Well tell you why traders are betting on an even bigger run. Later, airlines lower as they prepare for what could be a slow september the former ceo of continue nenal airlines will be with us to explain what the new normal may mean for travel stocks kelly evans is back. Welcome. Power lunch begins right now its the s p 500 sitting close to its record high now the wild market ride has brought a resurgence of the retail trader bob and kate are standing by with more. Bob, lets start with you in these record highs we are on new high watch and for the s p as well as the nasdaq and whats brought us there, thats a very familiar pattern. We have seen it many times its essentially Technology Stocks thats with megacap stocks moving on the upside sectors, its technology thats been leading the way we see banks, energy and industrials lagging there. We had many rallies in those cyclical value names banks, the energy and the industrial names over the last few months in various occasions including about a week ago, but thats not what powered us forward. Health care also minor contribution to that we talk about those names, the big five amazon, thats not a mistake there. 46 and you could see apple, netflix, facebook, microsoft all very big contributions this is the main reason were approaching new highs. Who has better posters than that guy love the posters lets go to kate on how robinhood is raking it in because of the rise of the retail trader. Robinhoods raising 200 million from a new backer. Its a price tag increase of almost 3 billion. All of this coming just a month after the Company Closed a two part funding round the round, 600 million robinhoods is climbing the ranks now among the most valuable private u. S. Fin Tech Companies second only to strike. Funding will be used for improving robinhood core product and customer experience. Analysts telling me the fresh financing could help robinhoods accelerate its own mma plans it could help robinhood prime itself for an ipo. Back to you. Im curious we have been here before we hat the dot com days and the etrade dominating air waves and people were day trading that way. Do you think the app itself will be subject to criticisms like we heard last hour that it is designed to, you know, just turn out as many trades as possible and to some extent not truly disclose its intentions to its users. Absolutely. They have caught the attention of regular lartors last week they pulled some of the da down from the website sort of distance themselves from that association kate, how do they make money . Payment forward thats the same way they are making the brokers. Thank you very much with Retail Investors adding to the market euphoria as kate just detailed citigroup is sounding an alarm its panic euphoria model estimates a 95 chance of a downturn in the market over the next 12 months david, let me start with you is there too much euphoria around and does the zoom in platforms like robinhood tip you off to that . I wouldnt be betting big in portfolios on a notable meaningful decline without some external stimulus. Just on valuation alone, i wouldnt make that bet not have sentiments gotten too far ahead but has the market gotten too far ahead of what reasonable people would think is the growth rate of the economy were back in a risk environment. Were in pace for a record year flows. Its really huge. Bob said earlier, we got a bit of a bifercated market so far year to date, spy, the biggest etf is 23 billion in assets. Energy and banks. I think from a valuation stand point people take that into account. When you buy in index etfs, theres no manager that making sure you are buying it on dips or the right valuation at this point in time american investors are saying they want in they want in and they want in the qqq despite the fact when you point out 48 of its value is represented by facebook, microsoft, amazon, netflix and google if i put money in there, arent i just chasing the winners youre participating in this new economy. 66 of gdp is based on Small Businesses all Small Businesses have had to change we had to be embracing technology, communication, buying online. Putting our data into the cloud. All these companies are pretty much in line with that and their growth rates are exacerbated by whats going on in this economy. Nasdaq 100 embraces that david, lets go to a part of the investing world that is about as opposite as you can get from netflix and facebook and so for forts and that is gold gold has been on a run money is doing into it is it a smart place to put 5 of your portfolio if youre going to be in that area, forget about the metal and look for those companies that can have a Business Model that can leverage the higher price of gold visavis a fixed coast that makes more sense then speck speculating on the price are you suggesting buying individual names are you sugi insuggesting buyinf that invest in the minors . If you dont have the time to put into it, you go into an etf. Thanks. A new federal relief bill means recession is about to get real for the half of americans without a College Degree for those americans who cant work at home Monetary Policy is pushed stocks near all time highs. Federal aid has cushioned the blow of the vegs for the unemployed but the relief has run out for low and moderate income Americans Congress cant agree on a new packa package. Executive orders issued by President Trump felt short providing meaningful support to the economy. The lack of funding for Small Businesses, state and local governments and Necessary Health measures will minimize chances of a sustained economic rebound. You look at employment for americans with bachelors degree or higher, unemployment is just 6. 