Transcripts For CNBC Closing Bell 20240712

Unit into a separate Public Company. More on that in just a bit ibm up and all the markets up with 59 minutes left in the session. All the big stories of the day coming up. Morgan stanleys Ceo James Gorman on the back of his companys 7 billion deal today to buy Investment Firm eaton vance. Carnival giving a Business Update as the crews and travel industries continues to deal with uncertainties amid the pandemic ceo Arnold Darnell will be our guest next hour. The ceo of Amc Entertainment will join us to discuss the rollback of more blockbuster movie releases why he is staying open when some of his competitors are deciding to close lets look at the stories we are watching in the final hour of trade. Joining us to talk about regenerons push for emergency authorization for its covid19 treatment is alettia young bob, start us off on the market. There may be no stimulus, but the market is actsing like there is going to be one they have levitated themselves into believing something is going to hatch you can see this in the trading patterns today. Look industrials are breaking out the xli at the highest level since february new highs on fed ex. New highs on ch robinson, deer, caterpillar, new high not multimonth high, new highs these are big global industrials. Same with materials. Cyclical sectors breaking out. Vulcan, marietta Freeport Mcmoran banks are even breaking out wells fargo has had a great week u. S. Bank corp. Is up 10 in the last week or so. A lot of the big regionals are up close to 10 on the week. Is there stimulus . Piecemeal stimulus airline stimulus look at delta 33 mid morning on hopes we are going to get a stand alone airline agreement. Then of course everybody throws cold water on that goes immediately down to 32. Down 3. 5 . You see it is sort of in the middle even with the news, folks, we dont have any deal here, the market continues to believe they are just kidding, there has got to be something happening. The good news is, hopes for a stimulus very much alive moving the cyclical stocks along. The bad news is none of these sectors have had any rallies throughout the year that are convincing because the market doesnt necessarily believe it is going the last. Of course there is a lot of awfully good news priced into the market around the idea that stimulus is coming tough for the markets. S p 500 up up. 6 . Lets get to washington cycle the latest on potential stimulus keels as a stand alone deal for airlines looks less likely than it did yesterday nancy pelosi said it point blank, there will be no aid for the airlines unless a broader deis in place. As she put it, there will be no stand alone bill for that industry, unless there is a bigger bill for everybody. This is central to the negotiations its no use saying we are going to give the administration more money to do whatever they want with it unless we get to the heart of the matter and crush this now, pelosi said that the aid to the airlines and the broader deal dont have to happen at the same time. But that she didnt want to move forward unless there was a guarantee that more help would be coming for state and local governments, schools, workplace safety, and unemployment as for the things that plump said he wanted to do on their open like extending ppp or direct checks, plessy was also clear on that. Not going to happen. Thank you. Regeneron is higher today after requesting emergency use authorization from the fda for its covid19 Monoclonal Antibody treatment. President trump used that treatment after being diagnosed with covid19 last week. The stock has been on i fire rallying 7 since monday, up 60 on the year. Lets bring in alooetia young from cantor fitzgerald. She upgraded the stock this week a good call, potentially a little late. My question is, are investors too optimistic there is going to be demand for this treatment especially with President Trump pushing it now as a test case but also talking about how it is going to be given for free or at very little cost to consumers. What does that mean for the company . I mean, we upgrade based on the platform that regeneron has. They have a robust antibody Platform Technology that alous them to kind of get from a to z very quickly as you saw with covid19 for example what do i think that means for regeneron in general most likely there probably will be some cost to the drug certainly, there will be high demand they have been working to ramp up manufacturing we saw data release last week on the drug i certainly believe the effects they are seeing are real i think it makes reasonable sense for them to move forward with emergency authorization use in light of where we are at with covid19 right now. Are they going to be able to produce enough of it for how much its needed, especially if they start to get data showing that it works prophylactically, as an actual way to prevent people at risk from getting sick with covid19 . Is there going to be enough of it it is a tall order. They have combined between the best manufacturing bodies in the world between the two of them. It is going to take time everything is taking time with this disease you are supplying for hundreds of millions of americans versus tens of thousands or a million i think with time they can get there. I think they are scaling as fast as they can. In the beginning the people are potentially the most sick will get the treatment. Over time people may be able to get it on a preventive basis i think the vaccines have the same problems as well. How much does this cost per dose at the moment what is it reallyistic to get down to in the shortterm . If you use gilead as a proxy with remdesivir, the commercial price is about 5,000 and the government price is 5,000 a course i think that could be the cost for an antiboend cocktail as well. How do you view the u. S. Government in terms of being in charge here of the supply . Operation warp speed, they put money in and then they sort of take a lot of the initial supply how does that get distributed . I mean i think it is it is kind of hard to tell. Thats kind the whole global issue that we have but i think probably my guess is the United States is taking a greater share of any regeneron covid19 cocktail at the moment. But it is still a question in my mind. What portion of the price target is related to Covid Treatment . It is 10 of my valuation it is a possible near term i have been driver for 2021 earnings if they are able to get it approved. But regeneron is much greater than this covid19 story they have a drug for blindless they have a drug for heart disease. They have a drug for diseases 69 skin these are multimillion dollar drugs separately this is like the cherry on top when you think about covid19 and a testament to the robustness of their platform that they are able to bring something this quickly to realization. I think it is not a big driver for me certainly it is a cherry on top. And it will help drive earnings as well. Thank you for joining us. Thank. After the break, morgan stan lease Ceo James Gorman joins us to discuss his companys 7 billion purchase of eaton vance and how it fits into his strategy at the bank you are watching closing bell on cnbc. Before we talk about taxsmart investing, whats new . Audreys expecting. Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. Welcome back weve got news on the deficit. Lets get to elon moi in washington with the details. The Congressional Budget Office now reporting that the deficit in fiscal year 2020 was 3. 1 trillion. That amounts to more than 15 of gdp. And it is the largest share since 1945 the deficit this year was also more than triple the deficit for fiscal 2019. And thats because revenues came in 1 lower, and spending was 47 higher in fiscal 2020. Sara, the budget deficit for fiscal 2020 now stands at over 3 trillion. Back offer to you. Elon, thanks for that. Morgan stanley is to acare eaton vance for 7 billion Morgan Stanleys Ceo James Gorman joins us now for a first on cnbc interview. James, very good afternoon to you thank you for joining us. Great to be with you. Thanks for having us. Another Asset Management acquisition follows sole yum and e trade. Are we to think of you more of an asset manager than an Investment Bank . Not at all. Our foundings were in Investment Banking in 1985 the Investment Banking is doing incredibly well across banking skegts fixed income that has given us the base to right size the other parts of the business we did that with smith barney, then e trade and sole yum and Wealth Management. Now with mesa west and with this transaction eaton vance and investment management. It is exciting to see all the pieces come together. Is this for scale primarily in the Asset Management business no. Fixed Income Management is scale driven but they have an incredible custom product in parametrics, which has been an Enormous Growth vehicle very good traditional Asset Management large end sustainability funds with the calvert funds it is an unusual deal it is and highly complimentary and it is something we have looked at for several years. The opportunity knocked and we took advantage of it. In terms of the timing we are looking at the share provides, eaton vance up a huge amount you are paying a big price for it and you are paying 50 in cash is this the right time to be deploying a lot of cash when there is so much uncertainty out there . We have made a lot of cash. I mean the first half this year i think we made nearly 5 billion. You know, our firm is required to told 13. 