Action from jay powell call it a pandemic breakthrough, the fda clears a near instant testing kit that could change the tide in washington, d. C. , lawmakers looking to make a deal over a skinny stimulus package. It is thursday, august 27, 2020 you are watching Worldwide Exchange on cnbc. Top of the morning to you. Im Brian Chu Dominic chu in Brian Sullivan this morning. S p lower by about two points, the nasdaq off by about six. Monitor day for the nasdaq yesterday. Coming off fresh alltime highs. The dow did end higher yesterday and is now less than 1 away from the break even level for 2020 that is 28,539 digging deeper, it is not just the big names keeping the rally alive. Looking at the semiconductors, both of those coming off intraday alltime highs. Up more than 2 this week alone. Cloud computing getting a boost. Three etfs tracking the space. Coming off the fresh high with a huge move, a massive move. Salesforce goes into the dow next week. That stock higher by 26 for its second best day ever they are down 1 premarket. We have to go back to the ipo in 2004 where it gained 66 in a day. The number of items on the radar this morning, including fed chair giving a speech later today discussing the policy framework and how it will shift its approach towards inflation after years of falling towards the 2 level on the data front, a busy day with jobless claims and pending home sales and real q 2 gdp. A lot of data on tap fed speakers this week every kind of catalyst you can think of with regard to the macro at play. Around the world, we have a mixed picture in asia. The nikkei in jan off onethird of 1 to close the shanghai composite up over one half a percent fractional losses across the continent. Out standing move has been the cac in france. Ftse 100 in the uk off onethird of a percent and the dax off one quarter of a percent as hurricane laura slams the coast just after 2 00 a. M. Eastern time this morning as an extremely dangerous category 4 storm. Stronger than katrina back in 2005 this hurricane is expected to be one of the worst in history, predicted to produce flash floods and storm surge that could leave areas uninhabitable for months the majority of Oil Production is on lookdown wti benchmark down onethird of one percent. Ice brent crude relatively flat right now. Joining us now is Nbcs Jay Gray in lake charles. I understand the storm was just downgraded moments ago to a category 3 storm let me tell you, i cant tell much of a difference between a three or four. We are still getting pounded here the eye has moved over lake charles. Reporter laura, crashing into the gulf coasterly thursday morning. The most pourful stowerful stor the shore line sustained winds of 150 miles an hour and gusts Even Stronger more than a foot of rain in some areas and what the National Hurricane center calls unsurvivable at just three feet, the surge can be life threatening, six feet can smash through windows and doors, at nine feet, entire neighborhoods could be swallowed. Lauras storm surge could crest at over 20 feet. The fact that there could be a wall of water over two stories high is hard to conceive we could have 90 mile an hour wind gusts up to southern arkansas we expect millions of people to be without power we have to deal with rainfall and flooding in tennessee and kentucky now look, we have early reports of damage. Power out for thousands and winds blowing both ways in the parking lot. We know there are several buildings in lake charles that have been severely damaged we have a while to go still. Back to you. Obviously, as we are watching, the conditions are not safe how are the evacuations going . Are people heeding these warnings do you get a sense people have heeded these warnings and made their way north away from the storm surge area i saw bus loads of people evacuated yesterday. By noon, the streets were relatively empty later in the afternoon, that was a ghost town there are people who decided to ride this thing out. It will be interesting to see how they fared i do think a lot of people listened to Emergency Managers and moved to Higher GroundNbcs Jay Gray, stay safe out there. Another developing story we are watching as the ceo of tiktok steps down months after leaving the disney job Frank Holland has more on that story. Good morning. Tiktok ceo quit just three months after leaving disney. In a letter, he said, quote, as the political environment has sharply changed, ive done significant reflection on what the role would require in the role i signed up for in the backdrop, it is with a heavy heart that i wanted to let you all know that i have decided to leave the general manager will be the interim global head. Turning to washington, republicans are working on a more narrow stimulus bill they could produce this week. Considering a roughly 500 billion proposal that will address only areas of bipartisan support including expanding unemployment and Small Business loans and would not include another payment to americans the u. S. Authorizes abbott labs rapid test. It works without relying on Lab Equipment and can be given at any location shares up now over premarket. To the markets now, another day, another close in the s p 500. Tech and e commerce leading the way higher amid news of the trials in hopes that it will signal and maintain the policy in a speech by jay powell later this morning joining me now, managing director is the fed the most key thing right now . I would agree that fed has our back and that has happened to support our market and tech to keep running. The fed has kept rates low which has made it possible for companies to survive. What are you looking for and will you be listening for through all the speakers later on this week, what is the key as we move back into the back half of this year they are two parts to this the first is how long the fed will stay low. Thats a massive support and will keep the markets going and probably keep momentum and on the outsides going the second will be