Transcripts For CNBC Closing Bell 20240712

As much as 10 some optimism that lawmakers are making progress on the next virus relief package we got news republican senators are pushing for 25 billion in additional aid for the airlines. Nasdaq record high, gold record high, oil at a fivemonth high, 59 minutes left to trade, wilfred. Were up 0. 6 on s p 500. Ahead on todays show cbs giving up despite strong earnings and guidance, well speak with Ceo Larry Merlo about the results. Plus shares of twillio up 50 but taking a dip on earnings today. Well take a look at work from home winner. Roku, etsy and zynga analysis as soon as they cross first big stories were watching today, mike santoli tracking action, david faber new reporting on microsoft tiktok and berty on a multibillion dollar tech tale mike, first with you. Objects in motion tend to stay in motion to this rally grinding higher as a lot of the macro forces are pretty familiar right now. Another leg lower in the u. S. Dollar, real Interest Rates are further into negative territory and upward tick in the s p 500 you see this reacceleration, a little bit of this upturn we have after we broke above trading range. Pretty significant right now its almost as if were getting close enough to the old highs that it will be unusual if we didnt actually make another closer run at it within 2 at that point, maybe Trader Sentiment is going to get a little too overconfident, finally get more people located onto the buy side of the vote. Thats a reason to stall out more of a cyclical flavor of the move in the last few days. Take a look at high beta stocks, more aggressive, cyclical, financials and consumer stocks as well as energy against low volatility which is more Defense Technology you see low volatility is underperforming if you look on a sixmonth basis. Going back six months here, they are basically neck and neck. Times when the more defensive quality stocks led the way and then catchup on the high beta. As much as youd want to see high beta improve its not necessary for s p to make that advance. Today it is alleges more traction in that story that were moving toward a recovery, seen a decline in the case curve for hardest hit states in covid and therefore you can look ahead to a better recovery earnings wise. Clearly when you see the down 1. 2 but nasdaq only 0. 5 classic rotation from tech into value. Thats not quite whats happening across the market. Shares almost neck and neck. Apple given we just discussed that downgrade was lower after a phenomenal run and the downgrade and its now higher which shows the resilience of big tech names. Its certainly not a zerosum game thats what the market demonstrated the outperformance by the dow has a lot to do with disney as well, which is not really about the style of the stock, its more about the news. Youre exactly right its not as if we have a regime shift in the market. It is much more about when things lag for a little while and perceived floor underneath the market and you have credit markets Holding Together okay, the market finds a way higher. Thats what were seeing here. I have to say momentum is definitely lacking on the move to the fresh high since february so have to watch to see if its losing some energy here. Still, seems like the good news comes a lot more these days than the bad news on the economy. Adp jobs not too hot lets talk tiktok. David faber reporting details on ongoing negotiations with microsoft. He joins us now by phone, david, with the latest. What can you tell us about where tiktok stands. They are finally starting to focus on the value that is the talks between microsoft and bytedance, the Chinese Company that owns tiktok around the world including u. S. Property, which is the one at issue right now and the one that microsoft may buy. They have not yet gotton a discussion of value because they have been very focused on determining other important things having to do with the National Security concerns of the United States, which, of course, as you guys know has been at the table dealing with these negotiations as well specifically im referring to the fact that microsoft has now received what i am told by people familiar with the negotiations is a one year deadline after close by which they will have to transfer all of the shoplift wear code from bytedance that undergirds tiktoks app in the u. S. To the United States. Thats a huge undertaking not easily taken on by almost any company except perhaps microsoft and a handful of others given how Many Software engineers will be needed to actually do that transfer so now knowing they have a year to do it of course, microsoft being what seems to be the only vetted buyer from a National Security perspective from the u. S. , not to mention one of the few that actually could undertake that kind of effort, is moving forward with the discussion around value that will take place, im told, over the next two to three weeks. At least thats the hope in terms of a time line to see if they can try to get to some deal that makes sense for both sides. If youre bytedance, of course, you are at a disadvantaged position youre dealing with the possibility of tiktok u. S. Being shut down or selling it. It doesnt really give you a great deal of leverage in these conversations. So well see where the number comes in your range, well, it could be enormous depending on how microsoft feels about the asset and exactly how generous they are feeling, sara. Yeah. Big range you reported earlier whats your sense of how involved the u. S. Government is now that were in negotiations is there any way, as trump suggested, the u. S. Could get a piece of the deal . Everybody is no. Nobody ive spoken to is involved in or aware of these negotiations on a detailed level can explain to me or understands what the president was really referring to and i am told that in the conversations between representatives for the u. S. Government, who are, to answer your question, still involved in this and bytedance and microsoft, it has not come up. It was just something that wasnt even discussed after it was said so the expectation is it will not amount to anything but then again, sara, we know that when it comes to the president , you just never know at all so it is an issue, perhaps, more for the chinese. It did probably cause the founder and ceo of bytedance some issues on his end but it doesnt appear to be something standing in the way of the two sides negotiating a final transaction. David, my question, if microsoft in order for this to happen is going to get all of the ap, all of the ai software, as you said, all of the code an bring that all over the u. S. , in order for the transaction to get over the line be presumably it would come with some lechvels o restriction they would never launch a tiktok rival outside of the u. S. Going forward they wouldnt be able to benefit from getting all that i. T. And using it in regions neither u. S. Or china with that in mind, does it put a limit on the value of this to microsoft . A great point, wilf i dont know the level of detail youre pointing to in terms of whether that is a part of it but it certainly would make sense and its something ill try and find out definitively about. That said, i think the opportunity if microsoft were to move ahead, and when you speak to others familiar with the service, its seen as a very large one for tiktok you know the numbers depending on who you talk to, anywhere from 80 to 100 million argentvee million, growing, time spent very large a very sticky app, as people say. So the expected growth rate is a great one. Potentially for microsoft, at least, whatever the number might be, 10, 15, 20 billion, whatever they may spend, conceivably the opportunity is far larger even if it is limited to the United States and to canada, australia, and new zealand. David, i assume as part of your reporting you have recorded a couple of tiktok videos youll be sharing with us at some point. Only if youre going to be in them with me, wilf. I dont know about that david, as always, thank you very much. Sure thing. Now to another deal. Hes got a teenager daughter. Exactly, he can tap into that. He knows all about it. Two Massive Health Care Companies teaming up berta coombs has the details hi, bertha. Hi, wilf. Investors may be questioning the evaluation for the deal, both stocks lowered certainly not the argument of the strategy teledoc says with the boom it makes sense to do this now. By putting them together, we think we get better engagement, higher levels of referrals and more value for the consumer. I guess i just add, this is what our clients have been asking for. Telladoc closed acquisition its an acquisition that gives them a strong berth with hospitals. Livongo would let them leverage that with draata driven management amwell providers, more primary care unitedhealth has its own doctors and nurses and they have a new app to rival that of lichlt ivongo on diabetes and virtual underwith virtual home care. Teladoc they are hoping the one stop shopping for care. After the break, golden ticker on the back of rising surprises and popularity, funds behind, more physical gold creators of that coming up youre watching closing bell on cnbc. Apps are used everywhere. Except work. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. To learn more, visit paycom. Com lookentertainmentour experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No Strings Attached. Record high hitting on breakout gains for the year sprird gold gtf has become biggest ons of gold bouillon surpassing japan, india, united kingdom. Lets bring in George Stanley steve strategist at Global Advisers good afternoon, thanks for joining us. Good afternoon, wilf, nice to be here. The first question, utilities how etf is run when someone buys shares in the market of etf, how soon after that have you bought the physical gold to match it up and where is all the gold stored. Its at the bank of london. The shares are not created until the gold is actually in the vault. Its not ourself or partners world gold counsel or sponsor that buys gold, when they make an order to buy gld shares, check New York Stock Exchange, pick up what they need and deliver to the client. If theres not enough shares available on nyc, they buy gold, make sure its available at that trust in london with irrevocable transfer of ownership. When the specific bars corresponding with that basket have been physically moved by a gentleman with a handheld forklift truck onto wooden pilots labeled spider gomd glt, thats when we instruct them to issue shares to the participants i dont have to go into the market and buy goal. They buy the gold from the trust. Instead of paying in cash, they pay in gold. I guess the important thing is its physically backed. Some Financial Products that track the gold price arent. It comes with a higher fee to have it physically backed. My question following up on that, george, is clearly during the month of april we saw oil prices go negative a large part thought to be futures contracts expiring, a lot of people take delivery when they wanted financial exposure to the price when we see the rising gold price at the moment, do you think part of that is the result of what happened to oil earlier in the year, technicalities if they want it and theres a technicality applying to the rally. No, different its a share like a share in microsoft or apple and shares in microsoft and apple are backed by the assets of those companies. Gld is backed by the gold in the vault. Theres 80 billion shares outstanding, 80 billion of gold in the vault to back up those shares, no cash, no derivatives, thats why theres no tracking error between gld and underlying spot gold prices. Futures are a very, very different thing. They can involve delivery. Typically futures are not actually physically delivered. When the contracts expire they are settled financially by people buying back or selling whatever contracts they may have or the owners will roll them forward into a future. Thats a completely different structure and only the futures are only partially backed by the quantity of gold sitting in the fault whereas gld is 100 backed by gold with no other assets in the trust at all. Wilf. It shows how much people want gold right now, the fact etf holdings are more than most governments in terms of their gold holding what do you think is driving the enthusiasm specifically at the moment i think gold started to move up 12 months ago it was in june 2019 gold broke out of a trading range that it effectively capped the price at 1,350 every time the price moved above there, somebody took profits and knocked it short back into the range. That existed 16 years, june of 2013 to june of 2019 gradually upward momentum building as people were becoming increasingly uneasy with the fact equities in this country had gone up for 11 straight years. The fact we had just in that wonderful precovid area completed a decade in the u. S. That didnt feature a recession. Nobody believed we abolished the Economic Cycle so gradually becoming more concerned about that also concerned about historically low Interest Rates. Of course with covid19 and all that happened subsequently we have zero Interest Rates guaranteed for a considerable period of time theres not a lot of solace for anybody worried about eck, not a lot in the bond market of course, again people are growing very worried about the u. S. Being 23 trillion in debt a year ago and that debt growing by a trillion dollars a year guess what, were in a much deeper debt hole now given the unconventional measures to counteract the economiceffects of covid19, so debt is another thing that is helping to drive the interest in gold no question. The difference is people are finding solace in bonds and stocks together with gold. George, thank you for joining us. After the break, buffett banks on b of a. Discuss why oracle of omaha building on his massive stake in the company. Stay with us, closing bell will be right back dow is up 315. 37 minutes left of trade shares of Major Airlines jumping this as republicans back a new round of payroll assistance. Airlines best performing group in the s p right now Kayla Tausche with the details kayla. Sara, 16 republican senators wrote a letter today to Senate Leadership advocating for a new 25 billion Payroll Support Program for the airlines because of how little traffic has been recouped in recent months as americans remain fearful of traveling an as flight schedules still remain well below 2019 levels sixteen senators advocated for a fresh round of a Similar Program for airline adjacent businesses like concessions and manufacturing who are suffering for the same reason. We should note this was part of the c. A. R. E. S. Act its been fully exhausted and many of these Airlines Warned they could lay off large fractions of their workforce beginning october 1st if this isnt renewed. This was not part of gop proposal the heals act released last week the support from such a large share of the Republican Party does give Majority Leader Mitch Mcconnell some political cover to offer this to democrats while they try to figure out where Common Ground lies as they negotiate the next stimulus package. To be clear, it would only happen if the airlines didnt make any single layoff. That is correct we dont have the exact details of what this would look like in the legislative text two different programs for the c. A. R. E. S. Act on the one hand a 25 billion grant program, so fully forgivable free money that was given to the airlines to support their payroll if they did not lay anyone off before september 30th there was a second loan program, i believe it was 29 billion that had limitations on executive pay buybacks and the like very few airlines took that money because of the Strings Attached so interesting that even though a lot of that money has not been allocated yet, there is talk and support for the forgivable money and grants to airlines instead. Thanks so much for that meantime Warren Buffett has been buying bank of america shares now for 12 Straight Days at an average price of 24. 33 increasing his stake by 2. 7 billion, he now owns 11. 9 of the company. Back in october he sought permission to go over 10 and granted flexibility up to 25 provided they notify s. E. C. Of any trades up or down in holdings within two days they must remain tacit investors. We await disclosures for the Second Quarter we know in the First Quarter he was a seller, selling out of Goldman Sachs entirely reducing holdings in jpmorgan and synchrony slightly there was an enormous sell on wells fargo in may indicating it was likely one of their major holders but we dont know who yet. Until we get buffetts q2 we dont know whether latest purchases of bank of america is a relative vote of confidence in bank of america or large absolute confidence in bank of america and change of heart from what he was doing in q1. Likely the former not the latter also worth noting, by the way, a seller of Goldman Sachs in march, as we believe there buffett was, was a badly timed seller Goldman Sachs was rallied sharply from that point. Take what you will from the timing of this buying in bank of america. Certainly a bit of a vote of confidence in Brian Moynihans company. While this buying has been going on as you suggest, if its just a swap from wells fargo to bank of america, the inference is not particularly strong. But buffett main insight and biggest most successful positions such as American Express, cocacola, apple, has been the idea that a business could have multiple expansion, that it was more steady, stable, reliable than the market is betting. Who knows if thats the case with b of a. The Wealth Management Investment Bank is probably underappreciated if were in a bull market. Just as well, American Express is another one where he got permission to go fwof 12 and fed ruling goes up 24. 9, same granted with bank of america, with amex gone up to 15 holdings, still 12 holding in bank of america if thats a conclusion to draw from him on where he might be headed with that position. Board seats on the jpmorgan so good insights but not directly on bank of americas board. Still ahead were counting down to big earnings after the close, roku, etsy and zynga, well preview what to watch from roku following disneys strong numbers. Well talk earnings and more with ceos of cvs, twillio. Bonds down close to 0. 