Transcripts For CNBC Closing Bell 20240712

Facebook, netflix all turning positive we are up 3 4 sorry, 2 3 on s p. Another higher day, certainly off session highs. Coming up on todays show. Great lineup uper facing fresh lawsuit from massachusetts over how it which was its drivers. Early investor bradley tusk has an idea that can help them avoid headaches and take on rival lyft hes going to join us to explain. Speaking of the pandemic, new Jersey Governor Phil Murphy will join us to discuss his states path forward, whether hes prepared for what the fall will bring in the northeast. Lets focus on two key stories meg tirrell with modernas vaccine news and Big Bank Earnings certainly better with Goldman Sachs. Meg, start us off with moderna. Hey, sara the full phase one trial results from the Covid Vaccine published last night in the new england journal of medicine. This was 45 in the trial we got a glimpse of 8 out of 45 on important key data. These were healthy adults who received two vaccines a month apart. Everyone generated antibody, the important ones that actually block the virus. At the dose level they are taking into the phase three trial they saw levels of neutralizing antibodies were two to four times higher than patients who recovered from covid19 the hope is that will be protective they did observe side effects particularly after the second shot with this vaccine things like fatigue, headache, muscle pain, fever in some patients those are going to be things we have to watch closely in the larger studies moderna is on track to start that 30,000 participant phase three trial july 27th. Pfizer also saying starting phase three later this month astrozeneca on its heels moderna stock is up, astrozeneca is up almost as much on report their phase one data is going to be published soon. We saw from reuters in the journal of lancet on monday theres errors the data is positive the company not telling us and were going to have to wait to see the data when they are in the lancet guys. Very exciting hope they can come through meg, ken frasier of merck in the vaccine game, werent on the list, i guess further behind, has been cautious on the time line and telling people not to get too excited. Is he going at it in a different way, a different method . What do you make of his comments. With Harvard Business school he called the time line of getting a vaccine by the end of the year a grave disservice. He said we just have to be really careful making sure we really understand science and everything about these vaccines before deploying them broadly. We actually asked modernas chief medical officer about that and he said he thinks they are doing it in the most ethical way possible, being careful while moving as quickly as they can. We know merck has two vaccines itself its advancing for covid19 they havent put the time lines out there the same way these other companies have we know they are priorities among the Trump Administration and operation warp speed. Meg, thank you. Want to highlight a few koefd related data points from the beige book in the last hour. The headline that stood out to me was on jobs contacts in nearly every district noted difficulty bringing back workers because of health and safety concerns, Child Care Needs and generous Unemployment Benefits. Many contacts who have been retaining workers from help from ppp says Going Forward the strength of demand would have layoffs. Thats broad regional data including in norse realize closings were down more than 50 from a year earlier and new contract signs down roughly 75 . Also noteworthy many retail tenants on commercial real estate still behind on rent but real estate contacts said they remained optimistic in the longterm. Then out of chicago, they mentioned some strength in home improvement, food and beverage and Sporting Good sectors and vehicle sales as well increased sharply. Apparel was selling but only with very big promotions a snapshot of whats working in the consumer kansas city all meat packing plants were said to be operational but supply chain issues related to covid were still impending some functions fred, overall a signal things were better than the month before in the snapshot of the data leading into july but still pervasive from real estate to consumer to employment on covid and on the uncertainty always a room good up to date color piece on whats going on across the districts in the country. The real estate closings in new york as well particularly fascinating given how strong a rebound in last two months in pending home sales its a clearly regional factor you can understand that given people escaping the major cities it will be interesting to see whether that does rebound in due course or not or whether expensive higher tax places that dont benefit from people escaping and seeing what nonurban living has been like in recent months. Whether they bounce back or continue to suffer. And interestingly, i pulled out the new york city snapshot because it was so weak there was mention of strength outside of new york city in suburban places and traditional vacation places, upstate new york as weve heard anecdotally people have flocked up there to get out to bigger spaces with a yard outside of the city and public transportation. Want to also mention the banks Goldman Sachs with results blue pass estimates, the stock is well off its highs, wilfred. Whats driving it . Smashed the analyst top and people line estimates Goldman Sachs did for the quarter. The most pronounced part trading, fixing concurrences and commodities. That was 4. 2 billion up 250 year over year jpmorgan yesterday was up 120 , citi up 70 . Nearly 3 billion inequities trading revenue up 46 , also very strong and better than jpmorgan and cities in terms of year over year gains banking revenue 2. 7, up 36 , also very strong the question, of course, now is whether all this can be repeated in the second half of the year here is ceo David Solomon on that topic as it relates to Capital Markets. I dont have a crystal ball as to whats going to happen in the next six months. Ive had discussions with people where people talk about some Capital Markets activity being pulled forward theres no question that some refinancing has been pulled forward. At the same point theres been a whole bunch of activity we could never imagine would have occurred because of the virus and the economic consequences of the shutdown so when you look at Industries Like airlines and cruise and travel and leisure, theres been an enormous amount of Capital Markets activity that was completely unanticipated. Investment banks usb numbers strong, beats on both lines and they had less of an increase in provisions that had been forecast pnc less positive on the provisions front but nonetheless the stock higher while usb and pnc. That will be next week as they report wells with yesterdays losses. Positive vaccine news no doubt moving the sector as it has all cyclicals. Despite that all bank ceos have been referencing enormous uncertainty over the Economic Outlook and reliance on government stimulus. That is a question about how sustainable this bounce in bank stocks is today. Nonetheless they are up and tomorrow well hear from Morgan Stanley and bank of america, sara. That is the big question. That is fiscal stimulus in a way. They have seen this artificial boost in terms of client accounts and direct deposits, the bankers have, that is, from their customers because the government stimulus has been plentiful, extra 600 on Unemployment Benefits per week, ppe funding keeping people on payrolls the question is, is demand going to come back enough for jobs and in the economy to get that going when the stimulus effects wear off. To me that seems like biggest uncertainties and Common Thread when they hear from bankers why they are not going for vshaped recovery theme even if not pervasive weakness they are preparing for it because a lot has been restored artificially because of the Unemployment Benefits. Absolutely. None of them are confident in what they can predict about the second half or next 18 months. All of them say were confident we provided enough for bad loans if our base case plays out but less confidence than ever before that their base case will be the reality. The other oddity i bring up, the only bank with widespread beats in almost all of its segments with no caveats, no off sets to the positivity is Goldman Sachs. Goldman sachs is the worst performer of the banks today it is up only 1 wells fargo, which was unquestionably the worst performer of the group is up 4. 4 today it was down more yesterday its kind of strange that when you look at the performance today. Similarly yesterday we were getting a cyclical bounce in other sectors but banks didnt perform. Were a little all over the place. Part of that does come down to where we were coming into this week banks have been terrible performers even if youre having a less positive outlook from the ceos in terms of macro picture, youre coming off a low base and thats certainly a factor. A bit afrotation theme in Broader Market technology is not doing as well, for instance, as industrials and materials, so value is working that tends to be the group that had been lagging is picking up some steam today maybe thats going on within the banks a little bit as well well hit it all into the close, industrials, financials, material in the market after the break, investor bradley tusk said they could handle regulatory winds by becoming ruthlessly woke hes going to explain what he means next youre watching closing bell on cnb usaa is made for whats next were helping members catch up by spreading any missed usaa insurance payments over the next twelve months so they can keep more cash in your pockets for when it matters most find out more at usaa. Com for when it matters most our Retirement Plan with voya gives us confidence. We can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Im good at my condo. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Save without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. A fight is between massachusetts Ride Share Companies and lyft the state filing a lawsuit against the two companies claiming they are misclassifying drivers as independent contractors instead of actual employees. The second state to challenge the classification of uber and lyft drivers this year california, remember, filed the first lawsuit against the two companies in may our next guest says instead of repeating history and engaging in a fight they should be ruthlessly woke and engage the reclassification of workers. Joining us bradley turvsk he was an investor and partner with uber. Just for clarification, youre not in the stock or in the company anymore, correct no. Ive been out of it since the end of last year so lets talk about what youre proposing here. You want them to classify as workers. Why would a company that already struggles with profitability go to such a major cost that would only drag on the loss in order to make these workers fulltime right so i know it seems a little crazy but if you look at ride sharing right now, its not a profitable business for either company. They are cost sharing, price war subsidizing drivers and its not working for everyone the reason that happens as in contractors drivers are allowed to drive for anyone they want. Every single driver is on the uber and lyft platforms. Lets say they drivers were reclassified as fulltime employees, then they have to pick you cant be an employee for one company and work for the competitor because uber is much bigger than lyft and offers driver more opportunities uber can say to its drivers, look, us or them. More drivers uber, lyfts wait times go up, customers start to leave because they dont want to wait they defect to uber. Drivers start defecting from lyft because they dont have as many fares and it builds on top of itself to the point lyfts business cant survive shortterm it would cost uber more money but longterm its the only way to take lyft out of the game and truly be profitable. Isnt that the whole thing, the whole way they were going to achieve profitability and make this work was to not have employees as employees but as contractors because of the costs associated with benefits and wages and Everything Else . What would that do to the economics of all this. It would certainly increase their cost shortterm, increase them by 20 . The original promise of uber hasnt been realize. They are supposed to be dominating ride sharing in china right now. Uber was supposed to be having flying cars and Autonomous Vehicles, cargo trucks that really exist, so sticking to the promise what the company wanted to be in 2013 or 2015 doesnt make sense because the company has been struggling for aling time now if it wants its core business to be profitable, ride sharing mainly in the United States, its got to find a way to dance itself from the competition. Yeah, that will mean initially that it costs more money if you have to give drivers benefits and other things like that but longterm if they stay on your platform and leave lift, you no longer have to be worried about being in a price war with lyft and you can become more profitable. What about the very longterm bradley, two thoughts come to mind one, would you face antitrust issues if they did become the only game in town . What about the ultimate dream of Autonomous Vehicles if they have a fully larged workforce, perhaps unionized workforce, would they face hurdles getting rid of those employees to move to Autonomous Cars yeah, its a good question. So in terms of the first one, i think if uber tried to buy lyft you would run into antitrust issues i think in the past thats why uber did not buy lyft. However, if lyfters cant compete and ultimately dont have enough riders and drivers to support the platform thats not ubers problem an no regulation to stop that from happening. In terms of Autonomous Cars, its definitely the vision a lot of it depends who you talk to people say were at level four, almost at level five, its coming right around the corner, get ready. Other people in the industry that say were at least 10 years away so it kind of depends on what you believe. If uber believes they can roll out a fleet of Autonomous Vehicles in the next between years and Regulatory Approval to do that, because its not just the technology but having the government on the board with it, yeah, they wouldnt want to be this but if you had to bet, its more like 2030, not 2022. You also put in your piece a little anecdote but meeting trfs, thats where you get ruthless out of ruthless woke. Hes focused on turning around the culture and ultimately achieving profitability. Is it working . Its not. Across the board a really nice man. When he came into the company, take down the temperature, uber is being too controversial, lets calm things down the problem is its been calmed down on everything yes, the Workplace Culture may be a little better but at the same time you dont really see that kind of innovation anymore that you saw when travis was ceo, counterintuitive thinking, hey, what if we embrace worker classification instead of routinely fighting against it. You dont see that its a traditional wall street play, may be a good acquisition, probably is, but not particularly creative thinking, just standard. Yeah, in the piece i said thats why being ruthlessly woke is better than the status quo so right now its ruthlessly conventional. The uber dream in 2015 hasnt played out yet what percentage chance do you put on uber going bust i think its going to be a while before they go bust. They have 9 billion in cash on the balance sheet. So i think thats not really happening any time soon. But if you want to a lockterm look, wilfred, like you said, if ride sharing isnt profitable, its hard to understand how uber is profitable. At a certain point if they cant make money, shouldnt be in business lyft said we wont give assurances we will ever be profitable thats crazy to invest in a stock if you never think the company is going to make money there is this notion of growth is important and you can subsidize growth losses for a while. At a certain point have you to make money if you keep going the way they are, thats not going to happen. Brad, thank you so much for joining us. Thank you for having me. We have 38 minutes of the session, off the session highs, dow up 141, high of the session was up 430 after the break, advertising titan sir martin sorrel will join us to discuss shifts in the industry due to thpaems e ndic plus his thoughts on facebook and apple boycott. His thoughts, back in a couple [announcer] if youve tried college but never finished, snhu lets you transfer up to 90 credits toward your bachelors degree. [woman] it doesnt matter how old you are, you can do it. You can finish. [announcer] finish your degree at snhu. Edu. In a highlyconnected 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. Covid19 to social justice boycotts, advertising budgets are slashed and shifted. Sir Martin Sorrell led the conglomerate but now on digital ads with twoyearold firm. Includes netflix, google, merck and cocacola. The firm announcing today it plans to raise up to 100 million pounds, 6 of existing Share Capital to accelerate its merger and growth strategy. Sir martin joins us in cnbc interview. Sir martin, good to see you. Good evening in england. Beginning, wilfred. Good to be with you and sara. We just said briefly the share price has been on a tear, not what you would expect for something so linked to the economy as most advertisers have been how do you manage to achieve that well, we manage to achieve it theres 2,600 people at s4 in 30 countries. Started 21 months ago from ground zero, from a sheet of paper. Weve built it off three things, first party data, will, content and we have four key principles. Purely digital because thats where the growth is. That holy trinity of beta and content programprogrammatic. Tag line, go to market, faster, understanding ecosystem, six big platforms, hardware and softer and cheaper, not ignoring innovation and branding but certainly efficiency then lastly, and most importantly, going back to your comment about conglomerates and ad Holding Companies a p l structure. We made considerable progress. As you say we did an equity raise of market cap is about 1. 