Transcripts For CNBC Closing Bell 20240712

Firmly in the red here nasdaq is up 104 . Up 3 this week alone. Only tuesday coming up on todays show kraft is trading higher. Of they outline two billion in cost cuts and selling off part of the cheese business not all of the cheese business and some confusion as to which cheeses go and which stay. Well find out why the companys president about those moves will join us to discuss whether lack of fresh stimulus can impact and speaking of stimulus, former treasury secretary jack lew will join us and his article calling for more than 2 trillion in government spending. We begin with breaking news on apple. It is much anticipated event unveiling a new number of products we have the latest josh so a lot of news in that 60 minutes of apples show today. Start with the new hardware. That new ipad air. It is going to start at 599 available next month 10. 9 inch display with a huge boost in performance we know the ipad is a hardware line clearly benefitting from that work from home trend apple wants to keep capitalizing on it. Two new apple watches as well. Remember apple dominates an estimated 50 of the smart watch market now introducing the new series 6. It can measure blood oxygen starting at 399 lower cost option, too, a watch se, starting at 279 news on services as well the long rumored services bunding is announced apple one. Three different tiers. Starting at 14. 95 per month includes apple music, tv, arcade and i cloud storage. A new streaming for fitness. They can access a catalog of workout videos at 9. 99 per month. Josh lipton, thank you. Stay with us if you could. For more on todays vent, lets bring in dan ives. Peter rojas also joins us and former editor of engadget. All the experts are on apple whats moving the stock right now. The view of today this is drum roll to the main event. Only apple customers and our estimates have apple watch it can be 25 the necxt three years. Massive upgrades what is happening across the hardware as well as the advertising side that speaks of the let rating h and what i believe is a drum roll to the main event i view it as a once in a decade upcycle for apple. Were not necessarily Ground Breaking it is on health and fitness as the key product features when they launched a few years back, it wasnt clear whether this is a new ecosystem for App Developers it is really all about fitness and health you can see the fact that theyre focusing on new features like oxygen level monitoring theyre trying to turn the apple watch into something that people use as a way to live a healthier lifestyle and save them when theyre in, you know, threatening situations do you think they have value image in fitness you can see that pivot they did before from music into streaming tv shows theyre a long way to having the brand value of a peloton, for example. They have pushed though you look at the apple watch, that has been positioned for years as a pure health and fitness product. They were hitting that hard again today. That resonated look at that smart watch business they dominate 50 of the smart watch market sam sung is at 10 theyre hammering home to consumers. At least with the watches its worked it is delayed, is there anything notable as far as stock drivers out to have days announcement nothing that is going to cause instant revisions to peoples outlook i dont think there is any specific disappointment with what is happening today. Its mostly about the setup. Hit a tremendous run even after backing off in the last couple of weeks everything is in the context of the mega cap stocks. Thauf been revalued. En that announcement today certainly doesnt do anything to detract from that. Reinforces the general idea that theyre trying to make the products more indispensable and coherent ecostick. Its about services and ecosystem and annuity like revenues thats in a 30 times multiple. Maybe its going to be demunnished. The focus is on hardware. Not necessarily the typical piece of hardware. What portion of your valuation for apple is still the iphone versus say a year ago . We think the Services Business is worth 950 billion when you look at the iconic hearts and lungs, that is still a trillion and a half valuation. That continues to be the story its all monetization going forward. It all starts with the super cycle which we continue to believe it going to be a game changer for cooper tino. Everyone stick with us. We want to vet get your views on the latest on tiktok we await the official word from the Treasury Department about the oracle deal. We have the latest on that ever evolving story traditionally deals involving National Security concerns take 90 days or longer to be approved but this deal is poised to be approved as soon as today with the treasury official telling cnbc things are moving at a clip reuters is taking a structure that tiktok proposed to the ghoost would see a global bite dance business carved out with the u. S. Government committee overseeing the operations. To be determined whether that is a structure that white house would sign off on. Earlier today Jared Kushner defended the deal. He defended the president s push as pragmatic in allowing the structure of the deal to change and denying the close ties to the president had anything to do with that company resulting the winner theres a lot of voices ash the president. But ultimately, hes the one that makes the decision. Something was submitted and being reviewed right now to make sure it qualified on all the different criteria that are necessary. That was from squawk box this morning well bring you any news as we have it this afternoon back to you. Thank you so much peter, i come you to first on this does this deal for you make sense . Do you think it will placate what the president said he was looking senator. The deal does not make sense. I think that if there is a National Security concern around user data, if there is a privacy concern, it is not clear that this arrangement is going to satisfy that it is not clear what at the relevanceship relationship is going to be between oracle and the business. Bite dance will still have operational control of the company. And, you know, i think the other issue is youre giving the extremely high levels of corruption out of this administration there might be some, you know, something shady or untoward behind this. It wouldnt surprise me if that came out something will come out that is driving this deal in a way that is probably going to attract the interest of regulators or investigators at some future point. Peter you can push back on all the points lets talk about National Security for a second. The way this stands, as we understand it, the oracle, data would be on the oracle cloud so the data on information from americans on tiktok is housed within oracle. So the Chinese Government cant ask for it i guess they could but thats going to be in the u. S. On u. S. In a u. S. Company. That solves that problem the disinformation, you know, oracle actually, it doesnt solve that problem you would push back on that, sfligt there are lots there are lots of different ways they can push back if they want user data from americans, they can get that from all other sources beyond tiktok and bite dance. We have to understand and a baseline what were talking about in terms of data and how it comes off with the apps into data brokerages. Okay. Thats fair. Im definitely no expert in this as i understand it, not just with oracle cloud house the data, they would lshgs you know, as an investor and as this Technology Partner be able to see the source code or the algorithm. Yes, it is under chinese operation still. But it would have a view into it oracle does have a history and an expertise in Software Engineering and Software Security and, therefore, perhaps would please the u. S. Government they would be able to manage that and handle that and intervene at the sign of any disinformation or prop grand th propaganda thats how you understand it the whole idea of an acquisition might not even solve that. That was just something proposed by microsoft that got very messy and very difficult to hammer out. Absolutely. One thing to keep in mind is its not something that operates, you know, in one direction. It requires user data to be fed into it including a user dwrat fr data from u. S. Based users how is that structured and worked how is the data going to be anonymized there are a lot of open questions with how this is structured and how it is going twos to work . It is what makes tiktok such a compelling product for people. Its not just about getting it back from china, so to speak you have to have data from users every day going back into it that feeds the personalization and customization of the product. There is a lot of moving parts of theres a lot of complexity i think the reality is we dont have a good understanding about how its going to work dan ives, is this good for oracle bad for facebook to me, its a major fabric in the cap for oracle to win this, especially given some of the hurdles theyve had in d. C. Going up against microsoft and aws. Had if you look for tiktok bite dance, back against the wall, it was sale or shutdown now they get a partnership and for oracle, its a trophy case to win this deal. Blake eye for microsoft because they didnt acquire this the they were not