Transcripts For CNBC Closing Bell 20240712

Again. Microsoft, amazon all hitting record highs the nasdaq flirting with another record close despite the Broader Markets selling off. 59 minutes left of the session sar yash sara, were down. 5 . We have big guests coming your way well be speaking with Loretta Mester about the economic signs she is seeing in america and how the fed is weighing the spike in cases. And the rollback of the reopening measures across this country. Shes a Voting Member of the fed. Plus, 150 million, that is how much Deutsche Bank agreed to pay in the settlement with regulators over the dealings with Jeffrey Epstein Deutsche Banks ceo will join us to talk about that settlement and a whole lot more an important update on the business lets get straight to the big stories were watching with one hour left of trade mike santoli tracking the market meg terrell has details on a 1. 6 billion as part of the operation warp speed effort to battle the coronavirus and get a vaccine. And phil lebeau has the latest on the struggling Airline Sector mike, start us off with the Broader Market and the pullback after yesterdays surge. Markets started to trade a little heavier in the afternoon. The decline in treasury yields down. 6 the stock market has limited tolerance for yields at those levels it was an uneven market with tech mostly driving things so what you see here, this is it that june 8th peak it was also the monday market rally on a monday after a big friday jobs day surge. Very similar to what weve seen in the last couple days with a market gets a little enthusiastic in the short term theyre going to have a big pullback there is a range that has been set up here at least for the time being take a look at how the market breaks down since that june 8th level. In terms of the s p 500, along with the equal weighted version of the s p 500 heres the nasdaq 100. Clearly the mega cap growth, tech, that is the leadership right there. And then the equal weighted version of the nasdaq 100 etf. You see a very clear hierarchy by far leading the way followed by the equal weighted version. That is interesting. Thats a big spread between the average nasdaq 100 stock and the market cap weighted version of that index then the s p 500, here you see the equal weighted s p 500 down 7. 5 in the last month that shows you that this kind of slowing of the reopening story and maybe some second thoughts about how much has been priced in about the strength of a recovery has registered in the stock market its not registered as much in the headline s p 500 or in the nasdaq sow thats how you square the story a little bit in terms of what the market has been trans mitting in at the last several weeks. Thats really what i want to ask about, mike. The resilience of the market in the face of not just rising case numbers but increasing effort from High Frequency data that we look at in the new york fed does have a weekly i had frequency indicator showing it is hurting spending weve seen it in the restaurant data, open table dwrat ata is a read were starting to see a slowdown and i wonder just how much that is registering with investors now and buy, buy, buy mentality weve seen its leading to differentiation within the market for sure. Now we can argue about whether, you know, the industrials being down 1 today, the entertainment and leisure sector being down. The equal weighted Consumer Discretionary down 1 . It is fully, you know, taking account for that rethinking of the reopening story. But it there is some differentiation happening. I think that just the incessant leadership and momentum in the large cap tech and other Growth Stocks that the secular growth trade is obscuring that to some degree its like you can explain it two different ways either the market is oblivious and resilient or it is showing you that there are some cracks in the reopening story depending on which parts you focus on. All right mike, great stuff. Dow is down at session lows. Down 286 a Company Secured 1. 6 billion from the Operation Warp Speed Program meg terrell has the details for that hey, wilf operation warp speed, the pranl to accelerate vaccines to market today awarding the biggest award yet in that fight. 1. 6 billion will support novavax through late stage Clinical Trials including a phase three that plans to include 30,000 participants if all goes well in earlier studies planning to start in the fall of 2020 this will also help them establish and scale up manufacturing. With the a plan to start supplying 100 million doses starting in late 2020. The government had previously made some large awards 1. 2 billion to others in may and as well as almost half a billion each to j j and to medirna. This is the largest one. We spoke with the ceo early better what this means for their company and explaining really the 30 stock rise heres what he told us with the coronavirus does is it moves up the timetable for us to have revenue and quite baa b actually. So saying essentially that they were on their way towards the market with other vaccines in the pipeline. But this speeds along the whole process. Were getting lots of headlines on the coronavirus front just now san franciscos mayor announcing they are temporarily pausing in their reopening plans due to the covid19 spread in that area. This as Northern California is starting to see some of the fastest growth in the country right now. Back to you. Wow after miami yesterday. Closed the restaurants and gyms. Meg, i also want to ask you about the federal money that is goi regenron there is a lot of stuff going around the antibodies as a bridge to get us to treechlatmet what do we know and when do we expect data . There is a lot of hope here there is a proven track record with this exact technology for ebola. The government today awarding them 450 million in a contract to manufacture and supply a lot of these doses theyre now in late stage Clinical Trials in both prevention so using these for people who have been exposed to a covid19 patient, trying to prevent infection, and also for treatment of patients within the hospital and not in the hospital and theyre expecting those data by the end of the summer this is one of the programs that is moving incredibly quickly it could give us an option before vaccines are widely available. Meg terrell, thank you. Dow is down about 284 points airlines are taking a leg lower again today amid lingering concerns over travel demand and cost cuts. Phil lebeau with the latest. Lets start with the cost cuts take a look at shares of united. United has said to the employees that it plans to warn tens of thousands that there are possible lay yofrz, possibly coming in october. This is not a surprise not only united but all the airlines have said come the end of september, theyre going to have to become substantially smaller. United will issue warn layoff notices. The you have to give employees 60 days notice saying you may be laid off heres the problem for united. Newarks near term bookings, tet bookings minus cancellations, down 84 compared to a year ago. United and all of the airlines, theyre being hurt by the spread of covid19. Its really a double whammy. Not only are people saying i dont want to good to florida or texas or somewhere elsewhere the virus is taking off. There is also the quarantine effect for the tristate area, now for massachusetts, chicago just put a quarantine effect in. Saying if you fly back, you have to self quarantine for 14 days who has the most xpexposure in h northeast . Jetblue in july and august 49 of the seats in that area. Then you have spirit at 18 . United at 14 . And, again, the airlines concern is one weve seen manifested in terms of bookings. People are saying im just not going to take this trip right now. Finally, as you take a look at the Airlines Stocks and how theyre trading to day, all of these airlines today agreed to essentially more treasury leans. We dont know what the terms are or how much money. And these airlines have until the end of september, guys, to determine whether or not they will take out these additional loans for billions of dollars from the Treasury Department guys, back to you. Wonder what that will mean for the planned layoffs and hiring phil, thank you. After the break, a rare interview with a Voting Member of the fed Loretta Mester about the latest economic signals shes watching and how the reopening rollbacks could impact fed policy youre watching closing bell here on cnbc usaa is made for whats next no matter what challenges life throws at you, were always here to help with Fast Response and Great Service and it doesnt stop there were also here to help look ahead thats why were helping members catch up by spreading any missed usaa insurance payments over the next twelve months so you can keep more cash in your pockets for when it matters most and thats just one of the many ways were here to help the military Community Find out more at usaa. Com to help the military community youre first. First to respond. First to put others lives before your own. And in an emergency, you need a network that puts you first. That connects you to technology to each other and to other agencies. Built with and for first responders. Firstnet. 