2 in our capital ratio something called the ct1 ratio. We were over 16. 5 in the first half of the year we are in the position that our ratios improved because we are less risky as an institution yet our accreted earnings have grown. Since we stopped the bye back early this year we are building a mountain of cash frankly, too. And this just made sense this was never an issue. If you had been allowed to continue buybacks and or increase your dividend, would you have done this deal still . Absolutely. I mean if you look at the change in our ct1 ratio just from our earnings and from what e trade to us, it went up about 100 basis points this deal is going to cost us 100 basis points we would have been in exactly the same position and still would have been doing buybacks we are holding excess capital right now. What do you see for the entire Asset Management business after this deal. And other mergers. With the shift to low fees and the entire new landscape, what is that going to look like sara, there are so many different parts of Asset Management there is, you know, the true index business, which has grown enormously very low cost, low revenue business, but scale business fixed income, which is really scaled the alternative spaces, private equity or infrastructure funds or mezzanine finance, whole range of areas, real estate, there are many small shops operating in those but the traditional Asset Management you are going the see more transactions. This is one i said this before, maybe on your show as i look across all of financial services, one of the most atomized or distributed Public Companies in the Asset Management space we saw a huge consolidation in Wealth Management over the last 20 years i think you are going to see it across some of the Asset Managers int doesnt surprise me. My other question about the deal, what it means for your Wealth Management, the thousands of Wealth Advisers that you have on board and how it helps them, if they are able to be able to use some of these products and sell some of these products. What benefits are in there for them well, we are already i think we are the largest distributor of eaton vances products we know this company very, very well phenomenal company led by tom faust and a Management Team really respect them. Been around for 94 years base 234d boston really quality business. That culture they fit our culture really well thats a terrific thing. In terms of the fit, yeah, the fit is there we know their products but there is more we can do. Particularly in the sustainability space with parametrics and fixed income frank lee, sara we can take their products internationally because they dont have distribution and we can put our products through their wholesaling network. So it is a rare opportunity where you can have a real win win. James, i wanted to ask you about the u. S. Economic outlook. What are you seeing at the moment on the macro front . Does it matter if the next round of fiscal stimulus is pushed back until after the election . Or is it needed imminently listen, it is not going to be a market crisis if it doesnt happen imminently. This is something thats evolving over months would my gut be that we definitely need more fiscal stimulus 100 once you make a decision, sooner to act, better always if i could get it done now, that would be the position i would be in is it a catastrophe if it is after the election no ities going to take the economy longer to recover . Yes. The market seems to be suggesting a blue wave at the election would be ultimately good for markets a, a certainty and a clear result and b, inflation, and banks. Is the market overlooking the risk on the regulatory front if we get a blue wave what is driving the market are the big tech stocks. Lets look at those. Telltive to the Banking Industry the tech sector has exploced within the macro view of the markets you have to look at what is driving industry segments i dont know if we are going to have a blue wave or not. Historically i think markets have done best when there has been a divided House Congress president from different parties. I am not sure how it is going play out listen, the market is fundamentally bullish on the long term growth of, he ma thats basically what the market is saying. In the short run, is it too bullish . It could well be it doesnt add up with the kind of credit issues we are going to be facing in the next year or so listen n the short market i have often said could be really stupid. In the medium term you can have a fundamental disagreement about some of the major drivers like global trade if the long run if you think the market is stupid it is because you are stupid it will play out the u. S. Economy you shouldnt writeoff the u. S. Economy. It is going to come back it is going to take time and need help from the fed, which it has had, and on the fiscal side. I am interested in your markets comments james because you joined us during the depths of the pandemic. It was just when the market started to bottom, really, and you said, weve seen the worst of it. When a lot of people were coming on and saying we are going to retest the lows, this is still a disaster it was good call the market is up 57 from those march lows i am in the wrong job, sara, i should be trading. Well, maybe what do you think now . You seemed to indicate you think it is a little stretched here given some of the shortterm uncertainties and issues out there. Well, what do we know we know we have a lot of uncertainty. We have a pretty fractious president ial election. We have an economy thats healing. We dont yet have a vaccine for covid. We have global trade issues particularly between the u. S. And china. We have much higher unemployment than we had a year ago and we have had a lot of emerging consumer credit, Small Business credit, and potential state and city credit issues over the next year or two. Thats what we know. Thats a lot fighting that is low interest rates. Good fighting that is we are recovering from the bottoms. Good and fighting that, is the governments need to step in, which they are doing all over the world including i just saw the Australian Government did something last night or the night before thats good. But i would not be shy in providing that support if i were the government this is not the time to intellectualize this this economy needs to get back on track and needs stimulus to help it. How has it been bringing traders and workers back into the office have you had any cases, outbreaks . Where do you think we will be on the head count in big cities and offices in five years time. Im in the office i am here two days a week because i want to signal that it is okay to be Work Health Care workers and security folks have done ann unbelievable job in our buildings here. We still only have about 12 back in new york, a little more in london. Different parts of the world, more it is going to take time i think we could safely bring in about 25 . I have encouraged all the managing directors to come in at least a day or two a week to rip the bandaid off, to experience what its like you know what . Its the pretty safe inside these buildings. We get covid testing when you can. People are very respectful of social distancing. Listen, i am a fan of whenever you are dealing with huge uncertainty, you take baby steps in the right direction you dont try to make a bold call i dont we couldnt take everybody back in this building we cant fit them in the elevator why create that problem for folks . Overall the president quoted in the last couple of days saying dont let covid dominate your life. I know you have had it and recovered from it. Do you agree with the president s sentiment over the last couple of ays listen, it is dominating some peoples lives if you are sitting on a ventilator in the hospital, it is the only thing you and your family are thinking about. If you have got severe immune issues or comorbidity type issues then it is probably the only thing you are thinking about. If you are healthy and active and certainly young and moving around and you are being respectful with social distancing, you wear a mask when you are around other people, you have got move forward with your life i dont think theres a not to engage with what the president thinks about it, but i dont think there is a blanket answer one way or the other. I think it is very customized to your personal situation. Obviously, i had it. I recovered completely from it i was never in danger of not recovering from it i am in good health so i move forward. You are also respectful of it and respectful that you dont pass it along to somebody else who is more vulnerable it is front of mind. James gorman of Morgan Stanley. The chairman and ceo sara weve got 36 minutes left before the close we have got a rally. The dow is up 88 points. We have off the highs of the session. But its pretty broad. In the s p 500, every sector Higher Energy is having a great week of it is up 3. 6 . Best performing sector financials also are doing better this week. Still ahead, carnivals ceo will join us closing bell well be right back before we talk about taxsmart investing, whats new . Audreys expecting. Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. Thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. While helping with occasional joint stiffness. Osteo biflex. 