Transcripts For CNBC Squawk On The Street 20240712

Tiktok bid jim, we will start with the retail numbers lowes is a good one to start with, its been called depots quarter on steroids today. Look, i think that Martin Ellison has taken a Company Making it anything but an also ran. 35 camp is terrific hes really got finally hes got the e com down Marvin Ellison is a turn around man par excellence and this is an amazing quarter we dont want target to overshadow it too much because i like the stock and i love the fact it wasnt up big early on its a buy yeah. In store traffic or in store comps, jim, up 11, which is different than what we saw out of others. I mean, i guess when you dont have as fierce a web challenge in Home Improvement and you have the stay at Home Rebuilding boom, thats going to add to a couple huge dynamics. Yes, it will. Remember, there was a period where lowes was not digitized enough also didnt really have very Strong Customer service. All of thats changed under marvin he is the last person to ever want to champion himself so i Will Champion him, i will also champion for how much he helps minority businesses. This is a man who that is changed this culture, changed the company, it is a delight to shop at. Boy, does he take it seriously, if he ever hears anybody that is unhappy from their experience at lowes, the numbers show it is a real turn and also not ending in august it continues and thats why i think thats why im so confident. So that raises b of as upgrade of depot today to buy, they go from 290 to 330, their general point is wouldnt surprise them if spending sequentially slowed, but the combination, jim, of the rebuilding boom and what theyre calling the urban exodus means that the longterm tailwind is intact which do we prefer here . Oh, thats tough because home depot is actually cheap on 2021 earnings the reason why im going to go with lowes is simply that lowes is the c plus student going to a minus home depot is the a mines student going to a plus, because of that delta of the c to a im going to say lowes. You really have to look theyre both a students but one was not an honor roll and other one has been phi bet at that kappa for so long you take it for granted. Fascinating quarter of course, jim, theres target which we will get to the internals in a moment but Brian Cornell was on squawk this morning, said a couple interesting things, one was that he credits the quarter not just the stimulus but the shift in dollars away interest travel an retail and, jim, of course said something about how comps have held up in august. Here is what he said may was the strongest month with comps over 30 , but in both june and july we saw comps in over 20 that strength has continued in august and were seeing low to mid teen growth. And the biggest adjustment is probably the consumer who is still waiting for a signal round back to school as you might imagine uniforms and backpacks and School Supplies are a little slower than last year but the overall momentum and growth in market share continues as we go into the Third Quarter. All right so is that more optimistic than what mcmillon said yesterday. Yes, and what i find once again the selfeffacing nature of Brian Cornell, they took 5 billion in share, you could argue they took it from the little guy, thats a totally different discussion and its a political discussion to some degree because you need stimulus, but what i liked about target was theyre extraordinary besides their digital comparable sales grew 195 this is shipt, shipt, and anyone who has used it is amazed because in a lot of ways its superior to amazon and superior to walmart no one saw that coming because the shipt acquisition wasnt that big target has always been a favorite place for my generation, it looks like its another favorite place for the millennials. It is extraordinary that brian saw a good august. Now, he did, again, he said backpacks is not that good but the fact is hes having the best back to school on a relative basis which is why i think that stock continues to go higher what caused stocks to decline yesterday in the segment is back to school was sluggish i can pick on kohls because they didnt say it was sluggish, they just said it was bad. Target has the most momentum going into the Holiday Season and brian has rebuilt another company. Unlike lowes that had fallen on hard times, target is now probably i would say one of the most fun places to. Sho, people get that, im not denigrating what Doug Mcmillon has done, but targets work on ecommerce is extraordinary. I remember when brian took that job he knew it was woeful, he had to close canada first, very tough decision, then he had to put a huge amount of money toward e com and he did it, its paying off the stores, by the way, are beautiful, more fun and, remember, one of the themes of this period is do you want to go to the stores . Do you feel safe one of the reasons why costco is up so much and theyre not in this reporting period is they have wide eyes, people feel safe there. I think target is another place people feel very safe shopping, you can pick it out outside, contactless, brian mentioned that another great quarter. It is hard after weve moved so much to come in and say you can still buy target but you can still buy target right so you dont see a repeat of the there is it is right there. You dont need a repeat of the inter day reversal we saw on walmart yesterday. I think youre going to see people say i want to take the profit the difference is today we have multiple upgrades and price target boosts in home depot. Those people who said i guess i didnt have it right and i sold home depot are going to lose out on what i think is going to be a decent day when people see that i think they will extrapolate home depot to trgt they will not extrapolate walmart. Walmart is a buy, too, this thing is a little ridiculous Doug Mcmillon he basically says we did this 9 comp its good. I have to go down there to bentonville and i have to hit him up side the head because that guy cannot promote himself to save his life he is not selfeffacing, he is a Glass Half Full guy yet in real life hes not. When i listened to him i said, poor walmart yeah. Its like urich give me a break. You mentioned the political discussion, jim, about how these guys were open while their smaller competitors were not should they be more overtly expressing that realization out loud i dont know in some way committing to paying back beyond employee bonuses thats going over with my nephew and head writer cliff mason today we both agreed that the last thing Doug Mcmillon should do is pound his chest, you will get some house antitrust Securities Committee saying we have to analyze how we got to w. A. T. C. H. And exhibit a. M. Would be qualls mart. Doug mcmillon wisely chooses to not say where he took share and what he did. Look, its such a natural. If you want to do a house antitrust Small Business committee where you basically draw you draw these guys down to washington and say, how could you do this . Its unfair. I mean, how do they do it . Because theyre better run, got scale, became Amazing Companies and we should applaud them remember lowes, Marvin Ellison has taken that company from a second rate to a first rate company. Target was the breach, the security breach. So, yes, it doesnt pay to say how great youre doing in this market because washington does not want to reward you they want to punish you. That is not political. Its just what you do. Lets call an apt truss investigation of why target is so good. That would be a shame. Its so good because Brian Cornell and his team, his teammates are so good. Now, back to School Cornell did say that the assortment on back to school would be available for longer because we know, jim, the season the School Season is starting out choppy. Looked at unc and notre dame yesterday. I mean, how do you how are you synthesizing any concerns you have about going back to school this year. Notre dame was the Gold Standard so it was shocking yesterday. Ive said to brian i just love it when you drop a kid off to college and there is a target because if there is a target that means you can just outfit them in their room or outfit her in her room in no time who is going to be left in a situation where you have unc and notre dame where probably some parents say you have to come home, who is going to be able to stay in business, im not sure about south bend and whether he has something there, but the answer is target survives and the other guys go under. It is interesting to see if you serve food, the essential food, you are designated to live and if you didnt sell food i dont want to say you were designated to buy but there is a dnr sign on your door, do not resuscitate. Thats one of the reasons you see nordstrom down and then kohls, theres no food. Yeah. Im not talking about slurpees so i really feel that to some degree that the nonessential essential designation gave you exactly what youre seeing right now. Right and this was the thesis all along, jim. Yes. Get them in with grocery at least postcovid, capitalize on the hoarding element we saw in march and april and then graduate them into general merchandise customers and take share there. Exactly grocery being the largest, walmart the largest. Look at kroger, a lot of people felt kroger wasnt doing a good job but they have food so they are in business and a lot of other companies that are marginal are not this is also by the way, these companies did not succumb to amazon there would have been another time when we would have said amazon took again, Brian Cornell talking about the way the consumer spends, the way the consumer does things the consumer has had to do a reassessmentment many consumers are afraid to do anything other than contactless or not spend a lot of time, obviously you are not going to the movies, not going out to dinner, that yelp interview we had on squawk was chilling to me because youre talking about many, Many Companies going under but not these. The essential designation and food including targets food really was a very big deal costco selling food at incredibly low prices main reason why they stayed at the top of the game. Right, which sort of brings us, jim, to the stimulus discussions or lack thereof. Meadows out today and pelosi yesterday suggesting that skinny deal might be possible there is in conversation that, well, we are both going to be in town on saturday, what can we do ive been trying to put that deal together all morning, frankly, carl. Trying to get the speaker to come on and i