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This as atlanta fed president warns that some Economic Activity is leveling off and the recovery trajectory could be bumpier than otherwise thought cleveland fed president and Voting Member loresta mester joins us now president mester, good to have you with us again. Thanks for having me. The resurgence of cases across the country, how does it impact the Economic Outlook . Its definitely something were seeing in our district as well, especially the southwest part of ohio it makes people much more cautious i mean, youre not going to go out if you fear, you know, for your safety. I think people are being more cautious were seeing that in businesses in ohio as well. I saw that you had rafaels comments on there. I think were seeing the same kind of thing. We saw reopening in may and activity started to come back pretty well. More actually than people thought it would come back in terms of our business contacts and over the past week or so theres been some leveling off i think its probably due to the increase in cases not only in ohio but across the country. So how do you think about what the shape of recovery at this point looks like and how fast its going to come . Yeah. So ive always been thinking about this in terms of phases. So the first phase, of course, was the shutdown of where activity was turned off. And now were in this reopening phase. And i guess i always anticipated this would not be a smooth reopening. Its going to, you know, go up and down with how the virus is contained or not contained were still in that part were still on this long recovery phase where i think its going to take quite a long time to get back to where activity and employment was prepandemic. And, of course, there is structural changes that the economy has to work through too. So were pretty early on even in the second phase of the reopening phase. I just think there is going to be a long road back to where we were in february thats why the fed has been saying were there with our tools and we anticipate having very calm Monetary Policy in the future its going to take a long time to work through this. So you suggesting that president mester that means no tightening, no reversal of the policies that the fed is already got in place or are they going to be extra measures taken that we havent seen yet i think its going to depend on how things play out you know, we are committed to using all of our tools to support getting back to our duel mandate goals of price stability with inflation at 2 and for our maximum employment were well away from both of those right now. I think were there as everyone else is trying to follow the virus. The virus is going to be a determinent of all this. Following how firms are able to come back and rehire and employment is key here making sure that were doing all we can with our tools to support the recovery i think a large part of this is going to be driven by the whether we have tools for testing, for contact tracing, for therapeutics and ultimately for vaccine. And so were going to have to see how that plays out to see what more we should be doing we have to make sure that credit is available for households and businesses and, of course, our Interest Rate tool is at the zero lower bound right now so were there were trying to support the economy with the tools that we have and the federal government is doing the same thing. You know, taking aggressive action early on as well. The market come back has been extraordinary. We followed it, the resilience of it. The fact we see new highs daily in technology, the fact that the nasdaq is up so strongly for this year. And a lot of people say its completely disconnected with reality. The economy, the fundamentals. Its being driven by the fed and fed liquidity. The how do you feel about that so thats not what were trying to do with our policy at all. We dont set asset prices with our policies were focused on the goals of price stability and full employment and, of course, we took aggressive action earlier in the year when marketses we were dise in terms of functioning. And when the treasury market was very liquid in the year, we took aggressive actions to address that because it would not help anyone to have a financial market, you know, instability in the Financial Markets at the same time you were having the pandemic our intention with the actions we took early on in terms of going into the treasury market and buying treasuries and Mortgage Backed securities was really to make sure the markets continue to function without functioning Financial Markets, credit cant go to households and businesses. Of course, we set up a number of socalled 13 three facilities again to make sure that the parts of the markets that were functioning could continue to function and also to support credit extensions to firms of all sizes so that credit could flow to support. I think weve briefly lost president mester well try and get that connection back in just a moment s p 500 down 0. 7 as we stand. It is near the session lows. 300 points or so on the dow. President mester is back with us we perhaps lost the end of that answer i guess my next question, though, was going to be to what extent do the current government programs, fiscal programs influence your expectations for the economy for the rest of this year and key parts of them like the extra 600 benefit are not extended beyond the end of this month. Does your Economic Forecast get a lot worse . So i built into my forecast fiscal policy. Some additional fiscal policy. I think we need it i think individuals need more help i think state and local governments also need more help. Remember, when this started, i think all of us, including myself, and i think most people did not anticipate it would last as long as it did. And as time has moved on, you have seen more help from the federal government theyve extended, for example, the ppp program for Small Businesses and other programs were added. So i expect that to continue i think its needed. You know, the fiscal authorities are the ones that can grant give grants. The fed is doing its part to make sure that money credit flows and so i think those two combined are necessary support for the economy. I do think that if we dont get further fiscal support, things wont come back as well. Were all working to make sure we have limited damage to the economy. So this is a period where we need to be supporting both individuals and businesses who but for the virus and pandemic would have been healthy to get them through this period so that we can have a more grounded recovery as you say, the feds been doing what it can on that front. The Balance Sheet, been looking at the fed Balance Sheet it leveled off recently. Should we take that as a sign that generally the fed is happy with the markets and the other question is there a limit to how high that Balance Sheet can go is there a limit to how much stimulus the Federal Reserve can add if more is needed . So the actions weve taken so far with the Balance Sheet have been to support the functioning of Financial Markets theyve actually added some easing in financial conditions as well. But the goal of those actions were to address the illiquidity in the markets theyre working better now than when we went in and took the actions in early arch. So to that extent we pulled back some of that because of the improvement in market functioning. Again, you know, further actions that we might take later on is really depends on what the d economy looks like the rest of the summer into the fall i think that is something that certainly is on the table. As swewe said, were open to dog what we can with our tools which includes Balance Sheet actions as well as Forward Guidance if and when its needed right now were in a good spot and we have to sort of watch and continue to analyze the data as it comes in so we can assess Loretta Mester, thank you for joining us. Take care be safe. You too you too. Markets near the session lows by the way. Were down 282 points on the dow. Still to come, our exclusive interview with christian sewing as his firm settles for 150 million over the dealings with Jeffrey Epstein. Well get his reaction plus, thoughts on the glalob pandemic and the economy thats straight ahead. Welcome back to closing bell. It was actually more of a buy recommendation on amazon Raymond James raising the price target for apple to 400 you hundred a share from 340. But the firm thinks there is a good chance they wont provide guidance for the september quart quarter due to late iphone 12 launch they hit a record high in todays session. After the break, dont miss our exclusive interview with the ceo of deutsche. Well get his reaction to the firms 150 million settlement over dealings with Jeffrey Epstein today and much more. As we head to break, a quick check on bonds for you stocks are selling off the dow is down 278. Tenyear yield is hovering around. 