33 minutes left to go. Heres a check on the markets for you. Dow is up 101. S p is up. 75 share of coty, the cosmetic Company Expanding the kylie line in the uk, france, germany and australia. The stock down 62 over the last 12 months. Roku is gaining steam. Needham raising its price target on that stock. The streaming Video Service taking its shares to 255 per share from 190 on the analyst rating the firm noting rapid growth in rokus installed base as well as an increase in the number of streamingonly homes roku is up 5. 5 . Our parent companys streaming platform peacock is available on roku. Important, because a lot of the brie mere league is on that. Ibm up today as the Company Announces plans to spin off parts of its business. As we head to break, heres a check on bonds yields slipping a little bit today. Still in the. 7 panhandle. 767 we will be back in a couple of minutes. Im searching for info on options trading, and look, it feels like im just wasting time. Thats why Td Ameritrade designed a firstofitskind, personalized education center. Oh. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. So its like my streaming service. Well except now youre binge learning. See how you can become a smarter investor with a personalized education from Td Ameritrade. Visit tdameritrade. Com learn welcome back time for our daily coronavirus tracker. 169 new York Public Schools are closed for two weeks in areas with clusters of covid19. The new york city mayor says while there are 108 schools initially closed on tuesday, new restrictions call for an additional 61 to be closed alex azar projects that the United States will have enough vaccines for everyone who wants for by march or april of next year italy recording another increase in number of new coronavirus cases, the largest daily rise since april 11th according to the countrys health ministry, at least 4. 458 new cases were reported today. Time now for a cnbc news update with sue herera. Heres whats happening at this hour. Michigans governor says the men who allegedly plotted to kidnap here are, quote, sick and depraved she is also thanking Law Enforcement officials. She says michigans strength lies in its unity. Hatred, bigotry and violence have no place in the great state of michigan. If you break the law or conspire to commit heinous acts of my lens against anyone, we will find you we will hold you accountable and we will bring you to justice. Elliot brody, a prominent fundraiser for President Trump and the Republican Party has been charged in a covert lobbying effort aimed at getting the Trump Administration to drop an investigation into the multibillion dollar looting of a malaysian investment fund. In italy, an Elementary School is keeping classes socially distanced by holding them on the beach. Take a look at that. Local businesses have pitched in so students can have safe lessons with absolutely gorgeous views. It is learning al fresco that is the news update guys i will send it back to you. That does look appealing. I must say sue, thank you. Sure. Sue herera. Under 30 minutes to go before the bell. A quick check on where we stand in the market. Dow is up. 4 the s p 500 up. 75 . The russel and small caps outpacing the others up 1. 1 thanks in part to strength in cyclical groups, financials, industrials, energy, those are the winners today. After the break, bloc buster movies continue to get delayed as the industry deals with the ncnsbof fresh content and coer aut the coronavirus the ceo of amc weighs in next. Is the salmon wildcaught . She only eats wild caught. [cash register beeps] uh, i need a price check on honey. Dont get mad. Get e trade and get more than just trading. Investing. Banking. Guidance. Get e trade and get more than just trading. But a resilient business you cacan be ready for it. Re. A Digital Foundation from vmware helps you redefine whats possible. Now. From the hospital shifting to remote patient care in just 48 hours. To the university moving hundreds of apps quickly to the cloud. Or the City Government Going Digital to keep Critical Services running. You are creating the future on the fly. And we are helping you do it. Vmware. Realize whats possible. Hmms and ahhs heard incall. Hmmand sweetie can coloryou just be. Gentle with the pens. Okey. Okey. I know. Gentle. Gentle new projects means new project managers. You need to hire. I need indeed. Indeed you do. The moment you sponsor a job on indeed you get a short list of quality candidates from our resume database so you can start hiring right away. Claim your seventy five dollar credit, when you post your first job at indeed. Com home. Wreaking havoc on the movie industry with major theater stocks down at least 40 this year regals parent is temporarily closing u. S. And uk locations. The move comes as highly anticipated blockbuster films like do you know and james bonds no time to die have been postponed. But Amc Entertainment is pushing ahead with its reopening plan announcing today it excepts to have more than 520 of its 600 locations reopened by october 16th joining us now, adam aaron, Amc Entertainment president and ceo. Welcome back to the show good to have you. Sara, good to be with you and your viewers, of course. So the first question is why you are going ahead with reopening when one of your biggest competitors is actually closing all location this is the u. S. And the uk. Well, the irony of all this is that a big story that you all covered in depth amc signed a groundbreaking agreement with Universal Studios a couple of months back, in july, that we are going to allow home viewing not allow but encourage home viewing of movies 17 days after they hit theaters so that movies can be shown theatrically and at home thats an agreement that amc has struck there are five universal movies coming out between now and Christmas Day that amc will be in a position to show as a result of that agreement we think it is the right thing to do to stay open i should tell you we have had millions of people, millions of people come to our theaters in the United States and ernl in europe since we reopened earlier this summer. My question was sort of getting at the safety question of it, adam. What has it been like having millions of people coming back are you doing Contact Tracing . Have you found any outbreaks related to people at theaters . Well, we have got the highest possible commitment to safety. This is something that we identified early we knew that we would never be able to reopen our theaters if we couldnt operate our theaters safely and convince the public accordingly. We teamed up early with clorox, the number one u. S. Cleaning brand, and also faculty from harvards school of Public Health we have been at the forefront of the science. All the things that you would expect, social distancing, manned dare mask wearing, hand sanitizers everywhere. Disinfecting wipes everywhere. We have invested millions of dollars in hightech solutions, too. Electrostatic sprayers hepa vacuums we have increased air filtration in our hvac systems, quadrupled with mers13 filters what we have seen so far is there have been no reported incidents at any amc theater the movie industry generally with cinema safe is also committed to safety. Does it anow you that some of the studios are delaying these big film releases. Powerful word i would rather the big blockbuster movies be out in and out rather than be delayed we have a war with grandpa w robert de niro, opens tomorrow croods is coming wonder woman 1984 is coming. But we are in the new car business, and there havent been a lot of new cars on the showroom floor we do need blockbuster movies. On that point, what is so important with the announcement this morning that Washington State is going to reopen next week, amc is now open in the 43 of the 45 u. S. States that we serve. The biggest state left to go is new york i am specifically calling on Governor Cuomo who i think has done just a fabulous job in containing the virus, changing a circumstance where it was in march when things were dwight bleak and dangerous in new york. He has brilliantly gotten this virus under control. Our theaters are safe. With social distancing, with seat blocking, with limited capacity, its time to ep up movie theaters across new york but across new york, the case rates are rising maybe i shouldnt say across new york in some specific places case rates are rising and they have had to close schools are you worried about a broader second wave before we can get to a vaccine or mass treatments where movies theaters would be first inline to shut down again if communities had to do something about it heres what we have seen california did, which i think is the right model. California has given a statewide clearance to open provided the local conditions are right in each part of the state its now a county by county decision in california and we have opened up in some counties because we are cautious and because amc is very concerned about the safety of our guests we have not opened up in other parts of california. I think thats the right recipe for new york. Adam, have sales of things like drinks and popcorn relative to number of people attending a movie fallen compared to the past because masks are being worn actually, what is kind of incredible is that our food and beverage sales per patron are dead on even