7 its about 15 for those with less than a High School Degree since the 600 per week federal pandemic Unemployment Compensation expired, actual Unemployment Insurance has fallen by 15 billion per week. Fed officials have expressed concern. The economy will suffer without more fiscal aid. Evictions, bankruptcys higher unploim at a more muted background could be the result tyler. If you look at stock market its continued this v shape rebound all the way through this Unemployment Benefits cliff even as expectations of a passing and a package are falling like you saw on the goldman note. I wonder if they are not telling us the fed is doing enough even though the fed says we need more on the fiscal side, i wonder if the markets is no. If fed has done enough the fed may have done enough for the stock market, kelly, i dont know that anybody at the fed or any place else thinks the fiscal side has done enough for the rest of the population the fed has provided a lot of li liquidity but it doesnt pay your rent if you dont have a big portfolio. I totally get that. That liquidity, the whole point is it makes its way into the real economy it starts in markets for sure. The whole point is it growth is it works its way. In an vierm with a lot of access capacity you have right now. Higher stock prices should lead to more investment in that sense a higher stock market in an vieenvironment of w investment doesnt help ordinary americans in that regard overtime, yes, it will eventually but right now you have this end of benefits. Thank you, sir. Ty still ahead, General Motors jumping this day as Deutsche Bank says its electric vehicle could send shares soaring. August demand lags and they gear up for historically sluggish september. Former continue nenal ceo tells us how bad he thinks it would get. More power hundred mp aftlunch s quick break. Hey you, yeah you. I opened a sofi money account and it was the first time that i realized i could be earning interest back on my money. I just discovered sofi, and im an investor with a diversified portfolio. Who am i . i refinanced my Student Loans with sofi because of their low interest rates. Thanks sofi for helping us get our money right. 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. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Demand did not rebound in august as the airlines expected. Thats at the height of vacation season when people get back to work and back to school, such as school will be in september, things could get even worse phil joins us with more details. September is not usually a busy month its not awful American Airlines out with a trim of its schedule preparing for the fact fewer people are expected to fly next month trimming it by 11 compared to august the september schedule will be down 59 compared to the same month last year. International travel down 77 compared to september of last year for American Airlines, this is all about being as prudent as possible with the schedule, understanding that at this point they will have further trim the schedule in october. Already its clear when you talk to executives they are planning on eliminating service to some smaller cities come october 1st unless theres another cares act which would man date that services not eliminated to certain cities at the end of the day this is about getting people back on board and the snap back in recovery is not there. When you look at the passenger levels now its down anywhere between 67 and 73 yesterday, best day since march 17th down still 67 compared to the same time last year. Take a look at the Airline Stocks were talking about delta, southwest, united. The airline job guarantees the money they were allocated back in march runs out on september 30th unless theres another 25 billion allocated, as part of a stimulus package, if and when its ever passed, then youll see the layoffs kick in on october 1st. Youre looking at potentially up to 75,000, if not more, employees at the airlines who will be let go which is a dounauntsing procs stay right there gordon, what options, what good options do the Airlines Face they are just facing reality, kelly and adjusting as quick as we can were looking at all the variable costs and they have been scrambling because of fixed cost basis are so high reduce this every month and i think september will be no change big problem is, things change on them where countries wont allow them to come in or change or quarantine or quarantine their crew members the international is a very difficult market for them and as fill mentioned doe messiah eed t has taken a hit although its down 60 something percent. Its not a great time. Significant, theres awful delays at the passport office. The expediting offices are closed it seems Congress Want to help these sectors. I dont think theres a lot of optimism it will happen the fact of the matter is, i dont think its going to change any time soon. If theres any good news in this entire situation, there are relatively fewer people. There are fewer people who are flying internationally right now. A lot of that is because of restrictions you cant fly over to most countries in europe and a number of other countries have restrictions on americans flying into them. Gordon, im asking because im curious and i dont know when airlines cut schedules, lets say they will not fly to greenville, or reno or wichita how much pressure can individual senators or Congress People put on them to force them to maintain service in those cities whats the game behind the game . They really kbts because they are fighting survival. This isnt for fun theyre not doing it for any reason than negative cash flow its about preserving cash burn every day is tremendous. They only have so many reserves and what the government might lend them. They have to do what they have to do. I think their employees unit and they are being let go. Its just conserving cash. Final question. Playing off of what gordon had to say this is why many believe the cares act extension will go through. They are saying give them another 25 billion to ensure the jobs are in place. That would ensure that no service is cut to some of those smaller markets. They are viable in terms ill let gordon answer as well are these guys going to go bankrupt tomorrow . No if they dont have the government aid they will getgo 75,000 people. The question becomes do you