going acquire it without the algorithm that is the centerpiece. Thank you all very much great conversation josh, peter and dan. Mike santoli is with us. Broader markets time weve been slipping a little bit. The dow went red briefly now up a few basis points. Whats the key things to focus on today we have a little followthrough to that bounce. I was saying yesterday this little rebound was enough not to fully please or convince anybody on either side weve been operating under last weeks highs that wasnt even to go back to the all time highs maybe you can make the case that, you know, trying to assert itself who knows . Maybe it develops into another one of the side ways boxes it acts as a landing today you dont think you got much of a convincing move. Even though up better than down for the bulls. Nasdaq still the core of the strength a lot of the cyclical groups falling away look at this this hasnt narrowed very much just slightly from a couple weeks ago. That is the extreme spread right there. Apple a huge part of that gap. The ipoetf, this cult of the new is still operational what you see in a lot of the charts is really aggressive peak and then old stuff youre seeing it in faang and the Options Market people chasing the same speculative plays. Well see if in fact they can make new ground here everything right now looks like just a bounce until proven otherwise. Thank you so much for that. After the break, investing giant Carlyle Group is out with a new report outlining the major long term changes to business as a result of the pandemic well spell with carlisles head of research about the most surprising findings next our Retirement Plan with voya gives us confidence. We can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Im good at my condo. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Makes it beautiful. Stateoftheart Technology Makes it brilliant. The visionary lexus nx. Lease the 2020 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. Experience amazing the big events are back. Xfinity is your home for the return of live sports. Dow is up 17 points. 40 minutes left of trade wet have a news alert on Facebook Facebook right now feeling the kardashian effect. Kim kardashian west said she would freeze her account i love i can connect directly with you through instagram and facebook, but i cant sit by and stay silent while the platforms continue to allow the spreading of hate, propaganda and miss information. She is a top ten personality on instagram. This may be part of a 24hour freeze being called for by stop hate for profit. Several other big celebrities also expected to take part again, shares of facebook off 1. 5 falling slightly below the level they were before she posted that back over to you calling though, frank, for a one day boycott . Yeah. Very possible. We have not seen her say she is taking part. But there is a group saying theyre going to do a 24hour boycott. Well see if one day she will get earnings thank you for that the s p 500 up nearly 50 since the march lows some indicators are calling a different recovery story Carlyle Group out with a new staut of t state of the economic recovery and the big businesses here to stay lets bring in jason thomas from carlisle great to you have with us. Part of the argument is this is a lot of dispersion between Different Industries in the recovery post the covid19 lows. You think that will broaden out to be dispersion within industries thats right. I think when investors look at the environment today, theyre focused on the difference between those industries by the pandemic the wider dispersion is not going to be businesses but businesses in it the same industry of those are those businesses that want to manage backwards. Theyre going to be those management teams that want to build better businesses. And effectively take the pandemic and shock as an opportunity to rethink everything they do and how they do it. Is there still time for a wouldbe loser in that environment if you were to snapshot things to day to rectify the situation, jason or would you have had to be putting in the investment laying the groundwork for the tech era in recent years past in order to be prepared for the next couple years . No. I think that this is an opportunity for everyone today i think its just a question of whether those management teams are willing to seize it. What is interesting is when we look at the investment environment, whether it is Public Markets or private markets, 85 of the value enterprise value of the corporate sector is intangible assets, brand, data, content the human capital, et cetera and what is interesting is that everyone focuses on big tech but its really the tech enabled platforms operating throughout the economy. But it is also actually very many traditional businesses. When they look at their enterprise value, what is really valuable about the business . They fund its the brand they fund its the customer relationships. They find its the data about customers, data about suppliers. Of its a question of the businesses and ability to refocus attention on where the value lies and where the Growth Opportunities are. What is the take away for bub lick investors besides the Software Companies speeding up the adoption i think what is interesting is for many public investors, theyre focused on tech. Really what we show in the report, the carlisle report that i think is perhaps most interesting is that when you control for business model, actually all the tech sector outperformance goes away t biggest innovation is the Business Models that now compete in areas like durable goods manufacturing, personal Care Products and so i think that the opportunity for Public Market investors is to actually identify those business thats are perhaps not labelled aztec, not perceived aztec bs tech but the valuable assets that can allow them to have a tech like Growth Profile that is something you can observe in private markets again, trying to capitalize on the growth options and opportunities. Jason, what about the next decade i expect the u. S. To continue to lead. Of course, china is closing the gap. When we look at, you know, so, for example, the digital platforms that i mention, thats really where all the startup capital is going its where all the Growth Capital is being directed as well. When we look at the United States and china, you know, over the last decade, china has closed the gap with the United States in terms of fortune 500 companies as of 2019 there was 129 in china 121 in the United States the First Time Ever another country has been home to more fortune 500 businesses over the next ten years, i think china is going to close the gap in term of the fast growing dibl digital platforms. I think the u. S. Will still come out ahead. Ut will be much narrower than in the past. Jason, thank you for joining us thank you for having me appreciate your thoughts on the latest report. Weve got just about 36 minutes left of trade. Heres a look at the markets right now. We turned lower. Were unchanged on the major averages after the break, bank stocks are under performing the market today amid new comments from j. P. Morgans c. F. O well fill you in on the latest which is hurting that stock and others were counting you down to earnings from fedex and adobe. Well preview the results next and bring you all the numbers as soon as they cross u wchg long bell. He did speak to the tale of two different economies. In contrast to citi yesterday, they said they did not expect to have to increase provisions in q3, however, j. P. Morgan shares dipped yesterday when she addressed income. For nni, were revising guidance to 55 billion for the full year. And thats primarily because were seeing higher payment rates in card and lower outstandings that obviously has a positive offset in credit so again, one of the positive things were seeing but a head wind for nii and then in home lending, jumbo originations are very strong but more than offset by faster prepays. So were revising from 56 to 55. About 55 no enough to turn that stock around t theyre in positive territory for the week reversing yesterdays gains. City down now 10 , 10. 