Reportedly uncovering Quality Control concerns at eli lilly plant set to manufacture its covid antibody treatment and apple debuts the new 5g phone line speedier devices, also coming with an even heftier price tag carl, back over to you. All right jim, on the banks this morning, conversation once again about loss provisions. Also about bond trading at goldman. I dont think it is just bond trading. I think goldman did a remarkable job taking some share, which i say remarkable because imagine youre at home, zooming and taking sharefrom others. I do believe that goldmans back to its old ways which is that it is a dry cleaner it doesnt have any risk remember, dry cleaner, what do we do with the dry cleaner give them our clothes and pick them up and they make money. That has been the goldman way until a couple of years where i think it got wayward where it became much more about, hey, lets invest in this, invest in that, no, to me, what theyre investing in, that i really like, theyre investing in their phone. Where is my phone . You know, right here thats the credit card, the credit card has unbelievable pull it is really something, a lot of people thought they would lose a lot of money in it it is working. It is contactless. On all the things, taking fixed income, growth of the credit card, which i think once we start traveling is going to be terrific, david, i got to tell you, i think it is all goldman cant buy back stock, the book value is so high versus where the stock is what do you say happens here what do i say happens here . I think rates probably went out yet again. Nobody wants to invest in this sector, jim. No. Okay doesnt seem to matter, does it how would you term the earnings yesterday . A lot of people made they said, listen, the reserve releases were very helpful you talked about the calls, you mentioned that at this very time, prior to when they sort of at least the city had gotten under way. Those stocks didnt react well. No. And citi realized theyre spending a billion on Technology Every year bank of america spends 3 billion. Maybe the whole book val ue screwed up how much they have to spend. Goldmans numbers were quite strong, looking through the slides here. Youre right, david it is a cohort etfs can be etfs are like newton, okay it is gravity. It pulls them down yeah. But Global Markets were quite strong net ref nvenue and equity up. Im looking through things that i net revenue, Consumer Banking is hardly anything at this point still for them. We talk about markets so often it is still a decimal point basically, a rounding error. Have you ever seen David Solomon be a deejay . No, ive never seen him. Really amazing. What does that have to do with markets nothing at all. Im trying to distinguish him from the rest of the banks. I got it. Youre right. Youre right Steven Sherrod is a tough guy. Reuters crossed him the other day. Did they . Yeah. Interesting. I got no issues with him. Look, it is a good quarter, the best house in the worst neighborhood that ive come across other than concho and conoco two drunk sailors get together. Thats a bloomberg story. Well keep an eye on concho shares im referencing where it comes from because it is not as though there has been an announcement. No announcement no press release. There is oil and gas, back to back carl, oil and gas, uninvestable. I dont care natural gas, i dont care. C conoco, do whatever you want then there is banks. And banks, there are some investable, hoping that one day theyll raise rates. But it doesnt matter. Goldman is considered a bank it is not considered an investment bank. When we see Morgan Stanley, you know, james gorman will come on, i hope yeah. He might. I think we got a shot now im going publicly. He did come on last week. Hes been on so much. Hes overexposed. To your point, they have a very different complexion of Morgan Stanley and goldman sachs. Goldman does versus wells fargo, yes, or bank of america. Thats stagecoach needs a little work there. Wells did not come in particularly well. The main thing im saying is that there is one day that we differentiation. Now there isnt. Citi was able to pull down everything the citi call was a not great call i dont know charlie sharp, media shy, what do you think will he be media shy if the senate goes democrat and Elizabeth Warren is head of the Banking Committee . What do you think hell be like . I dont know. There he is. It will be awful. There is his it will be theater. A lot of interesting commentary on the trajectory of the race and how polling may or may not be right large or 30,000 feet, have we answered the question yet about how deposits can be so strong and loan growth so weak . Why arent the banks taking a gamble on the American Consumer . I think theyll take a gamble if you have a business that youre not afraid of i think social distancing, and the way that you have to have just a few people in your restaurant or whatever store you have has made it so it may not be worth borrowing right now i think thats part of the problem is that there is just and the whole country is in flux, city and suburb. You need that time to foment new stores he said, listen, it is a matter of time before new stores come up to replace the old stores, but right now if you take a loan in order to expand, so foolhardy. You have no idea whether the customers will come, if there is a second or third wave david, have