64 . So there is buying of the safe haven bonds putting pressures on yields except at the short end of the curve with the two year kneeled up slightly. When the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Hello, everyone. Heres whats happening at this hour just moments ago President Trump said that he will put pressure on governors to open schools in the fall this after tweeting a demand for schools to hold classes this fall he is getting some pushback on that in new jersey, a major Movie Theater chain filed a complaint over health rules that prevent them from reopening. The complaint says Movie Theaters have been illegally singled out for closure while other businesses and houses of worship have reopened. You can go to cnbc. Com for more on that story. And in spain, this is a rare sight. There are no bulls running in the streets of pr in the bullri. In a normal year, the city would have been packed today would have seen first run of the annual festival there you see a few guys that dawned the traditional white outfits and red scarves to pay tribute to the patron saint of pampoloma fiesta thats the news update this hour wilfred, back to you thank you so much the new York Department of Financial Services announcing a settlement with Deutsche Bank. They will pay a fine in related to the dealings with Jeffrey Epstein. I sat down with the ceo of Deutsche Bank christian sewing and asked him if he regretted the banks relationship with mr. Epstein. It was a critical mistake there is no question the mr. Epstein should have never been onboard should have never been our client i just made it very clear again today in a letter to all of the 86,000 plo 86 th 86,000 employees of Deutsche Bank this should not happen again. We invested a lot over the last years into our compliance functions. But we shouldnt have done the mistake in 2013. There is no doubt. Superintendent lacewell said in her announcement today banks are the first line of defense with respect to preventing the facilitation of crime through the Financial System went on to say in the case of Jeffrey Epstein in particular, despite knowing mr. Epsteins terrible criminalry history, the bank failed to suspect millions of dollars in suspicious transactions i wonder if any executives at Deutsche Bank have some responsibility for his crimes . Well, as i said before. It was a mistake to onboard him in 2013, to are sure at that point in time. Escalation processes did not work like they should have worked since then, since we detected that Deutsche Bank has done everything to investigate this case, work with the authorities, remediate the issue of mr. Epstein. And i think we learned our lesson but in 2013, the escalation process did not work and, of course, also personal consequences were drawn. How long i mean, it looks like he didnt remain a client for long if at all after you became ceo, christian. Were executives that looked after his relationship in the prior five years, have they left the firm, any of them . You know, i think we shouldnt go into individuals here and what happened but i can assure you that personal consequences also on Senior Management level did happen, of course, because it was a mistake. Again, we did our lessons learned. We investigated and he had highlighted our cooperation which we i think have done exemplary over the last months but, of course, personal consequences have been drawn you mentioned that point. There have been other issues on antimoney laundering in the past towards Deutsche Bank the dfs said you provided exemplary cooperation in these and related matters. How confident are you no that you all of Deutsche Banks issues are in the past you know, its a function of investment its a function of attention its a function of commitment to these items and to i think Deutsche Bank has invested a lot into antifinancial crime, into compliance we have hired a lot of additional people in order to have a function which is able to actually monitor this in a proper way in this regard, im far more confident that we are in a far better place these days. Unfortunately, this is legacy case which we now have dealt with but with the investments with have done and the expertise we built and the cultural clarity of the first line of defense, ie, in the business, that this cannot happen and must not happen i think were in a far better place these days i want to move on and talk about a totally different scandal unrelated and the revelatio revelations about wire card in germany. Should germanys regulators be embarrassed that story unfolded . You know, its in my view not the key question of embarrassment. The key question for all of us and also for germany and for all key stake holders in this case is what do we learn from that . How quick can we get transparent in this case and what is the action then for remediation and that these things dont happen again . It is something not good for germany. Of its not something where we can obviously be happy about it. And, hence, i hope that all the stake holders who have been directly involved draw their right to conclusions out of that for that you need now full transparency and good investigation. Deutsche bank about business with wire card and lent money and the Asset Management arm at times owned shares was there a lack of Due Diligence on Deutsche Banks part first of all, ive been 30 years in the business. And, you know, i dont have now obviously all the facts. Obviously, fraud is apg. If all this comes out that it is fraud, it is not always easy to detect i can assure you that the net exposure of Deutsche Bank to wire card is very, very limited. And actually would like to repeat it. Its very limited. And i think our Risk Management actually worked. We are by far not the prime lender and the biggest lender. The our systems worked and, again, to avoid fraud and detect fraud is not that simple. Lets talk about strategy and big steps forward that Deutsche Bank is taking you announceded this partnership with google earlier today. Is that just simple back off cloud power or will it be consumers and clients that will experience the tech that you will work on them with as well we said we want to scale in the four businesses and were doing quite well the second part is cost. We instilled a cost discipline at Deutsche Bank which we have not seen before. And the third part was actually it helps boast items like revenues and also to get more efficiency and technology. And in this regard, we think that having a partner like google where we can develop further technology which makes our processes more efficient, which makes it easier to take costs out, but on the other hand, to build new applications, to build new offerings for our clients, be in the corporate bank, be in the private bank but also in the investment bank. It is a fantastic opportunity. And in my view, it will help us also to make a differentiating factor to our competitors also here in europe its needed. Banking is all about technology. You announced the Strategic Plan around about a year ago coronavirus forced you to pause aspects of it. Has it in fact led you to totally rethink any parts or do you now continue in earnest with the same plan and included in it the same amount of layoffs no. We are continuing as planned first of all, were very glad with how the plan has worked out. We continue with the momentum to restructure the business in this regard, we had quite a good q1, momentum in q2 on the revenue side and in particular in the Investment Banking is there and kept the way how we saw it in in q1 and on the cost side, we keep the discipline and that also means that we obviously continue our program to reduce our head count. We committed to 18,000 head counts that is the plan through 2022. And we will do this. And we just reiterated that we will hit our cost target of 19. 5 billion this year and, hence, there is no stop. There is no amendment to the plan we simply execute. I wanted to touch on the macro picture both virus and economy what do you think germany has done right that perhaps other countries havent done so well sympathy. Well, i think the ingoing assumption actually to say in germany was already different because our medical system compared to a lot of other countries is simply superior and that means we could cope with the first wave with the first infection wave in a different way. That is something that is not even reported on so much anymore. I think to have this kind of medical support which we have in germany is step number one number two is really swift and Decisive Action by the government by the way, in consultation and cooperation with banks, compare to 2008 and 2009 were now part of the solution and worked with the government on tailor made programs which was obviously taken very well by the economy they did a solid budgeting over the year that they could afford the programs and that all combined also with Central Bank Actions which we have seen moved germany into a position that they have dealt with immediate crisis very well. Now obviously we have to do this job as proper and as good as we entered the crisis but the preconditions and the way the government reacted is a part of it. How encouraged are you that the eurozone is heading towards some level of debt neutral youllization . Is that a game changer for the future i think what a game changer is the way europe reacted over the last four to six weeks you know, the Recovery Program which was announced is a real sign that europe wants to be aligned, that we see a more unified europe solidarity in europe is key. And now irrespective of this pandemic, i think it is key that europe gets more integrated, more unified we need to be and we need to stay competitive to the u. S. , to china. And you can only do it with a bigger whole market and that can only be a unified europe in this regard, the Recovery Program which has been announced is very, very important. I think it makes us more competitive Going Forward. And in this regard, its not so much about debt materialization. Much its actually the step and the signalling that europe stands now together and is trying to address this pandemic with a joint answer is most important. Actually, can you see this momentum growing in Europe Christian sewing there, the Deutsche Bank ceo. And, sara, people can say what they like about whether they really believe that the antimoney laundering issues are behind them for good i think thats what most analysts say well believe that when we fully see it clearly today, co cost settlemei behind them. In terms of the Strategic Plan he met a year ago, i met with skepticism then. Year on, 22 higher on the share price. 