5 over two sessions also earlier today, a story that j. P. Morgan had to send home one trader testing positive for covid19 the bank wouldnt confirm or deny that nor the number of potential cases but said, the bank is managing individual cases across the firm over the course of the last few months and following appropriate protocols when they occur. But clearly the banks once again showing that any time they get a little bit of an impe tis, the wind comes out of the sails soon after that yeah. You would wonder what the comments how much new news was there . Right . The market has felt so bearish around the banks for a while even in the face and sometimes of higher yields which weve seen for recent weeks. Theyre justining to thb downward pull on that group. I wonder if her comments were fresh news or maybe there is just still this shadow over citigroup and that announcement yesterday. If you look at the train day chart, there was a clear moment it sold off. That is alongside the comments on Net Interest Income its a little bit of a surprise. The big concern for banks this year which people think is what kept them as such underperformers is provisions. The comments on provisions were not negative Net Interest Income and margin were but as we just played in that clip, there were offsets that means credit quality is not as bad as first thought. Some thought such that comment would weigh on it. In terms of it is ji, people dont like the uncertainty of fearing that there could be a regulatory rebuke to come and exactly what that might imply, again, i would highlight as i did yesterday this is not expected to be anywhere near the same level of punishment as they say a wells fargo type punish naent would limit their ability to grow. Thats not expected at all nonthe less, until we get more confirmation, people willing to sell the shaurz dores down 5 . A pretty big decline for a stock that already underperformed year to date. Worst performer in the group of financials which is one of the worst performers in the market jpm weighing on the dow. Lets get an update from sue hello heres whats happening. The city of louisville is paying 12 million to the family of Breonna Taylor and instituting Police Reforms it is part of a settlement months after taylors killing by police in her home members of the Taylor Family and local activists are calling for charges against the ploufolice officers involved. Not have an dument happindice in this city is to say no matter how much we pay or reform we do, we would rather pay. We would rather cover it than to deal with the issue. And Major League Baseball announcing plans for a bubble style setup for this years playoffs the world series will be played in globe life field, home of the Texas Rangers beginning on october 20th youre up to date. Of thats the news update this hour back to you. Thank you so much for that. Former treasury secretary jack lew making a case in the oped for another massive round of stimulus totaling 2 trillion or more as we head to break. Here is a check in on bonds. Good job, michael does. Ok, lindsey now tell the class what your mommy does. My mom has super powers. Its like she can see the future. What . its like she time travels in a rocket ship. Thats cool and then she comes back saying try this or try that. She helps everyone. She helps them feel less worried. Wow mommy, so what is it that you do . Im a Financial Advisor. She is aig proudly supports all the professionals taking care of our Financial Futures. A lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. 26 minutes left if trade the s p 500 is up. 25 communication services, real estate and Consumer Discretionary are feeling the gains today. Financials, energy, and staples are lower. The nasdaq is up almost. 8 . It was up 1 a few moments ago tech is back in the lead names like tesla really popping. The rustle 2,000 is flat the dow is slightly lower. It is weighed down a little bit by the banks helped by dow, salesforce and home depot first up is this exquisite bowl of french onion dip. Im going to start the bidding at 5. Thank you, sir. Looking for 6. 6 over there do i hear 7 . 7 in the front 7 going once. Going twice. Sold to the onion lover in the front row next up is lot number 17, a spinach and artichoke dip, beautifully set in a hollowedout loaf of sourdough bread. Dont get mad get e trade and get more than just trading investing. Banking. Guidance. How did you come up withd opened all these backstories . Tudio. I got help from a pro. My financial professional explained to me all the ways nationwide can help protect Financial Futures in peytonville. Nationwide can help the greens get Lifetime Income because their son kyle is moving back home and could help set up a Financial Plan for mrs. Garcia. And he explained how nationwide can help mr. Paisley retire early and spend more time with his pal, peyton. And their new band. Exactly yeah. Dont forget the band. I havent. The Rapid Transformation of the economy is changing how we eat and cook kraft updated investors with an upbeat forecast, a return to top line growth, new investments in marketing and reorganization of the company. Theyre going to be selling off the cheese business for 3. 2 billion to cash joining us for more to talk about the companys strategy is the u. S. President welcome, carlos. First of all, clarify. Cheese whiz i think stays even though im not sure that is even real cheese. Why you are making the cheese move right now. Were very excited about the deal the reality is that it follows the strategy we want to pursue with the company we want to focus our business in the areas that we have scale the slast to, you knolast is tos on philadelphia and kraft cheese and you know, generate funds in order to continue to drive this strategy that we launch today. The other headline is the 2 billion in cost thats youre looking to save over the last five years the question on that is havent you been cutting costs for years and years . Wasnt this the whole 3g strategy post plit off with other companies . And that hasnt really worked or resulted in growth why cutting more of this is not about cost cutting. We actually shift from cost cutting to efficiency. So when he think about the two billion, things that we actually doing to find efficiency within the business and let me give you an example a big part of that is how we think about that differently we fwauk a new strategy for media and a way to find efficiency between suppliers and ous that allows us to bring it back in the business not about cost cutting were looking at how we actually reduce the number of our portfolio. Well have 20 less than we have just a few months ago. And the reality is the mayor are actually in the supply chain so by us simply getting the business allows us to drive efficiency that allows us to then bring this back in the business the what is the plan for the proceeds from the cheese sale . You know, as we talk today, for us were going to continue to drive our same strategy in terms of making sure we continue to lower debt. All within the context of us driving sustainable profitable growth as we launch today and as a company now ready to take on a new future together. The problem for the business at least prepandemic is always the brands, right . Whether theyre resonating with younger consumers and Kraft Mac Cheese its becoming very much a part of the pandemic diet what happens after that when we get back to eating at restaurants and sort of resuming life as normal, whatever that looks like what happens to those sfwlandz. I think that we are now the situation in which consumers eating more at home is going to stay with us for a while were going to prepare for this new better that is going to come out of here as we continue the situation and circumstances were in what were doing is seeing huge amount of growth within our business in a twha way that is helping d households into our brands were bringing in new households to each of them. Theyre not only buying but theyre coming back the last few months and for us, what we look to do is how do we continue to keep those consumers into our franchise . Were dhoog in a couple of ways. Were make shurg were just media to the places theyre looking for us we also adjusting our messages based on who they are. We understand who they are the fact that they are younger, they have higher income, theyre more diverse all the messages are curtailed to that particular consumer. At the same time, you talk to some of our brands, were also focused on how do we take all the learnings that we have done now through us understanding better the consumer as we shift into a more consumer Centric Company and appealing to the icon brands. Were in the process of renovating our brands to make sure consumers understand that we are responding to the things that theyre looking for for products listen, i think what we have seen is certainly a continued growth year over year in terms of how consumers are paying are buying our products. At the same time, we also know that there is many consumers there who do need some stimulus to use against food. And our Research Indicates that there are consumers looking to put in those stimulus money right back into purchasing food. What were doing is making sure we have different price points for all consumers and highlighting the value i can tell you that part of us making sure that we provide best value is also that we focus on the quality that everybody in the family can enjoy they know they can trust the brands like kraft and heinz to make sure because everybody in the family is going to enjoy it. They have the quality theyre looking for and going to service them and their families. Thank you very much for joining us thank you. Up a little bit today coming up after the break on closing bell, square cashes in and will fedex deliver a knockout quarter the dow turns negative with 15 minutes left of the session. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save 400 a year on your wireless bill. Plus, get 400 off when you buy the new Samsung Galaxy note20 ultra 5g. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. 