you noticed this people down south are telling us were sissies . Yeah. How do you feel about that . I dont feel good about that at all i dont agree with that in any, way, shape or form. I was invited to the eagles to be one of the new people, sent a memo out. Before we Start Talking about the divisions in our country again division. Can we come back to the banks . We didnt get through them here. We talked about goldman and you had got very upset about it and, wells did not do particularly well. Although to carls point on deposits, as a reflection especially of the state of the u. S. Consumer, some of them, it is extraordinary we talk about it yesterday jpmorgan up 30 . Citi up 16 . Bank of america, which we havent talked about, up 23 and wells, up 8 even wells fargo actually added deposits everybody added deposits. Is that a function of people not taking trips, of people not spending money on going out, on people what are they doing . Theyre redoing their homes we know that. Theyll make an office in their home remember, goldman did incredibly well with people who were at home. The other point is that the provisions for loan losses have not been what was anticipated in terms of a negative perspective. They havent been. Now, maybe it is all coming and if we dont get the aid from congress that everybody seems to think we need and you certainly believe we need, those who we dont talk about enough, not the big companies, maybe it starts to filter in at this point, it is still not there in the data. Look at the forbearance numbers. The people on forbearance, do you know that, you know, jpmorgan was very happy 80 are now paying it is higher at bank of america. 90 . How about the 20 . Just forget them because of the fight between the Speaker Pelosi and secretary mnuchin. Thats not right. It is not right yeah yeah. By the way, carl, i see tremendous value in how much bank of america ill highlight it for a second, giving to banks in minority areas. We cant forget that this is the thing we must think about and i think i have to praise them for what theyre doing. Jpmorgan is offering branchs in those areas. If we dont talk about it, there will be no shame for the banks that do nothing. No, it is true. Jpm spending 30 billion on racial equality measures. Thats fabulous. But to davids larger point, barkin on the tape this morning saying that 29 of the stimulus was spent, 35 was put into savings or debt payment. Right . A lot of that money just went into building a cushion for households because they didnt know what was coming either. Who knew that things could get somewhat under control in some areas by wearing masks. Who knew that the people who still think that masks dont matter, those people are luddites and the world is flat to them. I do think we made a lot of progress i think the therapeutic is gone. I think people are feeling brave, more brave, but i worry about the coald i worry about flu. How many people used to sneeze on you all the time . Sneezing on you means youre going to the hospital well, it doesnt. If youre wearing a mask and the other person is wearing a mask, youre in a much better position. True. Thank you for saying that and correcting my hyperbole. High prb hyperbole, david. I see our producers are putting something on the skrcre they want us to talk about this exclusive reuters story about manufacturing at lilly didnt have to do with anything with the trial that they halted yesterday. Or their antibody cocktail it relates separately. But, you know, jim, were getting closer and closer every day. Going to hear from pfizer. Were getting closer we know regeneron, not a drug, it is a company that makes the antibody cocktail as well. That the president used to great effect, it would seem. We know those are getting closer lilly did pause. We assume they will resume, there will be some availability. Bill gates, there will be some availability of these therapeutics fairly soon. Lets listen to what mr. Gates had to say in terms of how things rl othin roll out over the next few months. We worked with the different antibody companies, we picked eli lilly as our partner so that antibody has gone into the factory we reserved, and takes it will be into march before we have substantial volume coming out of that. In the meantime, eli lilly offered up 100,000 doses, once they get approval, that will go to the low and middle income countries. Well learn how to do the delivery as that we have were very excited about we hope that the safety, advocacy, all these things get cleared because it could save hundreds of thousands of lives. Jim, you know, that was a fascinating to listen to him and hes so knowledgeable and talks with Anthony Fauci a great deal as well. So knowledgeable in terms of infectious diseases, a focus from Gates Foundation for years, prior to this pandemic. One of the things that david ricks does at eli lilly, has to talk about the mobile vans and how many lives he saved with his therapeutic in Nursing Homes senior living. Im surprised he didnt do that. I know hes not going to brag on a day when the feds are saying that maybe the but this man has saved a lot lilly saved a lot of lives with this therapeutic already. This not some experimental drug that has not been used, but the nature of eli lilly, perhaps indiana, and the way they are, meaning they are hard core people who do not promote themselves ill promote