6 billion pounds crossing 2 billion. We rank already and well into the top 200 companies here on the ftse 350, so about 180 is our position post the fraiz. Fundraise. Thats a good thing, not compared by the market to the ad Holding Companies, over that twoyear period dropped in value by 40 to 50 were more compared to the tech platforms, obviously comparing a peanut with an elephant. Putting that one thing aside, were very much tagged as being part of the tech sector and thats what we continue to want to be, to be seen as more tech led. Our ambition is to build a techled new era, new age Advertising Marketing Services Model which basically disrupts and intermediatiates traditional ad Holding Companies more akin to accent youre than wpv which i still retain my personal interest. Sir martin, well get to the boycott question with facebook but just considering the covid impact, the assumption is advertising spend is down. But for the tech platforms, is it still up because of structural shifts in the industry its flat this year last year media spend, the market 600 billion, this year about 500 billion overall the digital part of the business is now onehalf because digital this year will be flat our own growth, as you know from our trading this afternoon in conjunction with the placing, our own like for like is up 12 . So through covid and the first 12 months five months of the year were up 12 . On pro forma up 14 . So our growth has continued. That is even greater than that flat level of digital. We saw in the First Quarter results of google and facebook and amazon, amazon actually was very strong growth i think jeff bezos and his colleagues invested the super profit there, like 4 billion in covid19, ppe type equipment and methods in 175,000 more employees to help build their model. Even google and facebook actually had relatively good First Quarters i think they will be more affected in q2 affected by enterprises which people forget is 60 we dont know, about 60 of their total ad revenue. Google, facebook, and amazon, dont forget, are the engines of Small Business getting onto things like the boycott, you have to be careful what you wish for. By damaging the prospects, restricting their prospects, you hit Small Enterprises and you hit jobs the key issue is going to be jobs as we go through c19 crisis and therefore giving an environment certainly in Digital Advertising the reason why digital is flat and smbs continue to increase their spending on digital and even Large Enterprises do is its cheaper and more network tv tends to be more fixed with up front in decline and probably nixed by whats happening with c19. Tv free to air has come under pressure not just streamers but lack of flexibility on advertising and of course absolute cost. You sounded a little caution. I believe youve been on the record, sir martin, saying you dont necessarily agree with the idea of boycotting facebook to force change why is that . What do you think the upslot of this is going to be . I think its best to do this in a direct conversation with facebook i think to be fair to facebook, they have hired over the last few years Something Like 35,000 employees the last time i checked. I think it may well be more to monitor editorial content. They have tightened their algorithms they have done something about the facebook groups, the extreme groups so they had responded i think its unfair to suggest they havent responded i think a lot of advertisers are doing this out of genuine concern obviously about their recent events around black lives matters and around george floyd and the senseless murder of him in america and the other events in america it has caused genuine concern and there has been a shift in Consumer Opinion but in order to get it done, im not sure there is the necessity. If i go back to what happened with youtube in 2000, over issues around safety, privacy, interference in elections, similar sort of thing happened google did modify its approach and did change i think facebook is in the process of change. As i pointed out before, you have to be careful what you wish for. Just like jack says alibaba and tencent in china and jobs for entrepreneurs and the economy, google, facebook, amazon, the three western engines, with tencent, alibaba and facebook generating marketing cheaply, flexibly with lockdown google has become more effective from a performance point of view. Television also has become more effective in terms of cost because of that lack of flexibility and absolute cost of tv, it has been less prominent when you say the budgets have fallen, that is true less so with tech crimes about half of our client base, more with cpg and autos no the so much with health care but certainly Offline Retail but at the same time there has been a switch to digital because its cheaper and more effective. Sir Martin Sorrell, good to see you. Thanks for joining us. Thank you sara, good to see you again. Still ahead the coronavirus pandemic rocked Retail Industry sending many names into bankruptcy and derailing rhythms investors and executives rely on well discuss that with coceo walter robb in the show. A check on bonds with you. Yearold is higher but not as high as you think with persistent rally and vaccine and vshaped hope. Tenyear treasury up slightly. 63. A bit of selling of bonds. Well be right back. Welcome back dow up 229 points. Virus tracker for you, a few headlines making news today. Alabamas governor announcing a statewide mask mandate as coronavirus cases continue to climb there. Alabama reported 47 deaths yesterday. It was a single day record for that state we are seeing cases continue to rise in the hot spots. California adding more than 12,000 cases in just one day reporting 161 deaths yesterday texas reporting more than 9,000 cases in one day yesterday 86 deaths. Florida also adding more than 9,000 cases, which is off the peak that we saw over the weekend, 132 deaths in that state. More retailers have begunman dating masks inside businesses as well. Walmart just announcing a mask policy this afternoon joining best buy which announced one yesterday. Starbucks mask mandate also takes effect today joining costco, National Retail federation, lobbying group, wilfred is urging all retailers to mandate masks if youre in the going to get a federal mask mandate in country and piecemeal by state the businesses are stepping up here like retailers which attract so many essential ones at this time to do so. It would be interesting if we saw a National Mask mandate whether that would lead the stock market to jump or not. I doubt well get to that stage. S p gaining again, up a full percent now. Time for cnbc update sue herera has it for us hi, sue. Here is whats happening this hour new numbers from texas new infections jumping once again. The state confirming nearly 10,800 cases that is a new record Governor Greg Abbott is not ruling out another lockdown but says the virus would continue to spread even if the state shut down for two weeks hes urging texans to abide by the order to wear face coverings in public. Jcpenney cutting another 1,000 jobs the bank retailer is closing 150 stores in the first phase of its restructuring. A new years tradition wont happen, the rose parade has been canceled organizers say they put off the decision until they were certain safety precautions would make it impossible to succeed. It takes thousands of volunteers for floats and social distancing would not be possible. Since it started in 1881 it has only been canceled three times, all during world war ii. The roads bowl Football Game so far still on the calendar. Youre up to date. Thats the news at this hour ill send it back to you guys, sara and wilf. Thanks. Cybersecurity crowd strike doubled this years investment safety remote work employees speak with the company ceo about that trend and how bad actors trying to use pandemic fears to their advantage. [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. Nineteen minutes left of trade, were strong across the board. S p up. 9 of 1 . Dow up 216 points kind of right in the middle of a range of where its been all day and nasdaq also tracking higher by about half a percent the russell 2000 is surging. Its up 3 3 4 , really have a big comeback today, more rotation into laggards like small caps, industrials, materials, banks, those are the groups leading today some check on individual a check on individual Market Movers for you right now, haynes bran hanes brands best performer who sees it taking share from victorias secret, walmart and target both of which stayed open analyst says thats about onefourth of all sales. Hanes up 15 gap rallying up 9 on upgrade from rbc saying the company will benefit from secular tail we understand and decrease in fixed cost after the pandemic and, of course, kanye west, biggest secular tail wind. The ceo of melon warned of Downside Risks due to struggling economy and lower Interest Rates. Wiza wilfred. Joining us josh brown, welcome to the show. Good afternoon to you and what are you going for . What last chance trade hey, will, hey, sarah i want to talk about d. R. Horton broadly speaking i like all the Home Builders as a sector, itb, home builder index up 44 over the last three months on an absolute tear. One of the few cyclical part of the stock market thats been working. With good reason we are underhoused in the United States we do not have enough Single Family homes to even come de los satiating the demand thats not going away. I dont think theres a season this year. I think homes will be snapped up repeatedly as soon as they come on the market. New homes, the type that d. R. Horton builds should do exceptionally well up 16 in may. I expect good numbers in june as well as july this trend is continuing a breakout happening, 61 a share, the stock is trading pennies before prior resistance at 62 i think it will get through. Its a 12 multiple looks like they will grow at least 10 this year, 1 dividend, not bad, not great i like this name on the trigger of the breakout. My stop could go in at 50, thats where the market tells me i was wrong. They build new homes. I guess no one builds old homes, do they, josh . We call them new home sales versus existing home sales they dont build existing homes, that is true. With fundamental and technical case for the stock, josh, stay with us, if you would. After the break, youre going to talk travel stocks, big move higher on the vaccine play are we on the verge of tech cold war . Well cover those stories and more inside the market zone with josh brown next. As a reminder, watch or listen live on the go on the cnbc app closing bell will be right back with 15 minutes left to trade. Biguity. This moment calls for more. And Northern Trust delivers more. With specialized expertise. Proven strategies rooted in data and analytics. And insights borne from over 130 years of successfully navigating economic turbulence. Giving you new clarity. Inspiring confidence. And helping you uncover new paths forward. Northern trust. Wealth management. Save without even leaving your house. 