with what i would call normal times. I guess there is something about a cocacola and our wonderful popcorn thats slathered in putter and salt very healthy for you, actually. There something that has appeal. The issue for us is not can woe sell f and b once somebody gets to the theater the question is how many people are getting to the theaters. We need new movies to open up. But as i said, millions of people have done it already ask. They have been very happy with what they have seen. Finally, adam, is there anything for you in a potential next stimulus package from washington and do you feel like the airlines are getting preferential treatment over Industries Like movies or other hospitality Industries Like restaurants in terms of bipartisan support for a relief package when so many industries, including your own, are facing big problems i wish there was support for us in the government legislation. Weve essentially gotten no relief through the c. A. R. E. S. Act even though we have spoken to countless u. S. Senators and congressmen. And even the secretary of the treasury, who understands that our industry is very hard hit. We employ as an industry about 150,000 people in the United States ours is not a frivolous business twheer the business of amusing and entertaining people. If there was ever a time when people need to be amused and entertained to escape from the stresses of daily life, its right now, when corona is hitting this country very hard im not optimistic we will see Government Support and thats the reason why amc has embarked on self help we raised over 800 million in cash since april i have said, you know, we are a resilient, resourceful, creative bunch. I have ever confidence we will do whenever we need to do to keep amc vibrant and strong. Ours is a proud 100yearold company that has been delighting moviegoers all across this nation for literally more than a century. We have got a Bright Future ahead. But we may just have to raise the money we need on our own without relying on washington to bail us out. Adam, if you happen to slip a copy of the james bond movie over to me in the next week or so, i wont mention it it would be very nice, indeed. Adam, thank you. Other pleasure. Thank you. After the break, ibm soars dominos falls and the ceo of American Airlines weighs in on stimulus those stories and nyma more when we take you inside the market zone, next one. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. Natures bounty is here for you. Ready to take your immune support to the next level . The number one herbal supplement brand has everything you need to help keep your immune system strong. Immune support comes naturally with natures bounty. Hey, son no dad, its a video call. You got to move the phone in front of you like. Like its a mirror, dad. You know . Alright, okay. Hows that . Is that how you hold a mirror . [ding] power e trade gives you an awardwinning mobile app with powerful, easytouse tools and interactive charts to give you an edge, 24 7 support when you need it the most plus 0 commissions for online u. S. Listed stocks. Dont get mad. Get e trade and start trading today. Announcer the market zone is sponsored by e trade trade Commission Free today with no account minimums. 11 minutes left in the trading day. We are now in the closing bell market scone commercial free coverage of all the action going into the close. Here to break down the crucial moments of the trading day, stephly link is back and russ koss trij also joins us we will kick it off with the major market russ, stimulus zpauks news and noise continue to dominate the conversation do you think it matters to the market whether it comes pre or postelection. I think the market is more comfortable with the notion it may compostelection one, we have seen a significant uptick in Vice President bidens poll numbers the chance of not only a Democratic Victory in the white house, has gone up who that means for the market is while it may have to wait a couple of months the eventually stimulus might be much larger than anything that was contemplated a month or two ago. Because of all of that and because of the lower probability of a contested election i think the market is taking this as a prove. Steph, do you agree does that mean you embrace cyclical stocks or not i do agree. And you know, i have been a big fan of cyclicals i said barbell as well i want to own some secular tech and definitely wont to reopen techs that have gotten pummelled. I am 400 basis points overweight in materials and 300 basis points overweight in discretionary as well i do believe it is more than just stimulus hopes. I think it is also the economy is showing pockets of strength those are the areas that are actually the majority the u. S. Gdp. If you look at housing auto manufacturing, thats three times the size of travel and leisure and hospitality. While i am sympathetic to the travel and leisure sector thats the reason why we are going get the fiscal stimulus. Thats the reason why it doesnt matter when you get it because you are going get it as long as you have 13 Million People still unemployed that i get but pockets of the economy are doing well 1 million new home sales is huge 16 million north america star in auto auto is actually on the way back, for a sure and manufacture has been a absolute v. I look at manufacturing and the pmi composite. Correlated to corporate profits, corporate profits is 80 correlated to earnings add it all up and it looks like economy better, profits better, i think thats your catalyst in next couple of week as we get earning. Thinggoering to to be better than expected. Ibm shares surging as it announces plans to spin off its i. T. Infrastructure business and focus on the cloud ibm splitting into two. Its lower margin contracting i. T. Services business will form the new units which will list next year. Ibm will be the faster growing higher margin cloud and next generation cloud and Technology Business the idea being shed the legacy parts and shift to hybrid cloud. Ibm made a big bet on this sector investors cheering the news but there is hard work ahead ibm was late to cloud, remember, and still trails the cloud giants Amazon Microsoft and google by a wide margin. Despite its previous turnaround plans sales have fallen 25 in the past eight years. Thank you. Steph, is this the big moment for ibm i think its a part of a big moment i think it is going to take a long time to see this thing play out. Remember rack space did the same thing in 2016 and they are just starting to see the benefits now. So it is going to take a while but i will say that it is positive because they are absolutely going after the growth part of the market ai software is going to go from 10. 6 to 126 billion in 2025. They are right to focus on this end market and other parts of the cloud and hybrid ai. I would say they have to right size they have to delever they have to streamline. They have to execute to the extent they can start using the azures and awss of the world and sell those products to their clients there is synergy there, for you are sure i think it is going to take some time enterprise demand is still very weak we still have to watch out for that in the near term. They also committed to the 5 dividend yield in the near term aswell. To restaurants. Kate rogers has some details. We will start it out with mcdonalds the fastfood giant out with better than expected comps this morning. Q 3 increasing 4. 6 . Analysts projected an increase of 1. 9 . The bump came from average check growth from larger group orders and also strength at dinner as consumers flk to delivery and drive lou. Meanwhile dominos saying consumers are spending more as well back over to you. A big decline for dominos, down 7 . Kate rogers, thank you russ, what part of consumer stocks do you like right now are there any discretionary names like restaurants that are worth buying as you bet on this more stimulus and more reopening . A couple things iee with stephanie the consumer is in good shape. Thats not because of the stimulus the consumer came into this in a fairly in a fairly good position Household Debt was down to a 20year low. Debt servicing costs were a record low wealth was at a record high. While there is still millions of Unemployed People if you look at the aggregate of the u. S. Household sectors Balance Sheet it came into this in solid shape. We do like parts of the Consumer Discretionary sector it is one of our largest overweights in addition to some of the restaurants you named the other place i would look to is housing it is not just low rates it is also people can spend but their redirecting their spending towards things like nesting, whether it is Home Improvement retailers, the Home Builders these are indirect beneficiaries of the fact that people have money to spend they cant trachlt they are less likely to travel they are spend morging more and that at home American Airlines has been weighing in on the stimulus. Despite the fact that the airline aid talks in washington have stalled Speaker Pelosi said there is going to be no stand alone airline aid bill she is in favor of putting it into a larger stimulus package americans ceo remains frustrated. It is a big problem no doubt about it. We cant continue to wait. If forced to, of course, we will, indeed, discontinue service to a lot of markets. And we will be much slower to rebound and help the country rebound from this pandemic. As you look at shares of americans, remember, it furloughed 19,000 employees last week and they cant bring them back unless they get airline aid from the federal government again, guys, every agrees, there is bipartisan support for it there is just not a vehicle for it getting advanced on capitol hill. Steph, are you surprised that the market resilience today, the broad market resilience today in light a day of negative stimulus headlines in the light of the way we had them a couple of days ago and it rocked the market. I dont think so. It could half. It could very well happen sooner than later because i cant imagine that the house can Congress Want more furloughs you have got low interest rates. Fed fund futures are not increasing rates until 2023. You have a chair who again was dovish this week again that alone is very favorable you get fiscal done and we are off to the races in the markets. Earnings is going to be part of the catalyst in the next weeks something to watch. Just over one minute left of the session. Up. 75 on the s p. 5 on the dow up 156 the nasdaq kbocomposite up. Oil is up 11. 