david ricks carl, this thing has worked and saved many lives it is not like it is just like one person has been hurt they have helped a lot of people he this come on, call in right now, hes working remote david ricks, not david faber, david ricks, please call in right now because i know how much you have done to help people in Nursing Homes. Jim, a good point so much attention this week on lilly and azn and j j and some pauses well take a break here. A lot of commentary to get to, upgrades or price target increases for tesla, activision, netflix. Well watch apple a day after that event with the new iphone well hear what tim cook had to say about that as the company bets on 5g dont go anywhere. When i was in high school, 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. Every decade there is a new generation of technology that provides a step change in what we can do with our iphones next generation is here. Today is the beginning of a new era for iphone thats tim cook at yesterdays apple iphone product event talking about the new iphones that support 5g. Jim, that surprise appearance by hans vespburg talking about nationwide service to 200,000 americans. I think hans is a different kind of soecceo. Hes not john legere lets make that point but hans comes into that meeting and he makes me feel like i have got to go get the phone. Sorry, tim tim knows tim is it a great job. Now i got to get the phone this phone is slow i try to watch things on this phone and it is not good enough. I want that phone. It is gorgeous and it does the cracking thing, i dont know about you, i cracked my phone in mexico and that was it. Look my lifeline i got the glass splinters. I dont know if youve gotten the glass splinters. I havent. And my wife put it in the washing machine. Claims she didnt know it was in my pants. She put it in the washing machine . Yes and she put it in a bag of rice and told me it would be better bag of rice. Got to do your own laundry, thats the lesson there. Thats the real takeaway. Ill give you another takeaway, from craig moffett, he says verizon is the big winner here they bet big on spectrum, we talked about that, there has been some questions can it get through the trees and things like that. But he says, listen, apple bet big with them. This wasnt a foregone conclusion it is a clear victory for verizon that apple went all in on millimeter wave, both of the two main mma wave bands, 28 gig and 39 as well are supported across the new hand set lineup and hans was there and that lends credence to the idea that apple my view verizons deployment as a differentiator, perhaps not relative to at t or tmobile really interesting. It is look, as a verizon guy, always happy to hear from john legere, hope he gets another job somewhere soon. Talking about another gig. Tell me your thoughts on this that i shared with you. Ive been waiting do you remember hans spread cesser of course i do. The super bowl, it was the one with the panthers, yeah, he said, look, it is going to be here, were all going to use it. But that was a long time ago it is finally here i feel look we got to use it i felt very like china yesterday. Yeah. Yeah. You felt like china china has it everywhere. They have it everywhere we dont have it everywhere. We have it starting but not really available. He said we have it everywhere the ads are a lie . Youre calling him a liar . Im saying are you able to get up on it right now i dont know. I got 4g. So does everybody else. I want the 5g. Im sure you do soon bible to haible able to it how many people call this what i really loved is tim cook had not gone on the stage and there were commentators. You know who they are, saying, this is a real yawn, this is not anything what do they do . Tmobile and at t already have 5g but it is in low frequencies in terms of coverage and small block widths for the spectrum means User Experience not any better than 4g now. I think verizon i have to test it. Yeah. Hans vespberg, i think he has the reputation for honesty and for getting it right verizon has always bet on the network. Thats the focus beginning with Ivan Seidenberg and on to Lowell Mcadam and now mr. Vespberg dont forget about t of mobilme story of the last ten years. Hans was a surprise i think the phone is a surprise. I think that the fact the stock was down is because it was up 6 the day before, which is stupid. Thats the people that david is talking about. Theyre, like, oh, there is a big unveiling, ill buy the stock before hand and then i will profit. David, these people are, what, what do you think these people are . Chowder heads . Are they naves. I think he did spobespoke sa iphone events, four days out of 15 have seen the stock rise on the day of the event that was classic apple fashion to be sure. I dont know. Well take a break here and get to unh, pretty interesting commentary, saying that next year will be inconsiderabdiy rd predict. At Morgan Stanley, a global collective of thought leaders offers investors a broader view. We see companies protecting the bottom line by putting people first. We see a bright future, still hungry for the ingenuity of those ready for the next challenge. Today, we are translating decades of experience into strategies for the road ahead. We are Morgan Stanley. Into strategies for the road ahead. music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. Futures look strong after