for subscriptions through the app itself which gives apple a cut of the revenue david hanson firing back on cnbc yesterday. The. Apple shows up and says like unless you give us 30 were going to bust your knee caps and burn down your store come on, apple youre a 1. 5 trillion company you dont need to shake down Small Software makers. The. Joining us to break down this topic, casey newton, and Roger Mcnamee elevate partners, cofounder and author of zucked. Good to see you both casey, could you set this up for us a little deeper clearly the eu is looking into some of the issues, the antitrust division over the app store. How big of a deal, how big of an issue is this for apple. Its starting to become very real it was a year ago that spotify made a formal complaint to the eu and asked for an investigation and it was just this week that we learned that one would be under way not just for App Store Policies but also for apple pay and the way that apple privileges its own nfc payment solution over other developers and then along comes base camp with a new email app and makes a ton of hay out of some policies that are frankly very hard to understand and appear to have been somewhat inconsistently enforced. The so ahead of wwdc next week when apple is heading out there to make the case that its a great platform developers, i say they have a lot to worry about right now. Roger, whether it was down to regulation or competition or anything else, were peoples long term expectations that apple would always hold on to such a big chunk of the economics within the app store or do people think that over time it would decrease anyway . Remember the alternative was dealing directly with the platforms of that era which were the Cellular Companies typically they charge 50 or more to an app developer so when apple came along, it was greeted as the hero. Now its so gigantic it does look excessive because apple has a 30 fee on everything that goes through the store. The reality is that does work for the vast majority of developers and obviously apples Global Market share is like 10 so there are alternatives. They handled the politics horrifically badly and i do think there are opportunities for apple to do better is and some categories in which the deal that theyre offering today is getting harder to defend simply because of the scale of the company at the end of the day, what apple offers for that 30 is protection for the users in the form of security, better privacy. And maintaining iron clad grip on what can go into the app store is essential if i were apple, i would concede the economics nord in order to maintain the control this is not an antitrust case that should be going on against amazon and google and facebook which are using their power to undermine potential competitors. Apple simply just charging a lot of money to people who would rather pay less. Casey zsh, does that argument work for roger apple can point to hundreds of companies they helped, smaller companies, smaller businesses by put it it on the app store and making it seamless when it comes to Payment Information and everything else. Well, look, they could certainly enforce rigid moderation of what is allowed in the app store without taking a 30 cut of everything that gets sold the you know, apple loves to talk about the great consumer experience, the consumer always comes first. If you go to buy a book on the kindle app, youre going to find you cant do it f you subscribe to netflix, youll find you cant do it. Apple is just set up roadblock after roadblock so that whether youre a big company or a small kmb, you cant company you cant go through the booth without taking a huge cut. They have to take a second look at this. You have people trying to make heads or tails of the policies if you cant explain yourself, youll find yourself on the wrong side of regulators. They have a bigger risk to face outside of the u. S. , not just because the regulators might be taking a keener look at them but also because the market share of ios versus android is not quite so strong. I think, wilf, this he have a problem politically everywhere today. I think one of the things that happened the last three months is that the combination of the extraordinary damage of the coronavirus pandemic, the economy coming down underneath that and the clear relationship that technology has, not so much apple but especially facebook, youtube, instagram, twitter to the political challenges that were facing as a kcountry put technology in the recollect torre cross hairs in this country. In europe it was far more advanced n europe, they have all the issues of fairness that in the United States historically we have not had consumers got shorted for a period of time people complaining because apples prices are too high is regulators would have disregarded three months ago i think today the situation changed. I think everything is up for negotiation now. And consumers have much p momore power. I think every tech company wouldiwoul well advised to take that tech is not going back to the thing that made them successful. For apple, this is not a li threatening issue. They should land in the u. S. Or europe im with casey on this issue the politics casey that the politics do not favor them today, but in comparison to google and to facebook and to amazon, the issues are trivial, as investors, we should keep our eye on the ball because the regulatory threat effects everybody. And this isnt their first fight with the eu antitrust chief in terms of apple. Casey, just want to bringing up twitter because big news today again, the company slapped a