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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. Twelve minutes left in the trading bell were in closing bell market and commercialfree going into the close. Here to break down crucial moments of the trading day management ceo josh brown with us Profit Investment ceo Eugene Profit joins the conversation as well, guys, lets kick off with Broader Market stocks off best levels of the day but rallying on positive vaccine news from moderna. Dow on track for fourth straight day of gains s p 500, josh, is on track to close positive yeartodate, which means we would really close here at a new post pandemic high. Are you feeling the optimism off the positive vaccine trial results from moderna, particularly boosting stocks like travel and airline . Well, i really want that vaccine to work, and i want all of the vaccines that look like they are close i would like them all to work because i dont think moderna can supply the whole world im extremely optimistic about the science. Unfortunately even if everything works out well with the trials, and we find ourselves in january of 2021 with widespread availability of multiple vaccines that people feel comfortable taking, thats still six months from now. A lot of economic damage can take place i genuinely dont believe were getting our real economy back until well in excess of when theres an available vaccine im looking at todays mean reversion trades and United Airlines up 12 , regional banks up 5 . Its fine. I dont have a problem with it ill just mention, though, because people have short memories, we already saw this episode. It happened from the middle of play to middle of june, lasted 3 1 2 weeks, had massive resurgence from quote, unquote, real economy, then those stocks got kicked again very, very harshly, and all work from anywhere stocks made a comeback. That is still a potentiality, so i try not to get too excited on days like that that the whole economy is coming back because i know its not. With the s p flat now where it is to date, does it make sense to rally like we are on days where theres positive news on a vaccine or should we only really start to rally when we actually physically have the vaccine and its being administered to people well, wilf, i think basically the market rallied on any good news looking at optimism where it can find it i dont think well be out of the woods until we have a vaccine as josh said i think that investors today basically took some money out of the highflying tech stops and solved the moves in the travel stocks and decided, okay, lets trade over there its not based on fundamentals, just based on momentum i do think youll see these stocks go down again as you start to see more reclosings, you start to see almost a second wave of the virus thats starting to happen and economic damage begins to really have impact on our economy. Its happening anyway but investors have basically chosen to focus on optimistic today being more of the same. Lets pivot to travel stocks staging a big rally on new vaccine hopes. Seema has the details for us. Wilfred encouraging data sending travel stocks higher, going back to the bond market raising 1. 25 billion at an Interest Rate above 10 , higher than most Investment Companies but priced lower than its previous bond deal in april. Hotel, online also participating in todays rebound i would also note most analysts remain cautious on todays move. Suntrust analyst Patrick Sholes says until a vaccine is widely disseminated travel will remain under incredible pressure. Sara and wilf, its a reminder while a vaccine would be a game changer for the travel industry, there are important questions about access and distribution. Seema, thanks so much for that josh brown, are there any of these subcompanies or subsectors within that value pack youre attracted to at the moment none of the travel stocks if i want to make a bet that were like a few weeks away from vaccine availability, and i still think theres value because stocks have run substantially into it, i would be more likely to look at things like expedia, where you get the exposure to travel but youre not saddled with all the debt, like a carnival, for example, or some of the hotel chains they are doing the right things, by the way im looking at all the companies raising money. They are doing what they have to do to make it there. Its not their fault, right . Im not being critical i dont want that risk personally i dont feel like the upside is worth it versus just getting travel exposure in another way to answer your question directly look, im booking a trip right now for the end of august to make my kids away before they dont go back to school this fall the guy told me dont book more than flee nights im like, why, you must be really busy. He said, you dont understand, were not letting maids into your room. I dont think you want to sleep on the same sheets for more than three nights i dont think you want to have to launder your own towels this is like a five star resort. If thats the situation, the idea that these travel stocks are discounting any kind of recovery i think its unwarranted, too soon, and youll have ample opportunities to look at casinos, cruises, airlines youll have time this is not Getting Better in the next quarter or two. It just isnt. Did you book a plane ticket along with Hotel Reservation no. No, no, no new england, driving im not flying. Yeah, like so many. Lets talk about u. S. China tensions they continue to simmer here, spreading to other parts of the world now. We saw uk announcing huawei from 5g Deutsche Bank brewing war with tech u. S. And china will cost the sector 3. 5 trillion over the next five years. The firm creating tech cold war index looking at stocks that tend to move lower when tensions with china rise. Some of the names in there, zillow, Palo Alto Networks and intel. They found stocks that react positively to heightened tensions include tmobile and emphasis eugene, any of these names or theme resonate with you and sort of signal a way you should be investing given what were here seems p to be a longterm issue . Sara, i look at this issue the same way i look at all the chinau. S. Trade war issues. Its the current market. Semiconductor markets will do well this analysis notwithstanding. I think what Deutsche Bank is pointing out here is as u. S. And chinas tensions continue and this really started in 2016, its really a proxy on Trump Administration policies toward china as much as it is concerns around sort of security risks. I think some of that is more attempt to get a leg up in the technology wars. I do think that this would dissipate in much the same way that the bill passed last night gave the president powers to enact sanctions against china and today came out and said he would walk that back a little bit. Because we have an election coming up, i dont think we want to see this tension continue so strongly a lot of it may change anyway depending on what happens in the outcome of the election. Do i think that as long as china controls the splupply chain you might be talking about 10 years before impact on the initial disruption that being the case, the Study Suggests that software and semiconductors is sort of a defensive way to play at concern about u. S. China issues in the technology sector. S p 500, by the way, is up 0. 9 beyond meat one of the big winners of the sessions. Aditi roy has details for us. Beyond meat, shares went up 6 on news the company is entering brazil. Beyond says it will sell at 19 st. Marche in sao paulo. They have 60 million potential customers. The stock on pace for its fourth straight down week, though, after analysts notes raised concerns about food service channel. Still beyond is up 80 the last three months back to you guys. Aditi, thanks very much for that i want to pivot back to the Broader Markets, josh, as we approach the close nasdaq 100 just gone green again but it was lower do you start to get concerned when you see big cap stocks led us higher for so long underperforming . I dont on the days they quote, unquote, underperform, that means Something Else is outperforming. Lets take a look at xlb here is the material sector. Its tiny. It doesnt matter for the direction of the s p 500 in the way that it once did but the companies that are represented in that index, they are kind of important. They ploy a lot of people. These are the materials that are elemental into our economy getting back on track. So thats now only 2 1 2 away from alltime highs. Thats extraordinary nobody talks about material stocks on cnbc anymore so for me when i see those big tech stocks having a down day or even a down week, i like to see other areas of the market benefit and get some of those dollars. If we dont get that rotation beneath the surface, were going to end up with xlk names being 50 of the s p at the rate were going. That to me seems even worse. Thats even less sustainable so i prefer these type of days, wilf, to answer your question. They dont concern me. On that note, for the week a whole, dow up 3 so we are seeing that rotation play out. Weve got one minute left of the session for today, s p 500 up 0. 