12 1 2 minutes left in the trading day. Were in market zone h mike santoli here to break down the crucial moments of the trading day. We have j. P. Morgan private banks analyst with us as well. Good afternoon lets kick things off with the broader markets. The dow turning negative on track to snap a two day winning streak only down 10 basis points. S p 500 up. 3 slippage that shows but still the tech rebound still very much at play. That is certainly the main feature of todays early bounce as well. I think it was about the people coming into the week, feeling as if this pull back is not fundamental based or based on some new concerning macro story. There is a dip buying impulse. You have prefed meeting drift higher as well there is always this kind of trench warfare that develops p people trying to play for whether in fact the low is in or there is still selling supply above. So we have a two week pause is that what youre telling your clients to do at this point . We had had a healthy pause and a healthy pullback in the very crowded momentum trades which tend to be dominate bid tech so we were not surprised to see the pullback im glad it happened it did clean up the positioning and did clean up a little butt of the extended valuations mike is right. There is nothing about that pullback that we saw last week that was fundamentally driven. Thats why when clients are looking for things they want to buy, they have conviction in over the long run, they look to the big tech names or tech names in general because the fundamentals are not changing, theyre being strengthens. When you look to some of the big tech names, they were trading down 10 or more from their 52week highs. We dont often get those types of opportunities all that cash and how much the rally might have missed. The i think that is finding itse cheap. That to me is doo get a yield lift its very prime for another one of the ripping bounces i dont know fit will come to much and not short term. Were seeing a bit of a yield lift today minor, sure lets talk apple. A new feature, blood oxygen tracking further branding the watch as a health and fitness product. Listen health care providers, insurance companies, and businesses are also seeing the benefits of offering apple watch. They know it can make a big difference in the lives of thur patients, customers, and employees. Apple watch helps people understand so much about thur health and fitness and to live a better day apple also announcing a new service that connects apple watch users to fitness trainers called fitness plus which sent shares of peloton lower. The ceo reacting to apples announcement calling it a lidge mutization of fitness content and theyre not coming for pelotons special soft which is the hardware category. Apple and peloton, are they even competitors . Is that even a threat for apple or for peloton well, i think its clear that apr apple is trying to dominate a trend in digital everything. So i think it is a big affirmation that the change we have seen in workout from home are here to stay apple very much wants to be a participant there. The i think it is really interesting that some of the Big Tech Companies are truly bulling out platforms for enterprises and consumers and obviously that helps with the Revenue Growth potential. The other thing i think is interesting about the apple news is we got everything but the iphone hopefully that is coming next month. They also have big implications for the supply chain the more products we have, the more opportunities for supply chain to benefit from that i think thats critical today. Mike, are we moving closer to a situation maybe in the next year or two or perhaps a little further out where apple just becomes totally subscription based including the all important hardware like the iphone thrown in as well and upgrade every year its edged in that direction. Just essentially spreading out the payments over the course of 12 months. Its not really a loan. I think theyre inching in that direction. Its not so much, you know, the old at t with a phone on the wall and you paid a fee to use it i dont know if its going to be quite like that. But certainly the economics are moving in that direction they just want to make bundle everything into some kind of a monthly character. It is interesting how the pattern goes nobody is really asking for that is apple really a Fitness Company . Who cares . Some will hit, some wont. But if they do hit, theyre kind of a slow build. So i dont think todays action in the stock is really a verdict on any of these initiatives. But, you know, i also dont think if you had a little bit of a flutter in peloton stock, there is nothing, you know, that says peloton has to sit in a valuation anyway whether theyre co coming for the core business or not theyre back positive square rolling out a new feature allowing customers to receive part of the salary before pay day. Kate rooney has details. Square out with two new payroll products for hourly workers and Small Businesses the key here though, both of these encourage people to use squares cash app for direct deposit. The banking app has gone from a footnote in earnings to squares crown jewel this year as they weigh on the better in person payments business. The banking app is now mostly driving squares 150 rally this year they estimate investors are valuing cash app alone at 40 billion. That is well over half of squares total market cap. Back to you zblcht its been a very strong run. Thank you so much for that youre a fan of square more broadly . Absolutely. Companies like square, like others in the payment space have been huge beneficiaries of the covid19 pandemic. This is for a couple reasons its the shift on line wheen and who is going to be the backbone for all of that the likes on this screen the second one that is really important, who wants to walk into the physical store and give a physical payment when we have coronavirus pandemic to contend with the notion of Contactless Payments and scanning a qr code or Something Like that, Contactless Payments is a huge opportunity for growth and clearly squares capitalizing. I thought what was really interesting in the report they released today, the degree of the adoption that we have seen from both vendors offering onhin Payment Services and also vendors accepting Contactless Payments that just tells me that payments of very early on in the growth stages and there is a lot more room to grow here. Must be painful, wul fred for them to watch some of the moves like a 7 move in square and a move weve seen in paypal this year especially when some of them are pointing to huge growth in various had this decline is also back according to facts set to 0. 5 times book value you see shares continue on wards and upwards with moult imexpansion to the max as well as Earnings Growth all you have to do, hook, ibm can talk all day about the embedded Cloud Business and what it will be worth if it is a stand alone business the market typically doesnt love to pay for embedded jewels. Its just one of those things you get a conglomerate discount and the bad with the good. The market says, fine, ill overpay if thats what were doing. For sure. And with the big banks, i think that i would be annoyed about it and i think that the positive case for tech for them is that it will allow them to drastically reduce their costs over the next decade they wouldnt expect multiples like paypal either way will you give us a hook inside the internals . Sure. They held up okay. Not astrong as they were for the highs for the day. Look at the volume split it remained marginally positive. Slipped to negative. Most of the day it was positive. Now you have a 50 50 split right there. And then if you want to take a look inside the market sector wise, mega cap growth has outperformed today it is a reversion to that summer time trade it is pure value etf theyre down 1 on the day hovering in the mid 20s. 25 a lot going on with the volatility Index Futures way have an expiration prices being paid. A little resistance to that slipping anymore, guys as we head into the close, less than a minute left, were seeing the dow in positive territory. Its up eight points home depot is the biggest contributor. Theyre up. 5 real estate could be assumer discretionary, technology is a big part of the story. Thats why the nasdaq is outperforming on this day. The russell 2,000 not doing as great. If you look at the dow, its sales force, microsoft is the biggest contractor in the s p 500 shrugging off the loss of tiktok the russell 2,000 index and the dow just closing date flat a very good finish though for the nasdaq thanks in part to the high flyers like a tesla. Indeed. Welcome to the closing bell. Im wilfred frost with sara eisen and mike santoli the dow just finishing in the green. It is by what, 0. 004 . That little flirtation with being in if red was just irrad indicated. Ended hup 1 communication services, real estate and tech the best performing sectors in the s p 500. Tesla up a healthy 7 or 21 over just the last two trading days so far this week. Tod today citi and they are going to get down were awaiting earnings from fedex and adobe. Were awaiting treasury secretary jack lew to discuss whether congress will put the economic come back in jeopardy and joining us to talk about the market day, j. P. Morgan private bank analyst still with us and mike santoli is still with us pete, long time, no see. Lets come to you first for a change good to see you zblst great to see you as well the fundamentals dont justify it this is mostly a composition issue. The s p 500 when we talk about the s p 500 and s p 500 performance, its about a handful of stocks that outperforms. Vast majority of stocks have been in a bear market. Some indices, some sectors in a bear market since mid 2018 you look at the nysecomposite. When you look at the russell both of those are down 5 . And 11. 