failed miserably. How is that going i have not been able to do it but i am not giving up if the speaker came on i believe we could nail it undo. I generally feel that a deal is in the offing. As secretary mnuchin said yesterday there are these companies that you cant sell and they are the ones that he always described as needing Business Interruption insurance that they dont have the more this goes on and you see that 5 billion that target took in share, well, that target 5 billion did not come from home depot, did not come from costco, did not come from amazon, did not come from walmart. It came from companies that are not going to be in business in another three to six months. I think the secretary knows that a lot of people are involved in the businesses, theyre not marginal, its just we dont trade them they are not trading trattorias and those restaurants that have been able to get seven more tables on the squawk or maybe the eighth one thats in the bus zone, thats always something that you have to be careful of they give you a little spot but when you put the tables in not everybody sees that you have tables i genuinely believe that its the restaurant, 15 Million People, 15 Million People at stake here and thats the v versus the l right . Because the v is in the stock market, its not in the real economy. Just wait until the temperatures start changing, jim, as you and i talked about yesterday. Whats the limit jan niffen and i were chatting about how are people going to dress when theyre sitting on a squawk having dinner and its 65 degrees instead of 85 degrees, right . I mean, are we going to see increased demand for boots and coats . Columbia sportswear on last night, they have this lighter coat that works in the colder weather. If you came to my house you would see all these heat lamps that my wife lisa bought, they just line the aisle of heat lamps. She sent them to my place, but heat lamps heat lamps theyre great when its 60, but when its 30 we need a we need a jenkins hot seat we need those coats like Aaron Rodgers and people dont want to eat in an Aaron Rodgers coat like they are at lambeau outside. Lambeau lambeau taco we will take a break hoar theres a lot to get to with jim this morning including an update from southwest on cash burn and their new ak do have a downgrade of darden which is kind of interesting and of course fed minutes on the way today. What are they going to say about their battle on inflation . We are back in a moment. Experience the joy of a bigger world and a highly connected lexus vehicle at the golden opportunity sales event, lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. 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. Southwest is one to watch in the premarket. They put out an ak talking about cash burn which they brought down to 17 million a day in july, the previously expectation was for about 18 million. 20 million for the quarter so far on what theyre calling modest improvements in revenue trends. That stock should be up not down theyre talking about declining the government loan. Gary kelly is extraordinary, he said there is really no place to go were getting more and more places to go and i think anyone who watches sports knows that there are some pockets of the economy that make it so that you want to get on a plane gary of course always been at the vanguard of saying airplane traffic is safe but lets wear masks. I booked an airplane airplane yesterday and its geez, i find its a safer place because people wear masks and the air circulates he has been at the vanguard of that, these numbers are good, this stock is ready to run we are betting on an improved, i guess, traffic season going into the fall i think the trajectory is getting very interesting i do think part of the problem, but gary doesnt face it, is we cant go to places italy wont take us, they will send us right back, they know that firsthand spain wont take us unless you have a visa which very hard to be able to get you have many countries that are saying off limits to us, but that doesnt matter so much for southwest because its largely domestic i would not extrapolate this although of course people will because people just say, oh, if southwest is good its got to be freight for american i say if southwest is good its great for southwest. Gary should call in, i know he watches the show and he is a true gentleman. Right so you think the Domestic Travel narrative is intact. Yes. We know that corporate and international is going to take longer to heal. I would have flown up to see the phillies trash boston last night but then again everyone else is trashing boston so its not as special it sort of reminds me of talking about the fall season this downgrade of darden today, jim. Which they say, you know, casual restaurants going into the fall have holiday parties, there are conventions, theres live sports as you mentioned all of which are going to be either at zero or down from typical patterns and thats going to be rough for some restaurant chains. I thought that was an interesting note because i felt that the analysts was truly struggling to say why darden may not be doing as well but you dont really look, do you really have your Holiday Party catered by olive garden . I would rather have it catered by chipotle. The truth is the numbers went up too much, this is part and parcel with the idea that your in store is not doing that well because of social distancing remember if you had if you had 100 tables youre lucky to have 50 tables and they can do a lot with take out and delivery but you dont drink wine with take out and delivery and thats where the money is made not on the bread sticks which are of course fantastic or the bottomless salad which i love. Route 10 in new jersey i do shout you out as a fantastic olive garden interesting we will keep an eye on the airlines today, jim, and i guess to a degree oil might be a factor as well as we watch some of the dynamics on opec today. We will take a quick break 20 minutes past the hour as we get set for the opening bell in about ten minutes. Dont go anywhere. Tara, did you know geico is now offering an extra 15 credit on car and motorcycle policies . Wow. Ok thats 15 on top of what geico could already save you. So what are you waiting for . Idina menzel to sing your own theme song . Tara, tara, look at her go with a fresh cup of joe. Gettin down to work early following her dreams into taxidermy oh, its. Tax attorney. I read that wrong, oh yeeaaaah geico. Save an extra 15 percent when you switch by october 7th. Give it up for tara when you switch by october 7th. Apps except work. Rywhere. 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 the average recovery from a bear market is 1,542 calendar days, we just did it in a tenth of that, 148 days the shortest bear market in s p history and futures hanging on to mild gains r weesy p and dow as we get set foa dndasession, dont go away. [ thunder rumbles ] [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know theres a 30minute limit, right . Tell that to the rain. [ beeping ] for those who were born to ride, theres progressive. Lets get cramers mad dash. Watching bio marin today, jim. The ceo on many times and one of the things that was a bright light for his fort worth was a hemophilia drug which was to me maybe the big break through for a horrible illness, fda rejected this one time therapy and i know the Company Field aggrieved because the problems theyre outlining werent even on the agenda before but this is just huge and the delay at least until 2022 maybe even putting the kibosh on it, i thought this drug was the bright light in their portfolio and felt if they got approved and the stock didnt go up it would be taken over now you are look the at a portfolio not in tatters, they have a lot of gore orphan drugs but this was it. Hemophilia is hard to beat but i thought they had it beat fda rejecting it, they bad for bio marin. Pipelines are in focus today, jim, at bio marin, at gilead and im sure we will talk about j j. Gill ra yad, im no shock, i thought they had a great Rheumatoid Arthritis answer id say, i dont want to say killer, but answer to what abvi had, and no, abvi is right back on to be and that is amazing. J j trying to further its medical pipeline because they need it, they want to be able to emphasize they are a fast drug company, looks like they have other people who want to do that merck with good news and regeneron, a terrific interview making me feel like if you have covid in the fall dont give up the ship they may have a cocktail that is ready for you they can produce a million the hardest thing is that you cant produce these difficult drugs, they have moved a lot of their manufacturing so that they can focus on this one drug the antibody that they are coming up with, the socalled cocktail is the one you never want to have to get, honestly, anyone who has covid i feel so bad or Family Member had a lost someone, but len has something for you, as close to a magic bullet that you can get once you are in the hospital. Right i mean, its interesting, wouldnt it be nice, jim, if this constellation of cocktails like that, saliva tests out of yale, obviously phase three safety results on a true vaccine sort of all came together and maybe maybe made covid manageable and more than that helped us keep a lid on other concerns like flu going into the fall. Absolutely. And i think that there will be some people who say, look, the reason why the stock market is going up so furiously is because there is a lot of money pumped in and no alternative. Other people are saying its going up furiously because of the len schlieffers of the world, as is j j, as is astrazeneca, pfizer, and merck and im going to throw moderna in if this thing ends or makes it so that its not i dont want to call it a death sentence but a sentence for changing the rest of why you are life to the negative then i think that the stock market will be justified in this rally but right now, i mean, len has never been he has not been a bull, hes been saying weve done ebola, we will do this. As long as people feel more confident and the numbers peak and go down faster, they are going down ever so slightly. Sure. We would have a terrific january, february, march, but right now its hope. Just hope. It is hope, jim, although well certainly take the trend, right . The trend is good. Yeah, i mean, new cases down 36 from the july peak, you look at whats happened in arizona, i mean, its encouraging. When you look at arizona seven days before when they instituted mandatory