the first day down in five yesterday. We are seeing all sectors positive for the month and a backtoback loss today ruld be first in about three wes. Wee back in a minute our Retirement Plan with voya gives us confidence. They help us with achievable steps along the way. So we can spend a bit today, knowing were prepared for tomorrow. Wow dad, do you think you overdid it maybe . I dont think so. What do you think, peanut . Nope honey, do you think we overdid it . Overdid what . See . We dont think so, son. Technically, grandparents cant overdo it. Its impossible. Well planned, well invested, well protected. Voya. Be confident to and through retirement. All right, two minutes before we get started with trading on hump day here you want to talk again about this concho deal reported by bloomberg that has conocophillips in talks to buy them. I think that conocophillips is well financed they raised their dividend by a penny. That was curious last week but concho is a company, you talk about a company that paired costs radically, has fabulous permian, delaware basin, we want to be in the delaware basin, but this is what is really important. The market cap of this company, three years ago, was 20 billion. And now it is at 8 with a good Balance Sheet and absolutely fantastic properties, it makes total sense. This is one of those Oil Companies that cut back, remember how there was this head long, look, lets drill, drill, drill. Yes. No. This company showed discipline and for the discipline maybe they get picked off. Less than about a month ago, you can see theyre fantastic termian positi i permian positions. Im sure this would be additive to conoco. This is not, david, while i have you, this is not like the occidental anadarko. If they can get that into greece, they could get rid of the whole gas prom the whole russian into europe thing. They wont do it. Who wont do it the countries will block it im hoping chevron. That was an interesting deal. A small deal for chevron this be would be a larger deal, but would give them as you say the permian and good assets there which continues to be our saudi arabia yes and concho has been considered to be one of the smarter companies. This makes a ton of sense if they do it wpx did a deal, really interesting thing about that, david, little hint, Rick Moncrief is going to run that company. Hes from wpx. Devin is not going to run the company. Rick moncrief is known as the man who built continental resources, not a person we have on a lot i dont know him. And you dont know Rick Moncrief. Sydney moncrief i remember, great basketball player. Played for ucla. Milwaukee too. Yeah. Played for the bucks, david. Yeah. One thing i want to point out about Rick Moncrief, i was in a helicopter with him looking at the looking at everything, and after an hour i realized i was with the einstein of oil einstein of oil. Not the neils bore ough of o. No. Not edmund teller of oil. No. I did not say da vinci we know who da vinci is. Yes jensen hua e en huang. Look at that. It has seen worse days. Unh is our laggard on the dow this morning, jim. As they say going into 2021, we envision stepping out initially with a more conservative all in 2021 starting point. Just because the Economic Impacts from covid at this point as you were saying a moment ago about what the winter portends will be hard to call now. A lot of delayed surgery. Delayed everything i dont know about you, know so many people delayed thing because theyre afraid to go to the hospital unh has often lowered expectations and every time they do that, take a look at the chart, every time you do that, you have to buy. Lets not panic on unh remember, it does come back, look at the chart, they always are conservative and then crush the numbers. I like the way they are. I think it is good remember, theyre independent of the aci, david. Meaning what . They theyre not in the exchange. No. Not in any exchanges. Unlike cigna. And centene. Right. These are so variable, you have to if youre a democrat or a republican, you got to realize it just it needs some change. It does november 10th, when the Supreme Court hears that on the aca, it all could go away. That would be unbelievable. How many people would be uncovered. Yeah. A lot of people. Goes back to, carl, of course to the hearings going on, continue today and many questions that amy barrett has gotten on how she with rule on that. She says not much. Right didnt get a whole lot of guidance on her legal views per se yesterday but day two of q a continues netflix up almost 2 a new street high, to 670. They report next week. It was goldman, jim, cowan at 625 now and piper at 534 a lot of optimism going into that. Playing that game, it is interesting because netflix is, again, like roku, all part of the same trait it is the go nowhere, do nothing trade. Thats why dominos does so well. What do people do . I got together the other day, i mentioned on the show, i got together with 20 people. It was outside you know the heat i got from people who said youre so irresponsible, 20 people, it was outside. Okay. I took subway yesterday. You did i did what do you think of that . There i am n 95. No, everybody was masked. Look how clean it is you took a picture to show me. And to my producer carrie i wanted them to both know. Im so proud of you really something. Very quiet. Very clean, they clean it every night now. Everybody was in a mask. And it is the best way to get around town. How many people versus usual . I would say like 30 of capacity thats that it is in philadelphia too i take the subway in philadelphia. When . When i go to the eagles, but im not go no, youre not. Youre having 20 people outside. Back to netflix, we got some other notes here also. With the piper . No, Moffett Nathan sson as well total market continues to grow interesting though how many people now are using it on a daily basis versus kind of a few times a week user streaming content on a daily basis at netflix flat at 43 . 