5 respectively so the s p 500 really is its own animal its difficult to discuss it really what you are recommending at this point ive been bullish for gold for some time. And that has played out reasonably well. I still do like that trade the currency space, i do like being long the dollar here i think we are going to risk we are so excessively overbought and overvalued the u. S. Markets correct as odd as that may sound. So not particularly constructive on equities. I do like Investment Grade credit i think its going to have support for some time. Youre not going to get a lot of yield out of it at this point. I do like it when it was trading quite a bit wider as well. Does gold have a big position in your clients portfolios . I think gold is a relate e. Relevant conversation to have. Can they be credible in getting inflation to come back up. To the extent that they even start to rise higher but not all rates do not, you can get a further fall in real yields or the stagnant around the current levels i think gold can do well the fed scheduled to meet tomorrow what they have done is inserted a significant massive amount of accommodation into the Financial System and they support the equity valuations. If you look at the earnings yield of some of the companies were talking about and the Earnings Growth rates, theyre so far in excess with anything that can be earned in the treasury market. Theyre going to continue to be supported. So very much in favor of equities and, you know, to the point of the s p 500, you have break it down and look it he specific names. When i look at biotech and clean energy and look at tech, there is so much Growth Potential there. Its all been about the fed, meek and thats been she just outlined the argument for the markets even at these high levels that valuations can go higher with the fed doing. But there is also this sort of cyclical story that is going on. The fact that the economy is performing a lot better than expected coming out of the crash. Where do we stand on the trades . Its a leading or confirming mix. How fast the down turn was and then also the rebound and the front loaded stimulus. You have this mix of early cycle patterns that are in play here you have manufacturing indices rebounding from very, very washed out levels. You didnt really ring out a lot of the juice from this market that had built up before the shock. I think that maybe both of those things worked in the markets favor for now. The cyclical outperformance if you look at things like most Consumer Discretionary, most consumer durables, industrials and transports, they seem to be suggesting that they can ride the early cycle dynamics i think what nobody knows is what is the new equilibrium that the economy is rising toward and is the much lower or less robust than we had had before . You know, the fed is sort of a given i think at this point. It told you its going to be at zero and going to do it for a long period of time. It is look being back in 2009 but not going to rush to have a taper tantrum or preemptively high grades. That is probably good at supportive i dont know fit creates incremental catalyst after a while. We have news on nikola. Take a look at shares of nikola which have been under pressure most of the day that continued into the closing bell there are multiple reports that department of justice has qurd whether nikola about some of the claims coming from the Research Report remember, that report which came out last week essentially called nikola an intricate fraud and they outlined 43 examples of what they consider examples where nikola was not being truthful with investors and with the public nikola had a response to that. It kaum out yesterday refuting ten of those points. And we have not heard yet from nikola on this latest bullet point here which is the department of justice is looking into claims of nikola misleading investors. Remember, the sec is reportedly also looking into those claims of fraud surrounding nikola f we hear from them, well let you know immediately, back to you. Phil lebeau, thank you. I was just going to clarify the doj is looking into the allegations of fraud against nikola and the sec is looking into, what, nikolas allegations against the short seller . What is the sec looking into are they looking into the claims made by the research which essentially says, hey, theyre a fraud at nikola . Or are they looking into what they said on friday which is, hey, this stuff is being made up by the research group. All we know is that there was a conversation between the sec and nikola so that investigation, what exact exact it is focused on is unclear at this point. Yeah. You got two departments in the federal government looking into this. Correct phil, thanks. You bet we have fedex earnings coming out. Lets get to Frank Holland with the numbers. Shares of fedex surging more than 4. 5 after a beat on revenue and really strong beat on eps more than 2 above estimates a key met riric is marnl in. It was 2 higher a year ago. Despite the surge in residential volume and the surge overall in e commerce. Fedex is not providing any guidance the cfo saying business demand improved in the first quarter, they cloud our ability to forecast full year earnings. We expect to continue to benefit from our strong position in the u. S. And International Package and freight markets. Opportunities and Cost Management initiatives again, fedex with a big beat on revenue and eps right now. Shares just about 4 higher. Back to you. Theyre doing a lot of e Commerce Business for sure p mi mike santoli, up 4 on a very Strong Performance for this stock. Really rebounding from the lows. And now trading at the highest level in years yeah. This is a 4 move doesnt really tell you what a blowout number it was the 40 gain the last five weeks told you the market was sniffing out the things were moving in the right direction. Its fascinating fedex is still underforemaning ups by 35 or Something Like that so really speeding out of a deficit situation. And clearly the numbers are going to have to go up given what they did this quarter. What is going to be the catalyst for the market to pull back more meaningfully as you expect it to do . Given that we kind of had a rolf the dice for that to happen over the last couple of weeks and wee se seem to be bouncing markets go up and down. The risks are so skewed to the down sued right now. We have any number of things that can happen. I actually respectfully disagree with the equity risk premium using the fed model. There is a reason why rates are low. That is Economic Activity fell off a cliff in an unprecedented way. Equities have been up on a stick because i think of the misperception that the fed has their back no, in fact, its fiscal policy that has had equities backs mostly through the lepding facilities that stabilized the credit markets and so i think there is a big risk that the next fiscal policy action will fall short both from the standpoint of the perception of Market Participants and from the standpoint of what it does for the real economy when you layer that on top of a budget situation later in the year, you can have a situation where corporate taxes increase quickly. By the way, corporate taxes are likely to increase pretty quickly anyway we incurred massive buget deficits on top deficits that are already arguably unsustainable. Something well talk about with jack lew. For now, we leave the conversation there fedex, youre looking at on the screen up 6 after hours thank you boning g to see see you. Good to see you sfwhchlt lets get the latest on tiktok we await a decision from the Treasury Department regarding the oracle deal and some new comments just coming in from the president. Sarah, President Trump spoke about the deal and other subjects on the south lawn as he was heading to philadelphia. He said that he is going to be taking a look at the tiktokoracle deal he hears a deal is very close. He said hes a fan of oracle founder larry ellison. He hosted a gop fundraiser in february there is reporting about the con surz of the potential deal could look like as proposed to the committee here in the u. S. That oversees foreign investment. Bite dance would move tick to beings headquarters to the United States. Bite dance would retain a majority in a Global Business with oracle taking a ma nort stake. They would provide the Data Services for the company and that governing body here in the United States would oversee the operations to make sure that it checks out with what the white house wants. We should note that we reached out to the sources at the white house and across the handful of agencies that make up the committee, we will let you know when we have more reporting to share. Wilf and sarah thank you for that on going developments snowflake is set to price the ipo which could happen any moment now we have details. Any minute indeed snowflake really defying gravity with the ipo valuation here. The company is finalizing a price now as you mentioned but regardless of where it winds up, snowflake will be the highest valued software ipo in the post dotcom era they provide cloud based Data Warehousing