mask, seven days later the numbers started going down and have been going down ever since. Those who think there is no relation to the two are people who believe in a flat earth and also are, i think, never took biology. Lets get the opening bell here and watch the s p heat map fill in, jim i do want to get your thoughts speaking of breadth on yesterday because we get these record closes, we get these record highs but transports, the ad line, i mean, was that confusing to you or does it make sense given what we know about the giants i think that we are all very thrown here. For instance, lowes and the Conference Call right now, bum letter, tools, paints, all up 30 . So you make so housing is good, housing is 10 of the economy, but what have been the winners . Jan francola showed me the winners of the top 20 stocks since the peak, in other words, who carried on carl, they are almost entirely really semiconductors, Semiconductor Equipment and cellphone. And when you look at that, that isnt the real economy, the real economy may be a kohls, the real economy may be the bodega, so i feel we are all thrown because we know that housing is good, but finance, used to be 20 of the s p, huhuh, thats because paypal, square has just eviscerated them then you start thinking auto and you have gm, how are they going to go up theyre going to break up gm not because of sales even though i think sales are better you dont have autos, you dont have finance, industrial on the rocks if you start getting a stronger dollar, oil right on the edge, cant say whether its going to go up or down, software as a service and fuego i know. Huge portions of the economy, jim, are being stubborn, i guess, relative to the growth in other areas. You mentioned the dollar, once again, close to 37month lows. I dont know if you saw demand, jim, for the german long bond, record high, which feeds this argument that people are looking for dollar alternative assets. Yeah, i mean, i think its become a crowded trade to hate the dollar, i did that last night with the help of Larry Williams who is a fantastic technician look, i just think that i like your word stubborn, may have to steal that for tonight if we have different you had a kwlenss, get away with it. There are different parts of the economy that cant lift for the same reason we had that yelp gentleman speaking you do not trade the dry cleaner, you do not trade those places where suddenly you see the number and the leasing agent. At the same time you do trade walmart, home depot, costco, those are companies that suck the lifeblood of Small Business which is why people are concerned about Small Business, at the same time the customer at home is saying, do you know what, im getting good prices from these people, im cooking at home, its really great, turns out i have a lot more money, lets go buy a chair at way fair, lets go buy a new coach at home, i have that company on tonight, and lets do you know what, lets go on amazon, buy some things, have shipt take some stuff to us. Next thing you know what you have is an economy where these big guys get bigger and bigger and they give you good prices so why bash them . And yet there is a lot of people who work at the other places and we have to get that unemployment number down or i dont think we can call an end to recession, we just can call an end to a bear market, they are two very different things. We will find out what claims show tomorrow. By the way, you mentioned wayfair. Guggenheim initiating with a buy 360 target, currently 330. Jim, we havent touched on oracle tiktok. The president made comments about it yesterday in arizona. If you missed it here is what he said i think oracle is a Great Company and i think its owner is a tremendous guy, he is a tremendous person. I think that oracle would be certainly somebody that could handle it, yeah. We gave them until september 15th after that theyve got to close shop okay thats tiktok. Do you prefer oracle to microsoft . I guess microsoft wants it and so does oracle and probably so do other people but they have to also make sure the United States is wellcompensated because we are the ones making it possible. Very simple. We are the ones making it possible so our treasury has to be very wellcompensated. And of course you talked about this with the treasury secretary yesterday, im. Yeah. The last part about compensating the treasury is a Sticking Point because i dont think anyone wants to do that other than to say thank you. I do believe when safir katz came to washington, Larry Ellison, donor to trump, but katz is a terrific ceo the one thing oracle has been trying to move they have said over and over again we have the best cloud. People on twitter i know that amazon is number one, i know that azure from microsoft is number two, i know that google cloud is number three and oracle is way far behind, however, this would be the chance for Larry Ellison to say, do you know what, not only are we very close but were going to leapfrog. Remember, this is 50 million daily users, au50 minutes at a time there is this undercurrent where people say that xi is in trouble, who knows if that is true but microsoft has substantial business in china. So oracle feels it has the edge and more important and President Trump does not talk about this is oracle bid would be 20 oracle, it would be 80 private equity money and its ready to go and its ready to go today. So i think that people who think its fanciful and microsoft has got it dont understand that the 80 private equity money including a lot of money thats already in tiktok wants to go with oracle and i dont think its a to try to get a higher bid from microsoft but Satya Nadella is clever, too, and he is watching and i think that oracle has lets say its a close second, you still have to bet on the mic soft horse, but its the home stretch and if Larry Ellison larry does not come on tv, s if ra i already gegd her to come on, at the same time i think theyre very real and jarrett has a close relationship with safra, these are people who obviously matter a great deal and i think that jarrett wants this deal to go to oracle. Interesting, jim. As part of the larger china information the president did say yesterday hes not interested in further talks with china and then this bit about warning universities to avoid chinese names on delisting risk, i thought that was interesting. Yeah, and also, remember, keep in front of you that the ipos have been far underperforming, the chinese ipos which by far are the largest co mortgage, underperforming, some have been disastrous, the president is close to that, Peter Navarro is close to that. If they Start Holding the Chinese Companies to the same standards as ours you will see it says allibaba and a big decline after that in terms of putting out numbers that look like u. S. Numbers. I would avoid chinese stocks studiously its obvious we are not just having a trade war the step up with taiwan and giving them the weapons that they need to be able to say, hey, listen, china, you cant hong kong us, was something that xi took very personally and so i think that you have to be you have to be very careful if you own a chinese stock because i dont think the president really wants any of those stocks and when you speak to them theyre beginning to be understanding that luck in was the starbucks luck in the chinese luck in being the company that i was most yelled at by bankers, they got my number and called me and said, jim if you when they start by saying you dont know what youre talking about i always say the same thing which is unless youre my mom im hanging up on you. Jim, you have had little tolerance for any questions about accounting, you have long said that. Accounting regulators equal sell am i going to suddenly rethinking its bad accounting irregularities but let me tell you the good side . Do you think i went to college to get stupid . The chinese today said that the u. S. Sailing near taiwan is extremely dangerous and yet nike and apple are leading the dow. Im raising trying target on nike i know remember the ministry of sport like nike and i think that apple has the best product and sometimes the best product wins unless you decide to ban it, that has not happened. Tim cook has walked the line really, really well and, by the way, i regard apple as being the winner there as being great for mark so im not and i think the president struggles over that very issue, but taiwan is about Taiwan Semiconductor and the need to be able to maintain our leadership in the semiconductor world. One of the top ten stocks since the february peak was kli ten core, if you go down to 20 you have Lamb Research and thats what were great at. We are great at Semiconductor Equipment. We cant have the chinese steal that from us, too. They are adapt at stealing Peter Navarro who is the first one to alert me to exactly how much theft there is, but peter likes to come on other shows, say la sri. He will come back, jim. To your point about nike, susquehanna goes to 150 today. Katie huberty had more supportive comments about apple as well. At morgan stanley. Katie huberty is the person you listen to. Yes she was the only one who didnt buy buy hold, buy hold, sell, sell, sell, buy, buy, buy. She just said own it katie is a beacon. By the way, a chi yet beacon, the selfee placing of the greats versus a lot of people on and say tim cook, i mean, if only if only he could be steve jobs stock was pretty good under steve jobs but i will take the tim cook move any day of the week why are people so short sighted. By the way, we are still on apple 2 trillion market cap watch which we need 467 just a couple dollars short of that jim, overall broadly, i mean, with err in the game where travel is going to lead, carnival, some retail, definitely the airlines, that southwest ak definitely made some noise. It should because thats been the missing piece of the puzzle. I read that and i said i am so close to telling people, do you know what, just swallow it and buy boeing but instead you should buy honeywell which is the cyclical way to buy boeing because they own the cockpit i feel strongly that nvidia tonight will be key because the stock has run up too much as far as im concerned nvidia has to do everything right in order to be able to continue to justify it or else were going to come in tomorrow and we are going to say darn it all. Lets watch nvidia because its now a 300 billion company yeah. I dont think ive ever heard you say that that nvidia is coming in hot as you like to say. We have seen some examples where stocks did