around inflation will they let the market run a little hot. The fed is still not thinking about raising rates. That will be the key lets focus specifically on the last few months. Focusing on the pandemic lows in march, still an amount of people that feel they dont deserve to be at this point right now is there a reason the markets are at record highs and is it justified . Some of the names are moving and a small group it is really that the market is moving the growth names youve missed out on a big run and if look at the movement you put up earlier, the technology weve seen the same thing on our side the tech etfs, work from home theme. Online documentation, social interaction and telemedicine the economic numbers are starting to look okay. Growth in consumer durables has lead to home depot, lowes and lenars to grow with investors sitting on the sidelines, theyve missed out on some of that i do think the sale winds are still there. Investors saying there is a lot of cash on the sidelines you said that there are those people missing out on the whole thing. Are they scared enough to buy into the market at these elevated levels to keep it going . What i would say to investors, there are still bright spots tech has run up high, if you are not comfortable buying microsoft and apple, maybe you are comfortable with the work from home names etsy, twilio, crowd strike there will be a microsector that emerges. And the trend will continue upward weve seen triple digit performance. Look at etsy it is incredible looking at direct to consumer, work from home they are all worth looking at. Yield on Corporate Bonds are a couple Percentage Points cash flow yield is 3 . You probably want to participate at least a little bit in that. Showing you stocks that have doubled, tripled in value. Always great to get your thoughts when we come back, much more on hurricane laura as it makesland just west of new orleans bill karins is tracking that storm. Plus finding value with technology at alltime highs mark mahaney makes his top picks in that sector more ahead when we return after this break i keep working my way back to you, babe with a burning love inside yeah im working my way back to you, babe and the happiness that died i let it get away servicenow. The smarter way to workflow. They have businesses to grow customers to care for lives to get home to they use stamps. Com print discounted postage for any letter any package any time right from your computer all the services of the post office plus ups only cheaper get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com try and never go to the post office again. On the move so far today netapp shares soaring. Just the latest Software Maker to get a boost from Companies Embracing the cloud. Netapp has limited exposure to those Industries Hit by covid Like Airlines and hotels box beats Second Quarter results and raises Revenue Target for the full year. Creating Strong Demand for work place tools and seeing a rise in demand for data shares as well up 7 . Williams s Williams Sonoma is lower online sales accounting for three quarters of total revenues strong trends are continuing this quarter although it sees sizeable head winds from shipping charges pressuring those. Those shares off 6 right now. Sfl. Coming up, whats at stake this year when fed chair takes the stage at the jackson hole symposium. And what is ing idbesa about schools and which 2020 candidate is best equipped to handle the virus. After this welcome back to Worldwide Exchange. A peaceful night of demonstrations in kenosha, wisconsin after the protests over the shooting of jacob blake. The officer Rusten Sheskey has been charged in that rooting meanwhile, the nba league to meet with players. The Milwaukee Bucks chose not to play in protest of the shooting of jacob blake shortly after the bucks decision, the Milwaukee Brewers followed and sat out in their game against the reds. Several other teams showing solidarity across Major League Soccer as well Governor Newsom says covid is creating challenges in fighting fires in that state former ceo of tiktok left the job. The reporter that broke that story is coming up but first nontodays big number, 51. 6 billion. Thats how much salesforce market cap grew. What happens when 2 Million People switch to Xfinity Mobile . Well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with Xfinity Mobile. Call, click or visit a store today. Stocks slipping from record highs as wall street turns to the focus. Breaking overnight, hurricane laura making land fafall as officials warn of an unsurvivable storm surge tiktok ceo announces he is leaving just months after taking that top spot. You are watching Worldwide Exchange on cnbc. Welcome back im dominic chu in for Brian Sullivan today you can see the dow implied lower by about 96 points it has been a slight deterioration. S p implied lower by about six points, the nasdaq implied lower by about 10 appointments trying for six Straight Days of gains the key level to watch, 28,539 things to watch, pending jobless claims, q 2 real gtp and across the country, grappling with how to get students back into the classroom. Parents are speaking out on which of these 2020 candidates would be best to handle the situation. Eamon, back to school is key for both you and i we are both parents and know the struggles going on there absolutely. Well have kids all over the house zooming in to school in our district in london take a look at the graphic the degree of which this is impacting the lives of parents this is fundamental stuff. We ask them how this is going to affect their life. 24 of people say theyll need to quit or work fewer hours if the schools dont reopen 13 said they rely on their Childs School to provide meals. And 10 said they lack reliable internet talking about feeding, educating, your ability to go to work as a parent in terms of the politics, 52 are saying joe biden and the democrats would do a better job and 48 say President Trump and the republicans. 