5, partly why the banks are strong were back in a couple minutes vo since our beginning, our business has been people. And their financial wellbeing. Its evident in good times, with decisions focused on the longterm. And crucial when circumstances become difficult. That continued emphasis on people our advisors, associates, clients and communities gives us purpose, strength and a way forward. Today. And always. Time for cnbc update with sue herera hi, sue. Hi, wilf, hi, everyone. Here is whats happening this hour while new cases are falling in hard hit states, testing across the nation is also on the decline. The Associated Press says daily tests are down 3. 5 over the last two weeks for the coronavirus with the count falling in 22 states the big 10 has become the first major conference to set a football schedule for this fall. It starts in September September 3rd to be exact. Ten games scheduled over 12 weeks to leave flexibility ohio statemichigan game will be october 24th instead of its usual date on the saturday after thanksgiving in beruit, a wedding photographer caught the moment when a brides bliss was shattered by a deadly explosion. She survived that blast thankfully but the death toll in beruit has risen to 135 with more than 5,000 people injured you are up to date thats the news update for this hour sara, i will send it back to you. All right sue, thank you sue herera cvs shares are falling today this comes on the back of reporting a pretty strong Second Quarter beating analyst expectation on earnings and revenue this morning raising guidance as well for the year. The stock up earlier down 1. 5 joining us for exclusive interview larry merlo, cvs president and ceo. Larry, welcome back. Good to have you good to be here. I know numbers helped by insurance, people filing claims for elective procedures during covid19 does that reverse itself now that the company is opening up aga again. Sara, we are seeing medical utilization returning to normal. We saw a big uptick in the month of june and july is a normal month. We do expect normal utilization over the second half of the year as you mentioned, a quarter, the real story in the quarter is our strategy coming to life in meaningful ways. Weve talked about making care available, meeting people where they are to provide care whether in the community or home or in the palm of your hand. The pandemic has really accelerated our transformation weve got real life examples of care being delivered in community, in home, in the hallmark of your hand as a result of what were dealing with with covid19. Definitely want to talk testing. Retail sales in the pharmacy, have those started reversing and picking back up as people are more comfortable going out yes in both places as shelter in place orders were lifted and we began to return and reopen economy, we saw traffic pick back up, saw front store sales as well as prescription utilization approaching normal leve levels keep in mind back in march we made sure our customers, patients did not run out of their medications. We did a lot of refills early. Therefo therefore, there were fewer in the quarter and weve seen that pick up in june and july time frame. Larry, i wanted to ask what your view is on teladoc and livongo merger, whether or not faster growth and homogenization is a good or bad thing for you. Wilf, theres no question it ties to in the palm of your Hand Technology will continue to play an Important Role in Health Care Delivery we have invested in that in virtual care properties. As the pandemic was been us, it wasnt a question of turning it on but dealing it up weve seen a dramatic increase in telemedicine utilization, more than 700 in the Second Quarter. Weve also seen a real opportunity for utilizing technology for home monitoring thats something we have invested in. Youll see us bringing more capabilities in products to market as we move into the future. So youve got 1800 test sites for covid19 testing i think you said on the Earnings Call that things have improved as far as people being able to get the test and get the turnaround times are we ready for the fall, though, larry, as a country where there are warnings that the virus could come back electric a seasonal perspective with a vengeance do we have the testing capability in place in this country . Sara, its a great question first of all, i could not be prouder of the work of our cvs colleagues in standing up 1800 testing sites in a matter of weeks. Weve now tested more than 2 million americans through our drivethrough sites and we did see a spike in activity coming out of the july 4th holiday. We responded immediately in terms of reducing our capacity and more importantly working with that process, test results and the work they were doing to scale up their capacity. To your point as a country, were testing about 17 million americans a month. The experts say as we move into the fall, were going to need between 26, 28 million tests on a monthly basis to meet the demand one of the things were working on is creating a plan with which we can pivot to more point of care testing more of those devices are being approved thats something that we expect to be able to do as we approach the fall time frame to meet that increased demand. What about when it comes to a vaccine, larry do you think it will be mayhem when we do have one in terms of how it gets distributed and who gets it first . Its going to be critically important in terms of prioritizing there is a lot of discussions. Were participating in those discussions with the administration i think terms of exactly how we do that most important, how are those immunizations provided for wilf, im going to take us back probably 11 or 12 years. Many of us remember h1n1 how were we going to provide that vaccination to millions of americans across the country pharmacies became the solution the regulations were changed at that point in time today many people think about their seasonal flu vaccine being administered by their local pharmacist we are ready we see ourselves as being an important part of that solution when the vaccine becomes available. Yeah. I think the prioritization is obviously going to be key, larry. Finally wanted to get your thoughts on the political situation. President trump laid out an executive order with a number of items meant to address high drug prices in this country wondering if any of that affects you and how a Trump Administration would be different than Biden Administration as far as your Insurance Business and drug business. Sara, first of all, theres a lot of dialogue around what is commonly referred to as rebate role from our perspective, we talked about this last year the data hasnt changed and as a result stats havent changed those do a great job with pharmaceutical manufacturers, 90 of those get passed back to the plan sponsor, in this case the government the government utilizes those dollars to reduce the monthly premium for our seniors enrolled in Medicare Part d drug plans. Government actuaries have said absent that ability, premiums will go up for seniors on average about 25 . So that rebate does not solve the issue of drug prices what needs to be done is point to what really drives drug prices and thats the list price by manufacturers sara, your second question in terms of the future, if you will, and the impact that politics may have on that, i dont think any of us have a crystal ball right now what i think we can say is that the role of the private sector has demonstrated its value time after time after time. Look at what weve done during the pandemic as you look at other Government Programs like Medicare Advantage or Medicare Part d program we were talking about, handing off those programs to the private sector, where competition and innovation made good things happen, i dont see that dynamic changing. We need the drugs right now and innovation larry merlomerlo, thank you for joining us. Thanks, sara. Ceo of cvs health. Coming up roku earnings in focus following disneys strong streaming results. What to watch from that report plus a look at other big movers. Dow is up 335 points, 20 minutes left to trade. [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. Welcome back lets check on the latest coronavirus case numbers in the u. S. Florida officially crossing 400,000 total cases after reporting more than 5,000 daily cases today. Overall, though, hot spots like florida, texas, and arizona are seeing declining numbers arizonas threeday daily case average, for instance, is down nearly 60 meantime some developments on the vaccine front to tell you about. J j delivering doses beginning late stage human trials in december j j joining toes like pfizer and sanofi to provide a vaccine. Novavax with encouraging new data which showed its vaccine produced neutralizing antibodies in early stage trial novavax jumping 10 after initially dipping lower in after hours trade on concerns about the vaccine safety there was an erroneous media report about that. It looks like most patients tolerated it with little reactions. Wilfred overall on the virus numbers the deaths are rising. That is seen as a lagging indicator. Most of the averages, three and sevenday averages in the hot spots are showing lower numbers, which is encouraging. Reversal in novavax, not just the share price but takeaways from last nights release. Um on s p with 15 minutes left up next a rare downgrade for am. Y s hwhitip to be square and many more stories when we take you inside the market zone look here, its your very own allinone Entertainment Experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No Strings Attached. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Thirteen minutes left in the trading day. We are now in the closing bell market zone, commercialfree coverage of market zone going into the close cnbc commentator mark santoli here to break down crucial moments of the trading day we have josh brown with us as well well kick it off with the Broader Market we are seeing strength nasdaq on track to close at a record high, closed above 11,000 apple, amazon up expedia, lululemon, some other gainers. Mike, the groups that are leading s p, industrials, materials, financials, which is a very sort of cyclical Strong Economy theme on a day where we got news of private sector jobs, which was a humongous myth more than a million added. More than 100,000 added in terms of jobs. What is driving this trade. Well, i think employment is not what is driving this trade what is driving global cyclical upturn of some description at this point, a weak dollar fostering and reflecting that trend. Also some traction with Service Sector pmi a general sense that Corporate America outperformed fears in this Quarterly Earnings season they set a higher floor than we thought in terms of protecting profit margin. I dont think it means all is well i dont know if this rotation is going to last. Not really a rotation, just skind of a little bit of a take your turn in the sun kind of thing for cyclical stocks but still better than the alternative which is five stocks going up and Everything Else for sale you have autos, appliances and housing in this country very strong services, its kind of a lost half here. Thats what the market is trying to sort out with this action. Josh, does the jocks on friday have theability to derail this market or not i think if you look back at the last few jobs reports that weve had since this pandemic a sample size of three so i dont know if you can call this science but i think if you look back we really havent had massive moves in the market to the downside. But we have had big ones to the upside id say thats where the risk is the risk is things are better than people think they would be and you get a big move higher. If they are worse, i almost feel like that hasnt been market moving news. We really havent seen anything on the employment front that affects stocks to the downside the big story to echo what mike said xli, industrial etf, everyone had been watching that over the last few weeks, consolidate below its 200 Day Moving Average it burst through today very important these stocks psychologically, very important to see them join the run great to have a pause and this come to the fore on the material side, these are tiny stocks. They really dont matter to the direction of the s p but more evidence to confirm the powerful move weve seen for large cap Growth Stocks. Nice to see these stocks join the party, too take a look at xcs, new high today, 53 high industrials working, again, psychologically important. Last two things. Emerging markets at the highest level sips they were at in february prior to the pandemic off 50 from the low lets take a look at xrt this is retail etf there is absolutely no reason this thing should look as good as it does again, very encouraging to see it got cut in half during the pandemic it is now up 90 from its low. This is the highest level xrt index of retailers traded going back to november 2018. So this is a massive move in some of the hardest hit companies of this era. When you see emerging markets and materials and retailers and many, many other things that are not named microsoft and apple running amok like this, i think its very bullish. Talking about tech taking a pause, apple got a rare downgrade today, bank of america cutting its rating to neutral, the firm highlighting key concerns including gross margin pressure for 5g iphones at store growth plus potential head winds out of washington like higher. I think actually went from neutral to sale. Well classify for that in a moment mike santoli, we mentioned this at the top clearly it had a bit of an effect on apple and down a little bit but closing in the green showing resilience. By the way, i think it was to neutral the price target remains Something Like 460 for b of a. I think this was a call that said lets take some profit. Stocks haddage amazing run,vertal, 40 above 200 day average. A lot of things that come derail the story or tilt sentiment in a negative direction why not kind of take account of those right now with this downgrade. The thing about apple is unlock stocks like amazon and microsoft and facebook and google where you have 80 to 90 of analysts always have a buy on it. Apple has been a twoway street in terms of opinion, costs arent that high now you have twothirds of the analysts have buys on it thats not really an overwhelming consensus that Everybody Loves this stock i do think its really more part of the debate thats always gone on with apple as opposed to some new bout of negativity washing over. It was from buy to neutral apple, downgrade from bank of america. It was lower now higher, 0. 44. Lets get other names here sorry, just want to move onto square the company doubled this year, up another 8 today. Were going to get your thoughts on that. First kate rooney has a story for square kate. Hey, sara, squares Quarterly Results are latest sign of a booming digital economy. Q2 results helped by popular payments app, cash app in more brook and mortar moving Online Company posting 64 in revenue wall street had been bracing a loss of 0. 05 on earnings but square surprising to the upside with 18 cents adjusted epps. Venmo the star with Profit Growth 160 year over year that was helped by spending of stimulus checks. It helped offset weakness in squares terminal business kroer said on the call square is trying to save people a trip to the bank we should note square was expected to report today but the company moved up the time line after a media outlet reported financials early guys, back to you. Thanks so much for that one lets move to disney, up 8 pours with roku due in a few minutes Julia Boorstin watching both those names for us. Thats right, wilf. We have disney up and roku down. Disney shares moving higher on better than expected Bottom Line Results and better than expected Digital Subscribers with disney topping 60 million with the company saying its going to continue to invest going direct to consumer. Ceo announcing disney will launch international general Entertainment Streaming Service to launch next year and saying disney subscribers can buy mulan, its Theatrical Release on september 4th while it launches in some theaters. Well hear more on streaming landscape when roku reports after the bell its expected to grow revenue by 26 to 315 million while its loss is expected to widen to 0. 50 a share from 0. 08 a loss in the year quarter. The big question analysts will be watching is how roku fared and outlook for ad market ahead. Back to you. Looking forward to roku numbers. Josh brown, on disney, i like the announcement structurally on mulan and disney but up 8. 7 missed revenue estimates and only beat on epps because its not spending any money because it cant make any movies at the moment you know, sometimes theres just nobody left to sell and its as simple as that thats the case with disney. If you wanted out of the stock because of the, quote, challenging environment, youve had like five months to sell it and a lot of people did. I really dont think there are people in the stock now that have not already decided were going to grit our teeth and get through this era whether it takes three months or six months or a year, the bet is that things will get back to some version of normal and disney will win again because they always win coming out of crisis moments weve seen this happen to disney over the decades not quite this severe, this sudden again, if youve been in the stock and you havent sold yet and youre willing to get this country through the pandemic to the reopening of everything. Thats whats happening here i just think you have an absence of sellers. Nobody, i guess, was surprised that the parks business was down 85 or that revenue is down or disney reported its first loss since back in 2001 the surprise was actually on the disney numbers and how impressive and how fast thats growing ahead of their own expectation. Complaintlized at a high rate you cant deny that, willingness to look through when it comes back theres no denying if theres a vaccine in six months, then why isnt disney going back to its highs. That being said, i think you have a general willingness to give the benefit of the doubt in the market rallies, turn pessimism into overconfidence, i think were well along in that process and see where it takes us. Two minutes left of trade lets go through the market internals. They are firm average stock outperforming s p by 500, almost three to one advancing on New York Stock Exchange wanted to highlight dollar versus equity action if you look at it over the last month or so, the u. S. Dollar index, there you go, tilting lower as the s p climbs its not the only thing going on but a big part of the backdrop at the moment. Then the volatility index, our daily check right here of this sort of gauge of hedging demand. Its buckling, under 23, confirming resilient strength in grind higher its a picture of slow, grudging normalization. Weve got over one minute left in the session. Approaching session highs, s p 500 up 7, dow leads the charge up 1. 