27 higher year to date. The best performing bank stocks, big Cap Bank Stocks around the world. Can you argue that is low hanging fruit from 0. 3 times the book value either way, decent share price performance. Germanys macro handling of the virus certainly something to do with that as well. They just have such a Bad Reputation at this point, wilfred when it comes to scandals and frauds. We saw the Jeffrey Epstein headlines and everyone said, oh, Deutsche Bank again. The question of morality i think he answereded that question you asked him about it a number of times obviously, it goes back to a prior regime but they are facing an Important Supreme Court ruling in this country, right exactly right due soon potentially going to come this week as to whether they are going to in fact have to hand over records relating to Donald Trumps personal and Business Finances of course, pending Supreme Court decision, we couldnt talk about that but well await that news as and when it comes as well. Yeah. That will be a big deal. Still to come on the show, stocks are sinking were seeing the lows of the day right now with the dow down more than 300 points. One bright spot though in the session, shares of walmart leading the dow and s p 500 on reports of a plan to take on amazon prime well fill you in on the new deal tails and discuss it with imran khan, the former snap chat executive who is looking to make a big splash in ecommerce himself. 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. After the break, prime competition for amazon and shake shack getting grilled today on an update. Stocks sinking into the close when we take you inside the market zone next. You say that customers make their own rules. Lets talk data. 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And we have paul hickey here as well lets kick it off with the Broader Market stocks are lower actually sinking to session lows as we speak. Were looking for a decline of 1 dow, 1. 4 . Boeing is the big weight there were seeing weakness in industrials and energy and financials mike, anything in particular causing this sell into the close . Were breaking a fiveday win streak. Exactly i was going to say the setup is a strong run to the upper end of this trading range today, sort of ends the july fourth area. Seasonally strong period i mentioned before treasury yields have sunk a little bit. Stocks dont tend to like that so today you have the familiar story with those banks, the industrials are struggling a bit. We get more of the steady stream of the negative covid19 headlines and the big tech stocks are simply not offsetting for a day right now. The dafrpgs intraday movers as well, mike, have been really bad over the last ten trading sessions tesla, 2 higher today paul, whats your take on this if you bought tesla stock, youre a massive winner. Perhaps not as simple as that. The. Yeah. I mean, i think taking a cue from Vladimir Lennon there is decades why nothing happens and then there are weeks where decades happen you look at a long term chart of tesla, theyre at record highs right now. Its the best performing stock since the ipo. But if you look at a chart, there is two sixmonth windows where the vast majority of the gains have come. The chart youre seeing there was in in mid 2013 and the last six months. Stocks just under 1400 a share. If you didnt have those two six month periods and all else equalled, the stock would be under 90 a share now. A ses llesson from tesla, there lot of periodin vestors have the opportunity to doubt themselves they were really rewarded for hanging on to the stock. Its an Overall Investment lesson for investors to focus on not to get too antsy because the bulk of most stock moves nhappen in a short period of time. Were in the middle of one of the spurts for tesla what does that, in five days up more than 40 . Whats causing it . What is it a symptom of right snou. First of all, 1. 4 for tesla means its a down day. So you did have another callout there that it could get to 2,000. What is it about its a combination of pure momentum but also just the benefit of having this complete dig picture thinking almost unlimited theoretical growth story that captain vaivates peo. Its the short as a percentage of the flow is down to 10 used to be around 30 . Right now the market value of 260 billion i dont know what you have to assume goes right for many, many years. Back in 2016, the case on tesla is, guess what theyre not going to have to wait to 2020 to get half a million units. Theyre going to do it in 2018 they didnt do it in 2018. Right no you they hope to get that half a million in 2020. That is when the stock was at 200. So i cant tell what you is getting baked into the stock right now except all the clean energy stuff that doesnt rely on current earnings is moving like this. Lets move on to shares of walmart. Theyre also higher today. Getting a boost off this report. The retailer is launching an amazon prime competitor coming later this month it is according to recode. Walmart plus is what its called its a Subscription Service costing 98 a month including same day grocery delivery, discounts on fuel at walmart gas stations and early access to product deals. Sounds a lot like amazon prime paul, are investors right to be excited about it i think there are two online retailers pretty much right now. Walmart has, you know, is moving move and more equal to amazon in the case of retail but amazon is a lot bigger and a lot more tenic wills and a lot more places. Its just as far as the value of the prime competitor, i wouldnt suggest that its you are getting as much value for your money there . I mean, i think in this environment that were in, walmart is really made the transition to on line Grocery Shopping and on line shopping with, you know, pretty smoothly. Thats benefiting the stock here i want to come back to the Broader Markets. Dow is down over 400 points. Once again, a theme where the russell and dow were suffering much more than the nasdaq. The nasdaq composite will not have another record close. But facebook and apple are just holding on to slight gains the relative leadership of big tech and the Growth Stocks is not something that is really been shaken much both before and after that february march crash. And when i talked about it earlier, the treasury yields going down, it saps the energy away from the more cyclical trades its the big Growth Stocks that benefit in that environment when you get yields very low. Long duration assets like these, you know, high cash flow Growth Companies all of a sudden are the place to hide. Thats a little bit why you have both ends of the kind of seesaw moving as they do here in these markets. Its really like, paul, the Airlines Versus the stay at home stocks the Airlines Versus amazon or zoom or etsy, all the stocks doing well which one looks like a better bet right now given whats going on in the country in terms of reopening rollbacks but at the same time were still reopened yes i mean, i think its a function its a day to day trend here, you know, where is the virus trends going you know, that it has impacts on Economic Growth and what were seeing then you see the capital intensive high Capital Intensive Companies underperforming and you see the Tech Companies which are high growth outperforming. Yields are going down. That signifies that growth expectations are going down. So when growth expectations are going down, people transition into the few stocks and the scarce stocks where there is some growth. You know, just tesla is one of them in the auto sector. Is there any other company oem that is going to see growth this year even close to tesla so people go there. People go into the growth oriented sectors and tech overall, its not just cap tech small and mid cap is outperforming the peer stocks in this instance. With three minutes left, breaking news first on United Airlines phil lebeau wilf, take a look at shares of united. They essentially said they will be sending out noticing to employees. There was an employee town hall meeting and the headline from this meeting is that not enough voluntary departures have been accepted by employees. Thats according to someone who is familiar with the town hall meeting. Read between the lines here, guys this is united essentially saying to their employees, saying to the market overall, there has to be layoffs. Not enough people have taken the voluntary departures as we reported earlier today, united has already indicated to employees that at some point more notices will go out those are required by law at least 60 days ahead of a layoff and they all have any layoffs cannot happen until october 1st. Guys, back to you. What if they take more money . Can they still go ahead with the layoffs from the government . Yes yeah the money is separate from the money for the payroll. The payroll basically said you take this money. You guarantee the jobs through september 30th that was back in april anything separate in that does not change the fact that they can do layoffs come october 1st and all airlines will do layoffs. Theyll be substantially smaller starting october 1st, almost all. There may be one or two that can get by with a few reductions phil lebeau, thank you. Less than two minutes left in the trading day. They eroded quite a bit the New York Stock Exchange is up and down volume this was a little below even before now now 21 to the negative side things have grown a little bit more heavy throughout the day. Take a look. We were talking about the relative performance of the internet sector. Up a little bit. Week to date and the s p 500 banks down 2. 