3 so far this week we have got gold prices up a little bit today, but hovering around just below that 1900 level for a while now, not managing to break up again for the last couple of weeks the dollar is flat as we speak ask. The ten year yield slipping fractional low closer to the. 8 handle. At the bell, up. 8 on the s p 500. Nearly half a percent on the dow, and just over half a percent on the nasdaq composite. Pretty strong finish to another rally day on wreath. Welcome back im sara eisen with wilfred frost. Look at how we finished. The dow close up 122 points. Ibm the biggest winner after news it is restructuring american express, dow chemical, Goldman Sachs as well. Energy had a nearly 4 jump as far as Energy Stocks it has been a great week for the Energy Sector so far, up almost 7 still the loser on the year. The nasdaq closed up half a Information Technology and Consumer Discretionary were at the bottom of the s p. Everything else was higher the russell 2000 jumping 1 , faster than the rest of the major averages that has been the story all week up almost 6 for the week, best week since august 7th. Same thing for the dow, best week since august 7th ahead of a friday coming up, we will ask Arnold Donald when cruisers will be ready to return to the seas with so much concern out there about the coronavirus. First lets talk about the markets. Stephanie like and ross cost ridge are with us. We usually turn to mike santoli for a recap but today we had a rally day, even with no new knaus on progress on the stimulus what stood out to you . Yeah, no. Thanks for the honor of coming to me first. Im so proud i will say that i think that everybody look, it is really stimulus i think people think we are going to make progress on that front, one way or the other. We dont know the timing but we have to get it done. And to your point, initial claims i know you always push back at me, when i say the economy is doing well you always say initial claims are high. They are they really are. You cant have that many people out of a job even though it is better than the 8 that was forecasted it is still really high. It is going to get done. It is a matter of timing i think in the meantime there are enough pieces of the economy that are doing well enough and you definitely have this rotation out of growth into value because you know what . Those sectors are really unloved and unowned. So it is really not hard to put some allocation into these areas in the economy housing, auto, manufacturing. The one thing i want to point out really quick is that i am really encouraged by m and n we have had 256 billion worth in july and august nine deals that were over 5 billion. The most in history this past week, Morgan Stanley we had an amazing interview an hou ago with the ceo you had bristolmyers. This is a sign that they feel a little bit better. There is more visibility, they have more confidence they say what they want to say but they do what they do and thats interesting. Eugene, is stimulus needed in the next three weeks, or as long as it arrives before the end of 2020 is that all right. I think as long as it arrives before the end of the year thats fine. The market is trading like it doesnt matter certainly the people who are suffering would like to have it sooner rather than later but the economy is focusing on other thing. As long as we get it sometime right up until the end of the year i think we will be fine for every better headline, russ, there seems to be some questions. Today, touchdown warner media plans thousands of job cuts and a restructuring. They are looking at saving 20 in their second round of job cuts er inially every day a big company is laying off workers. How much better can the economy be getting the economy is Getting Better think about where the labor market is today versus three or four months ago. It is recovered faster than nip thought. But if you look at jobless claims they are not falling the same pace they were back in the summer we are going the see more layoffs. Lets be clear, the labor market will heal slowly companies will use that as an opportunity to restructure the Unemployment Rate is not going to be back to where it was in february probably for another number of years. Parts of the economy are doing quite well housing. Autos. We are having a rebound in manufacturing that is much stronger than people expected. The market is sniffing this out. If you look at what outperformed the most over the last three months two of the best performing sectors, industrials, materials up in the high to mid teens they are outperforming technology which is also up 10 . What you are seeing is the belief there are names out there that are cheap, Quality Companies outside of technology. And many of the Cyclical Companies are going to benefit if we continue to get this recovery, even if it is an uneven recovery. Speaking of the unevenness, wilfred, we mentioned the jobless claims at the top. I think it bears repeating and putting into context here. Layoffsr continuing to pile up at alarming numbers. This morning we got a report showing 840,000 americans filed for firsttime claims for Unemployment Benefits. It was worse than expected definitely improving, as you can see, from the peak that was during the height of the lockdowns when more than 6 million americans per week for filing for Unemployment Benefits but, still, if you see the line at the line there, it is historically very high if you take the last recession, during the height of the financial crisis the worst it got was 495,000 americans filing unemployment claims per week we have surpassed that number for 25 weeks in a row. There are 25. 5 million workers claiming some form of Unemployment Benefits wilfred. We are kind of numb to these numbers because it has been so consistent but it is stubbornly high i think it is also why the market continues to shrug off the numbers really from the beginning. It shows there is still a lot of pain out there for american workers. Absolutely. It talks to the k shape of the recovery, if thats one angle we want to go down. It also raises the question as to whether in the final quarter of this year we will see, whether it is the gdp or the nonfund pay rolls start to change direction as opposed to slow its pafs recovery euge eugene, i guess that isnt a fear that any of you on the panel seem to have at the moment no. Im actually quite afraid of that my comment was related to what investors are focused on and i think that, basically, the economy has sown itself to be somewhat weak. We just had the gdp ujt about deficit number coming in at 3 trillion, which is the worst number since world war ii, basically. I think if you are just looking at fundamentals this is a tough market to invest in. However, investors have looked at all the liquidity out there, they have accepted the fact we are probably going to get fiscal stimulus and are investing on that basis f. We dont get the fiscal stimulus, i think we are in for a rude awakening. Russ, i wanted to talk about the Energy Stocks. Up 4 today. Up almost 7 for the week. A Group Everybody hates, no one wants to touch down more than 40 for the year but making a nice move here. Is it enticing actually, this is not the part of the cyclical space we are focused on we are much more focused on more of the sustainable plays in rails, defense, chemicals, housing. Energy, there are idiosyncratic things going on. A strike in norway is impacting supply weather again in the gulf. We have seen this rebound in oil again, i do think that generally the economy is healing. As we all know, there are structural head winds facing the Energy Sector. I think there are better opportunities in the industrials and materials in the consumer space if you want to play the cyclical round. News on nxp semi. Josh we have news from nxp. They are updating their performance expectations for the Third Quarter. They say they are pleased to announce what they call a significant improvement in their outlook for the Third Quarter. They say demands that improved across all of their end market but they specifically call out automotive and mobile and market they say the environment has improved at a faster than anticipated pace they will reviews the result officially on monday, october 