5 or 400 points largely because of disneys 10 or 9 . Nasdaq set for record closed, the laggard up 0. 5 . Russell 2000 strong instead up 9 because of sector, materials, industrials, financials top. Youve got Energy Companies doing well as well those banks and energy names helping russell 2000, kb bank index up 1 . As mike said dollar weak gold up another 1. 5 , 2,052 treshtry note kbloofg. Banks strong this session. Right at the session high record closing high of nasdaq composite up 0. 5 todays performance beaten 0. 7 and do you up 1. 4 . Still the nasdaq with sixth straight daily gain, wilfred, in its 31st record close of 2020 welcome back if you are joining us im sara eisen with wizard frost, mike santoli, cnbc commentator. Take a look. Across the board session highs dow tick positive a strong close. Up 373 points. The big winner was disney as weve been talking about closed the boeing up, walmart the loser on the dow. S p 500 up. 6 of 1 led not by technology industrials, materials, financials, those were your best performing groups. Consumer discretionary retail josh brown mentioned had a good day. Nasdaq closing, that will do it, another record close for nasdaq. You did have names like amazon and apple. Retailers like monster beverage, a good quarter russell 2000 up 2 if youre keeping score at home, s p 500 is now 2 away from an alltime high. Its up about 3 so far yeartodate and heading for a strong week. Investors awaiting from roku, zynga. All the numbers and analysis as always as soon as they hit the tape first joining us to talk about the market josh brown with us. Sarah malek, head of equities joins the conversation as well ill turn to you first on the strength were seeing not just in the nasdaq now but really expanding a 2 move higher than the russell 2000 and industrials and financials even on value days havent necessarily joined the party but they were in on it today. We see a couple of days now of this broadening action. Markets in past weeks did absorb pullback in tech stocks reasonably well, didnt get thrown off course. You have to give the benefit of the doubt to this firm grinding trend higher you can always quibble with things, volumes remain really light. You cant have anything great to say about august in general historically from a seasonal perspective. Everybody seems to know that right now. Not sure if it can necessarily matter it is dependent on the move lower in the dollar in real bond yeels. All that being said, markets continue to acquit itself well as i said continually turning cautious sentiment into confidence and then eventually overconfidence where it ends. Arah, are you worried about the data in the u. S. And how it compares to data around the rest of the world in terms of economic strength . U. S. Markets have been really resilient in the spikes in covid cases. Relief over earnings we are becoming concerned. Once were passed stimulus we have to worry about election concerns, high volumes and trade talks. We think the rest of the year will be volatile weaker dollar is good for international markets. Were finding value outside of the u. S. Eventually the u. S. As it starts to normalize in 2021, going into 2022 and Earnings Growth comes back that will drive markets higher we see lower returns Going Forward, volatility not what weve seen since the bottom in march. Josh, there was a lot about the fiscal cliff another day unemployment bump has expired and people are not collecting that that are out of work, the millions of people an moratorium or evictions has expired in for closures. Congress has yet to make a deal. Why isnt the market more worried about that im surprised, too, i think its a very good point i dont think maybe the market is worried about it until we see evidence that its affected spending on the part of the consumer that will happen quickly we wont wait for the information. All kinds of data sources fairly new people paying close attention to bookings at open table or online sales we get very quickly. Bank of america, Merrill Lynch debit and credit card data stay tuned for that, that might not be something we whistle past by the end of the week we may be hearing theres a dropoff in the way and rate people are going out and spending money. I looked at jpmorgan spending data and it plateaued. The initial boost after states started reopening, mike, and now its kind of stagnant and staying. I guess, i dont know, is it just that the vaccine news is such a powerful force that investors do not want to bet again against. I dont know vaccine news were in the window likely progress in that direction also, just if you look at the curve of the average daily case count, it has curled lower in a pretty defined way and i think thats giving people confidence, yes, you saw plateauing of Consumer Spending but theres a since modest modifications on relatively temporary basis were not going to ring this out somehow this company is willing to live with a certain amount of infection and not going to necessarily bring the economy to a halt just yet. Thais the cover story for whats going on and why the market isnt panicking on this fitful recovery on the consumer side. Roku numbers just out nice beat on the revenue line. 356 million versus forecast of 315 million so thats 42 year over year in terms of active accounts, 3. 2 million active accounts to total of 42 million, forecasters coming in at 42 million. Streaming fractionally soft 4. 6 versus 14. 8. Average user trailing was a slight beat, 24. 9 dollars per user the top line revenue beat coming due to more active accounts and better average revenue per user. The shares are jumping about 5 after hours. Julia boorstin digging into numbers. Julia, what stands out absolutely. Wilf, a bead across the board better than expected in top and bottom lines one thing they point out in the letter to shareholders is exceptional account growth saying the Company Generated its largest net increase in active accounts in history outside of q4 holiday period saying its partners saw a surge in growth for advertising bod, sbod and tbod, subscription on demand as well as advertising on demand. A big focus on advertising here. They are saying as economic pressures caused advertisers to further reevaluate how much and where to invest media dollars roku delivered strong growth in ad business particularly relatively to overall ad market thats down. That was a particular point of reinsurance on concerns about rokus exposure to advertising which is overall contracting you see shares up 4 . Julia, well come back to roku in just a minute. We want to get to zynga earnings out also well get to josh with those numbers. Josh. A lot of 0. 16, not clear if thats comparable. Bookings, thats a beat, street at 503, q3 guidance zynga looking for bookings of 620 million street closer to 450 for the year they say they are looking for bookings of 2. 2 billion, up 360 million versus prior guidance, closer to 1. 9 billion. Also announcing acquisition by the way saying it is buying publisher with portfolio gains downloaded more than 250 times zynga says they are going to acquire 80 of the company with 168 million cash over the next three years requiring remainder. Interesting comments on trends they saw the highest mobile daily active users in april and early may as more people sheltered in place toward the latter half mobile daus they say did start to return to levels consistent with q1 2020. Heading in it was up 30 over the last three months. Guys, back to you. All right josh, thanks lets hit numbers as well, looks like a big beat. Kate rogers digging through those. We will take you through the numbers. Etsy a huge beat, epps coming in at 0. 75 compared to 0. 39 highest estimate at 0. 56, blows that away. Revenue higher than anticipated, 429 million for the quarter analysts have been expecting 330 million the highest estimate was 351 million for the quarter. Once again, 429 million revenues for the quarter also 18. 7 new and reactivated buyers for etsy in the quarter, consolidated gross merchandise up 146 . The Company Giving higher than expected revenue guidance for the third quarter. The stock as we know up 200 yeartodate, guys back over to you. Yeah. Ill just add a little more color, kate, thank you this is masks and ex masks, organic up 125 . Etsy has become a huge seller of masks as states have mandated across the country organic without masks still up 90 . They are seeing a lot of strength not just in the mask category but home wear and Home Furniture and apparel interestingly up 77 , which were not seeing across retail consumers are changing their buying habits here and going to places like etsy also another interesting stat here seller growth is very strong a lot of people coming on etsy and becoming artisans and selling and looking for Economic Opportunities as weve seen a lot of job losses in this country. That number up more than 100 from last year as well a company that clearly is in the sweetspot josh brown, etsy up 2. 