6 . This is a dichotomy that persisted for some time in this low yield environment. The volatility index, some commentary yesterday while i was out, the vix was up. So it works against the idea that everybody is too complaisant. It says the market is still under a little bit of anxiety and stress mike, thanks for that just 45 seconds left gold is up 1800 its up another 1 equities, of course, lower lower across the board dow is down 400 points plus. Down 1. 6 . The nasdaq composite also taking part in the selling is down 0. 85 after a number of record closes the russell is down 1. 9 in terms of the sector performance, Consumer Staples is hanging ton a gain of 0. 9 because of walmarts gain of 6 . All the other sectors are lower. At the bottom of the pile, energy and financials are down 2 at the bell, were down 417 points on the dow. S p 500 is down 1. 2 nasdaq down 0. 9 . Losing almost everything that we gained yesterday. Welcome back, everyone if youre just joining us to closing bell, im sara eisen with wilfred frost take a look at how we finish upped on wall street we saw some selling just in the final half hour of trade there you see and closed at the lows of the day. The dow down 1. 5 . 396 points boeing is the biggest drag on the dow. S p 500 lost 1 in the close it did break the fiveday win streak all sectors closed lower except for Consumer Staples energy, financials and industrials the hardest hit. Technology took a step back after a strong week. Down about. 86 . Held up better than the overall market the russell 2,000 index of small caps got hit the hardest, down 2 into the close. Coming up, were going to ask the former snap chat executive whether walmarts new Membership Program will be able to dethrone amazon prime walmart was a big winner today, up more than 6 . Joining us to talk about this selloff, the spokes paul hickey is here. First though, to you, mike on what we saw thats what a judgement on the reopening getting rolled back and some of the states and the economic hit that could post i mean, i think there is an on going rethink of that whole process thats been happening for weeks. And the kinds of companies that are most exposed to needing a strong recovery are the ones underperforming badly. A difference today i think is market had risen five days in a row. Up towards the top end of this range. The nasdaq in particular had been really the source of all the upside energy in the last few days its more than it was in the early part of the year in february so that is just a natural tendency to just slide back a little bit just because of being overstretched. That means the overall market doesnt have much of an answer in terms of Holding Together it does reinforce the notion that it is a side ways trend within a longer term does it risk exposure so over the past couple of months weve been thinking about adding a little bit more risk. But avoiding an extreme. Adding bonds and more risk on the bond side. Incrementally looking at emerging market debt and within the stock side, weve been thinking less about the u. S. Equity market and more about other cyclical regions elsewhere where we have a little bit more conviction of the reopening as proceeding as planned. So thinking about adding cyclical regions like emerging asia and europe. And thats actually a trend, a cyclical trend that has not paused over the past few weeks International Outperformance versus the u. S so, yes, adding risk not to an extreme and where it makes sense. If you look at what the economy is doing, paul, were watching data week to week to see what is happening with the rollbacks. The old data, the official data like ism services which were out yesterday or the jobs report are coming in much better than expected the economic releases are coming in better than expected. Either the economists were way too negative or were coming back in a quick way. Does this mean the strength were seeing in the market can continue that chart shouldnt be surprising that puts teslas chart to shame. When you look at economic data, two indicators that came out last week got our attention, the ism Manufacturing Index and the Consumer Confidence report for june the ism manufacturing, we saw one of the biggest month over month increases on record. And when you look at periods where you have seen high month over month increases, virtually all of them except for three took place very early in an economic expansion and the three that didnt were in the last four months of the 48 49 expansion. Similar story with the Consumer Confidence that is always early cycle so i think its a little bit of both i think economists got a little bit negative and tried to just like analysts on amazon are trying to do each other, it seems like they were trying to do each other putting in the forecast for q2 gdp he we reached one extreme and Going Forward, its going to depend on how this virus impacts confidence and unfortunately none of us know how thats going to be. We have to take it one day at a time and listen to the incertainlii incertainlies of the market. Thats positive. You know, well you could see some volatility and declines as Companies May not live up to expectations longer term, were positive. Lets get earnings. Were getting one from levi strauss. The 167yearold Denim Company just out results were better than expected still paint a pretty ugly picture of what is happening across retail. The adjusted loss, 48 cents. The revenue was also a tad better pretty much in line. 498 million and just to put that number in context for you, that means that q2 revenues declined 62 overall. They declined in every region that they do business. Ek commerce sales are growing nicely were seeing in a lot of other retailers. Theyre up 25 though. This is a company that does not get most of the sales online Guggenheim Securities estimates 15 of sales online. 88 million in covid19 related sgna expenses for levi strauss and update on liquidity. Liquidity 2 billion at the end of the quarter another announcement here in conjunction with earnings to tell you about levi strauss is going to make job cuts theyre cutting what they call nonretail, nonmanufacturing workforce. So that is corporate jobs by 700 positions. 15 of the workforce which will amount to savings of 100 million. The company is also putting out a letter from chip burg to the entire workforce announcing the job cuts talking about the weakness in the business chip burg says were starting to see some green shoots, we still need to be cautious. We continue to see covid19 infection rates increasing in many states here in the u. S. And hot spots around the world so talking a lot about the uncertainty there that is leading to these cuts that they are making when it comes to the workforce. The stock is bouncing all the way around it was down when the results first hit. It its now gone positive on the session. There is an invterview tomorrow at 10 00 a. M. On squawk on the street where youre selling jeans. I havent put on a pair of jeans probably fwh 2020 and youre selling to wholesale and depend on Retail Stores and most of those had to close during this quarter. While they say most of the stores are open right now, we know that the traffic for retail in particular is pretty lackluster its highlighting a sign of the times. Levis is up 3 or so in after hours trade. Pivoting back to the Broader Markets. Last hour we spoke with Loretta Mester heres what she had to say about the path of the economic recovery i just think this is going to be a long road back to where we were in february and i think, you know, thats why the fed has been saying were there with our tools and we anticipate having very common Monetary Policy in the future. Its going take a long time to work through this. Mester also weighed in on whether fed policy is playing a role in the disconnect between the stock market and broader economy. Dont set asset prices with the policies were really focused on the goals of price stability and