26th the stock moving higher right now. Interest that one, steph, including autos as josh just mentioned as part of the reason for the surprise improvement in outlook . I happen to own this game i out about it a month ago on auto and mobile, on this team. 60 of total revenues are those components 40 is auto. A wonderful Management Team. As you see the recovery these are the kinds of names you want the own. You want to own this one, you want to own aptiv, it is auto parts. You want to have exposure in this end market. Everyone is ignoring it at this point. I dont want to own the oes, but this is the third positive preannouncement today. Ppg, mcdonalds, and nxp earnings are going to be good. I am excited about i next week is a ton of companies. I feel really good i think the expectations are pretty muted even though we have had a nice rally. Steph, i know you are a holder of Morgan Stanley do you approve of that deal . It was expensive. Expensive for sure. And it comes after e trade which was 11 billion. So people are nervous. But gorman can do it if anybody can. Sizing and scaling of this company is going to be tremendous eaton vance is one of the view Wealth Managers that are seeing inflows because the performance is so good it is a tremendous asset and it doesnt change any of the capital ratios like this one. Down on the year changing their stripes i like this one a lot. Steph, russ, and eugene, thank you all for joining us. Thank you. Thank you. Carnival cruises losing nearly 3 billion in the Third Quarter as the coronavirus forced the cancellation of most u. S. Cruises through the end of the year up next, the ceo will join us and discuss how long it will take for the company to return to profitability andheer wth consumer demand will ever reach prepandemic levels again we are back in 90 seconds. Dont go anywhere. Share of Carnival Corporation closing lower today despite reporting a narrower than expected quarterly loss carnival also reported it burned 770 million per month during the Third Quarter as cruise ships have been barred from sailing since mid march by the cdc. Joining us is the ceo of carnival, Arnold Donald. Thank you for joining us again. Hi, will, hi sara, how are you guys we are good, thank you. All the better for seeing u arnold i wanted to start, if i may we will come to the u. S. In a moment and your confidence that you will be sailing by tend of the year how has it gone in europe any know you have been alloyd to sail there and parts of asia how has that process gone . Have you had any outbreaks how have you dealt with them if they have arrived . We have been very successful. We had two of our acosta ships and now we have a third that will be cruising there soon. And then our german line will soon be sailing. We have extensive protocols and operating procedures that were done in conjunction with informed by medical experts and scientists from around the world and in collaboration with governments and agencies there and other lines are sailing over there as well. So far, so good. There have been people who tested positive and so on. But protocols are in place to mitigate spread, to handle cases when they come up. It is universal testing for all the guests it is a lot of operating procedures in place, additional testing if people show symptoms, medical screening, physical distancing, mask wearing, enhanced ventilation protocols, prearranged cessups if there are cases identified on board to isolate and then get them off board. And mitigating spread. So far the guests are happy and things have gone reasonably well even though there have been cases and they have been handled. Good to hear, arnold. Also interesting to hear that the guests are seemingly, from what you are seeing, quite happy and relaxed about it is the only hurdle for you to be sailing again here in the u. S. The cdc . I think, obviously the industry is working with all the various authorities, including the cdc. So we can sail again in the u. S. You know, at this time, it looks very promising because of the way thing have gone in europe. But also because of all the work that all the brands have done here, including our own, with our scientists and scientists were other brands as well to really set up what is unique in the travel sector. We will have universal testing nobody else is really doing that to any great extent in the travel sector. And then all the other protocols i mentioned in europe and enhanced even further in the u. S. That and the desire to get people back to work. And the pent up demand for cruise all of those things coming together, we are optimistic we could be sailing before year end. Arnold, hi, its sara hi, sara. Wondering what your relationship hi and your direct communication is with the white house at this point. It has been widely reported, including by us that the cdc wanted to put the no sail order in place until february. But Vice President mike pence intervened and it was extended then until october are you in direct communication where the Vice President i know you were supposed to be at the white house last week obviously, that couldnt happen. Have you received any assurances there. I am not personally in direct conversation with the Vice President. But what i will say is simply this that, look, everybody is trying to do what they think is the best thing and i think the key issue here is, number one, to make certain what we do acting in the best interests of the Public Health because our highest responsibility and top priority is compliance and Environmental Protection the health and wellbeing of our guests and our crew and the people we touch. That would be the same for others in the industry as well then with the variousings agencies, hhs, cdc, transportation, homeland security, there is a lot of parties involved thats at the National Level then at the local level, you have the municipalities and the states and the ports and so on then there is destinations, the places we have to go there is a plethora of people involved here. Everybody wants to do the right thing i just think that with the protocols we are exercising in europe and in the informed procedures we are looking at collectively here in the u. S. That the conditions could be right for us to be welcome by all to renew sailing i think evidence is that the extension went to october 30th this time which we had already voluntarily extended as an industry past that time. Again, things are at this time looking positive. Arnold, do you think it is fair if the airlines get a sectorspecific bailout, further stimulus i wouldnt pass judgment on that i think, look, anything that supports people who are trying to work to better their families lives and their own lives, anything thats done prudently with all of the various things that have to be considered in a situation like that that helps people get back to work is a good thing and allows the economy to move on is a good thing so i am supportive of prudent support of Businesses Enterprises where we can get people back to work or at least give them a bridge until they can get back to work around, i know you have talked a little bit about pent up command but the cdc itself says from march until september there have been almost 3700 covid19 or covidlike cases on cruise ships and 41 deaths. Thats pr disaster are you worried about having to combat the narrative that its just not safe to be on cruises with other people even after you have been given the green light to sail. I wont comment on the statistic quote that you quoted. You know, i am not aware of that as a statistic or whatever but the bottom line is this. People want to cruise. Cruising has dealt with viruses around the world for many years. A lot of the protocols that you are seeing in place in other places now, restaurants, amusement parks, airports, have been in place on cruiseships for a long time. This is a unique virus it does require its own way of dealing with it. But what i can tell you is that there is pent up demand for cruising the second hand bookings as we said on our Earnings Call are very strong. People want to cruise now. We dont have a demand problem for cruise we have an ability to sail problem with cruise. And we only want to sail when its right and its in the best interests of the Public Health so we dont have, to date a massive demand problem for cruise we have pent up demand on average, people that cruise will repeat every couple of years. We have almost two thirds of our cruisers in normal times are repeat cruisers. They have missed by the time this is over almost a year of cruising we will have all of those people who are anxious to go again. We wont have all the ships out at once. We will have to introduce them in a staggered measure over time there will be pent up demand we will be in good shape for a time to come. I know you mentioned testing, which is key airlines have tried on some routes but as an industry have committed to testing people before they get on cruises do you have the ability to test every day. Even if you are negative one day you can be positive the next day or the day after that. Dont you have to test every day . Number one, you have lots of layers the idea is to mitigate the risk of spread. So you start with testing. You let very little on in the first place. There is no testing regiment i am aware of today that guarantees you for sure that you have caught everything but you have