that and the print delivered. Look, nvidia can certainly do t they have auto thats not as strong, they have the acquisition that is terrific look, i mean, maybe im playing superstitiously, i dont want to jinx nvidia, huge position for my travel trust, always has been, i dont want to inks j them they need a target and they can do it. They could be the target of this group. Meaning a Company Whose stock has run so much and then it turns out it hasnt run enough, but i think people at this point would rather buy American Airline and delta knowing they are down in the dumps then they would buy the number one stock in the market which is nvidia. Number one. Sure. Yeah no question about it so we did edge above yesterdays all time high on the s p and the nas. Lets get to bob pisani. Good morning, bob. Good morning, carl. Happy wednesday, everybody new high on the s p just barely, again, but fairly mixed open, about even on the advanced decline line and not a lot of clear direction in terms of the sectors, remember the market leaders this month remain technology, industrials is doing well, banks lagging, energy lagging as well, but you see here sort of a mixed open here, health care, banks modestly on the upside, energy down. Retail which has had a decent month overall modestly to the upside ive often said theres two different economies or it seems that way, there seems to be the Digital Economy where goods are goods and buying is shifting online and then theres everything else, boy, talk about this Digital Economy, you can see this with the Digital Sales for the big retailers, look at these numbers with target up 195 for Digital Sales, lowes 135, walmart that was yesterday up 97 , these are amazing numbers and are really helping power the Overall Comp Store Sales forward here, but despite all these good numbers here target is similar to other companies pointing to some slight decelerating numbers similar to what kohls, walmart were pointing to yesterday, brian was on this morning, Brian Cornell saying may was up 30 , june and july was up 20 , august is up in the low to mid teens. So, yes, good numbers, pent up demand early in may obviously, but still somewhat decelerating. Tjx which we dont talk about a lot said something very similar this morning in their numbers, they had strong initial sales in the Second Quarter, if you put up tjxs numbers, strong initial sales, traffic and sales moderated thats their term they used in the press release through the Second Quarter now their estimates for q3 sales, this is just for stores that are open, down 10 to 20 percent and they also like kohls talked about the slower back to school selling season. So these things are these issues are not going away here with the back to school numbers. On the retailers here you see lowes, thats a new high, with he see target, thats a new high as well for target tjx of course down here, suffering a little bit from i guess the kohls syndrome that they had yesterday here. As for where we go from here, we have new highs i think the issue might be the u. S. , you know, how long can the spending spree continue without the stimulus checks is a major issue. New highs here i noted yesterday we only had 25 new highs on the s p, thats like 5 , thats not great and we have less than that today. So we are at new highs without a lot of new highs, thats because the big mega cap names are sitting near new highs and are pushing the index to the upside. Broader rally needs more new highs. We dont have that yet whats next for the markets . You know, it is fairly typical to have a modest pull back after a new high so if you see something 5 , 5 , 6 nobody would be surprised to see that i would Pay Attention of attention to back to school warnings, this he seem to be resonating with investors. As for where the money s i dont care what anybody says there is no big massive exodus out of technology into value stocks look at the volume its not happening, you will get mini rallies for a few days in banks or a few days in industrials, for a few days in energy and it doesnt last we have had three, four of them in the last three months or so and none of them have any real staying power. Im sticking with big money, staying with technology. As to what the next catalyst s if you look at the vix futures there is a big spike in the next two months around the elections, the vix october futures, october ending futures contract is almost at 30 right now, that indicates that the market is very nervous about the election and the possible outcomes around that election so if you are looking for a catalyst, the market is telling you that its the election thats likely to be the most volatile next event for the overall markets. Carl, back to you. All right beg your pardon, thanks for that we continue to watch yields here today as we await the fed minutes this afternoon lets get to Rick Santelli yes, carl this is the fourth session lower for long dated treasury yields as you see on this chart that starts on thursday, with he just dipped under 65, we are at 64 basis points thats down 3 basis points we are at 72 plus on our High Water Mark as we drift lets look at the health of the ten year yield note. We can do that by looking at a mid march chart. This is like the ekg of ten year on that mid march right to the left is your first blip around 120 basis points, early june its around 90 basis and last week, thursday, another blip, 72 basis points you see the pattern here, each one of those blips is getting lower and we continue to ride along the bottom our lowest yields closed around 50, 51 basis points and we are not all that far away from it at this point. The action continues to be in the Foreign Exchange market, the euro seems to be leading the charge against most of the majors although some of that strength has fallen off against the japanese yen, its still pretty solid against the chinese yuan versus the dollar fresh highs going back to march of 2018, we will call it 27 months on this particular chart you can see we are up six sessions in a row against the green back, today is number seven and as for the green back here is a chart of the dollar index going back 28 months to april of 2018 and you can see the drop many believe right around 121 is going to be resistance on the euro versus dollar side, we will have to wait and see we still have a ways to go carl and jim, back to you. Rick, we will see you in a little bit our Rick Santelli. Take a break here. We did edge above that s p record high from yesterday and the banks are leading today. Kind of a nice shift as goldman and jpm lead the dow back in just a moment. The list of universities adjusting their reopening plans continues to grow. This time its notre dame announcing its canceling inperson classes and moving those online for at least two weeks due to a surge in covid cases. The school has set up an extensive testing system in an effort to bring students back to campus Michigan State, meanwhile, asking students who were planning to move into dorms to stay home for now. Jim, we mentioned unc and even dr. Gottlieb this morning on squawk talking about how its awfully hard to keep students from avoiding parties when they come back. This is the big issue in the fall and one of the things that i think has most people on tender hooks the problem is that it only takes a couple of kids to not do the right thing. This is not like the bubble in the nba. Its not even like the nfl where at least theyre testing, testing, testing and i think its part of a confusion that has made it so im going to extend this to the analysts on wall street. Analysts on wall street they dealt with the bout of covid we have in new york they have kids in college or they know many people in college and its just not working. They extrapolate that and they say, listen, were bullish on the market these are just different worlds. And they dont extrapolate theres not a lot of stocks related to colleges. And speaking of the online colleges, those are stocks, but this is just another example of how difficult it is to try to figure out whats wrong with the economy versus whats right with the stock market so youre basically describing a huge blind spot when it comes to public markets. Yeah. I mean, because these are all, you know, nonprofits getting killed small, medium sized businesses getting killed, giant companies doing terrifically digitization going on unretrained. 5g unrestrained, housing very strong because of the deorganization and, of course, people spending more at home because theyre not going out. These are patterns that many people misjudged, including many analysts and then dont forget the president did say this was going to go away and that did not help universities trying to figure out a strategy. Right extremely complex. Yes at the board dynamics i cant imagine. It must be very difficult. Everyone wants to do the right thing. Yeah. Watching the markets here. Interestingly, target at 1. 50 is hanging on to its gains after that monster quarter rba iju aom gain. Wee ckn st ment. Traded goods. Tools, cattle, grain, even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. The dynamics of the oil industry are going to come back into focus as we watch opec. Theres a look at crude which remain aes proxy for global activity all around the world. Meantime, dow is up 22 and stop trading with jim is coming up next pnc knows business keeps moving. And whether we connect over the phone, online, or face to face, were here to help utilizing our resources as one of the nations largest banks and a local approach with a focus on customized insights. So youre ready for today. Lets get to jim one of the things i refuse to give up on are the cruise ships. They have terrific management. Last week, a premo performance talking about how bookings are up very big for 2021 norwegian doing invepd vedbly well carnival speaking very well. And Royal Caribbean is the way theyre extrapolating the southwest news do i think thats right . Were not going to do any cruising this year but the fact that people are signing up still for next year tells me Royal Caribbean, a decent bet i like the stock wow do you think in retrospect now, jim, does it seem like not doing a cruise related specific stimulus package was the right move yeah. Look, i mean, i think these companies were able to, if you recall, the dark days when things were really bad, march, april, carnival did an 11 deal. Wow, what a steal that was, i think, in retrospect thats when jay powell said were not going to let this happen were not going to do a replay of 2007 let alone 1991 so he went to work these companies were able to raise money in the public markets. Congratulation toes all of them. Norwegian is best capitalized. They have 2. 