with a lengthy customer list. They generated top line groeblg at nearly tripled although the marketing expenses alone surpassed the 265 millions in revenue for fiscal year 2020 losses accelerated to 350 million. Regardless, snowflake captured investors demand it landed an unprecedented anchor investment by Berkshire Hathaway thats to the tune of 700 million. Salesforce is also putting 250 million into this deal guys, its rare to see such a vote of confidence going into an ipo particularly with that Berkshire Hathaway investment. I cant remember the last time we talked about Berkshire Hathaway when talking about an ipo . Is it because yeah, it wasnt in our lifetime sorry but is it because of the business that snowflake is in . So there are some sec documents saying that todd combs is behind this ib vestment but its one of his associates behind more of the kind of growth tech invest thats berkshire has done recently its certainly the fact this this company is growing dramatically the a lot of times, you know, you get this ib vestor demand when you see an unprecedented top lun growth and software, of course, has been in focus these days but, yes, the last time Berkshire Hathaway invested in an ipo was ford back in 1956 so half a century ago. None of us were alive, at least those of us part of this conversation now thats a good stat, leslie. Thank you. Up next, well ask former treasury secretary jack lew why i thinks congress shouldnt worry about deficit spending and pass more coronavirus stimulus to ensure thecome onic recovery continues. Were back in just 90 seconds. When the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Aflac now tell me, what does aflac do . Aflac pays you money directly to help with unexpected medical bills. And is Aflac Health Insurance . No, but it can help with expenses Health Insurance doesnt cover thats right. Are there any questions . Coach yes . Can i get one of those cool blue blazers . You know i cant play favorites. Alright lets talk coverage. Its go time get help with expenses Health Insurance doesnt cover. Mmm hmm get to know us at aflac. Com everything we have, weve earned. The unmistakable lexus is. Get zero percent financing on the 2020 is 300. Experience amazing at your lexus dealer. Welcome back adobe numbers are out. Kate rooney has them for us. Adobes late Software Company seeing tail winds during the pandemic, record revenue lets get you that top line up in that was a beat, 3. 23 billion that was a 14 jump year over year adjusted eps, a beat by 16 cents. Q4 guidance in line with expectations adobe citing subscription revenue and record operating cash flow for that beat. The stock popping a bit here after hours. Its up about 250 year to date thank you so much for that dont miss an exclusive interview with adobe ceo tomorrow morning 11 00 a. M. On squawk on the street. Stimulus talks reaching a stalemate in washington after the republicans so call skinny bill failed to advance in the Senate Last Week our next guest with an oped urging congress to address the current economic crisis calling for more than 2 trillion in it stimulus aid jack lew joins us in a first on cnbc interview its great to you have, secretary lew. Your call was an urgent one. At the same time, we have markets, you know, going back up and not too far from record highs. We have jobs numbers that are coming in better than expected theres no urgency to pass an emergency stimulus bill right now. Why is that if youre warning the situation is so dire good to be with you, sara i would say there is no feeling of urgency, thats very different from there being urgency. Were still looking in the economy where there is an 11. 5 million few perm worki 11. 5 million fewer people working. One in ten households are short of food. There is difficulty feeding families were seeing when experts are looking at as perhaps the worst rental housing crisis in our history. And we have a mixed story between the markets and the real economy out there. And i think its a mistake to not keep our eye on the pain thats out there in terms of families and their human needs and also with a macro effect is if we take away all of the support thats have kept things so that when things partially reopen, we can partially come back we basically have seen half a recovery we cant see the other half until all of the rest of the economy is able to open up and that doesnt appear to be any time soon. So, you know, we wrote in the oped is playing with fire to wait some of the problems that youre addressing arent in it the data really. What were getting is better than expected data that is that from the unemployment benefits. Still adding to peoples Bank Accounts and the stimulus. But were expecting a gdp of 30 to 40 growth . The question is then what . If we dont get any stimulus passed in the Fourth Quarter and beyond the data tells a different story depending on the data you look at. If you come half way back from a complete shutdown economy, it looks like a lot of growth it looks like a situation that is reminiscent of the worst of the financial crisis and Great Recession period what we need is we need to see the followthrough i give a lot of good marks to washington the fed and to policymakers in congress and the administration for responding early on. The problem is they havent finished the job thats why were hearing the fed feels there say need for more fiscal action. Republican and democratic economists are saying there is a need for more fiscal response. The fact that its not being treated as an urgent moment is very different from the fact that the need is great just look at state and local governments. Theyve already laid off over a Million People that includes k12 teachers and trying to open schools at a very difficult time most states have balance budget requirements and they put off reductions hoping for some help from washington. If that help isnt coming, were going see the dams break in terms of cuts they have to make. Thats going to hurt both in terms of the services lost and in terms of the Macro Economic drag i dont think the economy is ready for that kind of a hit mr. Secretary, you also know washington incredibly well and the time in which were in and the election around the corner do you realistically expect there to be a stimulus deal before the election . You know, i certainly hope that parties will get back into a serious negotiation. Lets just remember the chronology here. The house passed a very substantial bill almost three months ago the senate waited until provisions expired and it was almost the eve of adjourning for the elections to pass a very small bill that doesnt address many of the urgent needs all right. So both parties have taken positions. Now they need to negotiation they need to work it out and, yes, i think there should be more of a sense of urgency. I think they should do it before they go home i think its a mistake to wait until after the election and, you know, i can tell you from the Great Recession that when we took away the support for the economy too quickly, we paid a price in terms of slower Economic Growth and longer lag in the recovery. Were not back where we need to be i think is the wrong time to look the other way big picture, mr. Secretary. Politics aside, assuming you were to get the stimulus deal youd like to see. You write in the oped now is not the time two worry about deficits when will it be possible to convince people that it is then the time to worry about deficits. Were seeing the same mistake we saw in the middle of the last economic down turn t the foot came off the gas too soon. After 2010, it was very difficult to continue any meaningful support for an economy that is still needed so i actually think the risk here is we stopped too soon. There is going to be a need to come back to some kind of sustainable fiscal position. I spent most of my career working to try to make sure that we can pay our bills when the economy was healthy and we would have the resources to deal with a broken economy nobody imagined an economy is hurt as ours was when we shut it down and were not back yet its too soon to act as if its all okay i think the right time is when we get unemployment back to a level precovid19. I dont think thats going to be any tomb very soime very soon. I think 2021 is going to be a duffle year. The challenge is getting back after that youll hear voices like mine saying what weve said in the kmast past is once we get out of the crisis, we have to talk about other fiscal paths now it costs us money in the long run because a weaker economy throws off less growth and revenue and has more spending so im listening to you and youre saying now is not the time to worry about the deficit and now is the time to spend comet is on rough footing and things not looking great y then is joe biden talking about raising taxes on corporations and people that make more than 400,000 at such a precarious time in the economy . Well, i have not heard him say we should be raising taxes to pay for recovery from the Current Crisis or to deal with the longer term recovery that will take more than a year to get through. What he is saying is when we invest in long term priorities, we need to go back to a world where we pay our bills i wish that congress and the Administration Sh done that in 2017 when they spent 2 