full employment. Of course, we took aggressive action earlier in the year when markets were disrupted in terms of their functioning it was about market functioning not about the levels of prices and when the treasury market was very ill liquid in the year, we took aggressive actions to address that it would not help anyone to have a financial market, you know, instability at the same time we were having the pandemic the other point that president mester said was she did expect and did think the economy needed more fiscal stimulus which is not necessarily guaranteed as yet. With that all in mind, do you think the market has fully priced in what was a relatively down beat outlook for the economy for the rest of this year i think there is more of a realization today compared to in may that this is the beginning of a recovery. But its going to be a slow and uncertain one. So i think that does put a bit of a ceiling for equity markets until we get a little bit more clarity on treatments and vaccines but i think what also helps to put a fore is the fact that the fed see it this way and theyre not in my rush to remove accommodation. That helps to provide a bit of a floor. I think sometimes we understate how important the support from the fed has been its not just a sugar hichlt its not just moving investors from very low paying bonds into equities its much more than. That its the fact that they have recovered 99 of the spread widening they had in early march. You have a Financial System that is working its the fact that Investment Grade spreads recovered 85 of the widening so you have credit action flowing to companies that need it so its so important ultimately, we do continue to expect a bit of a trading range to continue with the floor coming for Monetary Policy it can maybe create baa bit of down side and could be more on the fiscal side. There is an expectation that more will be done not just on monetary side but fiscal side. So that is an upcoming risk that were watching very important to get an extra trillion in fiscal support by the latest early august to maintain the trading range going. Paul hickey, quick final question on investor positioning. What is your take on that at the moment i think quickly said, were still continuing to see flows out of mutual funds and etfs on the equity side. Investor sentiment polls are low. Under 25 bullish for the last three weeks. Then we have 13 other times. Three months and 12 months later. The s p 500 is higher every time i think shorter term, a little bit of a question. Weve had five very strong days. Longer term, as long as we dont see things completely fall off a cliff, economic wise, you know, i think the market can look past the short term few quarters of weakness that were going see in earnings a lot of people reacting to her saying that. The fed doesnt set asset prices when they are out there buying Corporate Bonds and etfs when it has been stated that qe in the past from former fed chairman ben bernanke, one of the goals is to prop up the markets and get the wealth effect into the economy. A debate for another day guys, thank you. Paul hickey and gabriella santos, we appreciate the time despite todays selloff, walmart closed up more than 6 will well discuss the retailers new plan to take on amazon with the ceo of e Commerce Company imran khan. And then civil rights organizations just meeting with facebook executives this afternoon. Doesnt seem like it went very well organizers are holding a News Conference as we speak facebook approached our meeting today like it was nothing more than a pr exercise the ceo of the naacp was at that meeting. Hell join us live were back in just 90 seconds on closing bell. A lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Shares of walmart popping today saying theyll be unveiling a Membership Service to take on amazon prime and coming later this month. Walmart plus will cost 98 a year which comes with perks like same day delivery, discounts on fuel, early access to deals. Joining us for more is the former snap chat chief Strategy Officer and ceo of verishop. Great to you have here we were curious as to how you felt about this news that walmart was taking on amazon so directly as you are a new entrant in this e commerce space. Thank you for having me. First of all, ecommerce is a very large opportunity if you look at precovid19, ecommerce was only 15 of the u. S. Retail market i think over the next decade, it will be 50 to 60 the way we saw that Digital Advertising so as that means almost a trillion dollars will probably shift online over a few years. So i think its a huge opportunity and it makes sense what walmart is doing and i think, you know, theyre trying to drive convenience convenience is a very important factor for customers to shop on your site. What have you seen during the pandemic era normally startups are having such a hard time startups in retail but as someone in ecommerce, i think now is the time where people are spending more online. Yeah. We saw healthy growth. For example, in april our revenue grew 30 these are month over month growth rates i think what were trying to do and i saw your segment on levis, i think brands are now really struggling to tell their stories to consumers you know, there is a significant shift had happening. And so what were trying to do is create this platform to tell the branch the stories a brand is a product they should tell stories Consumer Needs to discover that. The discovery is missing in online shopping. So what were doing, were bringing the best in class convenience like we see on amazon and walmart but were also marrying that we launched to day the new app where you can come and discover n new branding and new product and buy from the pictures and videos so thats what really excites us about how we can bring discovery and lets the brand tell stories and bring the convenience together you sell higher priced items, imran. When you see the walmart kind of direct competition with amazon prime story, do you think that further dewhlays when mass mark online consumption becomes profitable i think, you know, what im really focused on is the unit economics. Can we build a business that is Profit Margins that drive contribution profit . One thing you dont want to do is scale an unprofitable business when you scale an unprofitable contribution margin business, you lose more money. And i think thats a big ris wk a the lot of the private companies we see so what we really focus on is our business on an economics profitable we should invest more in the business because we believe its a very, very largeopportunity. Convenience is a very important factor story telling is also a very important factor there is no story, there is no difference between levis jeans or, you know, private label jeans. And so thats why i think we really creating a platform that lets the brand tell their stories. Thats really missing on other ecommerce and bringing the best in convenience together. This has been theyve been trying to crack this at facebook and instagram and former snapchat for a while bringing shopping to social media. Sound like youre going the other way. Bringing social media to shopping why not just partner one of those companies to get at this great question. And i put a lot of thought behind it over last few years. Ill tell you a story. I went to get a new iphone about to give away my phone. I moved from verizon to at t to get the phone. I just wanted to make sure the phone works. I think a lot of the companies who come in from the social to solve the commerce problem they theyre missing the fact you need to solve the commerce problem first. That means when youre buying something, sara, if youre buying a dress or something for your kid or buying something for your family members, youre giving somebody money and youre giving a trust you want to make sure that product shows up our net score is now 75. That is higher than apple. Now were building the fun stuff. So i dont think you built can build innovation until you deliver the core experience first. Thats what were doing. Mike pompeo can possibly consider restrictions on tiktok in the u. S. And snap is jumping 6 in the session because of that what is your take on that story and the level of ip that gets stolen by chinese Tech Companies and whether they can be trusted . Tiktok is a great product. I use it personally. Its really addictive. It is good in terms of building the profit they have done is really inspiring so they have done a really good job building the team and building a great team behind it. In terms of, you know, the data privacy and the data, im not privy to that information. I dont have all the knowledge to really make a look at a statement on that. In general, take a step back im a big believer of free market im a big believer of more competition is better. And so i think, you know, to be honest with you, some u. S. Companies are facing, you know, unfair scrutiny in International Market whether its in europe or whether its in asian market we think there has to be fair competition for the u. S. Companies in the Global Market and at the same time im completely fine as long as its fair and as long as its legal you know, i always welcome fair competition when i was at snap chat you know what . That is healthy for consumers. Thank you for joining us. Thank you for having me. Still ahead, Mark Zuckerberg wrapping up meeting with the hate speech leaders at boycott they were deeply disappointed and didnt hear anything today to convince us that zuckerberg and the cleeolleagues are taking action well speak with the president of the naacp who was in that meeting and whether he agrees with that sent ted lexus vehicle at the golden opportunity sales event. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. A lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. And tailored recommendations. The xfinity voiceremote will find exactly that. Happy stuff. If the groups happy, im happy. You can even say a famous movie quote and it will know the right movie. Circle of trust, greg. Relax the needles are jumping. You can learn something new any time. Education. And if youre not sure what youre looking for, say. Surprise me. Just ask what can i say . To find more of what you love with the xfinity voice remote. Big selloff into the close lets go to mike santoli looking at the valuation of stocks right now versus bonds mike yeah, sara. This is 35 years from net davis. Comparing the earnings yield of stocks again high grade corporate yields right along the parody line. This is proximate fair value theyre even a couple of take aways, look at how cheap stocks were. That bore out in good fort returns. Then look at how expensive stocks were in the late 90s and the 1987 crash it works against the idea that equities are in a similar bubble at least against corporate yields if you believe yields stay down there, there is not much of a catalyst for a downward revaluation of equities any time soon guys looks just about even yeah. Mike, thank you coronavirus concerns forced gyms to reclose in south florida and arizona. But up next, were going to discuss the new results of a study showing it may be safe to alw op tlopeleo work out again thats coming up disney coming out with a statement saying they will continue the phased reopening of the Walt Disney World resort in florida on saturday. The chief medical officer of disney parks saying in part from increased cleaning and disinfecting across our parks and resorts to updated health and safety policies, we have reimagined the disney experience so we can all enjoy the magic responsibly. Shares up a bit here after hours. Looks like theyre Going Forward despite questions and rising case numbers in florida. Yeah. Including rising hospitalizations as well. Well see how well that goes and what level of attendance they v as you said, fractional move higher after hours. Coronavirus cases continue to spike in many states. Sort of as we just talked about. Scott cohen is having a look at which states are better equipped to handle the response to the pandemic hey, scott hey, wilf we couldnt stop gathering data including on health and Health Care Resources like hospital beds available the this is data through yesterday. Icu beds and standard beds per 100,000 people north dakota leads the way at 11 intensive care beds for 100,000 intensive care people. Connecticut is doing well with the case count has just one bed per 100,000 people in the intensive care unit and just 43 regular beds some state populations are at greater risk than others of serious medical complications from covid19. Utah is least at risk of 30 of the population west virginia, most at risk at 49 . This year vermont is americas Healthiest State according to the United Health foundation with low rates of diabetes, Clean Environment and the low rate of uninsured. The least healthy state is mississippi with the highest rates of diabetes and cardio vak vascular deaths and 12 of the population uninsured as we go forward and states continue to look at competitiveness along with everything else, health and health care are going to be important issues once we get out of all of this and as they are now. Guys is. Is there any way to tell which states used the opportunity of having time since the new york pandemic really exploded a few months ago to prepare the Hospital Systems and beds and their equipment for what theyre dealing are right now . The number of overall hospital beds stayed constant were looking at things on the state level. Were out here in california theyre having some real difficulties in Southern California and shipping patients up here to Northern California so its different within the state as well as the states an aggregate. They seem to be trying so that is one reason we look at the Resources Available as we eventually hopefully come out of this very difficult situation and something that is going to, you know, occupy our attention on the competitiveness front for a long time. Absolutely. Thank you. Starting tomorrow, miamidade county, florida, will force gyms among other businesses to reclose. This comes as the Arizona Governor recloses some businesses as well including gyms for one month both states battling coronavirus surges in terms of case loads. Scientists no norway conducted a study to see if people were at greater risk of infection if they returned to a gym one of the leading scientists behind that study joins us now he is a professor at the university of oslow. Nice to see you. First, take us inside the study you did. How big it was and what were some of the specifics that led you to this conclusion that ultimately it looked safe. Thank you, its great to be here what we did is all gyms as you just said was in the u. S. , all gimz here in norway were closed during the early faphases of th pandemic we were concerned about the health and wellbeing of people. At the same time, of course, we were concerned about the virus he wondered how it contributed to the virus spread. Given certain measures for increased hygiene, for social distancing and will be save to reopen gyms and facilities the so what we did then about six weeks ago is that we randomized 4,000 members of Training Facilities and gyms here in as low in norway to allow access to the gym or continue to no access which was the standard in the country. At the end offed study, we found there was no difference in covid1919 transmission and infection rates or clinical disease which is hospital transmission, hospital admissions, icu admissions, v t ventilator treatment in the two groups there is only one person that got the virus during the study period and this person was not infected in the gym but at his workplace. We conclude its safe to reopen the gyms i wonder how specific this is to norway. And whether we can glean anything as it relates to the united states. It sounds like the social distancing enforcements were strict i dont know if americans would follow that same sort of requirements not sure how many masks were used it sounds like the prevalence is low of the actual disease. So is there anything that the governors here in the states can take away . Thats a good question. Lets start with the measures. We had strict measures for hygiene. We had victims at each work station. We ask people to wipe off their instruments and their gear before and after they used it. And we had had three feet distancing between everybody at all times in the gym and 6 feet for high intensity classes such as spinning. T basically, every other bike was closed down. That worked very well. I dont know if it would work in the u. S. I guess it would and, of course, we had people there who made sure that the members were compliant with regards to background transmission during the study, we had background transmission rates of the virus here in oslo that was pretty comparable with many areas in the u. S. For the people using the gym, that risk was not increased by going to the gym how important, though, is ventilation and recycling of air in this analysis i mean, is that not an absolutely key factor which might be irrelevant whether its a gym or a Movie Theater or a bar . Youre raising an important point. The distance between people when there is activities. When people breathe a lot during these activities, the distance is important so we were saying six feet and six feet worked very well in our study. Interesting study thank you for joining us thank you nothing more than a pr exercise thats how one civil rights leader behind the facebook ad boycott said that ceo Mark Zuckerberg treated the meeting just this afternoon. Naacp ceo Derrick Johnson was in had that meeting hell join us later on closing bell to tell us all about it. Welcome back time now for a cnbc update with sue herrera. Hello, everyone heres whats happening at this hour dr. Anthony fauci says he believes governors should mandate the use of coverings in it public. Hae az warning for those encouraged by the slowing death toll its a false narrative to take comfort in a lower rate of death. So many other things that are very dangerous and bad about this virus dont get yourself into false complaisancy the white house is dismissing claims in the forthcoming book about the trump family from his niece mary trump she says she hasnt seen it yet but calls it a book of falsehoods and Georgia Republican senator kelly lawfuller opposes wnba teams adding black lives matter to their warm upjerseys she also is a coowner of the wnbas atlanta dream team. The wnba says theyll continue to advocate for social justice youre up to date. That is the news update this hour sara, ill send it back to you sue, thank you. Civil rights leaders behind the facebook ad boycott say Mark Zuckerberg did nothing to convince them hell take action against hate speech. Kherext, well talk to naacp si drick johnson in that meeting. He is joining us on the other side of the break. Hey there people eligible for medicare. Gimme one minute. And ill tell you some important things to know about medicare. 