4 already on top of monster run its already had. You like this name sara, you havent visited my etsy shop yet. I think youll be delighted at all the items eye been making that are right up your alley ive been so wrong on this stock. Are you serious yeah. I have not talked about it a lot. Ive never been bullish on it and very dismissive. I almost looked at it, it reminded me of blue apron, things i said i can see it hot for a year or two and people get sick of it im totally wrong. The stock went into the numbers at 200 times pe multiple sometimes the market is right in overpaying for a stock this Company Continues to deliver. This is a huge number tonight. Im also impressed by those seller growth numbers. I dont know what else there is to say the stock is on a tear, small winner in the space. Its small 14 million market cap it has room to grow if they continue to execute. Want to bring out a line in roku, replatform to tv has accelerated. Big implications, roku with 19, 20 billion market cap, not game changer for s p 500 but others forecasters. I dont know the degree to which it is underappreciated or not really priced into the market if you look at roku, it has always been that way with netflix to essentially bet on the massive secular shift. Its definitely gotten an acceleration theres been a boost roku challenging its old high. Its not carving out new upside ground i dont know if theres a Game Changing aspect as much as pull forward with what was going to happen anyway. The bet with roku has been can they remain a hub, virtual bundle for all these services and then layer ad sales on top of that in a meaningful way. So weve got threeforthree here, sara, roku, zynga, etsy. The Common Thread is they have all been working in covid19 era, stayathome economy. They continue expectations when its strong. Take a pick, is this an area you want to be these are all three companies that had strong trends in place before covid coughed only accelerated the shift. For Many Companies that acceleration is permanent. For zynga we loved video game space a long time, very well positioned, continuing users roku longer term theres competitive issues for them. Even though cord cutting has been accelerating and advertising will return to normal over time we do worry about netflix and amazon and roku for some its a mix, permanent shift, strong return, for some companies they may hit a wall with stronger competition from larger companies. Zaira and josh, thanks for joining us. Thank you. Details on three nonSilicon Valley ceos with one priced this afternoon and more on rokus quarter, stock showed up a percent. Back 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. Welcome back, renaissance ipo which tracks listings, up 45 . Investor appetite for Growth Stocks stayed really strong. Just today we got two other big ipos with another waving in the wings and none of them come from Silicon Valley interestingly enough our leslie picker has the story for us lesl leslie we saw two Saas Companies from texas. Thats where the ipos end. Take a look at shares of big commerce, above the range. This is austinbased competitor to shopify and Hedge Fund Tiger global coming in and acquiring 20 of the offering. Then there is apollobacked r k rackspace shares of the company plummeting after pricing at the low end of the range it had been marketing to investors. North of texas is, of course, detroitbased Rocket Companies the parent of quicken loans set to price in the next few hours or so. Demand, im told, is a little rocky here im hearing bankers guiding investors from 18 to 20 range with likely pricing at the low end of that range and possibly even selling fewer shares than they initially planned that is below the range on file with the s. E. C guys. Its interesting, leslie, the two names today went in such opposite directions in really big ways i guess that could be seen as a sign that the appetite is not overly frothy or at least theres some ability to distinguish of. Definitely if you look at the intro, investors want growth these days big commerce has that. Top line growth 22 . You look at rackspace from 2018 to 2019, their growth on the top line was flat. So investors these days like new names, they like Younger Companies in that phase of the growth cycle they are not as interested in companies that have been around for 20 years in the case of rackspace, 35 years in the case for some iteration of Rocket Companies. So i think youre right, its a growth story here, which is also why were seeing such huge demand for stocks these days people like riskier, less tested companies. Leslie, thanks so much for that roku shares as we just reported, nice beat on both lines. Lets bring in Research Analyst tom forte. Tom, are you impressed with the numbers, particularly the adding of accounts . I am quite impressed with the numbers. If you look at the streaming growth north of 66 on year over year basis by way of comparison when amazon reported its june quarter, it indicated video consumption had doubled. So i think what youre seeing here is strength in advertising revenue despite the fact that advertising revenue in general has been challenged by the very weak economy, so i think strong results from roku. I did mention in terms of looking forward the ad Industry Outlook uncertain for q3 and q4 and total tv adds not recover to precovid levels until 2021. What did you think about that . Definitely this way within Television Advertising spending, i think youre seeing an acceleration of the move to ott, benefits roku, also crackle, another player. I do think that in general if we were to look back, our initial expectations were probably higher as far as rate influence for rokus advertising revenue in 2021. Still impressed it is growing. So beyond the advertising wild card here, tom, whats been the pandemic effect on roku and has it been as big as some of the other places for stayathome and streaming in particular. The pandemic for roku is really consumption again, thats north of 66 year over year growth in consumption and doubling of consumption for video for amazon since their Business Model is a combination of selling hardware and advertising, they arent benefiting as much on the Revenue Growth as, say, a wayfair or overstock or amazon ecommerce getting more revenue boost than advertising in general. I do think a bigger opportunity Going Forward like pinterest where they start leveraging facebook boycott and our leverage suggesting they are doing so you have more ad impressions from advertisers and new gravitating to ott that happened to be boycotting facebook. Whats the big threat, tom, to roku . The absolute biggest threat for roku is they swim with the sharks you think about couldnt be more challenging. They have Strategic Partnerships with amazon but compete against amazon, could be the same for google and others. The competitive set is the longest challenge for the company. They have carved out a niche and kind of an independent player in the category. Where are we broadly, tom, on cord cutting from cable to streaming given the fact sports weve had a lack of live sports and people have been at home. Whats happened with that . I would argue covid19 has been full north in ott consumption. To the extent i think that is driving cord cutting and to the extent you have a challenged economy, opportunities to save money, internet, covid19 and challenged economy are accelerating cord cutting. Tom forte, thanks for joining us, your first take on roku. Up next mike is taking a look at one measure between the disconnect in the market economy and what explains it a reminder listen to us live and on the go. Well be right back. On a scale not seen in decades. An estimated 54 million americans will struggle with hunger. With 200 food banks and 60,000 meal programs, feeding america is the largest hungerrelief organization in the country. Join Morgan Stanley in supporting feeding america and your local Community Food bank. Woi felt completely helpless. Hed online. And your local Community Food bank. 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. Puts its customers a wiin charge . Rier well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with xfinity mobile. Call, click or visit a store today. Lets get a check on movers. Seema mody has a breakdown hey, seemy. Hey Technology May be providing leadership, a remainder from Western Digital key laggards, company has focuses on hard disk drives and storage reporting numbers that come in well below estimates. Most importantly q1 guidance below what wall street anticipating as it continues to face rising competition. That stock down 9 after hours lets pivot to sonos, following after hours 0. 