trillion on a tax cut that did very little good for the fiscal hold that next generation has to pay. Thats a mistake i give him a lot of credit at a difficult time he is saying for now and for the beginning of next year is not the time. Once we get to the long term plans after that, hes put on the table ideas of how to pay for it that i think are the right ideas. With all due respect, he said he wants to raise corporate taxes on day one he is talking about raising taxes for spending and, yes, spending is a big part of your solution but with the jobs picture out there this as difficult as it is raising corporate taxes seems like a risky move. I dont believe he called to pay for taxes for dealing with this crisis. He called for raising taxes to pay for long term investments. Im not sure what the schedule in mind is, what day you enact anything we all know that programs take some time to implement and effective dates are out in the future i actually think the idea of comparing joe biden has said to raising taxes while were in a recession is silly he has no the said that. That is not what he is proposing to do. Mr. Secretary, thank you for joining us great to see you as always good tow s see you both, sta well jack lew joining us there i want to get to breaking news as well on j. P. Morgan as we knew that the lead independent director given jamie diamond is ceo and chairman lee raymond is stepping down we knew that they just appointed steve burke, the former ceo of our Parent Company nbc universe sal the new independent director and the press release chairman and ceo saying, steve is a true leader, brings to this role his strong integrity and collaborative approach and willingness to challenge we thank him for accepting this new responsibility of course, burkes background is not in banking to take on a significant role on the board for the biggest bank in the nation but hes been on the board of j. P. Morgan since 2004 and, of course, is also on the board of Berkshire Hathaway add an interesting point i would note about this and where we could be in a few years time, not imminently, is as and when jamie dimon does step down this would put burke in the front seat for potentially becoming chairman, not ceo. Thats likely to be one of the executives below dimon assuming the new ceo in, two three, four, five years time doesnt get the chairman title as well, then burke is in the primary role for that. People wond whaerd other rolerel come up for burke. No question about it. You said he is also a director at Berkshire Hathaway, right no news as far as i can see he would step down from that position of course, Berkshire Hathaway have various positions in banks selling them down. And have been outright positioned themselves through todd combs on the j. P. Morgan board. The it has always been one of the questions the level of overlap there. They dont have the positions in other banks that they hold positions in so maybe that will change going forward. As far as i can see, there is no change to steve burkes position on the Berkshire Hathaway board. I also wonder whether Berkshire Hathaway is selling down the bank stocks. Maybe that is continuing as well we dont know. This announcement from j. P. Morgan that steve burke is elevated to lead independent director up nichext, well look at if anf apples anounnouncements move te needle 56 Cents Per Share or a dividend yield. Well be right back. When the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Every curve, every innovation, every feeling. A product of mastery. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. Experience amazing the big events are back. Xfinity is your home for the return of live sports. Welcome back apple finishing slightly higher. New products and services unveiled during the event include the ipad air, series 6 apple watch and Apple Fitness plus lets bring in kara swisher and jon fortt. Have good afternoon. Jon, i come you to first what do you make of of this fitness announcement and for all of the extraordinary brand value that apple has, how much ground does it have to make up in that area to become a big player . I dont think its necessarily a big player i think the significance of fitness plus is the existence in this Apple Services bundle i think that is a threat to all kinds of competitors including spotify. If youre an apple user and use one service even if if its i cloud, you have to consider how much do i love spotify should i switch to apple music would i get more value there all my family has the apple devices. That is interesting from a competitive standpoint but then the ipad aur is tir is most interesting because of the times that were in, productivity and the fact this wraps in so many ipad pro features into a cheaper price point. Sorry, ill come to you as well what stands out for you . The fitness plus is trig. It will get all the attention because of the runup in peloton stocks many may look at buying peloton and the prus is pretice is preth right now. I think its, you know, i dont know if there will be a big player here. Its a very small little screen to work on and there are people do like their devices. But its a move into this area its an interest, an area of interest i dont think theyre going to put peloton or the others out of business by any stretch of the imagination with this. But its an interesting move i think as jon said this idea of the bundle, Scott Galloway on our podcast calls it a rundle. It is bundling the Subscription Services for which this business has gotten bigger and bigger services is a more important part of apples future as people dont recycle devices as quickly. And so it is, youre right, it hits the spotify it hits the idea of going with apple just the way you might go with amazon and youre going to see this more and more from these companies in the future. Amazon will maybe give you health care and delivery and this and stuff because theyre trusted brands that to me is a bigger theyve been slow to it. But the idea of bundling services is inevitable thats where the real money will be made. Do you think that, kara, some of the companies that have called out apple for anticompetitive bee hauf anticompetitive bee haufhaviord epic games, do you think theyll make any real traction with the regulators or the court of Public Opinion in their fight against apple . Yes, indeed i think apple has to face it apple does behave a little more like a dell when these things happen theyre not good at digging their feet in like a facebook or others might i think they have to face the issues and start to have really born important discussions with their important App Developers some its hard to get around theyre in a competitive business against spotify there is a lot of competition which brings the attention of regulators around antitrust. And so i think they have to thread this needle really carefully. Its a really important one where theyre a provider of services and at the same time theyre a platform so they definitely have attract add tension. Certain people like tim swinney and the guys from the base camp who are complaining, i think thats only going to grow and people arent going to knuckle under to these prices. Theyre going to have to do something or theyll be acted upon by the government eventually jon, not huge action by the close in apple stock today perhaps to be expected given this wasnt major Product Announcement what do we expect the next iphone announcement . We expect i expect that will come next month in october and, you know, apple hinted that there will be a delivery delay dlufrry of these versus what we normally see in a calendar year. I would still expect to see them on shelves by early november so you might miss the back end of their fiscal q4 but you get the holiday quarter. What is not clear is what supply the phones will be in. I guess to some degree well get consumer demand for Apple Technology based on what happens with the watches and ipad airs that they Just Announced today wall street is bullish about it, thats for sure. We have to leave it there. Good to have both of you up next, mike santoli is looking at the dramatic outperformance of the spin tech stocks and the big banks the anwhheth sw y gn of slowing down who is usaa made for . Its made for this guy a veteran who honorably served and its made for her shes serving now we made it for all branches and all ranks whether they served one tour or made a career of it. We also made usaa for military spouses and their kids usaa is easy to work with and can save you money on auto, home and renters insurance. Become a member today. Get an insurance quote at usaa. Com quote usaa. What youre made of were made for welcome back time for an update from sue herrera. Heres whats happening at this hour. A deputy Secretary Health and Human Service as pollingized s r accusing scientists of sa decision the New York Times reporting that he is considering taking a leave of absence political reporting that hhs secretary overrode the head of the fda to ease rules on coronavirus testing. The decision affects socalled lab develop tests for disease thats include covid19. At least seven people have died in connection with the coronavirus outbreak tied to a wedding reception in maine more than 175 confirmed cases have also been tied to event which violated state virus guidelines and