want to keep the 75,000 employed then you give them the 25 billion if youre in washington otherwise, you let them cut. They will continue to bring down their cash burn. Gordon, what do you think . They may subsidize the employment again they really have to have a viability marketplace. Got a lot of fixed costs airplanes have to be paid for whether you fly them or not. Its tremendous. If we extend it, if they goents get government aid for their balance sheet, their cash, theyre not beginning to be there. Thank you both. We appreciate it coming up, two big earnings this week. Home depot and lowes, both stocks have benefitted from the coronavirus shutdown people are at home and wondering what should i do the stocks at all time highs could this be their best quarter ever plus, apple at an all time high with its market cap near inches from 2 trillion doubling in less than a year. Should you chase the rally in apple. The traders will weigh in. Much more power lunch coming rit ghupan, did you know geico is now offering an extra 15 credit on car and motorcycle policies . Thats great thats 15 on top of what geico could already save you. So what are you waiting for . John stamos to knit you a scarf . All finished, jean. Enjoy thank you. I give. The stitch work is impeccable. Its just a double fleck pattern with a reverse garter stitch. No big deal. Is your hair this soft . Softer. Geico. Save an extra 15 when you switch by october 7th. Geico. Its totally not the same without you. Were finally back and cant wait until you are too. Universal orlando resort. Buy now and get two days free at the parks. Restrictions apply. Apple racing to a 2 trillion dollar valuation after a 60 run this year and hitting a record high today is the stock too hot to handle. Lets bring in a trading nation team and mark teper of strategic well partners. The largest u. S. Mention fund in the country disclosing it did sell apple you have a position in the stock. What are you doing with it right now . Apple is a must own you have to have it in your portfolio because its nearly 7 of the s p 500 if you dont own it, you run the risk of underperforming the benchmark. The question is how to manage this risk. For us and our clients we have been trimming the position as it continues to go up are we leaving some money on the table . It depends hon you loon how yout it apple is Great Company the issue is all of the returns over the course of the last 18 months have come from multiple expansion. 18 months ago we were at about an 11 on the forward pe. Now were at 30. 30 times look, the pandemic has boosted ipad and mac sales 5g roll out around the corner. Theres a lot of positive catalyst here. I think its important to trim your position so its not a ridiculous overweight. Will apple take us there . This is third leg of its break out above its previous all time highs theres a bold flag after its post earnings run. Thats over the last week and a half has created a new fresh break out. What im looking at in the near term if youre trading this is about 478 and 499 are you two upside targets if youre trading this, you look at a close below 452 and you have to start managing your risk you dont want to be chased out if this thing start falling. Bill and mark, thanks for joining us today more more trading nation follow us on twitter. Thank you. Ahead on power lunch, working and schooling at home has sparked a renovation boom across the country. Well look at two Home Improvement stocks hitting two all time highs well explain how. Despite a rough year, Deutsche Bank sees an e electric run ahead for gm all this and more when power lunch returns. Welcome barck post mamaster general has agreeo testify a week from today before a house panel. This as Congressional Democrats pressure the postal board of governors to reverse changes lawmakers think are designed to sabotage mail service. President trump tweeted democrats quote dont have a clue, end quote. He says the goal is to make the Postal Service great again while also cutting costs President Trump has arrived in minneapolis for a Campaign Event in that state. He said he might visit nearby iowa to see damage from the big wind storm but on the flight an official told reporters the logistics could not be worked out. In the czech republic, a zoo is letting visitors see this new guy. A pip pohippos are generally ma available after a few months old. Maybe they know we need a Little Something to make us smile, ty, right. Id like to sort of sit there in a pond like that baby hippo on some of these hot days. Im feel like a hippo. Kind of lay there. Thaieyve got a good life. Keep my head above water. Just barely thanks. Lets tell you about the markets right now. As the dow takes a breather today. All 53 points but the s p 500 is right at its closing high. I think its maybe 33. 86 maybe be closing high. Its within a nip of getting that record. Nasdaq up about 1 or 119 points and the russell 2000 up a half a percent. Eric has the news from the cnbc commodity desk thats right. Oil is rising for the day with wti up more than 2 and brent up over 1 . Wti has gained 6 so far this month. Its still down 30 in 2020. Hopes for demand recovery are helping prices today along with strong compliance on production cuts from opec and its allies. The group reached 95 compliance in july. Thats according to reuters. The group notes the Oil Market Remains Fragile and there could be risk if the coronavirus situation worsens. Back to you. Thank you very much. Many americans stuck at home have stunk money into fixing up their homes. That trend helping to send shares of home depot and lowes to record highs today. Both Companies Report results this week. If question analysts i spoke with are asking will this be the best quarter ever for home depot and lowes da da shta shows contractors are seeing their business increase the march, 47 said they rev more job requests. In july that grew to 69 lowes, 70 of americans say they are starting a Home Improvement project in july compared to 60 back in march. Covid19 cleaning supplies up slightly another potential sign that americans plan to keep spending on and more time at their homes. Back over to you that is happening frank thank you. So, how much improvement is left for Home Improvement stocks with more on a big week of retail earnings is stacy the president of sw retail advisers good as always to see you. If we think about lockdown and what happened, it was all about diy and the pro or big projects in your house that require help like i would require, didnt happen they were pushed forward perhaps we have not seen the best thats the big question here is that last quarter, home depot didnt do their spring sales event and their comps were still up 7. 