52 loss on revenue, that beat, that stock you see under pressure live nation, a wider than expected loss for the quarter. The company says fans will return when its safe to do so fans are holding onto their tickets even when given the option of a refund in fact, through the he said of the Second Quarter, 86 of concert fans are keeping their tickets for rescheduled shows. Guys, back to you. Thats interesting. Seema, thank you up next new hurdle for microsoft. Secretary of state mike pompeo making comments about untrusted chinese apps and calling out tiktok by name well have the details for you next come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. The nasdaq closing at a new record high. S p 500 about 2 away from its own record lets send it back to mike santoli. Taking a look at the disconnect between markets and the economy, a constant theme. It has for months, sara i will call it a perceived disconnect we can explain away perceived dislocation here this chart from nautilus capital, sixmonth average unemployment, credit between highquality corporate debt and lower quality corporate debt as you can see back in the crisis in 2008, 2009, they rose and fell in similar magnitude. You saw credit bottoming out, riskier outcome, a lot more defaults, stress in the market even here in early 2000 something similar. What we see right here, of course, is unemployment shooting higher and credit spreads contained, in fact, lower than they were a few years ago. Obviously quick and preempt action by Federal Reserve and treasury to liquefy the system and try to cushion impact of worsening Credit Conditions out there. So its kept the credit markets, Corporate Capital markets in general in decent shape. Also, you have to imagine theres a sense out there in the market that this spike in unemployment because it came through such extraordinary circumstances and shutdown maybe quicker. I would point out a little gap in the kind of mild, early 90s, mostly corporate and real estate that was a time when fed kept financial conditions quite easy relative to whats happening in the economy. Maybe thats the explanation that plugs the gap. Yeah, i mean, the fed, the fed, the fed thats clearly the biggest reason for the disconduct congress. Also Congress Fiscal Response to companies was also meaning fful. For sure. The other i get when i talk about disconnect, people say, look, not much of a disconnect with bang stocks or industrials down 10 for the year so it really is the haves and have nots a lot is megacap tech stocks that weathered the storm. S p 500 came in down 10 from the high a third of the s p still down 25 from its high. Those parts of the markets are not pricing in a great economic scenario now. Okay, mike. Thank you very much for that meantime secretary of state mike pompeo made comments on tiktok and it briefly moved microsoft stock. Kayla tausche has more on unconventional m a negotiations still ongoing. Kayla. Those unconventional negotiations come against a very complicated geopolitical backdrop reporters which he led in part by commenting with a new strategy called clean store, clean cloud, Clean Network where essentially the u. S. Wants chinese app untrusted scrubbed from american app stores, american app from apps stores administered by huawei President Trump announced action on tiktok for good reason and sees these apps as a significant threat to personal data and tools for Chinese Communist Party Content censorship certainly yet another shot across the bow by the secretary of state hes applauding the president s decision to essentially light a fire under negotiations for that acquisition of tiktok, but it comes against a very complicated backdrop where the u. S. Is going to be trying to make a lot of changes to the way a lot of companies operate. Wilf. Sato conclude from this the next level of suggestion would be all these chinese developed apps should be removed from apps stores even if not huawei. In his remarks he specifically talked about we chat in addition to tiktok weve heard other members of the Administration Name check we chat as well that is another one that the administration has its sight on. Sounds from the comments last hour there could be sweeping action against a set of these apps. Meantime, kayla, what is the latest on the stimulus negotiations have we made any headway today. We are awaiting a meeting to break on capitol hill Top Democrats and members of the administration they have been meeting every day, every other day for the last week or so to try to reach a compromise treasury secretary said yesterday the end of this week is a deadline. The senate is expected to go on recess next week he said they thought they could reach a deal by the end of this week and vote on it by next week there do appear to be glimmers of hope. We talked about republican senators backing aid for airlines that had not been in the original proposal that the gop floated and there appears to be potentially a compromise on Unemployment Benefits at 400 a week through the middle of december of course, all of this is a moving target and probably changing behind closed doors in that room right now. What is the big holdup . If they are moving toward some sort of middle ground on the extra unemployment bump, is state and local government aid a hold up . Thats not in the republicans plan what is it well, yesterday senator schumer said the disagreement, the crux of the disagreement is on the scope of the problem and the solution which seems like a pretty fundamental area to disagree on. What the problem is and what needs to be done to be sure the 2 trillion difference is quite large here there are some suspicions that perhaps what we could see is a smaller package that moves forward. Thats something the white house has seen to be backing in some fashion even though democrats have not wanted to support that quite yet but its clear that unemployment is critical for both parties and that 400 level could be the sweetspot for them to move forward but well just have to see. Well see if the jobs report adds any urgency to that discussion on friday kayla, thanks. Coming up, the summer of home sales despite coronavirus concerns, the health of the Housing Market has been positive overall. Were going to discuss wh itthe ceo of lgi homes when closing bell comes right back. We do have a ratt problem. Round and round with love well find a way, just give it time. At least geico makes bundling our home and Car Insurance easy. It does help us save. Round and round with love well find a way, just give it time. Round and round what comes around, goes around. For bundling made easy, go to geico. Com welcome back time for cnbc update with sue herera. In israel a rare show of unity with lebanon following the explosion in beruit. Lit up with the colors of the lebanese flag. Officially the two countries are at war though a ceasefire has been infect since 2006. In florida a man has been charged with battery after he attacked his lyft Driver Police released this video showing travis smith tearing down a plastic partition, showing the driver and making him lose control of the car. Hes also charged with child abuse for endangering a 7yearold in the car. A legendary columnist died, pete hamill covered everything from murders to local politics to sports, wars in lebanon, ireland. Hes a usual jist that fought for the underdog and mingled with the elite pete hamill was 85 years old you are up to date thats the news update this hour sara, ill send it back to you. Thanks. Still to come the home buying boom lgi homes, just one stock benefiting from recent uptick in mal estate across the country, upore than 60 this year well discuss the trend with the ceo after the break. U. S. Consumers pursuing Home Ownership at record levels as Mortgage Rates drop. According to Commerce Department u. S. Home ownership rate rose to 67. 9 in the Second Quarter, the highest level weve seen in more than 10 years. One stock benefiting from the home buying rush, lgi homes, the company reporting strong q2 earnings this week and rallying 62 of joining us for an exclusive, chairman and ceo of lgi homes. Thank you for joining us talk about the demand youre seeing right now. Thanks, sara, appreciate being on the show. Were seeing Strong Demand july orders were up 60 year over year. Really since the pandemic started and on the show really talked about things slowing d n down weve seen strong rentals, looking to get out of dense environments and get into Home Ownership. Things are good from a demand standpoint. Its going to ask about Home Ownership rate because for ye s years, this was a number stuck from the financial crisis and couldnt get up. We were wondering how much was scarring, how much was millennials living with their parents, which a lot of the data showed was happening is that finally changing because of the pandemic. We think it is. Thats what were seeing in the field. Our customers are in rental environments, in a dense hallway, shared hallways, elevators, quarantinetype environment. What they are starting to look at is the ability to own a home. Interest rates are low, which makes affordable payments. They can have more space, a yard, Start Building up equity into their house its a much Better Living situati situation, coming out to the suburbs. We have inventory, have the customers ready to move into their home and out of the apartments quickly were seeing Strong Demand we think this will be here for a while. Urban to suburban is a clear theme that sounds like youve witnessed. Any other clear themes as well do tax rates in cities make a difference are you seeing faster growth in smaller towns versus bigger towns, for example we are seeing now we think theres a flight to the suburbs because of safety, privacy, the space. Also more people working from home, which has been a theme on cnbc and we think thats a theme thats here to stay because location, when youre working from home isnt quite as important. Most of the time when you come out to the suburbs or move a little further out customers can get more space and value for their dollar. The question here is how sustainable these numbers are and this surge is, eric, when especially you have millions of people out of work. Sure. We need to get the country back open we need to get people back working. Fortunately for lgi, customers that are employed, 85 of americans that are working today, that demand is so strong. We think thats going to continue we think as the jobs come back that flight to the suburb and that desire for Home Ownership is only going to increase as the jobs come back to the economy. What area of deposit are people putting down where you are seeing new First Time Buyers of a younger age in large part attracted by these low Mortgage Rates. Are they quite leveraged up or not . Do you know if they have fixed mortgages or floating mortgages. If rates suddenly soared, could they be in trouble right now, wilfred, our financing for our customers is predominantly fha. Thats a program that focuses on entry level First Time Buyer thats a 3. 