2 years of money if cruising doesnt come back would i take a cruise right now . No but next year, yes wow thats going to be remarkable, that first sailing if and when it happens, jim. Thats is going to be huge the haven level of norwegian is one of the greatest bargains of a lifetime and i would go to alaska to watch the caling as they call it of the glaciers so at home, a furniture company, giant furnishels that is up 1,000 from the bottom this is a company, you want to hear about what theyre doing with Hydrogen Fuel cells i know people love hydrogen. I am going to do massive hydrogen tonight another great quarter. Theyre making acquisitions and its not reflected in the stock. But 80i, hard to go wrong. Does a lot of cell phone and a lot of auto. We got a lot. And it will be fun to kick nvidia around tonight. Well see you at 6 00. Nvidia, i cant jinx my call and i cant jinx nvidia. Good wednesday morning. Welcome to another hour of squawk on the street. Im Carl Quintanilla along with leslie picker. David morgan has the day off record highs today for the dow and nasdaq more blowout earnings for the likes of target and lows today and two of the 20 attorneys general suing the postmaster general join us. Why one is saying the usps cost cuts are the, quote, most deceitful plan in American History to disrupt an election and finally, the end of the shortest bear market ever and stocks fastest recovery on record an explanation this hour but first, we begin this morning with earnings as lows and target report big beats. If there is one big theme that can draw from this weeks earnings, you know, youve got yesterday with walmart and home depot, today with target and lows, theyve clearly seen some tremendous tail winds serves ago essential businesses, consumers seeing extra stimulus in their pockets. Do you expect to continue to see this dynamic in the Third Quarter this year . Lets start with you, michael. Yeah. Well, what were seeing is one of the greatest redistributions of share in recent history where consumers are not traveling, theyre not going out to eat, theyre not going to concerts and leisure activities and theyre relying on the consumption of goods that is benefiting the well positioned, largest retailers who have scale and the capabilities to serve that demand were going to see that continue not only into the Third Quarter, but also into the Fourth Quarter. Thats going to benefit these big, well positioned retailers and simione, another big story weve seen is that of ecommerce, the fact that were seeing sales from their ecommerce sites, sales from digital increase one times, two times, three times, even four times what they were doing last year at this time. You know, what kind of base are these increases coming from . And do you expect that trend to continue yeah. The base is a great question at the end of the day, if youre a company, you need to know your revenues are coming rather than your revenues from ecomm are coming ecommerce is allowing these companies to offset these declines as they continue to grow, that would be important but at the end of the day, that channel buzz word exists because the stores and the brands need to meet the customers where they want to be i think where were going to find this increasing focus on ecomm, and everyone has used that word acceleration due to covid, but at the end of the day, you need to drive revenue where the consumer is willing to spend it during covid, thats absolutely online so, michael, where does this go from here im hearing from chief Information Officers in the retail space that they had plans to migrate to the cloud, perhaps to implement an omni channel strategy throughout 2020 and they accelerated that dramatically and thats what is benefiting them now does that continue does that spend continue are there smaller competitors who might have had down plans who now have to ramp those up . Michael . Absolutely. The pace of innovation, the pace of online adoption is here to stay so retailers will have to adapt. The large retailers like a walmart, like a home depot, like a lowes have been able to adapt very quickly in the last three months or so, have ruled out innovations like Curbside Pickup and ruled out innovations to the degree where when youre at the store, you can click a button and they will walk out and bring the product to your car. Thats here to stay. The question is, when the volunteership recedes, what does the overall retail pie look like and what do overall margins look like . A lot of these initiatives are very expensive retailers are assuming the burden of cost that has been born by the consumers, that could structurally change retail margins depending on what the future top line environment looks like and what is your take on the margin impact of what these retailers might continue to have to do to just be prepared whichever direction consumer tastes go in as far as how theyre actually going to shop yeah. Absolutely and i think michaels point is critical so im glad you followed up on that. At the end of the day, what is fascinating about this is were having a conversation intrapandemic that weve been having for the last five muss years. So this conversation could have been had at any point, right, with the rise of amazon. So the notion that ecommerce is going to continue growing and the notion that ecommerce is going to continue to be beneficial to the consumer is not new and its not going to go away i think what is interesting here is going to be watching who are the share shifts, who is going to be able to grab those dollars because the consumers is changing their mindset. Basket sizes are growing and duration of shopping is extending. So when people are now going to a store, theyre going with a much greater intent to purchase. So if you can capitalize on that, that is your offset on the margin yeah. Thats interesting, simon. Michael, i remember some of the bear cases laid out going into the print on target a couple of weeks ago. One is the online monetization would not make up for concerns about physical store purchasing, that when rivals are gearing up, that meant decelerating comps for target why did that not happen . It didnt happen because the target customer had a lot of extra money to spend because they werent spending on things like travel and going out to eat. So they were not only spending online, their Online Business up 200 in the most recent quarter but the instore comps grew 10 so target deserves a ton of credit for the transformation that the business has been under with its Leadership Team over the last few years and ruling out these various online fulfillment options for consumers, rolling out new private grants and although that has looked very appealing to the consumer and allowed it to both grow instore and online in this most recent, unique period. Target shares up almost 11 today on those earnings. Michael simieon, thanks for joining us thank you so much and we are going to stick with retail as ace hardware reports earnings this morning. Ceo john van heisen joins us now. John, good morning good morning. So these results looked really strong, 35. 3 samestore sales growth 493 increase in Digital Business am i reading that correctly . Yeah. You know, you get the figures correct. And before we get into it, if i could just say, if i may, i want to be really sensitive to the fact that while im sitting here talking to you about aces record financial results, theres a lot of people at home that are hurting and theres a lot of businesses that are still suffering. And im really sensitive to that yet at the same time, it would be total ingratitude for me not to thank the ace team for these results, their grit and determination, their hearts in what was arguably the most difficult, unusual in aces history. I couldnt be more pleased with and proud of our team and our local owners for serving so well and producing the kind of numbers you just talked about. I think theres a lot of light you can shed, not just on ace itself, but on the state of the consumer of the economy. What in your plans did you have to accelerate in order to meet the kind of demand that you saw as an essential business and what is your investment for the rest of the year in some of those systems its going to take to continue . Good question so lets look back first i think there is clearly three very big things that drove an incredible quarter with 35 comp growth and 493 increase in our Digital Business and it started with the fact that a huge number of people were forced to stay home and when people are at home, they use it, they preserve it and they improve it a lot more than when theyre not. Drove a lot of business. Second is this distortion. Theres a huge bifurcation in Discretionary Spending on one end of the continuum, there is a tremendous amount of businesses that were forced to close. Sectors were essentially shut down and your heart goes out to them that shifted discretionary dollars to the other end of the continuum. Thats where ace was, we were decland an essential business. That was both a blessing and a burden third, i think there was really good execution a lot of wonderful pivoting from our local ace owners to ensure safety of their people and their customers. We call it pandemic store operations what time at the same time, executing quality. Best service, most convenient and highest quality. Theyre able to do all that and produce these numbers in the combination of those three things produce tremendous results. Stunning results john, i guess the question would be to you, are you a believer in the idea that the giants are going to get so big that theyre going to eventually wash out what were calling mom and pops or is the boom to renovate your home and do stuff around the house, as youre quarantining, so large that everybody will benefit just to varying degrees . There is going to be shake up, no question. But we are a david and goliath story. No question, we are david. We represent Small Businesses around the world, but in aggregate, were strong. I think the results from the last quarter are a testament that the little guy, local ownership with a local understanding of their community and understanding what service, safety, and convenience now means, it got redefined in the quarter, it got amplified and our stores were ben factors of that, for sure but they capitalized it. So i think a testament that theres a place for