5 . What were all learning here is if the consumer really wants something and its compelling, they will pay up for it nap was helpful for margins. Maybe they left a bit on the table because lowes did have their spring sale. Investors want to see consistent comp Growth Without giving it away as we talk about retail earnings this season and look beyond the Home Improvement stores, i think you make an interesting point about what should investor do its the postpantry panic what do you do now we know walmart has been killing it a stock like target offers the private label apparel. They offer incredibly compelling home which is higher margin which we saw shipped away from pm when those things recover, thats what you want to own and you want to own the one stop shopping like the target who has the food exposure who has the remodels and who has the other categories including School Assuming we go back. Speaking after back to school, i know that there is some bump in laptop purchase we talked about best buy but what are the other back to school plays do they exist and is the nonexistence hurting other stocks that would ben fits this time of year i think its very much about the one stop shopping and the bigger are getting bigger and crushing small business. Its expensive to operate as a business cleaning your store, paying your staff. I think again its all about comfort, connectivity and computing. Home improvement, consumer electronics, toys and comfort clothing and lulu lemon which has skyrocketed. Think about what they are offering they are transitioning into outdoor wear more than ever. Thats a new nishinitiative andc higher ticket. I wouldnt rule them out at this price. Its the specialty retailers that have a niche that seems to be sustaining them is there any reason, stacy, to buy any of the Department Store stocks i would say no on that one. I think the Department Store stocks still havent seen the worse and here is why. Most of the brands that have reported have said that orders from wholesale, meaning Department Stores have come to complete halt. What the brands have said is they will be looking at alternatives to the Department Store sale space because they are sick of being thrown under the bus with promotions. Maybe they start to look more at amazon were hearing brands say maybe well swap into amazon from the Department Store space again, amazon gets bigger, Department Stores continue to suffer always great to see you thanks again thanks. Coming up in power mover, its chips, drug and a big gold deal all the details on tiffany versus costco. Can you tell which ring is whose . Thats next on power lunch. Welcome back time now for some monday movers starting with nvidia several analyst raising price targets. Reports saying its rumored purchase of armed holdings could happen soon. Stock is up 2,000 percent over five years incredible santa fe buyi ining principia biopharma. Gold stocks are higher today after warren buffet is taking a new position in barrett gold ty here is an interesting story. Costco today winning a court battle against its retail rival tiffany. What yeah, rooifival a court overturning a 21 million judgment against costco. This feud has been going on for years. Tiffany saying costco sold Engagement Rings using tiffanys name a judge saying it was unlikely to confuse customers kelly, here are the two rings side by side one from tiffany one from costco. Which do you think there they look pretty dang similar. This isnt exact lly a reveal. That jewelry section, you look at some of the stuff its really expensive. Im surprised that costco prevailed here and tiffany said it will keep fighting. I think costco should just change it to the kirkland ring or maybe tiffany should call their bracelet kirkland just to get back at costco i dont know if tiffany would do that. Were talking about this 6point ring tiffanys thing is people might get confused there are stiffany cuts of diamond and dont have the actual Property Protection of some of tiffanys goods. Lets get to the bond market rick is tracking the action. Short maturities, they dont move much. Were never far from 14 on a two year thats where it closed were down 3 at 68 and 10. Theres a threeday chart of tens i picked three days because thursday was the bond auction that started some selling. You see it off on the left side when yields pop up we went up to 72 basis points. Today we dip below that. Its starting to get a bit of momentum you want to watch 50 basisintrax open the chart up to august. The reason its important is because in august on the 6th, the low close was 72. 