manipulated media warning on president trumps racist baby tweet. What are going to be the ramifications of that . That was their third action they have done recently when it comes to labeling the president s tweet or correcting the president s tweet. Yeah, i mean, its sort of funny. It seems like it was only a few weeks ago when the question was, will twitter ever take action against the president , and a lot of folks thought maybe not theyll do anything they can to avoid taking action. Then trump kind of bulldozed right over the line. You know, somewhat cynically, i sort of see this as a win for everyone trump gets to go on complaining about, you know, bias against conservatives on social media. Hes being sensored, but for Companies Like twitter and facebook, who have taken similar actions, they get to go back to their employees and say we did enforce our policiepolicies, no above the law, and thats good for morale as depressing as it is to watch it unfold, i think everybody gets something out of this casey and roger, thank you both for joining us. You bet still ahead, startling statistics on the student debt front. New data shows people of color are at a severe financial disadvantage in the face of covid19 well explain when closing bell returns. s been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Talk to your financial professional or consultant vo at whether on the track,that exhor the everyday drive. Ty, today, that philosophy extends to how we connect with you. We call it, audi at your door. Whether a remote test drive, shopping, tradein, or even service pickup, audi at your door can do this and more at participating dealers. The premium audi dealership experience, on your terms. Audi at your door. Yeah yyeah yeah hey, hey can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Talk to your financial professional or consultant like real bad. We cant wait to get you back so weve added temp checks, face coverings, social distancing and extra sanitizing to get the good times going again. Were finally back. And cant wait until you are too. Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Up next, student debt disparities. Well break down the data when closing bell comes right back. Many student loan borrowers are unaware of covid19 benefits that could prevent them from facing financial disaster. And a new poll finds the lack of awareness and potential Economic Impact are greatest among people of color cnbcs personal finance correspondent Sharon Epperson joins us more with more on these results. Thanks to a provision of the c. A. R. E. S. Act, the u. S. Department of education is allowing borrowers to pause payments for federal Student Loans until the end of september. Yet, 38 of africanamericans and 38 of latino borrowers did not know that this covid19 relief was available thats compared to 31 of whites and that is according to a new poll of more than 38,000 student loan borrowers conducted by the Nonprofit Student Debt crisis and the benefits firm savvy. Over the past 15 years, student loan balances for blacks have been rising faster and are now greater than for whites. While overall debt at graduation is about 30,000, new york fed data shows the average student loan balance in mostly black neighborhoods is above 37,000 now, facing higher rates of unemployment as well, black and latino student loan borrowers are also more likely than whites to say they have been unle to make a rent or mortgage payment during this crisis again, thats according to this new poll sara Sharon Epperson, thank you very much. Why Financial Literacy is so important. As we wrapp the week here in the markets, mike santoli, another strong one gains for stocks four weeks out of the last five weeks, though we did end the session today with a little softness if you look at the biggest losers on the week, the cruise lines right at the bottom of the pack norwegian, carnival, those are the ones getting hit along with simon property, which tells us the reopening trade may be taking a step back here even as the market continues to hold up. Yeah, i think arguably those groups overshot a little bit into the highs last week they had to correct. They have not given up all the gains of the last couple months, but the market had a defensive cast to it even as it went up 2 this week. Theres still people trying to sort out how much they should be paying attention to things like the rising viral case counts when so far it has not seemed like its really impeding Consumer Behavior as things repopen. Mike, one of the other things that stands out for the week as a whole, Energy Sector down. But oil prices sharply higher, by about 8 or 9 . So a few more disconnects kind of working they wear out now rather than all high or all low. Its true its much more of a twoway market i would say the Energy Stocks were caught up in that value cyclical trade that has come off the boil and that was across the board this week. We ended lower for the s p and the dow. Nasdaq just higher for its sixth straight session in a row. 17th out of 20 sessions positive for the nasdaq were out of time there on closing bell. Fast money starts now. Fast money does start right now. Im melissa lee. Jeff mills, Peet Najarian and mike khouw a major reversal hitting a speed bump in the reopen the chart master breaks down what he sees on the horizon. Plus, slacking off why the work from home darling may not be able to cut it against the much larger competitor and later, the fed adding a new layer to its bank stress test. We start off tonight with apple. Dropping sharply from alltime highs after news it was reclosing stores i