9, dow up 200 points, 0. 8 , had been up. Well off the highs the composite is half of 1 . In terms of sector performances earlier in the day, all sectors comfortable Consumer Staples and utilities just about in the red. Other nine sectors higher industrials, financials, and energy stocks. In terms of the vix, which weve been keeping an eye on, up above 30 and below that today, its slipping to 28 or so oil prices high by 2 , gold is flat the dollar is a little soft down. 2 of 1 by the way, as we approach the bell, ringing is Comcast Corporation which is a parent of cnbc to celebrate National Launch of Peacock Streaming Service from nbc universal. Ringing the bell is peacocks chairman matt strauss available nationwide today at the close,. 9 on the dow and 0. 6 on the nasdaq. Did not quite get there in terms of positive yeartodate performance on the s p 500 were pretty much flat for the year positive close welcome back to closing bell if youre seeing us im sara eisen with wfrd frost. Take a look at how we closed on wall street, dow climbed we were up 4800 for the highs of the day. Solidly higher the big winner was boeing leading the dow higher most stocks finished the day higher except for unitedhealth, verizon and p g. Some lower utilities the only in the s p to close down s p 500 eking out a gain of 9 putting it around the flat line for the year it needed a few points higher to go positive yeartodate you get the picture, its a strong one, industrials, financials, not in the number one spot today thats why nasdaq was only up half a percent on the day. A snapshot of what weve seen in terms of leadership for the market so far this week s p 500 up 3 , nasdaq its down 0. 3 russell 2000 small caps had a tremendous day, really big rally up 3 1 2 as they played catch up third positive day their best day since june 5th when they rallied 4 very strong day for stocks financials a big help there as we make up a lot of it after a brutal start, new jersey has seen big improvements in Coronavirus Infections comings up well ask Governor Phil Murphy how high that bar is for reclosing the state if the virus does come back as the state reopens. First joining us to talk about the market, ceo josh brown and Profit Investments Eugene Profit is still with us Portfolio Manager sebastian page joins the discussion here is the part you play mike santoli, round up for us what you saw in the market, which is a big rotation where you did see groups like materials and financials and small caps do better these are the losing sectors is this the theme . If so, whats driving it so i would separate the two things out even though both have lagged the story with small caps is very different than the story with value stocks. Small caps actually arent cheap versus s p 500 so to the extent they have lagged, that really hasnt created a big valuation disparity. Again, a lot of that has to do with the construction of the index and the Industry Groups that make up the russell so i wouldnt get too far down that rabbit hole but it is possible to underperform and still be just as expensive the value side, sara, is really the story here stocks like boeing and the dow, obviously its a large dollar price stock so it has an outsized impact. Its a different construction in the s p. That matters not because of what it does to the dow, stocks like boeing matter because of how emblematic they are of whats wrong in the economy and how painful the ongoing pandemic has been so i like days where boeing is green. But back to my earlier comments, i dont get so excited about it that i run wild with my imagination that were all of a sudden about to get back 2019 economy. I dont think a few days of dow stocks doing well really is indicative of anything other than sometimes people sell the tech and buy the other stuff. Sebastian, you like the small caps is that right . We happenter overweight selma blair ca small caps. We take a 6 to 18 months horizon. Small caps historically nine out of ten recessions have been asset class of choice coming out of the release, also benefit from fiscal stimulus i would argue they might not look cheap relative to earnings and a lot of companies losing money but this is a fundamentally temporary shock. If you take a longer term view, we do things small caps are cheap, add macro to it, you have a compelling case. Hey, sebastien. But neutral overall. Sorry. Go ahead. Small caps tend to lead out of a recession okay i agree with that point. I think, though, even if you look at a fiscally adjusted pe ratio for small caps, they are still not cheap. Even if you eliminate the effects of whats going on right now or minimize them and look at a longterm horizon, normalized earnings, if we get a normal economy back, i like small caps, too, but i cant make the case they are a bargain right now what am i missing . Well, i think you have to look at the cyclicality and how you want to take cyclicality if youre of the view were going to get to this eventually. Valuations at the moment are very hard to estimate. It depends which earnings measures we look at. I agree its different if you look at longerterm earnings or current earnings theres so much liquidity in the system if youre giving a choice between cyclicality or more seculartype risks in value stocks, for example, id rather be neutral between value stocks, 6 to 18 months horizon, maybe hold slight overweight to Growth Stocks and get my cyclicality exposure in small caps generally speaking cyclicality has been undervalued in this recovery relative to historical recovers we will get to this. We got a taste of it today i also agree its going to be bumpy to get through this recovery while neutral storks verpz bonds, not just loading up on risks, its good to have functionality in the portfolio 24 trillion is the highest estimate ive seen for fiscal monetary stimulus globally so just think about that 24 trillion this includes potential measures the total market cap of the stock market globally is 50 trillion so were talking about 48 more money chasing less stock to buy than ever before and were getting it three times faster than ever before so theres a case for cyclicality in the portfolio, while remaining neutral with stocks and bonds in our case. Were just getting some headlines here from dr. Fauci, of course, the Infectious Disease expert at nih u. S. Will have effective Coronavirus Vaccine said moderna were especially promising eugene that was the headline that drove the day top stocks, royal caribbean, carnival, they were all cruise stocks norwegian, American Airlines and United Airlines that was rounding up the top five on days like today, is not being in the market, not being overweight stocks, is it a bet against ingenuity of some of these pharmaceutical companies rushing at light speed to bring a vaccine . I think it would be but i dont think you should be able to market and time it because we dont know when the vaccine will come i would suggest i think sebastien is correct with small caps, a day like today if youre looking beyond the fact the time period we held the vaccine, cyclicality in small caps is where youre going to get a lot of return. I think thats what you see with moderna news coming out and some investors mostly trading as if the vaccine was already here the problem is that almost all stocks are expensive right now so its like where are you going to balance your portfolio between being invested now and having positive returns along with the rise in the market. We do, we own small cap but you want cyclical names in the portfolio when we get a vaccine. I still think were 6 to 18 months away from where the economy is back to where it was precovid, maybe even longer but investors looked optimistic and tend to trade the market as if the vaccine is already here i think the day was actually a good primer and what could happen when the vaccine arrives but the market is so expensive, in my opinion, that youre going to have bumps along the way. I do think a lot of Earnings Guidance is sort of suggesting that, that we are not going to have improvement over the next two to three quarters. Starting discount with 2022, which is too far in advance in my opinion thats what were left with. Were going to stay fully invested, balanced, a barbell approach and large cap, small cap, Technology Names but also v valuation names for when the economy is recovered. Goldman sachs closed high after earnings comfortably beating street estimates on both lines. On the call ceo David Solomon outlined his level of uncertainty about the future outlook for the economy. I watch tv and read the news like everyone else, and im sometimes quite surprised by how certain people are i continue to be relatively uncertain as to the trajectory of all this. While theres no question theres progress with respect to Companies Making