36 used it a few times a week, down about 3 . Used to be that you needed to have a water cooler kind of production remember, drop the production and more people sign up. There is nothing there is nothing im trying to figure out what they did i want to see if amazon is doing better the boys is so great you know, yeah. Better first of all, they all are dealing with these this production gap that is going to make their libraries or what they have available a little more paultltry than it has beenn the past there are things you follow this stuff closely there are things back in production, i believe. It is it is not uniform at all, is it no. And we have seen a couple of instances where at least on major films like batman, you know, covid case, incrementally there has been a bit of a slowdown, but i guess, jim, the larger point is that the flywheel goes beyond netflix at incremental streaming service feeds the idea that cord cutting continues, right youll see roku up. It is like, well, lets take roku up. The company by itself is very unpromotional. But it is one of those stocks, the roku, peloton, we know what they are and then you get fastly. It is fastly, but competitor who also does gambling calls it fistly and people buy it go by fistly im not kidding. Robin hoodies, they got gone smacked by Royal Caribbean look at this name. Fastly. Fastly is fistly the one they use lets buy fistly today. 13 billion market value. What is the multiple to sales theyre trying to get it to pass snowflake isnt that the goal . 13 billion market capitalization, not a lot of earnings there, when you think about it zero but it is but fistly has a following. And it is actually called fastly, but has a following, like the old days. It has become, like when the beetles came to new york or something more recent, i dont know, they have a following like who . Who . Who do your kids follow . My kids depends. Taylor swift . Not really. Like Justin Bieber a few years ago. Isnt he one of the from 298 million in revs to 400 in revs and that is attractive to this cohort. It is like theyre trying to get tickets. They come in every day and try to get tickets to shows. This is the fistly show. Which, by the way, produces fast internet for none other than i have to mention because david has tiktok and the New York Times, which is recommended today. Thats what fastly does. They make it fastly. Right like nicely and guys in dolls. Fastly fastly. And when it comes to tiktok, we have to wait for the judge, less than a month from now few weeks from now we havent heard anything on the de deal by the way at all walmart, nothing just crickets you want another one theyre in. Theyre going to fvrr this is what they go for this is like k2 it is what what does it do does it matter . No. What does it do . It does it is an online marketplace for selling goods and services they help you. If you want to design something, theyll go over and help you, you have actual people who help you photo shop and it is actual it makes your business come alive with pleasure will you look at that this is the new cohort they like stocks that go higher. Theyre not buying wells fargo. That is unreal. 675 . We have to ask them if they know what it does. We need a quiz is that the new test for your do you know what the business does . I think it may be radical it would be radical if they knew what it did, tel aviv company. I dont know you dont know what it does either. They help you they help you. That explan explains a lot. Theyre into etsy because they sell hundreds of millions of dollars of masks. What are you calling them now . Hoodies zuckerberg wears a really nice sweater. It is off the rack. Your little boy is growing up. There is a suit place in westchester that outfitted him and has a picture of him. Really . Yeah. I didnt know that. Guys fvrr. Here is a name somebody would know not one that comes up often. I looked at it this morning because there was no research on it the New York Times, have you seen the shares of the New York Times over the last five years a great piece of research, game set match only ones that have a they have unique opportunity to scale its paid Subscriber Base on a global premium news market and they have a 5 price target. This thing has an actual market cap over 7 billion. They figured it out. Living large again. They figured out, carl. It is a juggernaut they figured out the paid model, turned out the free model wasnt so great almost all went out of business. Digital is working for them have they benefitted from the Trump Presidency very much so. They are considered to be im reading hoax right now fox does well. Hoax is whose book . Stelter. Stelters book. Got it not bad, carl that was a very interesting upgrade. Indeed, jim it has real movement. A lot of the upgrade s have rea action today