a malaysian man said he fou found a video after finding his missing phone. The video includes eerie selfies, closeups of the monkeys mouth i didnt make it up, i promise it was on nbc news channel you just you never know what youre going to find i mean, its almost unbelievable but i guess the evidence is there. The evident is there and theyre incredibly smart animals. They are. Obviously thankfully. Or else we wouldnt be relatively smart. So true thanks so much, sue. The latest cnbc fed survey finds a majority of economists dont think the fed will raise Interest Rates until 2023. Up next, well ask jeffries strat ju strategist what he is expecting to hear from the fed tomorrow and how it could impact the market when the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. And tailored recommendations. Good job, michael does. Ok, lindsey now tell the class what your mommy does. My mom has super powers. Its like she can see the future. What . its like she time travels in a rocket ship. Thats cool and then she comes back saying try this or try that. She helps everyone. She helps them feel less worried. Wow mommy, so what is it that you do . Im a Financial Advisor. She is aig proudly supports all the professionals taking care of our Financial Futures. Lets go to mike who is taking a look at the surging market valuations and big banks in the opposite direction. As we were discussing, the market prefers anything that looks like a Software Based platform even if it is in financials. St so here is the etf that follows payments and other electronic type companies. Obviously up 10 year to date. Outforemaning the market you see what happens banks down 20 tachlt a look at the breakdown. Really stark in terms of market cap. You have the four large electronic payments. Collectively worth more than a trul trillion dollars in the market today. Bigger than the Investment Banking companies here, j. P. Morgan, citi, wells fargo, bank of america and Goldman Sachs that just tells you they have a much smaller economic footprint than these banks do and collective Balance Sheets. It shows what you the market prefers right now wlchlt you take that as the market playing two events in one direction or the other. This is sector by sector you can see the Software Based Platform Solutions within that industry they love that a lot more than they do traditional businesses, guys it really is such a stark wow. Up next, were going to look ahead to the fed tomorrow. Plus, take a look at fedex surging after hours on a big earnings beat. Were going to dive into that. Its up more than 9 after hours. Already after already rniunng 40 in the last three months well be right back. R mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. And tailored recommendations. vo while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager your life is just as unique. A Raymond James Financial Advisor gets to know you, your passions, and the way you help others. So you can live your life. Thats life well planned. This was the theater i came to quite often. The support weve had over the last few months has been amazing. Its not just a work environment. Everyone here is family. If you are ready to open your heart and your home, check us out. We thought for sure that we were done. And this town said not today. Welcome back the fed kicking off the two day meeting today. Just weeks after announcing the new policy shift in the first cnbc fed survey. They now expect the next rate hike to come in february 2023 compared to julys survey when respondents forecast august 2022 for the next rate hike majority of respondents saying they think fed will let inflation run above 2 for six months or more before making a move lets bring in the chief Market Strategist at jeffries david, great to see you as always enjoyed reading your last couple of research notes. What really stands out is the political pressure you think these fed members will be under or at least the thoughts will be running through their minds. Two months from an election so this is an obviously an election that is not a pretty challenging election all around. So i think the fed doesnt like to be involved in politics even though its Political Institutions but two months before election is a very difficult time to put your politics aside. And every one of these president s or governors are political appointees of some sort they come through a political process. So you just have to expect that there is going to be some thought to politics. They are to say, you know, hey, why do something really big a crazy or aggressive before the election, it doesnt make a lot of sense politically thats how i see it. So wall street doesnt expect any major move to happen tomorrow, david, in terms of policy changes what is the mystery in terms of the market focus for the statement and the tone of the News Conference . What is the question i think, sara, the point that id like to make is that its less about its more about some dissent or some angst that some folks might have on the committee that could drive potentially some political outcomes in the next potentially some political outcomes in the next two months. That was the point and its really keyed off of the article put out which talked about how the fed, in his mind, had this obligation to think about the election, think about what it could do to influence the election so what im trying to get at is, i think underlying a forecast or projection from the president or governor underlying a decision about Forward Guidance on the Balance Sheet already is going to be some political viewpoint these are pretty powerful political viewpoints two months before an election if there are any folks who lean toward that phil dudley style of thinking, we could see a little bit more of some angst or differences of opinion maybe people are thinking about at this meeting thats what i wanted to highlight. Theres been a lot of focus on the dollars apparent weakness in recent months. We had the piece called the death of the dollar. The death of the dollar has been around for many decades people have been calling for it in the 90s and the 2000s and the 2010s. The same crowd that predicted the sort of hyper inflationary events and the Balance Sheet running out of control and the fed losing credibility and everybody deciding to save and pay their bills. Its a very fun game to talk about and you can wave bitcoin flag or a china flag, the reality is the reserve currency is the u. S. Dallas dollar i think this is all very overblown. One thing i say on the Balance Sheet as driving this inflation story, the feds Balance Sheet hasnt even gone up by 2 x since they started in march. Over the course of the crisis last time, the Balance Sheet went up by 5 x, from 848 to 4. 5 trillion theyre not even kpudoubling the Balance Sheet and everybodys already freaking out about the Balance Sheet being an inflationary driver. Its the same story we heard in 2010 and 2011, economists talking abo its the same crowd thats been wrong for a decade on their demise of the dollar. Fedex and adobe both reporting moments ago and both moving hire after hours. Well explain why. The big events are back. Xfinity is your home for the return of live sports. Up next, a look at what Goldman Sachs interns think about everything, from tiktok to the economy to their pets. And fedex and adobe moving higher where are you . honey, did you hear about these new geico savings . Mom . Youll get an extra 15 on top of what geico could already save you. Can i call you back . You know your fathers learning to make sourdough. Even though he knows i prefer rye theres never been a better time to save with geico. Switch by october seventh for an extra 15 on car and motorcycle insurance. Hey, next time lets do a face call on car and motorcycle insurance. When you see or hear of others confronted with hate, there are many positive actions you can take. Volunteer, call friends, or host a Community Meeting to denounce the hate and talk about the shared values you do have. Goldman sachs out with its annual summer intern survey. Here are some of the results out of a class of more than 2700 hundred, 52 are women 64 believe biden will be elected president. 81 prefer dogs over cats. 61 plan to spend less and save more due to covid19 77 of them dont even use tiktok other notable mentions here, 31 expect the checkbook to be obsolete in ten years and 90 preferred to get their news digitally rather than tv and newspapers mike, 77 dont use tiktok i think thats because theyre too old. 77 do not admit to using tiktok. Or that number one, 71 of interns spent their internship at their homes, not in person. This is a bummer. 64 prefer video calls to phone calls stands out to me good for the zooms of this world, i guess i look back at last years survey 14 said they would love to have much more time with friends and family to have work life balance. We are out of time here on closing bell. Thanks so much for watching. Im melissa lee. This is fast money. Guy adami, tim seymour, steve grasso and victoria fernandez. Fedex shares on the move well bring you the big headlines. Plus nikola shares tumbling on the after hours on reports the Justice Department is now looking into claims the Company Misled Investors later steve grasso is taking the mound to pitch his next best idea all that, but firsth