investments in a vaccine, and there was positive news again this morning, the exact trajectory of that, how deployed, whether it will work and the effectiveness of all that is still unclear and uncertain. Theres no question as reopenings occurred weve seen a pickup in that activity but increase in viruses and uncertainty persisting, i think youll see a flattening in that economic pickup and that will slow progress economically from here we continue to advise clients to be cautious about that. So ive listened to all of these Bank Conference calls over the last couple of days. That sort of minute from David Solomon sums up the sentiment all of them have in terms of outlook for the next 6 to 12 months, ie, theres very little confidence anybody can have in the direction in which were heading. Josh brown, the bank stocks themselves not actually that strong this week Kbw Bank Index up 2 1 2 sara listed best performing stocks today, Cruise Companies and airlines weak to date industrial sect or up 5 , materials as you were touching on earlier 4 1 2 how does it make sense to rotate into cyclical sectors the last couple of days when were getting that type of uncertain outlook from the people who have the best feel for the economy right now . Yes, i agree with you we heard charlie sharp say the same thing yesterday, jpmorgan say the same thing they are reserving for even worse credit losses. Thats responsible, what we should be doing. In the case of wells fargo, told me things had gotten worse third quarter. Thats not supposed to be happening right now if you look at stock prices. 2. 5 million jobs in april and in march and april, we only gained back like 7 million. Thats 15 Million People still not working. Every continuous claims number is a million more people that number doesnt seem to be Getting Better so were now in a situation where its reasonable to say the snap back weve seen in a lot of metrics, whether its Consumer Metrics like shopping or some of these employment numbers that weve gotten the low hanging fruit of the recovery, the fastest people who got their jobs back. Now the road ahead is much more challenging. Youve got all kinds of issues for the banks. Goldman sachs im sure is just as much on the hook for this stuff. But youve got a lot of landlords, commercial, they arent collecting rents. Thats not going to get better this month, next month its actually getting worse. Forbearance doesnt make the problem go away. Thats just debt tapped on at the end. Youve got 5 Million People thrown off Health Insurance since the crisis started people looking now at the sun setting of things like payroll protection, things like extraordinary unemployment benefit. What is going to replace these things i dont know i hope its every bit as good as the original version if its not, youre seeing a Consumer Spending ownturn. So its great that everybody went and bought a new house and bought a boat and bought a bicycle, those things are important, they helped this summer, but i do think were facing the next 5 million jobs we try to get back, they are going to be a little bit harder. I think what the banks are telling us is exactly that. Josh, thank you very much for that for joining us, thanks to Eugene Profit and sebastien page as well next well ask new jersey governor murphy how the state is preparing for a comeback this fall were back on closing bell in 90 seconds. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. Of retailers mandate masks for customers. This just in, kroger, the nations largest grocery store, pure play grocery outside of walmart is now mandating as of july 22nd, all customers in all locations, and there are thousands across this country are going to be required to wear a mask in stores this follows walmarts similar move and other big box chains that decided to implement mask mandates just clear, mandate associates or employees wear masks. Now this extends to all of their customers. Kroger says because we recognize additional precautions are needed to protect our country. Private sector really jumping on board. Lets talk about local governments now, new jersey. One of the countrys early covid19 hot spots reported 27 deaths on wednesday bringing total to 13,660 since the outbreak began one effort the state is taking to keep the outbreak under control asking travelers from 22 stae states to quarantine two weeks unlike its neighbor new York New Jersey wonting fining people who do not follow rules. Joining us new Jersey Governor Phil Murphy. Governor murphy, good to have you back on the show a lot to talk about. Just in terms of the virus numbers, i read the deaths looks like hospitalizations and cases do continue to sablize how is the reopening going what is activity like. So far so good but were digging out as an economic matter for years weve deliberately based decisions on data, incrementally and Outdoor Activities over indoor were still not there on indoor dining, we know this, but virus more lethal inside than outside. Youre absolutely right, our Hospital Systems are in a lot stronger condition than we are at the peak of this. They did a great job every step. You look at the rest of the country and you wont be surprised to hear our mindset not out of the woods yet. Not out of the woods with this wave, severe warnings from the fall, medical experts, flu season and a season it wont be as easy to dine outdoors how are you preparing for that carefully department of education put out as comprehensive a roadmap in terms of districts to put plans together and come back to them just as we did when we closed schools. Weve got challenges, everything from digital divide, which we need to address, to reliance on hot meals at schools with so many kids to the reality of the virus. The hardest nut to crack is to prevent that asymptomatic, otherwise healthy, unwittingly young kid unwittingly passing to older administrator, someone with comorbidities, thats our biggest challenge in the school setti setting. We have to do this carefully and cant jump the gun. Whats the latest advisory in and out of the state how uncomfortable is it to have to impose that sort of guidance when you want everyone to travel freely across the country and what should be the punishment if people break the guidance youre giving on that front it doesnt bring us a lot of joy, wilfred this is the United States of america. Constitutionally we cant stop someone at the border of our state. Its about the only time in my life that id ever thought id say i wish we could build a wall around either our state or our region but we cant. The mindset is simple. If youve been in a hot spot state, 22 of them based on rolling sevenday averages of data, we want folks to selfquarantine for 14 days and get tested we are reaching to peoples personal responsibility, as we have since day one in this pandemic folks in our state have done the right thing. So this is both visitors as well as New Jerseyans who traveled to those states and are coming back we dont have a blanket penalty but the department of health and commissioner has it right and ability to target noncompliant behavior while we hope for personal responsibility and good behavior, we wont hesitate to use that wanted to follow up, governor murphy, on your school plans sounds like youre still working them out there might be some inperson learning but not fully why not when most of the studies show and also some examples in europe show it can work to bring students back to school. When President Trump threatened to pull federal funding if you dont. Yeah, im not the threats are not our consideration. Our consideration is public health, Mental Health education. Sara, i want to make sure im clear on this, our strong desire is to get back to school we agree with the points on the richness of education being in person but weve got to do it responsibly. Just as i mentioned, when we closed our school systems, our School Districts are very localized. Weve got almost 600 of them, so we had them give us the plan for closure. Weve given them broad parameters in terms of how to reopen likewise were asking for plans to reopen. No school district, no two School Districts are exactly alike so we want to respect that but want to respect them to stay within the broad parameters weve laid out. I guess your numbers at the moment are better than some states and thats great to see youve also gone further than some governors as it relates to masks. That said with hindsight, do you wish youd enacted stricter rules on masks earlier well, its hard to say we could have been stricter indoors. The number one state in america to ban them indoors. Frankly outdoors the virus is a lot less lethal but we know it is still lethal. Frankly we also dont want to put in place things that are really hard to enforce so at the end of the day, you know what, both as a role model fact in particular when youve got folks outdoors and they cant properly social distance, thats our mandate, its not if youre on your own street walking your dog and youre by yourself, we frankly dont care about that i care and we care youre on the boardwalk of jersey shore, in line to get a slice of pizza youre on top of each other. Theres not good ventilation, we want you to be wearing a face covering. Yeah. There are a lot of crowds at the jersey shore according to social media and some of those pictures, governor finally wanted to ask you about budgets and layoffs. While this continues to be a political football in washington over whether