no fiber fiber, though, we got to talk more fiber and fastly thats what were talking about. Period we didnt get to peloton, new street high, 144 at truest we didnt get to some of the downgrades of stocks we talked a lot about early in the pandemic, kroger, cut at wells, constellation, cut at atlantic. That was painful. They said depreciations are bad. They had a piece, look an upgrade. They didnt want to offend kroger has anyone spoken to rodney . Rodney mcmullen . I once said something negative about kroger and i was going to cry after he was mad at you no, the opposite. He wanted to explain why i was wrong. Thats a better approach. That works well. A lesson for all chief executives who get upset by the way, maybe one day Charlie Scharf will have that conversation with me as opposed to you wells fargo down 3 . Hes a sweetheart. Bacnk of america down 3 . Who is nicer, Steven Sherrod or Charlie Scharf . Both rigorous guys. I like that carl, over to you modest gains here, nasdaq is in the lead. To bob pisani. Hey, bob. Carl, happy wednesday, everybody. Mixed open today, 3 to 20 advaned advancing to declining stocks. Oil is creeping back up again. Thats helping energy out. The banks are mixed, mixed reporting there. Industrials okay materials, healthcare on the downside thats mixed here. All over the place, goldman had a big beat on the earnings, just top line, bank of america was about inline, pnc and u. S. Bancorp, i love watching the super regionals, they had good numbers overall here the other one we like is wells fargo, moving parts there. Interest margin on the light side big Mortgage Division all over the place. I want to show you here about just generally what we know about the banks so far with mostly earnings beat and lower credit provisions, it is hard to move the stocks forward here the credits are lower. The deposits are increasing. But the big question is if you dont have a trading operation, how do you make money . You get long growth, foursquarefoursquare that is fairly tepid or maybe fees, you can get them up slightly for some of them because the Mortgage Applications are higher. Thats fees are increasing this is a big commercial consumer business. Very broad, good company to look at to get an idea what the consumer and commercial loans are doing. Their average loans down quarter over quarter, commercial is down but look, see all that Residential Mortgage increase, they have been doing gangbusters, we have been reporting that credit cards are generally up slightly higher as well. Quarter over quarter there is a little bit of good news and bad news there. The bad news is banks are going nowhere this year. The bank etf is down 30 30 year to date thats the problem overall earnings are better than expected overall. But this whole wall street versus main street thing is still very much alive. Thats because there is a real dichbs in h difference in how the earnings are coming in here spending on services has decreased. Thats a big thing remember, wall street versus main street, services are a big part of the main street competent. Not so much on the wall street economy. Services is a percentage of u. S. Economic activity is 83 it is 50 or so of the s p profits. So when you have skewed more towards production of goods than main street, production of goods are higher, that will help wall street this is the main reason our profits are demanding why wall street seems to be doing better than main street overall thats the important distinction. We have the megacap names benefiting from work from home as well. More on the differences between wall street and main street and the earnings situation coming in at trader talk. Cnbc. Com. Carl, back to you. All right, bob, thanks. We continue to sift through some of the fed headlines today to Rick Santelli you know, whether it is fed headlines, carl, or hotter than expected Producer Price index, you look at the intraday of 10s, very little response to any of the headlines or any of the recent news or economic releases outside of, hey, we want some stimulus possibly. The equity markets in the states doing pretty well. Globally not doing too bad japan, not doing too bad it is not the type of economic realities that we are really hoping for because Interest Rates arent paired up and correlated with it look at september 1st start to 10 years, well off the high yields look at gilds, month to date of gilds since the beginning of september. You see a drift at 21 basis points, it is at the lows of october on a closing basis bund yields, this chart goes back to midapril. Theyre at the lowest yields since the end of april 5 1 2 months italian 10s at 63, theyre at all time forever low yields. With sovereign yields this low, it is hard to inspire Economic Confidence especially outside of some of the issues of governments and Central Banks applying and helping boost Economic Data points carl, jim, david, back to you. All right rick, thanks so much modest gains, financials as a sector almost flat as goldman blows the doors off. Shares are higher. But bank of america down 2 . And wells fargo down about 3 . Were back in a moment hmms and ahhs heard incall. Hmms and ahhs and 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. Morning on squawk box. Take a listen. People should understand you dont have the Institutional Investor base kicking around the tires to the same extend you would