the little guy even though the goliaths of the world are getting very, very large. No question about it its the benefit of the little guy working together and thats what ace stands for. Were fortunate to be in that space, but theres no question, carl, there will be a shakeout john, its clear from your Second Quarter numbers that you are clearly a beneficiary of being essential during the quarter. You mentioned in your statement that it was also a burden. Im curious what you mean by that yeah. It is a far superior place to be than on the other side of the continuum. I dont want to be confused by that at all. But it placed an incredible amount of strain on our systems, our supply chain and our people. The amount of money and work to ensure a safe environment, our highest priority is to protect our people and to do that is an incredible amount of work to get this huge amount of volume in a short period of time creates a huge amount of burden on everything. And most notably, we have a fatigued and fragile workforce you know, they dont get to work from home. Theyre essential. You know, they have to show up for work and operate safely for their community. That is a burden but at the same time, its been a blessing because the alternative is, you know, furloughs, firings, debatement and in some cases chapter 11 we feel very fortunate to be on the other end of that continuum. But it didnt come without its challenges, which is why im so proud of our owners in pivoting and handling those owners well finally, give us some color on supply chain, which you mentioned. We had tariff concerns in recent months that would have made me question where you would be on that and omni channel for the rest of the year as i imagine, you know, people are buying some heavy stuff from ace stores and probably want to pick it up themselves. Yeah. Listen, we have a bullish bias i cant predict the future i dont know the timing of it. But we have a bullish buy for the future, for sure the supply chain is disrupted. Our suppliers cant even come close to meeting our very large orders they cant ramp up capacity that quickly. But what were doing is control the things we can. We think of it as the three ps Going Forward. Were going to invest substantially in more physical space. Well probably have 1. 2 million more square feet of distribution space to serve our stores by spring of next year. Product, well go into next season with at least another 140 million in product in our dcs to support our network of stores around the world and then more people. Well probably end up, id say 900 to 1,000 new orders in just our Distribution Centers next year and were bullish. We anticipate about 160 new stores this year and next year that translates into about 160 million more in new product and probably another 5,000 to 6,000 new jobs created i dont know if the timing will be perfect, but were Going Forward in what we think is a great industry, relative recession resistance with a bunch of local owners who are in it for the long run. Theyre not all that worried about next quarter theyre worried about the next generation stark contrasts showing themselves in what is happening in this economy and aces result showing the upside of that ceo john van heisen, thanks for being with us. Thank you when we come back, two of the 20 attorneys general announcing plans to sue the postmaster general thats coming up next after a quick break. Aip is holding on to gns dow is up 100. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. The postmaster announcing all changes would be suspended until after the election but still some 20 attorneys general are announcing plans to File Lawsuits against what they call unlawful costs. Joining us is the attorney general of maryland. Mr. Ag, good to see you. Were dejoys statements yesterday saef or not . Satisfactory or not no, not even close. First of all, this is a guy who a couple of weeks ago wrote to maryland and 45 other states and said, hey, we cant deliver your ballots on time. And weve been scrambling as have most of the other states in the country. To have him write a letter after we file suit and say, oh, you know what . Its going to be just fine i dont trust him. I think hes got to do more than write us a letter, a letter filled with all kinds of qualifiers and words if they want to make this lawsuit go away, we can reach a settlement quickly, but we have to have much clearer assurances that theyre not going to continue to try to disrupt the election were being joined this morning, as well, by the ag of massachusetts. Maura healey ill turn to you on the phone and ask about the coordinated efforts between the state ags and how thats going to make it any different than any single state, for example, filing a federal lawsuit. Well, good morning. I mean, look, this is a nationwide issue what dejoy and donald trump have done or attempted to do with the Postal Service affects every american across this country and so i think what youve seen is that once we put the postmaster general on notice, you know, its no coincidence that the next day he decides to back down and announce that he is reskinnedicinding some of hiy changes. And were just going to keep the pressure on. Youre messing around right now with peoples ability to get their Social Security checks, you know, their prescription drugs. I mean, you told the story we know. This is a now problem and it certainly is a problem to the extent it involves them mucking around with establishmenting to thwart Election Results in their favor by messing around with the Postal Service so is this lawsuit about the timing of these Postal Service actions, these weeks and months before the election, or about the substance of them because a l a lot of people would argue the Postal Service needs to be changed for efficiency and solvency reasons its about both, john number one, the timing is not just suspect donald trump has made it very clear that he will not fund the Postal Service because he doesnt want states to have mailin elections. But the impact is as aghealey just said, its terrible theyre fought just impacting the ability of states to hold their elections. Theyre hurting innocent bystanders, folks who are expecting their Social Security, unemployment checks in the mail, and the folks who are waiting for their medications. And weve had complaints from marylanders across the board saying, i cant get medicine that i need in order to breathe. I used to get mail six days a week now i get it two days a week the changes are really an attempt to undermine the Postal Service. And it seems like the objective is to cause people to lose confidence in the ability of the states to have their elections run smoothly in november and perhaps because people will lose confidence in the results because donald trump, i think at this point, is afraid hes going lose but the impact is immediate and harmful to just about every citizen in our state and given that immediacy, ag healey, im curious, what happens next what does it process look like from here . Youve got 75 days until the election so time is certainly ticking absolutely. So first order of business, rescind what youve done undo the harm that youve done restore the sorting machines, restore the mailboxes. Two, ensure and commit you are not going to do anything further until after the election we got that commitment after we announced our lawsuit, but were going to continue to press on that and three, my colleague is absolutely right this is, in part, an effort by donald trump to undermine mailin voting because he doesnt view it to his electoral advantage. So we want to communicate and be he clear with the american people, the most important thing for you to do is vote. If you can vote early in your state, do it if you can vote by mail, do it our job as state ags will be to work with congress, work with others to make sure that all votes are counted. Regardless of who youre voting for. And, you know, this is a multi faceted effort, too. Its not just us in lawsuits in court. Its working with congress, supporting their efforts around accountability and oversight its working with our state legislatures in congress to make sure Postal Service operations are funded working with secretary of state in the clerks office. Bottom line, everyone, regardless of party, should be fighting for a fair and safe election, everyone and what donald trump is trying to do with his appointee dejoy, is really shameful and i think its back fired. Youve got seniors and veterans who dont have access to basic needs right now as a result of the games being played i mean, everyone should be indignant about that and i think the best response is to continue to ensure that we get the reform now. Brian, you know, were a business channel so when we talk Postal Service, it always turn toes amazon what do you make of the arguments that they are somehow responsible for some of the trouble that the service has come under and the degree to which theyre underpaying for service they get. I dont buy it. Ive seen study thats show that the posts offices revenues have increased because theyre delivering a lot of the paejs from the folks who are ordering online and, you know, their capacity has not been damaged by amazon, whether or not their economic status has the post Office Delivers about 1. 3 billion pieces of mail every week and the week before christmas, that doubles it goes up to i think last year it was 2. 