98. Tyler, back to you thank you very much. Coming up, the story of the Hedge Fund Manager who booked a 4,000 percent return as the markets crumbled an analyst gets bullish on an auto maker because of hopes for electric vehicles. Its not tesla the case for General Motors is coming up. Feeling stressed . Try new natures bounty stress comfort. Three unique gummies for your unique needs. Find peace. Boost mood. Sleep well. Stress comfort comes naturally, only from natures bounty. A Hedge Fund Manager that produced returns of 4,000 in the First Quarter of this year, how did he do it leslie picker knows. Thats right. That Hedge Fund Manager is mark spitznagel, a firm that uses derivatives and options for doomsday protection. The strategy is known as tail risk hedging think of it as insurance and the payoff you get if your house burns down so when the markets went up in flames in march, universes algorithms kicked in and able to deliver the 40 x returns now as the markets teeter around record highs once again, they have given back some of those gains. But the firm is handedly the best performing hedge fund this year he said earlier on cnbc that markets are overvalued he believes theyre set up for another left tail event or major market shock he says the fed and washington are complicit in creating a bubble we see that were repairing these things we dont see the things we dont see the opportunity and the things that lie around the corner which always lie around the corner from credit bubbles and were also not paying attention to the massive disparity of wealth that is being created when we inflate the financial markets. Its unconscienceable really he says were in the midst a monumental boom and bust cycle just because were near record highs wont mean it wont be a bumpy ride from here, guys as a general rule, leslie, as you follow hedge funds across the board, how have they done this year . They have done okay they especially did well in the First Quarter. The whole purpose of hedge funds as you know is essentially to provide diverse fiction for endowments, pension funds, wealthy families and so forth to provide down side protection so they outperform the market when the market went down. They were still in the red on average. But they outperformed. Now since then, as we have seen, you know, as a trend over the last few years, theyve underperforms the market as its been kind of a rising tide any time you have a hedge on and the market goes up, its difficult to outperform, especially if you, you know, are you have too much of that beta risk in the portfolio all right le leslie, picker, thank you. Shares of General Motors is down 20 and tesla has risen more than 700 theyre up eight fold in the past 12 months the market shifts to electric cars, can and will will General Motors catch up . Thats next on power lunch. You can watch or listen to us on the go on the cnbc app were back after this. Flexshak like other etfs. 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. 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. Woi felt completely helpless. Hed online. Weve just been finding a way to keep on pushing. 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. Welcome back shares of General Motors getting a nice 7. 5 bum top day after Deutsche Bank added them to the short term buy list. Theyre saying there is a strong chance gm will spin off the electric Vehicle Operations into a stand alone company which will be positive for the stock. Joining us now is Deutsche Bank analyst. Great to you have here im going to cut right to the chase. If gm spins off the operations, would it retain any control over them its really going to be up to them a lot of options you probably will retain a little bit just ownership stake to ensure that the two companies can continue to work well. The less it retains, the better for Value Creation the okay. Thats my question so you think there is a possibility they work out. I think, you know, we speak to investors on a day to day basis. At the same time, the market shows us every day theyre willing to do it as part of a legacy automaker and so gm, despite being strong technology, very strong electronic lineup coming up, its not being recognized by the market so spinning it off essentially creates value. It can unlock a massive amount of value, actually it can enable them to ataletaled capital. You said mary barrs response to your question made it sound like maybe they were actively considering this do you think its a nobrainer by if it were to happen. But lets look at the range of outcomes you think gm could be worth anywhere from 28 to 93 a share. Its trading at 30 today yes, there is huge upside. But only in one of the scenarios you describe in the scenario, there is not no value destruction. You would be even. You would have a lot of it move to the electric Vehicle Company. The rest you would come out of the remain in all the other scenarios, there is dramatic valuation. We think the electric Vehicle Company could be worth anywhere from 20 to 100 billion depending on the multiple. We dont think there is a lot of value on the remainco because it is trading very cheap as it is in almost every scenario, there is evaluation. There is no scenario where there is is there any similar option on the table for this for ford ford is in the best position to do it they dont have the europe operation. As you recall, they sold out of europe they dont need electric vehicles to be a compliance vehicle for the emission regulation in europe ford does work in europe they need to sell electric vehicle. It is a little bit more difficult. Its possible. Thats fascinating. So ford needs to keep ownership of electric vehicles to meet Compliance Standards in france thank you very much for joining us to explain the call we appreciate it thanks for having me. Tyler, it will be a big boost for gm shares if they started trading with any upside to electric vehicles like tesla yeah. And the spread there between the price targets is really wide looks like if that were to come to pass, could be a nice thing lets set you up for the closing bell. The s p 500 at 3383. The closing high all time is 3386. 15. The close at the train day high is 3393. Those are the numbers were watching kelly, ill see you tomorrow closing bell right now thanks, guys welcome to closing bell, everyone im wilfred frost. The s p 500 is within just a handful of points as we stand at that record close. Lets have a look at what is driving the action advances in amazon, alphabet, microsoft helping the market and the nasdaq in particular tesla also breaking out to highs, up about 8 the 10 today. Home builder stocks are rallying concerns over the stalled stimulus negotiations and simmering china tensions are keeping broader markets tempered