a traditional ipo. Not saying they are fundamentally problems here. I like competition and direct listings we need to make sure the investors are getting the same disclosure comes a day after larry fink told us they are putting pressure on private he can wequy i had a terrific guy on the other day. Sports entertainment spac and former executive Vice President of the nfl he ran consolation when they got in trouble the baltimore gas and electric he was a submarine commander before i always wanted to invest in a guy like grubman hes got a terrific spac you are backing the person thats what people have to recognize. It is the cult of personality. If you like the person, then you can back them. Right the key for them is then they have the ability to raise the money. Very little down side. It takes some time for the investor, you can decide whether to go in or not. Get redeemed at 10. Will that fair . His partner is probably more important than he is no offense to gary hes been around a lot longer and a lot more savvy i want to invest in some people i cant invest in anybody. Except for fiber aslong as you know what it does take a break more sqwawk on the street after the break. For skin as alive as you are. Dont settle for silver gold bond champion your skin take a look at the Airlines Sector year to date speaking of which, be sure to watch Shepard Smith, air travel in turmoil premiers tonight at 8 00 p. Meaer. Stn after the news with Shepard Smith i cant wait to tell everyone about at ts big 5g news. shouting through the glass at t has nationwide 5g . Yup and thats faster . Faster, yea but is it reliable . Ah huh and secure you should consider making a big deal about it bigger . I said bigger oh, bigbigger deal bigger than what im doing . Its not complicated. A 5g Network Needs a 5g device. Get the new Samsung Galaxy s20 fe 5g for free when you tradein. Lets start with trading a wonderful thing he comes in to bed bath and beyond and actually sold the Christmas Tree shoppes business he sold linen and holdings i thought he would just close this ive been there. Hes a genius. Ill see it fastly and play you a bed bath look at that jim, what is on mad tonight vm and medtronic. They are getting killed in diabetes what a show. Never forget it. Fiber and fastly you ask those people what they do you know what they say they go higher well see you at 6 00 jim mad money 6 00 p. M. Eastern time Bank Earnings again in focus. We add to the mix again watching apple reaction goldman and wells fargo. More with a lot of stocks next the election impact how policies could move the stocks you own well start with Bank Earnings wilford has been moving through them starting with provisions of bad loans. Showing how much lower they are this quarter compared to q 1 and q 2. Still positive theyve fallen the most relative particularly with consumer environment. That september spending was higher year over year. This has been offset by pressures on Net Interest Income because of lower yields yesterday. Jp morgan was down 9 . And now both down high teens year over year on the call they made clear the net income has bottomed. Not because they expect the net end but because of refinancing has been exhausted goldman had blowout numbers. With the performance like sitcii it was their Asset Management that contributed most of all to their wide beat. The cfo gave a pretty optimistic outlook in terms of Investment Banking from here. You including saying that they feel looking forward the backlog would increase the Second Quarter and is supported by rampant m a was his words. Advisory fees, as you know, were not as strong as they were from the last quarter. From that trading that was expected from the lower quarter still year over year you want to be in Investment Banking in 2020 and not commercial banking we wonder whether that gap would narrow the difference between goldmans share price and that of wells fargo and bank of america highlighting that Investment Banking for this year. Thank you for more on the banks, lets bring in former wells fargo ceo. Great to get your perspective on things i feel like there could be a bank discussion and a separate wells fargo discussion wells fargo has been much weaker through the pandemic and has a lot of regulatory issues as a former ceo and presumably a share holder, how much work do they have ahead of them . Im not sure about that but what i read, primarily on fixing the issues they have with the federal reserve. That focus and the asset cap is causing revenues to continue to decrease so you have increasing expenses and lower revenues that is not a good position to be in hopefully they are working to change those things. You are still a share holder are . I am. As a share holder, youve been out and you have a benefit of being outside this slightly impartial ty to wells fargo. Why do you hold on are you banking on this turn around do you see that coming as a share holder yes i think it will come i think there are fewer Share Holders because they cut their dividends so much. For a long time, that was a reason to wait for the turn around because you were getting paid to wait i think they lost a lot of longterm Share Holders when the dividend was cut i dont remember seeing a group quite this out of favor for this long in a while i dont know about you is it all about rates in the end . Even goldman sack, really isnt doing much of