5 down payment its increased from 3 a number of years ago and the Interest Rates are helping. If Interest Rates went up, that would lead to more expensive down payments. We think its an affordable alternative to renting right now. Customers can get in with a reasonable down payment but they have to have skin in the game, have to have income, have to be able to pay their bills but very Strong Demand for those that qualify to buy. So only putting down a deposit worth 3. 5 the value of the home. 3. 5 is fha standard for all builders and thats most of our customers are utilizing fha financing. Just on home prices, looks like you did get an increase in home prices about 1 over the same quarter last year is that going to continue . Are you seeing that across different markets . We are, sara. 1. 1 increase quarter over quarter for the year and our guidance for the year we anticipate sales prices continuing to increase between 245 and 255,000 we think that trend of prices increasing because were in high demand, low supply environment plus the cost whether lumber, land cost, labor cost, all those costs we see continuing to rise. Therefore were going to have to increase the price of our house to maintain margins. Eric, thanks so much for joining us. Thank you, we appreciate it. Still ahead, uber gearing up for earnings tomorrow. Breakdown of what to watch in that report when closing bell returns. We made usaa insurance for veterans like liz and mike. An army family who is always at the ready. So when they got a little surprise. Two . They didnt panic. They got a bigger car for their soontobebigger family. After shopping around for insurance, they called usaa who helped find the right coverage for them and even some muchneeded savings. That was the easy part. Usaa insurance is made the way liz and mike need it easy. Usputs its customersde the waa wiin charge . Rierd it well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with xfinity mobile. Call, click or visit a store today. Facebook launching its answer to tiktok today, rolling out reels on instagram tiktoks own future remains in limbo. The videos on reels can be up to 15 seconds long and usually feature trending music some youtube and tiktok influencers are starting to create content using reels i mean, mike, clearly what weve got is a deadline imposed by the administration and by the negotiations betwe negotiations another time pressure is they dont want to let reels grow too long before theres an alternative with tiktok. For sure. I dont know that would happen in 45 days its interesting for facebook and instagram to have this and try and test whether they can maybe draw some of the attention and eyeball hours away from tiktok i might be a little bit skeptical because the tiktokness of tiktok based on what my daughters are doing, theres a very High Standard for it being authentic and inside jokes. I dont know if thats replicaable very quickly by instagram. The timing is pretty interesting. Weve known facebook has done this before in terms of not copying. I think some of the legislators used the word copying but they went after snap with the filters. It is copying. The timing of this seems very timely for them to do this as the future of tiktok in the United States seems in jeopardy. Im not sure if they moved it up or what but its interesting. And doing fritit from a posin of strength, its not as if this is a make or break for instagram. I dont think theres any doubt theyve copied whether it was the story feature on snap or this, but theres no law against it here ive presented the computer mouse apple perfected it these things are shared and borrows. Instagram stories became a thing over snapchat. They havent done the dating app. They havent necessarily done everything can they get baby aerii the key be on your radar and what else we are watching. Im searching for info on options trading, and look, it feels like im just wasting time. Thats why Td Ameritrade designed a firstofitskind, personalized education center. Oh. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. So its like my streaming service. Well except now youre binge learning. See how you can become a smarter investor with a personalized education from Td Ameritrade. Visit tdameritrade. Com learn visit tdameritrade. Com learn as business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. Uber set to report results tomorrow uber of course has gone all in on food delivery but its Main Business and the majority of its revenue still comes from ride sharing. That unit expected to remain under pressure as economic reopenings stall or reverse in some cities. A bright spot, though, could be leaner cost structure after the company laid off, remember, a quarter of its staff regulation will be in focus too as a key ruling on driver classification in california is also expected tomorrow afternoon. As we wrap up the hour, i mean, stunning action to see for the stock market, mike, with the s p now up well above 50 from the march lows, 2 away from a record high, 3 higher for the year thats the s p 500 its not the nasdaq, which continues to make new record high after record high which is a head scratcher a little bit when you look at some of the Economic Data that weve been getting, some of the earnings reports weve been getting and some of the forecasts for how fast its all going to come back. Yeah. Theres nothing really typical about the speed and just the depre compressed nature of this down and up cycle weve had yes, the rally off the lows looks a lot like what the one in 2009 did and even ones off prior crashes did. But usually the downturns lasted longer than five or six weeks. Its a testament to just how fast the response has been i do think Corporate America moving very quickly to adapt and also the sense that investors are free to try to look across the valley and expect the upturn simply because of all the stimulus in the system, because of the weird nature of the enforced downturn and the fact that the Central Banks and congress are cushioning the downside if you dont have to worry about the downside scenario, youre free to maybe have a longer term perspective. I dont think its going to be a smooth ride higher there are a lot of circumstances where we say oh no, the s p 500 has done nothing in six months whats wrong thats where we might be pretty soon. For a couple of days the dollar tried to reverse its recent weakness, today really breaking down again to the downside, back down. 6 . Theres a real persistence to this move even though people came into the week saying trader positioning seems really negative on the dollar, its trying to bounce you have these long trending moves. Theres a lot behind it, Global Growth exceeding what we can expect in the u. S. In the shortterm, europe getting a little credit perhaps for having its act together right now its momentum. The intermarket relationships are clear, weak dollar, strong real assets, negative real yield. It seems like its that simple but well see if that constellation gets interrupted or disrupted at some point before too long. Were going the get the government jobs report for july on friday. We got a really weak reading on adp private sector jobs. I just wonder how much of that is the fact that margins are better they were able to lay off a lot of workers and save a lot of costs. The question is are they going to hire them back if we dont get a surge in demand. It relates to the Underlying Health of the economy. We are going to get the weekly jobless claims tomorrow too. That will be a glimpse at whats been going on. Thank you so much for watching fast money starts now. Im melissa lee and this is fast money. A game of tiktok. More on the big battle brewing over one of the most closely watched deals in all of tech plus Warren Buffetts Berkshire Hathaway if youre looking for love, dan nathan found it in this name why he says investors should get ready to swipe right on this stock. We start off with the dollar dilemma. Feeling the pressure today as yields crumble this mov