states get aid, what are your plans . What kind of layoffs and cuts are we going to see and which cuts in the state . They will be dramatic, and they will be exactly the jobs we cant afford to lose right now in the extreme hour of our residents need. It will be frontline workers, firefighters, police, ems, health care, educators its unfathomable. We need, beyond the shadow of any doubt, its not just a blue state issue, not a legacy state issue, its not the northeast, any american state thats been hit by this. By the way, its overwhelmingly all of us. Every state needs direct federal cash assistance to allow us to continue to employ these vitally needed folks to allow our states to get back on its feet to help our Small Businesses, restaurants. We have no other choice. Governor murphy, thanks for joining us. Great to be with you both. Weve got news on galactic. Lizzy has it for us. Will, thats right. Management change at the top of virgin clack particular, up as a result they are naming Michael Colglazer as ceo as the company progresses towards Test Flight Program and prepares for commercial service he takes over for george whitesides, that was the first ceo who will now assume the role of chief space offer most recently colglazer was managing director of disney marks, operations, Experiential Development of disneys parks and resorts. From space mountain to actual space, guys. There you go. After hours session appears to like it getting 5 pop leslie, thank you. Am is doubling down on its news business. Details straight ahead plus former whole foods whether Retail Industry will be able to recover from coronavirus disruption to sales. As a reminder, you can aaylws watch or listen live on the go on the cnbc app. Well be right back. Lexus suv. At the golden opportunity sales event. Get zero percent financing on all 2020 lexus models. Experience amazing at your lexus dealer. On alsave without evenls. Leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Prlg. Retailers already beaten down by the pandemic with store closures and layoffs now face another obstacle their crucial backtoschool shopping season is on the shopping block joining us for more on the state of the industry is former whole foods coceo walter robb now principle at stonewall robb. If youre a Management Company trying to operate retailer back to school, holiday season, visibility, not to mention investors trying to figure out what to do with this companies how do you figure it all out. Good to see you both. Weve watched our retail rhythm. Thats the thing as you say, retail year is built around going back to school. Weve known that many years. Now its unclear are we going back to school, not going back to school some places. Organize our shopping that way, our meals that way so thing we have to recognize were out of rhythm trying to find a new rhythm we havent done and theres a lot involved in that. I want to talk about food inflation we saw earlier this week what level of inflation is good for retailers, a small amount is positive, is it, when it relates to certain issues certain items like meat and eggs, for example, which jump quite significantly . A certain amount is a good idea because it helps the top line and keeps things moving forward point guarding p l what we have now weve got 5 , 5. 6 on cpi look behind it cpi is stopped out. As i said before, i think the second half of the year is much more competitive with loss more promos and temporary Price Reductions as people compete for share. I think inflation was driven by the surge early on, the supply chain got choked off and had to recover. It had to rebalance. Toilet paper, butter, flower, key items like this still havent caught up on inventory thats where you could see elevated pricing i wanted to ask you about bankruptcies, which is the other hot topic in retail. Every day brings new bankruptcy. Paper store, new york company, department stores, theres too many to even name here, walter will there be any surprises or is it just going to continue to hit the weaker links that everyone expected attack bankrupt. I think the fact is covid accelerated everything that already was taking place in the marketplace. You will see some more i saw numbers from yelp folks, 30 to 60 of Small Businesses could go out we will continue to see disruption as covid turns left, turns right, throwing curve balls at businesses. Very difficult to operate in this environment the main thing is can we keep the economy over in a safe manner not essential or nonessential but safe manner for team members and customers is going to determine some of that some folks have thrown in the towel and going into bankruptcy as you pointed out a lot in retail working to serve people and it will depend on support in main Street Lending amendment or in terms of keeping the economy open to let them continue to serve their customers. Walter robb, thanks so much for joining us. Thanks for having me. We got some news on uber aditi with details for us. Hi, aditi. Uber said to be holding talks for an investment in its freight unit reportedly discussing 500 million in potential funding which would value unit at 4 billion. This is according to bloomberg attribute to an uber spokesperson tells me while its not unusual for us to receive interest for investment in uber freight, we are not able to comment on rumors about the discussion implying this wouldnt be the first time others have looked to invest in this unit. To give you more context, freight gross bookings grew year over year. Ebitda losses more than doubled year over year its a quickly growing but money losing part of the business. Back to you. Okay. Thank you very much for that. Now apple making some moves in the podcast space well have the details of that coming up next i was tempted to sing this line but, the hills are alive with the sound of music. Josh lipton explains. Apple news is getting a suite of new features including a new podcast called apple news today hosted by apple news editors that will be free to all listeners, about eight minutes long its going to guide listeners with stories and how reporters are covering them. That wasnt all. Apple produced about 20 audio stories a week for apple news plus subscribers remember the Subscription Service costing 10 a month. Apple news introduced a new curated local news featuring content to publishers. During the pandemic and economic lockdowns people are more interested in local updates. Apple news isnt in and of itself a financial mover for the company but part of faster growing higher margin segment. As many investors excite about this stock, surged nearly 40 in just the last three months guys, back to you. Josh, thank you Cybersecurity Firm crowdstrike one of the hottest well ask the ceo about hackers trying to take advantage of people working from home tomorrow, cnbc in partnership with acorns is sponsoring virtual live town hall its a special and features americans affected by the current health, social and economic crisis rebuild their financial future its tomorrow 7 00 p. M. Eastern on cnbc. Well be right back. What do you look for when you trade . 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. But inside. Theres advanced research, modeling and refinement. Constructing funds that dont simply follow an index. But explore new terrain. Helping you fill portfolio gaps. Connect to client goals. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Kurtz. News update with sue here. Hi, sue. Hi, here is whats happening this here. Nbc reporting mark meadows is telling white house officials to stand down on attacks against dr. Anthony fauci. One staffer telling nbc that meado meadows, quote, wasnt happy about Peter Navarros scathing oped about nowsch you can go to cnbc. Com with more. Ruth Bader Ginsburg has been discharged from the hospital she was admitted last night to treat an infection the spokesman said shes at home and doing well. Louisianas attorney general jeff landry says the mask mandate and bar restrictions are likely illegal governor john edwards disagrees saying pandemic rules are both legal and needed twotime triple crown winning trainer bob baffert has been suspended 15 days by Arkansas Racing Commission after two of his horses failed drug tests you are up to date thats the news update at this hour sara, ill send it back to you. Sue, thank you. Up next, the stock has more than doubled this year crowdstrike has ridden the work omome wave big time. The ceo talking about what investments in security will look like. Covid19 pandemic has become perfect opportunity for cyber criminals krorgd to kiesch Security Company crowdstrike, files using covid19 related themes since march as it is Company Helps in these fights against cyber attacks, joining us cofounder and Ceo George Kurtz very good afternoon to you thanks for joining us. Thank you. Why such a ripe opportunity for hackers . Is this because they are hacking cloud storage, Tech Companies or all using our devices so much we might miss their approaches and fall for it directly ourselves. When you think about this particular pandemic, it is worldwide. Ive never seen a topic with so much interest if you think where we are today anything related to covid is guaranteed to be open, if you arent following practices weve seen lures talk about testing kits, c. A. R. E. S. Act and getting money. Weve seen educating users at home, targeting home users so its a universal topic thats going to get a lot of attention, which makes it a really