48 of the people we talk to approve of what the president is doing here in terms of reopening schools. 52 disapprove and say hes not ensuring schools will reopen safely some real splits there between the way people view trump and biden. You can tell it goes to the core of the way they live their lives. How they educate and feed their children 5248 i dont know what the exact margin of error is but it seems like thats within the margin of error. This is very much a toin toss issue in those swing states. These small differences can make a big differenceover all looking at just the battleground states that could go either way. The president needs to win a majority of those to repeat what he did in 2016 in most of the states, it is win or take all. In most of those states, you get the electoral college. Biden is narrowly ahead and is ahead in a small way of all of those battleground states in just the biden versus trump number the margin is slim, weve seen a bump over the past week or so in terms of his approval and the economy and coronavirus. This could go either way. A huge contentious issue. Not just in the swing states back to the markets, investors keeping a close watch. Fed chairman set to deliver opening marks. Powell is expected to introduce a new tool aimed at fighting low inflation and combatting the impact of the covid19 pandemic. Joining me now, scott, it is strange to say the lack of inflation is a bad thing but it can be why is the fed so concerned right now . Thank you for having me when we think about the perspective, it is really indicative of the healthy economy where peoples growth rates are glowing. You are earning more than inflation so you can spend a little more on Economic Growth lets talk about that real yield. Interest rates are at that level. How does that dynamic play into how this plays out for americans to them in the coming months and years. Essentially, weve seen benchmark Interest Rates on the deposit, theyve all declined significantly. What weve found for most is that they would be considered a safe investment we call that the negative reinvestment rate the challenge is that many may have gotten used to that weve pushed many of those out to the core bonds. Venturing into places that are more high yield because that yield number is higher you mention that corporate level. Is the fed seen as supporting this level now it used to be treasuries and mortgages. Does that mean the fed can be there to backstop them we cant under estimate. When we look at the Economic Data that has come out in the strategies, it hasnt been quite as bad effectively yes, the fed has been injecting capital and buying Corporate Bonds to push those yield curves out thats really what the fed program was about. They are encouraging you to take the capital to refinance and invest. Thank you for joining us this morning. Cnbc will have complete coverage of Jerome Powells jackson hole remarks starting at 9 10 eastern time. Catch full coverage. We are talking with the Central Bank Economist fed president s, all the big policymakers youll hear from them later on today. Coming up, hurricane laura officially making landfall overnight. More on where the devastating storm is heading next. First, other top stories Facebook Says it removed a Facebook Page and event listing for a malitia group in kenosha, wisconsin. Amazon will reveal the First Grocery store, amazon fresh in california today inviting customers to the store for a preview. The fake meat wars heating up wednesday again. Kellogg launching several new plant based products through the morning star line even in Chicken Nuggets atth will be available starting today well have more after this break. Welcome back, we continue to follow breaking news making landfall overnight slamming into the texas and louisiana boarder. Maximum sustained winds 129 miles an hour. The storm making its way inland as officials warn of devastation stemming from this storm nearly half of the koirnts Oil Refining Capacity under lockdown world benchmark ice Brent Futures higher today nbc news meteorologist we spoke with jay gray at the top of the hour cannot tell the difference between category 4 and 3 storm. You still can get a ton of damage we know this was still a strong 4 and is finally weakening it made land fall. It was a category 5 last night right before the last six hours before it levelled off the damage is already done it happened in the middle of the night. We dont know how extensive the damage is. The wind damage there has been really extreme you can see where the eye is located. Almost along the texas louisiana border the storm ends quickly, the storm does not stick around for a long time. The sun will be out later on today in southern louisiana. We have an extreme wind warning in effect for that eye that moves through. If we have power outage still getting significant damage, that is happening with the north and northeastern section and those strong winds making the way. The latest as it moves north at 16 moving quickly in the shreveport area, we may get some tornadoes later today as a concern and Power Outages could spread into arkansas and on the east coast, we could see a rainy and windy saturday for the rest of today, the max wind gust up into arkansas then the storm surge will die off after that we are doing that with flash flooding too we dont know how extreme the storm surge was. Well have to wait and see for daylight if we get the helicopters up i havent heard anything close to the 15 to 20foot storm surge, ill save my judgement until we get those pictures in early on, we were seeing the initial parts of the storm move forward. We were talking two possible storms that could hit the United States marking marco. Would it have been better. Some have said if there wasnt another storm out there, how significant was it for laura to be the storm this time around . Right the original possibility is that we could have two lower end category 1 hurricanes that they