reduced the risk quite a bit. Then you put all the other layers on top of that, medical screening, temperature checks, anybody showing any symptoms, you isolate right away you test them again if they are showing any kind of symptoms but the physical distancing, the mask wearing, you know, the sanitation practices, all of those things, you know, kind of derisk, derisk, derisk is there going to be cases on board . Almost certainly there will be, just like there will be for anything else. But the trick here is to make certain that you have mitigated the risk you have minimized what comes on, you know, from land. And you mitigate the risk of spread and then you are able to handle when it does happen, proper isolation, get the people to proper care quickly. And all of that is part of the Going Forward protocols. How do you do long term planning arnold . Are you able to get back to normal before a vaccine . With so many uncertainties in this environment how do you do that right now you plan a day at a time but you look ahead and look at the long term long term, there is no question that cruising will be great. No question. It is a great vacation experience we will eventually have the various measures, whether it is vaccines, treatments, just the mitigation of risk of complications even if you have covid of not having complications or worse from it all of that will happen over time you know, as it does with every other virus and Everything Else the world has had to deal with long term, we know we are in great shape. The question is how do you manage through this interim period right now thats what we have done we have made certain we put safety first we also made certain that we have the financial where with all to withstand an extended pause andwe are getting geared up to restart in a responsible way as we have done in europe and we can make sure we can handle whatever comes along. Thats the simple planning thing. Long term, prospects are fantastic for cruises. Prior to the pandemic we were sailing full we were growing every year the industry was prospering, we will be back at those terms again. You are disposing of ships, doing whatever you can to reserve cash, you have raised money from the credit markets at high rates how long can you financially survive without a vaccine. We have told everyone we can go into the summer next year with zero revenues obviously, hopefully that wont be the case because we have already started with some sailing in europe already and are optimistic about sailing from the u. S. Eventually here soon hopefully that wont be the case if it was, we could. Of course we can continue to work to make sure we can go beyond that if it is necessary thats where we are from that. I think a vaccine is going to be helpful, but it will be one more tool in the tool box it obviously would lift everyones spirits to know there was a vaccine even if it wasnt 100 effective, but also treatments under development and testing you mentioned testing and testing is evolving to a level where we might be able to test everyone every day at low cost and rapidly and effectively. If we could get to that, that could be another fantastic tool in the tool box to address contract this virus. Fantastic for everyone. Arnold, we really appreciate you coming on and sharing an update. Thanks, sara. Thanks, will good to be with you guys. Carnivals ceo arnold darnold. California no longer the place where dreams come true for disney up next we will look at the dispute between the media giant did the golden state over the closure of disneylands theme park a reminder watch or listen to us live or on the go on the cnbc app we are bk tethacafr is before we talk about taxsmart investing, whats new . Well, audreys expecting. Twins grandparents we want to put money aside for them, so. Change in plans. Alright, lets see what we can adjust. Wed be closer to the twins. Change in plans. Okay. Mom, are you painting again . You could sell these. Lemme guess, change in plans . At fidelity, a change in plans is always part of the plan. You can go your own way lemme go your own way plans . 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 up to 400 a year on your wireless bill. With the carrier rated 1 in customer satisfaction. Call, click, or visit your local xfinity store today. A heated battle is emerging between disney and california over reopening theme parks in that state julia boor steen with the details. Disney is criticizing californias refusal to allow disneyland to reopen in anaheim, california saying quote we absolutely reject the suggestion that reopening the Disneyland Resort is incompatible with a health first approach this comes after the governor of california said yesterday that the parks wont reopen until covid cases stabilize in california l. A. County yet reported its biggest spike in cases in six weeks. Last week bob iger resigned from knew. Somes state task force for economic recovery and when laying out 28,000 employees disney pointed to the states unwillingness to let the park reopen. Julia, a fascinating story. Julia go ahead, sara. I wanted to follow up i was curious, julia, based on that report how it was going in florida, with disly world and what it has been like since reopening . Disney said it would not operate any of its parks if it was unprofitable we also dont know what percentage they are capping capacity at. They have said they are limiting capacity we dont know whether thats at 50 or 70 or 20 . But they said they would only operate if it was profitable so there have been a lot of reports about how there have been plenty of efforts to clean up the park, make sure they are adhering to all sorts of different Safety Standards but not a lot of detail coming out of there exactly how many people are going through the park every day. Ibm shares are higher after announcing plans to spin off its it infrom structure to focus on its cloud usiness. Up next we will easpk to an analyst who thinks the company could benefit from this addition by subtraction move. Back in a couple of minutes. 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Ibm shares closing sharply higher today after the Company Announced it would spin off its managed infrastructure unit into a new Public Company and folk us the legacy business on the high margin cloud ibm says the separation will be completed by the end of 2021 stock up 6 . Joining us is Research Analyst with evercore isi. Research analysts initially gave this a thumbsup i think this like the deal as well whats the opportunity here for investors. We call that potentially addition by subtraction that could happen here. Opportunity i think for investors ibm is offloading 19 billion of it Service Business that we think was declining 8 to 10 a year with low margins and minimal fee cash flow you are left with a 59 million focus on the hybrid it cloud markets that should grow mid Single Digits with a better margin there is not enough financials on this, so far it looks like what you are going to be left with is a faster growing more profitable asset. Does this actually change the prospects of the business, the prospects of the top line of the business or is it just going to change the multiple that the stock might get . Initially i would imagine it is a multiple that helps you are offloading the lower value lower multiple it. As you go forward to extend they can compound the growth they have been getting from or i would argue for more m and arcs to go forward. That would drive eps and Revenue Growth much faster. Is this good timing is it late is it too late i would rather have had them do this five years ago prior to the red hat but i would say it is better late than never bucket for us. Is this credit due to the relatively new ceo. [ indiscernible i think weve basically lost amits mic there. We lost it. Maybe we will call it a close there on that particular interview. We got the point. We likes the separation. Hes got a target price of is 137 just a little bit where ibm is trading today. Still ahead on the show, Information Technology company cheg helping employees pay down their student debt we will discuss that when we comeac bk. Future. But a resilient business can be ready for it. A Digital Foundation from vmware helps you redefine whats possible. Now. From the hospital shifting to remote patient care in just 48 hours. To the university moving hundreds of apps quickly to the cloud. Or the City Government Going Digital to keep Critical Services running. You are creating the future on the fly. And we are helping you do it. Vmware. Realize whats possible. Time for a cnbc news update. Sue herera has got it for us hello, everybody. Heres whats happening at this hour washington, d. C. s department of health urging covid19 tests for anyone who attended the rose garden ceremony for Supreme Court nominee amy coney barrett. Until now, d. C. Officials said they trusted the white house to handle testing and Contact Tracing. Ford telling its north American Office workers they will be working from home until next june that move follows a similar decision by General Motors Infectious Disease expert dr. Fauci making clear covid19 is more dangerous than the seasonal flu contradicting a tweet by President Trump theres absolutely no doubt, no doubt at all, that this covid19 w its 210,000 deaths in the United States, 1 Million Deaths globally, 7plusmillion infections in the United States is far more serious than a seasonal flu there you have it you are up to date sara, ill send it back to you. All right, sue. Thank you. Up next, tackling student debt education Technology Company chegg making a big push to help combat the issue we will discuss with the ceo straight ahead plus, last week at delivering alpha i spoke with joc jack oven and john rodgers in a panel it was called the activist investor for esg all sorts of strategies how these two are thinking about doing better while making higher returns. They are both Value Investors but have different approaches when it comes the environment, say priorities and also diversity which john rodgers has been very strong on. You can catch that entire panel right now. Delivering alpha. Com we have posted all of the content. It is worth checking out closing bell well be right back before we talk about taxsmart investing, whats new . Audreys expecting. Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. U. S. Student loan borrowers owe a collective 1. 67 trillion in federal and private Student Loan Debt according to the Federal Reserve n. Last nights debate in the Vice President ial debate, it came up senator harris talked about what a Biden Administration would offer for those seeking higher education. Listen for folks who want to go to a twoyear Community College, it will be free if you come from a family that makes less than 125,000, you will go to a Public University for free and across the board, well make sure that if you have Student Loan Debt, it is cut by 10,000. Shares of chegg have been on a tear this year, more than doubling year the date joining us now to discuss the student loan issue and on line education is cheggs ceo dad rosenwe ayeg does it make sense, the biden plan, i know you have been pushing companies to deal with this issue would you rather see the government do it i think Everybody Needs to chip in. I think Free Community college would be helpful to a large group of students who normally cant get to school or afford school or take time off. The average age of a student today is 25 years old. 25 of them already have children somebody has to pay for it it may not always be the student. One way or the other we need to be able to fund it if we are going to fund it as taxpayers, whether through a lenore through preschool, we better make sure the curriculum is relevant for employers. 43 of students that go to school today dont graduate. The average starting salary is 25,000 for those that do. It take them six years to graduate the entire system needs to be reinvented the costs are insane you know, they are pernicious. We have got to get rid of that more importantly we have to make sure the curriculum is accurate we can accelerate learning to earning. People if they do borrow money it is a reasonable amount. You can actually measure an roi. It is not just making it free. It is may going the curriculum right and making sure it is funded in a way thats sustainable. Yeah. Not many folks talking about that meantime no. What is actually happening is the president , President Trump did extent his relief, a pause in payments, which was part of the initial system lull bill until the end of the year. Thats fast approaching. What is going to happen come the end of january when those bills are due and we still have high unemployment and we are still dealing with this virus . The benefit is they delayed it, they didnt eliminate it what i heard senator harris talk about last night, there would be a 10,000 blanket reduction of peoples debt. I think that would have an extraordinary positive impact on the students and the economy when you are dealing with people who have a job and are trying to go to school and have to pay back loans all at the same time, you know whats going to happen. You know people with Mental Health issues are going to go up oipd issues are going up alcohol issues are going up. They are going to quit school. We are only accelerating a disaster and so i think we have got to rethink lowering the costs make it available on line making it available so people who have jobs and have families can did both technology now allows us to do that students can learn more and Different Things and do it when it is available to them. Sara, you and i have talked about this f. We can binge watch everything on tv, why cant we binge our education . When i have time, why cant i get through as much of it as humanly possible and accelerate the path from learning to earning. People go to school to get a better job even if it is free, it is not worth it if it is not doing that. What pouring of the current total costs of the College Education is the education versus everything that goes with it, accommodation and food and various other experiences . Within that, even if you could remove that cost is some of that experience not important you go to get a better job, importantly, but you also go for a better Life Experience look, i think we should acknowledge the fact that the Student Experience is mott going to be the same for everybody as much as we would like to create an equal path for everybody, not everybody has the same set of circumstances. If you have got enough money to be able to go take four years off of your life and go to a college, you get a different experience than somebody who has a job, has a child and is 25 or 30 years old trying to complete a degree, which is overwhelmingly what we are seeing with on line colleges and universities and with Community Colleges 10 of all students go to the california Community College system thats just one Community College system we have to separate who we think the student is versus actually what it is today students are starting to split that up. The virus, and putting people on line, and through zoom, and the core way in which schools are trying to teach people, students are finally saying you know what, the academics is worth this, the experience is worth this it is not what they charge for each one it is what the student actually thinks the value of each one is. Thats why you see on line school being less expensive than the experience you have at a full campus. Truth be told it will be nice if everybody could do that but the overwhelming majority of americans cannot take four years off from their life, cannot go to classes a couple of hours a day. They are living a full life. I think we need to acknowledge who the College Student is evolved in america and we need to program a system that works for them really important conversation, dan, thank you for joining us, as always. And come back after earnings when you can talk about your own business. I will be happy to. I want to thank you guys for keeping a focus thank you forin focus on this. Still to come, the investments every investor needs to be watching the Auto Industry is working was massive elect if ication. Super cars that could be left behind 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 up to 400 a year on your wireless bill. With the carrier rated 1 in customer satisfaction. Call, click, or visit your local xfinity store today. We have news on disney executives news with hollywood names involved forest road files for 250 million tech and media focused spac kevin mayer is serving on the board as is Shaquille Oneal the company focuses in movie financing by lending against u. S. Tax credits every big name has a spac super cars hit the kids could the age of the luxury cars hit t be over . When we come back. 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The likes of ferrari, martin aston struggling could it be a thing of the past for luxury sports cars volkswagen says either sell or find partnerships for lamborghini. The talk is increasingly on going electric themakers of super cars, gas hungry status symbols are fighting to find a place in an increasingly ev world. Mcclaren is hoping to set or lease back its headquarters in the uk shares of aston martin falling 95 since their ipo last year. They say customer demands remain strong and customers continue to hunger for speed the big question is whether these companies can continue to attract investors as well as these wealthy car buyers i knew aston martin had done bad. I didnt realize it was down 95 since the ipo. One question i have to this is of all of the areas of Combustion Engine cars, one would think these super high end status symbols would be slightly more protected than mass market vehicles over the long run they will be there will always be a passionate group that will love these cars that wont run out of battery. But for investors, it is a small investment model there will always be a buyer for this, but will there be investors willing to funneled it fund it. Ferrari has done well. But who will want to own them. Robert, good story. Thank you very much. This is the part of the program where we turn to mike to see what he is watching tomorrow he is not here today so what i am watching, we are looking at 3 gain for stocks heading into friday. A lot of hope being factored in on stimulus. We continue to watch discussions. No movement in the right direction, but it seems like Everyone Wants stimulus, the people, the market, President Trump, vice President Trump. And yet we are up 3 on the s p. Thanks for watching. Tonight on fast money a big call on big oil. Plus, the mouse that roared. Big battles between disney and the state of california. And find out if yo