juicy target for the bad guys. What are the key things you help your clients do to prevent against attacks. Are you helping tech firms or helping individuals like us . Well, its mostly focused on Large Businesses down to small smbs we dont focus on consumer today although our technology will work in that environment what we tried to do is focus on the outcome, leveraging the breach, the platform we built equivalent to security using ai and Machine Learning to prevent threats that have never been seen before to prevent adversary groups whether nation states or e crime groups doing what they do well, getting into systems and causing havoc. What kind of boost storage have you seen in spending from your clients as a result of working from home and all the threats that come with it . In march it was just the fog of war everyone was trying to get everyone up and running at home. I talked to at cio and asked about Digital Transition roadmap and he said he executed it one night in march when we look at work from home, its really work from anywhere it isnt about working from home its a more longterm sustainable trend died to Digital Transformation so a lot of our customers open remotely, Cloud Solution works perfectly for that its off and youre up and running easily we see this as a more sustainable trend. What we do know is people arent going to work in the same way as we have in the past. I believe a hybrid environment some people go in the office other people youll have pods of offices, many people working from home and only going into the Office One Day a week. I dont think its everyone back to the office and i dont think its everyone not in the office. I do think its going to be a hybrid model and thats google to need protection when you think about cloud providers as people transform legacy infrastructure into cloud providers like amazon and others, they are going to need protection and were there protecting those workloads as well. George, do you think the u. S. Is prepared for the election or do you think there will be the same levels of questions about whether theres been hacking going on and outside influence. Certainly Election Security is important not only here but around the world i think what weve seen in the past at least has given folks a view to what can happen again and how can they take better measures to protect themselves obviously we have a lot of Customers Using Falcon Technology to protect l environments, folks involved in these campaigns, et cetera we just need to be vigilant across the board because the adversary is going to continue to come after juicy targets and wreak havoc. A lot of these security stocks, your competitors have also rallied, palo alto, a big scaler, whats the difference . Are you chasing the same kind of business we focus on endpoint. You get someone like palo alto focus on network and z scaler is a great partner of crowdstrike transforming legacy strategies and doing cloud approach and we integrate well with them so everyone has their focus. I think what weve been able to do is capture the mind share and hearts and minds of customers in protecting their desk tops, their servers and crowd workloads. That takes a lot of focus. We want to be the best endpoint company on the planet and weve pioneered this cloud delivered, cloud native approach protecting endpoints from the cloud using things like Machine Learning and ai as were speaking, george, a bit of a question on whether certain highprofile people have been hacked on twitter elon musk is tweeting something that appears to be a hack, you never know, Warren Buffett as well how vulnerable are high profile social media accounts. Think of President Trump who tweets a lot and certainly hasnt been a victim yet clearly thats out there. When you look at high profile media accounts, in many cases, not all, the person behind them isnt doing the tweeting so you have the sharing of credentials. Whenever you have the sharing of credentials, exponentially your tax service goes up. If a staffer gets their computer compromised, its very easy to capture keystrokes and get that password, even if its a complex password a lot of times thats what we find, a shared password between many people because the person who is very famous isnt necessarily always doing the tweeting. Yeah. This one is soliciting bitcoin into his bitcoin account that sounds like a hack. George kurtz, thank you for joining us. Thank you so much. Up next, the class of covid19 were looking at two areas where big money and Education Technology is going. Testing d antechnology those stories and how to invest in it next you cant predict the future. But a resilient business can be ready for it. 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. Simon pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. Touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Thousands of 22yearolds will potentially be living in crowded dorms and going to bars and parties when summer ends colleges are now putting huge high stakes investments to make sure all of that will be safe. This gives a whole new meaning to College Testing a majority of institutions do plan to bring their students back to campus in some form this fall testing is a key component of that their approaches include pulling samples, leveraging local health organizations, using smart phone apps some of the largest institutions are creating their own testing infrastructure the university of illinois has developed its own saliva based testing sample the University Says it plans to test up to 10,000 students and staff each day we think the model should be applicable in many other contexts talk about companies, an army base, a prison there are many situations where you could imagine learnings translated into another context. Thats our goal. This is a grand experiment then, not just for education but also one that potentially has lessons for corporate america. Guys, you can read more about this on cnbc. Com. Thank you and if inperson learning isnt able to return, weve been looking at what could be a lurking giant in the Education Technology space, google the aim here is to hook the next generation of google users. Gclassroom is a hub for online cours courses. It looks set to continue in the fall so google is adding more privacy and security controls in the fall its early days for the tech space, so there are many players with different specializations google is positioning classroom as a hub that works with other systems and apps that way classroom can give smaller classrooms a boost similar to how the app and play stores let developers reach wider audiences. As with those platforms, it could be at a special price. Google as the scope and capital to move into other areas in ed tech and one day possibly eat their lunch. Melinda gates has published a new paper on the impact of covid19 on women and girls. She argues that ignoring effects on women could cost the Global Economy 5 trillion in the year 2030 one example a twohour increase in unpaid womens care work at home and a 10 decrease in womens ability to participate in the labor force gates proposes including improving Health Systems for women, design more inclusive economies, gather better data and utilize female leadership. The pandemic is hitting women harder because of their responsibilities at home one thing to watch is a longer term trend which is female participation in the workforce shows they are slightly exiting the workforce a little more than men. Its a good article and good read on this topic we have been talking quite a lot, never enough of the minority impact of this crisis, less so on the gender bias difference, but certainly an important one as well. Especially if you think about whether schools are going to reopen even going one or three days a week, someone has to stay home with the kids. Up next, netflix has a huge quarter as we all stayed home and streamed and binged. vo touch and go. Handwriting recognition and the audi a4. Get exceptional offers at your local audi dealer. The volatility. The ambiguity. This moment calls for more. And Northern Trust delivers more. With specialized expertise. Proven strategies rooted in data and analytics. And insights borne from over 130 years of successfully navigating economic turbulence. Giving you new clarity. Inspiring confidence. And helping you uncover new paths forward. Northern trust. Wealth management. Welcome back netflix reports earnings tomorrow the big question is whether netflix can keep up its lockdowndriven gains that it made during the First Quarter. This quarter, the second quarter, is forecasting the addition of about 7. 5 subscribers, down from the 15. 8 million it gained last quarter Analysts Expect netflix to grow earnings per share by 200 while revenue is projected to grow by 24 . It is worth noting netflix shares are up about 20 since its last Earnings Report some breaking news here. Dell is confirming it is exploring a potential spinoff of its 81 ownership of vmware. Dell originally got control of shares through its 67 billion acquisition of storage hardware maker emc. That closed back in 2016 this was rumored to be out there, but dell now confirming it in a press release. Both stocks on the move higher, especially dell up 7. 75 fast money starts right now. Guy adami, dan nathan, jeff mills. Tonight on fast, the dow posting another tripledidntrit gain it was a big day for moderna later, jeff mills has a pitch on one nonbank name in the Financial Sector why he