would interact and maybe spin around each other but marco fizzled out so quickly that by the time laura got to that area, it didnt matter it was like a linebacker dealing with a toddler laura was a strong beast the name will be retired it was a major storm to hit the coast of louisiana coming up on tech, the c suite shake up at tiktok as a reminder, you can watch or listen to us live on the s p after after you watch these live shots omeworcisimfr n yk ty te square i keep working my way back to you, babe with a burning love inside yeah im working my way back to you, babe and the happiness that died i let it get away servicenow. The smarter way to workflow. Welcome back now to the broader markets overall. Not just the faang names that are hot. Cloud computing surging to alltime highs as to semiconductors and etfs at these levels can investors still find any relative value or bargain. It is tough but we have a guy that can do it lead analyst, good Early Morning to you a lot different talking to you at 10 00 or 11 00 eastern. Thank you for the early wakeup call lets talk about relative value. I see stocks going up 100, 200, 300 , i think where can you still buy . There are two baskets of stocks, those who have benefitted the Online Retail and streaming. The amazon and streaming names like netflix shopify are those bargains theyve priced them up those are the recovery stocks impacted by the covid19 pandemic those are the Ridesharing Companies and add tidesing nameg names as well. You have to be more patient. The uber, lyft and booking. Com offer the best bargains in the space. Hind sight is 2020 but we can says it easy to buy stocks we did in mid to late march and the number of record highs that weve seen so far this year. Is this a situation where you can buy these and leg into them . How do you go about picking out the bestinvestments making it out of these conditions and the travel that may not be until 2022 would be discounted back. That gives you a sense of how long on these names. I look at these and they are more like grinders they could be made for shopify is there an area of the midcap region or perhaps down the chain where there is not the 2 to 300 change sa sails fo sailsforce is in that mode im thinking of names like roku and stitch fix, they have lagged some what i think there is an opportunity in these names here. Looking at the whole thesis are there themes you see playing out . What is the biggest friend in your mind . The biggest trend economically or soishlcially is covid. That has had a pull forward demand you leave people in this condition for five and a half months, that leads to structural changes in human behavior. The reason the Cloud Companies have done so well, the fundamentals have shakened up, we are structurally going to be needing greater cloud capacity in the future. For no other reason but a big reason is work from home that will clearly be dramatically more part of the landscape in the last five years than 10 years because of covid decisions. We watch you and colleagues on skype and face time i hope things get back to normal always great to catch up with you. Thank you, dom. We continue to follow the developing story overnight with tiktok ceo saying he is existing the company. Three months after leaving disney to take that job amid pressure from the Trump Administration to sell its u. S. Operations joining the reporter who broke this news. Thank you for joining us how much of this was a surprise . We know tiktok was under fire even before kevin mayer took the job. It shouldnt have been that much of a surprise yet in may, the big concern was we need to have family appropriate content. Who can be better at that than disney yet, three months later, it is clear one person said this is not what he signed up for. He never anticipated he would be spending all his time on the politics of it. The other executives there how do you not know working for a Chinese Company of that size how does the next person that comes into that job have to approach it . In retrospect, you can say wasnt he naive . When you think back, bytedance and tiktok wasnt all that logical target given the ply ority of the Trump Administration would be more significant challenges, whether it is potential chinese aggression in the South China Sea and these kinds of things. We saw huawei that was a threat to the u. S. Technology supreme si it just seems that hip shaking teenagers and dancers should have become the priority now it is too early to say who will be the next successor because who will tiktok be one by something happening between the u. S. And china what do you think will be the next big theme or battle that brews between the u. S. And china from a business perspective . Everything going on now with tiktok is all about data privacy. At the moment, National Security is the target. You can ask the question, which vested interests are the most threatened in the u. S. Clearly there were some content providers that felt threatened by tiktok. A very big story out there. Thank you. Great work on breaking that story on tiktok. We appreciate it thank you that does it for us on Worldwide Exchange. Check out what is happening now with futures we are going to pull back from record high levels dow implied lower by about 61 points the nasdaq indicated up. Squawk box is coming up next hey, kids welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. News breaking overnight. Tiktoks ceo leaving laura makes landfall battering texas and louisiana with 150mileanhour winds and a stung moment in the world of sports as Milwaukee Buck players decided to boycott a game in protest of the shooting of jake ok blake in kenosha. Well show you what players and owners are saying in already a fragile season for sports. Good morning here with joe kerne kernen becky is off again today right now, the dow should open down about 58 points s p 500 looking to open down about three points the nasdaq looking to open marginally hurricane laura making