5 billion. And were talking about even if every single registered voter in the United States decided to cast a ballot by mail, an increase of about 150 million pieces of mail thats a blip on the post offices screen. They can do this job theyve got the money, theyve got the people, and theyve got the ability they need to do their job. Thats what we are fighting for. Well certainly be looking for news on funding and then, of course, dejoys testimony will be interesting in the coming days, as well. Appreciate your help, both of you. Thanks so much thanks for having us. Good to be with you time now for a look at our health care checkup. Etf ticker, led higher by names like j j up after a deal announcing a purchase of moment ya pharma. Surging 69 plus percent today. Well keep an eye on that. Stay with us surging 69 plus per. Well keep an eye on that. Stay with us pharma surging 69 plus percent today. Well keep an eye on that. Stay with us right now, switch to tmobile and get four lines of unlimited for just 25 bucks a line. With access to americas largest 5g included. Thats right. Unlimited and nationwide 5g for the whole family for just 25 bucks a line. Only at tmobile. Welcome back, everybody. Im sue herera here is your cnbc news update. Emergency fda approval for the use of blood plasma to treat covid19 is on hold. The New York Times supports top health officials, including dr. Anthony fauci argued the data supporting it is not Strong Enough at this point as protests continue in belarus, like this one outside a tractor factory, and police continued to break them up, the European Union says it does not recognize the results of that countrys disputed election and sanctions will be imposed soon german Officials Say a 30yearold man born in iraq deliberately hit several vehicles along a busy stretch of a highway in berlin in what the believe was an islamist motivated attack it caused six injuries, three of them severe. And here at home, a plant west of dallas attacked. It is being blamed on a power line that fell into a storage area luckily, no injuries have been reported youre up to date. Ill see you back here in a moment experience the adventure of a bigger world in a highly capable lexus suv at the golden opportunity sales event. Lease the 2020 rx 350 for 419 a month for 36 months. Experience amazing. At your lexus dealer. We know that traditions matter more if theyre celebrated with the ones you love. Thats why were proud to partner with the kentucky derby. Welcome back to squawk on the street were keeping a close eye on shares of apple this morning the magic number is 467. 77. That is the price per share at which apple will touch the 2 trillion market share mark and it is less than a dollar a share away, guys i mean, 1 trillion was pretty mind boggling. People wondered, boy, how long is it going to take, how many years to get to 2 trillion . Maybe not that long. Maybe just a few minutes it could be minutes away. And its fascinating that it coincides pretty much almost just a day later, potentially, after we said goodbye to the shortest bear market ever after stocks had their fastest recovery ever. And thats something that we want to get into with our next guest, joyce chang, the jpmorgan chair of Global Research joining us now on the stock toes watch around these levels. Joyce, pretty remarkable that weve seen this rise from apple. Could potentially surpass that 2 trillion threshold today. But first, i want to get into this, the overall market from a macro standpoint youve got the bear market lasting 33 days, shortest bear market ever, and then the recovery from the bear market low to the new high, just under 150 days, 148 days to be exact do you think that this speed, the velocity by which weve seen the ups and downs this year makes it likely that we could see another bear market soon, that we could see one of those double top actions like we saw back in 2000, 2007 does that present more of a risk to this rally . I think the key thing to focus on is still the monetary and the fiscal policy that have been supporting the pace of this rally. And that remains firmly in place. If we take a look at what Central Banks have done in the g4 countries, they have now expanded Balance Sheet its around 62 of gdp and were also hearing that some of this impasse on the fiscal tops, there are more signs of a compromise coming. So i still would not bet against all of that monetary support and fiscal stimulus. I think thats going to continue and that youre going to see signals coming out in the virtual jackson poll meetings, out of the policymakers that still support this so its just too early to bet against this type of policy support that i think will just remain with us, at least until 2021 can we say, though, definitively that this rally is the feds doing . Especially when we look at whats going on with apple its a monstrous rise here up towards that 2 trillion mark. When we look at some of the other names and compare that with some of the rest of the market that hasnt seen as much of an impact, that hasnt seen as much of a benefit during this recent rally its been a pretty narrow rally, actually you know, if it were so much of the feds activities, wouldnt we see a broader rally than weve seen well, we are also seeing, you know, real structural changes to the way that were all working so it has been tech as winter takes hold and i dont see the momentum for that really stopping right now, particularly as we worry about a second wave for the virus, what the flu season will bring. It is still something where the reopenings are having to be delayed . Were seeing that not just as a u. S. If phenomena. Tech and health care will remain in the lead. Its been a narrow rally, but youre seeing the concentration as the market rallies this is becoming a bigger part of the market, as well. Joyce, good morning especially given what weve seen from the retail players this week, how much of the continuance of this market rally is on the consumers shoulders yeah. Well, we track about 30 million users of chase credit cards and debit cards. And for the week ending august 14th, we still saw that these trends were very positive. Even with all of the noise on the fiscal stimulus and the package being stalled. So i think that you will continue to see some follow through for the next month, but i would think by the Fourth Quarter, some of this is going to ebb off you have a very sharp rebound after the strongest downturn that weve seen in the Second Quarter of the year. So i dont know if that is going to hold, you know, through to the Fourth Quarter of the year, but right now, if you take a look at the overall Growth Numbers, 70 of the Growth Numbers reported locally have been surprising on the up side and earnings have been surprising on the upside so its stereo early to bet against growth momentum and take more defensive positions joyce one mentioned all the fiscal support do you blame that for the dollars woes or is it more about covid performance in the u. S. Is it about election risk . Or maybe you dont even consider the dollar situation woeful. I dont think the dollar situation is that woeful we see a peek of euro dollar at about 1. 20 but what we see is the western european numbers are outperforming the u. S. Which is support ago somewhat stronger number and the numbers that came out today out of the uk were better than expected and the unemployment numbers have not been as severe as either, just given the support programs that are in place in europe so i would not say that this is a massive pivot point for the dollar we see euro dollar peaking at 120, but we think youre going to have more geopolitical risk to watch on the horizon. Whether its related to u. S. china tensions, the u. S. Elections, even brexit risk as the year and as we get into the second half of the year. I did see, there was research from your desk earlier in the year saying this is back when covid was really spiking in the summer that europe maybe looked a little more attractive because they, at that time, had been appear to go manage covid better than the u. S is that narrative still intact well, the u. S. Still has the numbers for the outbreaks that are exceeding the rest of the world and parts of emerging markets. Countries are in that category, as well. I think overall, europe is doing a better job of managing this. But were seeing everywhere, particularly in the uk the last couple of weeks, that there is more concern about a resurgence or reopening too quickly youre seeing all of the schools put more controls into place, as well so this is not going to go away, but i think that europe has benefited from having the unemployment supports in place, but very importantly, also on the fiscal side, the European Recovery Fund was a bit of a break through and using the fiscal space and basically coming up with ways in which policymakers accepted that they needed to take that step joyce, do you expect trade to go bit a bit more volatile heading into the election season i do think youre going to see a pick up in volatility and youre going to see reactions to the polls, as well to the president ial debates in particular i mean, that is really the key thing that i think the markets begin to focus on when were back after labor day, that the president ial debates coming up, the approval rankings, we also saw that the u. S. China talks scheduled over the weekend were canceled theres been more rhetoric that is antitrade thats been coming out, as well so i think you have to expect, as weve seen in past election cycles, that the rhetoric is going to become more heated. And the evaluations are at the top of the market right now. It is a record fast recovery from the bottom that we were at in march certainly some signals to be watching thank you, joyce thank you and we mentioned that we are watching shares of apple, 467. 77 is the magic number. When it hits a 2 trillion market cap in this mornings trade so far its come within 8 cents a share of that number, but has not gotten there we will, of course, ton to watch it cant look away. Meanwhile, the shift in Online Learning putting more focus on studenting housing debt defaults notre dame and Michigan State are among the growing number of universities going virtual as more schools cancel in class classes and pivot to Online Learning its raised serious questions about the health of Student Housing projects in a municipal debt market, we are seeing a handful of defaults Student Housing buildings near howard university, oklahoma university, and the university of massachusetts Student Housing project. It hasnt defaulted yet, but it was downgraded to the low Investment Grade recently by s p. The Credit Rating agency says students Housing Properties have primarily catered to large, public or private universities will likely recover in performance after the virus is no longer a concern compared to smaller, regional colleges which are more atrisk shares of american canvas communities, the largest Student Housing rate suffered as of late its down another 3 today s p revising its outlook to negative on acc writing that it will likely be under pressure from occupancy declines and increases in rent dlin wentsies. Keep in mind, prior to covid19, Student Housing market was starting to decline. For the last five years, its been the third most popular type of property to build john all right, siema, naunthank. Xpo logistics is getting a boost today as keybank upgrades that stock to overweight spo is poised for its biggest monthly gain since may dont go anywhere. Home depot results, consumers are spending on their homes, but how long can that last with another round of consumer relief still uncertain . Find out on trading nation. Cnbc. Com. More squawk on the street coming up. 