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[announcer] finish your degree at snhu. Edu. 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. Facebook wrapping up their meeting. Organizers didnt seem too pleased with the outcome the ceo putting out a statement saying facebook approached our meeting today like it was nothing more than a pr exercise. But boycott Coalition Leaders and advertisers understand that the stop hate for profit effort is about the life, safety, and freedom of our communities lets bring in Derrick Johnson, naacp president and ceo who is also present at todays meeting. How would you qualify the meeting overall, derrick well, facebook is more interested in dialogues than action and outcomes. It was a pleasant conversation but at the end of the day, we have done nothing or theyve done nothing, i should say, to keep our society safe and protect our democracy. Its not enough. We gave them a list of ten things three weeks ago they asked for the meeting the outcome is the same thing we got from the last meeting, very little to no action. Im sure you accept theyre in a tricky position, derrick. They have a lot of competing pressures on them. What could and Mark Zuckerberg have done today that would have satisfied you . Well, it its not a tricky position to work to remove hate, racial hate from your platform its no the a tricky position to secure our democracy they had ten things. There is nothing that was done you think about the politician exception and all the platform that we had a politician who would say when the looting starts, the shoog begins that puts africanamericans at risk you have africanamerican employees and they tnt put in consideration. They left that post on the platform the reason it was there is they lack any civil rights person with experience to speak to how that post alone can insight violence what did they say what did Mark Zuckerberg say what did cheryl sanberg say . The same conversation they speak about progress being made but we have nothing to measure against. They talk about value alignments, good conversation, nothing was done they talk about maintaining open dialogue weve done that but there are no actions. Do you believe they approach this as a pr exercise as a meeting member characterized it . After being involved with facebook two comes, the only thing i can measure is the outcomes and no actions. The purpose is to continue a dialogue which seems to be the most interesting thing the thing theyre most interested in there are no outcomes. There are no outcomes. No outcomes. I keep repeating the same thing. Just like any company, theyre looking for outcomes to return on investments there is no return on the investment of the dialogue weve had over two years derrick, we just put the number of giants in Corporate America that are either pausing or pulling ads from facebooks platform so was there any conversation about that and what would happen next in this movement that you created, that youve enlisted so many well known brands like cocacola and unilever into the cause. We appreciate those brands and the value alignment that we see. Those brands like naacp and all of our partners, we believe that our society should be free of hate speak we believe that our society should ensure and protect our democracy. Thats a value alignment and unfortunately facebook has not done anything to selfregulate to ensure that racial hate groups are removed from the platforms that have qualified person neal can understand and appreciate the need to have a civil rights review of their policy and they have not done anything to ensure the protection of our democracy. So are you going to call for this boycott to last beyond july into august . Were going to continue to push to make sure our communities are safe i think about africanamerican employees at facebook. Some were on the zoom call and i asked a question what impact do you think their life would have when they leave the safety of that campus and go to africanamerican communities and racial hatred posts are there to insight incidents you put your own staff at risk those companies that align with our values, they have africanamerican employees they have jewish employees theyre putting employees at risk we should not be in this in 2020 looking at Companies Like facebook who are refusing to do basic things like protect our society from racial hate speech and protect our democracy. How do you think this ends, derrick . Do you think facebook will make the type of changes that youve been looking for or do you think well go back to normal as if nothing ever happened or do you think lots and lots and lots of more companies will add their names to the list of those boycotting facebook . The naacp, were 111 years old. We have been fighting against discrimination, racial hatred that whole time. Well continue to fight. We have no option. And at some point we hope that facebook will wake up to the tht to keep communities safe they have a responsibility to protect this democracy and many of the partners who have stood up with us, we hope they will continue to stand with us. We must continue to fight. Our lives depend on it. Derrick johnson, thanks for joining us. Thank you. Up next, a threat to the e i comy eno thfbcalling out china. In a highly capable lexus suv at the golden opportunity sales event. Lease the 2020 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. Eyou say that customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. 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Breaking news to get to on the covid19 front texas new cases just out jumping by more than 10,000 for the first time in a day. So clearly that spike continues in texas floridas been above that level for a little while now. Yeah. Well have to see if it affects the markets tomorrow switching focus, fbi director Christopher Wray speaking out on chinese cyber activity earlier today as we report on all these scientific breakthroughs on covid19 research, the fbi director said today theres a secret threat lurking behind the scenes at this very moment, china is working to compromise American Health care organizations, pharmaceutical companies and academic institutions conducting essential covid19 research. The fbi director said those attacks often come within a single day of covid19 announcements in the media wray describes chinas cyber theft overall as one of the largest transfers of wealth in human history. He said more than half the fbis Counter Intelligence cases relate to china with the fbi opening new cases every 10 hours. Christopher wray also said that every one of the fbis 56 field offices across the country currently has a counter espionage case against chinese targets right now. So this is a very preoccupying topic for the entire fbi right now, guys. Back to you. Huge. Eamon, thank you the market today did finish at just about the lows of the session. It was a pretty broad selloff. We saw every sector get hit except for Consumer Staples, a 1 decline on the s p. Does it signal more weakness as we deal with these rising case numbers and roll back the reopening or is it just a pause in the fiveday win streak the market just came from . It would basically look the same whether it were a Inflection Point or a pause. The staples outperformance owes a lot to walmart all that being said, i do think theres kind of a wear and tear on the cyclical part to the market that has not been escapable. You look at banks with a new relative low against the s p 500 going back a few months. Thats not great news. Treasury yields are showing a very subdued outlook for the pace of the recovery this is going to be the background concern that has been there for a little while the big question has been is it going to be a die when the big cap Growth Stocks that drive the nasdaq are going to make up for that it didnt do it today. It looks like a pretty ugly reversal on the nasdaq on a shortterm basis today. The intraday moves on the banks as well the last 10 to 15 trading sessions have been terrible almost always opening high and closing low regardless of the rest of the market the s p 500 hitting a low today. Of course, banks do start earnings a week from now clearly theres plenty of people willing to sell and the highs of the session. Also the vix is up today and gold closing above 1800 worth noting the broader s p 500 down just over 1 . That does it for closing bell. Fast money starts now. Fast money starts right now. Im melissa lee. Guy adami, tim seymour with us well break down where the market is headed from here plus, attention walmart shoppers, the nations biggest retailer reportedly ready for prime time the big headline that sent stocks soaring today and were answering your stock questions. Tweet us at cnbc fast money and get your answer on the air