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. Expected for southwest, phil lebeau explains. Hey, phil. Hey, leslie this is the kind of news that people will look at and theyll say, this is an indication things are improving for the airlines this is not a huge improvement, but it is material enough that when southwest put out its ak today, they said their daily cash burn is now down to 17 million a day. Thats the average previously the guidance for july was 18 million a day and thats for the month of july for the Third Quarter. That means that theyre expecting the daily cash burn to be 20 million a day instead of 23 million a day. And here is the reason why there has been a gradual, not a huge one, but a gradual increase in the number of people who are flying and you see that as you look here were up, you know, in the range of anywhere between 580 and 880 thousand people, depending on the day. By the way, thats down about 68 to 73 , depending on the day. Southwest september revenue guide is now down 65 to 75 that is their expectation there. As you take a look at the Airline Stock webs this is giving all of them a boost here because they are expected to hopefully continue to see a gradual increase carl, we should point out, september and october, they will likely be slower than august and july thats just a fact fewer people are going to be taking vacations or traveling. Its always slower so you will see basically a moderation here. Perhaps. Unless we see some major news in terms of vaccine or covid19 dieing down. Yeah. Stocks are off, obviously, taking the Glass Half Full story today, phil. Interesting, ak. Thanks, phil lebeau on southwest. As we go to break, take a look at shares of biomarin this morning, plunging more than 30 as the fda rejects its gene therapy for hemophilia a the company says the delay will push out any approval of the treatment to 2022 and thats going to take you back to levels last seen in april wee ckn mont rba ia me 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. Welcome back to squawk on the street. Im dominic chew anoth chu its more of a mixed trade in a narrow range for most of the market as you can see behind me here financials, industrials, Technology Leading the way higher meanwhile, youve got real estate, energy and utilities, the laggers so far today honing in on that energy trade, we are seeing some weakness in Oil Prices Today just released data from the Energy Department showed some draw down activity in both oil and gasoline stockpiles, but mixed with regard to analyst establishments some of the bigger laggards in the oil sector are marathon oil, common back energy, some names to watch in that trade today keep it ghrit here we have more squawk on the street coming up in two minutes. For skin as alive as you are. Dont settle for silver gold bond champion your skin 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. Weve just been finding a way to keep on pushing. Right now, switch to tmobile and get four lines of unlimited for just 25 bucks a line. With access to americas largest 5g included. Thats right. Unlimited and nationwide 5g for the whole family for just 25 bucks a line. Only at tmobile. music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. Announcer the path forward is sponsored by adyen business not boundaries. Moments ago we got it, apple above 467. 77 making it a 2 trillion market cap. Guys, its kind of i mean, its a momentous moment, tim cook, nine years as ceo, officially now a billionaire himself. Guiding a company with market cap larger than the gdp of many, many countries and jon, a reflection of how quarantining and covid has really changed the game for megacap tech. It sure has i cant help but think, october 5th, 2011, back in october, 2011, the stock was in the 50s its up more than 8. 5 times. Thats when steve jobs passed away anybody will tell you, tim cook will be first, to say this is still a Company Apple with the soul of steve jobs here is a guy who had this idea about design, about vertical integration, about crafting technology for everyday life and people were telling him he was wrong for a long time. Microsoft had the right model. Apple had the wrong model. But the iphone and the businesses that they built on top of it from the app store to the ipad now the mac is taking on custom design chipsfrom apple along these same lines has grown this company into something can only imagine what steve jobs would say he sent an internal email the day that apple passed dells market cap to mark that occasion this is something on an entirely different level, carl. And its worth noting that apple became, of course, the First Company to reach 1 trillion in market cap that was just about a year ago now 2 trillion. That puts them if they were a stand alone Stock Exchange, if their market cap was a stand alone Stock Exchange in this world, that would put them just behind the tmx and just ahead of germany in terms of the largest Stock Exchange in the world, ranking number ten this, of course, represents about 10 of the market cap on the new york Stock Exchange and about 13 of the market cap on the nasdaq, those two were the largest by market cap. So all that weve learned about the law of large numbers, you can kind of throw it out the window. Breaking the law. When you look at apple. Youre breaking the law here in terms of math when you look at just what apple has been able to accomplish in the span of about a year, carl. Its been unbelievable. Jon, i always think back to remember when cook was sort of inline, running operations, obviously a master logistics expert and at the time, i mean, i remember one of the quips was that steve jobs greatest creation was not the ipad, the iphone or ipod it was tim cook and took a while for the market to come around to that and then as we said, covid the stay at home era, the reliance on digital, the reliance on technology and wifi sort of put that game into turbo boost. Yeah. Steve jobs sure knew how to put a Team Together and how to switch around that team when it was necessary. Tim cook is one of those people who he never switched out. Tim cook was at ibm before he was at apple, and he had some skills and has some skills that steve jobs just werent his strong suit. The logistics is part of that. Tim cook hates inventory thats not necessary. He helped really streamline that tim cook is diplomatic at a level that steve jobs just wasnt you can see tim cook playing to a multiple stake holders and constituencies in a way that steve jobs didnt seem to have patience for but, i mean, ill tell you apples place in technology right now so hard to pin down. I mean, today its almost a half a trillion dollars in market cap above microsoft. Now, just a few weeks ago it was neck and neck with microsoft where did that half a trillion dollars come from, leslie . What does that mean . Its interesting in the journal today they have a stat showing that apple has averaged a weekly gain of 3. 5 since the beginning of june. They site fact set data there. That could help explain it i have to wonder, too, part of it is pandemic driven, the fact that people are really turning to tech in droves as far as what they see as safe investments if we do have a vaccine, safe investments, if we dont have a vaccine. But also just the fact that people are turning to apple as something that they know and something that they feel safe with youve got the validation from buffett and a bunch of other big investors. Still thats more than a walmart market cap that opened up between apple and microsoft in a few weeks. We have to wonder as we look at this 2 trillion mark is apple are apple shares now priced to perfection how do they drive this higher from here i think is the key question you know, 2 trillion, big number as we look at whats going on with regard to the rest of the economy and the rest of the stock market quite frankly yeah, jon its interesting you know, thinking back to a few weeks ago when cook and zuckerberg and bezos were on the hill trying to argument theyre still in competitive markets its hard to argue youre not a giant who is not somehow treating App Developers unfairly even though they may know the rules of the game going into that and whether its chinarisk or worries about monetization on the app store or services. Its going to get more fraught, i think, certainly at least from the communications standpoint for the company. It is, carl but it seems like we could have had and have had the conversation about more fraught when it comes to apple every year about a different set of issues you know, people were worried about google and android then people were worried about samsung. Then people were worried about amazon was going to come out with a phone when ever amazon is coming out with something, the narrative from some folks is amazon never fails at anything. Oh, yeah, a few things they do tend to fail at. Now its apple is too big along with these other companies that are too big. So many risks. Leslie, i guess people now are going to wonder if especially this year the iphone launch becomes a sell on the news event, im not sure in the shortterm that even matters. That is the key question, the investors seem to be shrugging off any concerns on that front were now getting a market flash on goodyear. Dom chu has that for us. We have goodyear rubber and tire shares off by 2. 5 on a slight pickup in volume off the worst levels of the session. The reaction is to a tweet from President Trump that basically says dont buy Goodyear Tires. They announced a ban on maga hats get better tires for far less. Two can play this same game. We have to Start Playing it now. The reason why its an Interesting Development here is because we have not yet confirmed whether or not there is a ban on maga hats at Goodyear Tire and rubber the tweet caused an Immediate Reaction in those shares as you can see by the charts. What we do have we have reached out to Goodyear Tire for some kind of a comment or clarification on what their policies are but in a prior statement, goodyear did say that they are committed to foersing an inclusive and respectful workplace. They ask that they can comment on issues of injustice and other equity issues or verbal otherwise support of political campaigning. We reached out to goodyear for a comment, but thats the reason why, folks, youre seeing that reaction in the shares and i will send back over to you. All right, dom. Thank you very much dominic chu watching gt for us today. Good morning, welcome to squawk