anything as a stock. Not down as much as some of the big banks. Does it just all come back down to rates the rates are low because there is a lot of uncertainty about the economy, those are related. Certainly as the fed has said. They are going to keep rates low forever. Even if the economy improved so thats a negative for banks you talk about trading revenue it has been truly unyouve got the noninterest revenue other than trading youve got to get special interest as long as the banks are going through and the fed will keep Interest Rates low the margins stay the same or maybe even go up a bit the only way you are going to get more is if the economy is sprung there is some certainty well have a turnaround in the economy and more employment and so on. Thats the most important catalyst to see bank stocks. The lowest theyve been for the longest back to the good spot. Is that the fed is still considering. Eliminating the dividends. The banks have held up through all of this. They have a what the fed is doing. Dont leave it all in the bank from the Economic Confidence. We watched goldman sack turn negative the deposits of all these big banks is extraordinary those have slowed not to mention the reserves from those who think there are no issues from the probability of that i think that the loen losses are more than required. Which makes absolutely more with increasing and not reducing making that industry any time. What sort of banks seem to be best sit waited in your view over the next years to be transforming the business. With the size and shape would you favor. Ive always been in favor of diversified. You need to be diversified the jpmorgans of the world is the best place to be the consumers and the economy will come back well have trading revenue which im not. The best place to be as an investor and all of those world diversified high yields. From an interest rate. Great to speak with you thank you for your time. Watching the airlines this morning, set after the bell tonight. More than that moving a little higher today when the numbers come out after the bell, everyone knows theyll le ugly after the First Quarter. We saw with all of the airlines stock, the focus will be on how much they lower the cash burn. Do they bring it down further than that with a sense of where they are for q 3 and what they expect for q 4 revenue is expected to drop 78 . Making a move not only in moves of securing with the frequent Flier Program and adding capacity also adding flights and routes in q 4 they had the furloughs of 13,000 people that went into effect at the end of q 3 happening on october 1. When we talk with ceo, scott kirby tomorrow morning, exclusively on squawk box, well be talking about a lot of things not only results but the forecast and the outlook for how those things will go which will be tough for the Airline Industry and yes, what happens with Airline Relief talks in washington, guys as you know, that discussion is still there. For these airlines that have already furloughed workers, there will be discussion of bringing these people back in. Thats one of the many topics that will come up tomorrow morning. Theyll speak again on the phone. Well have to watch. One of those things the market is closely monitoring. As we go to break look at shares of concho amid look at shares of concho amid reports co hoping things will pick up by q3. Yeah. Uh. N ooco wa buy it well be back after the break. Boss you alright . [sigh] [ding] never settle with power e trade. It has powerful, easytouse tools to help you find opportunities, 24 7 support when you need answers plus some of the lowest options and futures Contract Prices around. Dont get mad. Get e trade and start trading today. The election is less than three weeks away we are taking a look at the impact each policy will have on different sectors of the economy. Today, the focus is on the sector and utilities director roger joins us on the phone. Talking about 6 a barrel sorry 6 a gallon gasoline and the prospect that biden would ban fraking and has said he would not. How do you see it . Thanks for having me. We noted theinconsistencies. Referring to the fraking ban and that they recently say to that the move towards decarbonizing the world. That is the longterm goal and the difference between the two candidates here. How do you see it the longer term you refer to which are only going to accelerate thats going to happen irrespective of what occupies the white house. Investors will have to see those and well see a core relation with companies that are increasing and have a higher and lower cost of capital. In terms of gasoline prices. There are so many things that will affect prices who occupies the white house is one of the long list of things that will happen in the economy whether people start traveling again is the most important driver assuming the economy recovers and with the prospect of any sort of blue wave, in the short term, even as we march towards decarbonization, there is still a time people drive fossil fuelled cars if they make drilling harder to do and the supply of oil goes down, we could be in a very positive time frame period for the oil and gas companies. Where prices are supported i would agree with that to consider if biden were elected, he would probably reenter a Nuclear Agreement with a roon bringing more iranian barrels to the market. The idea if they start pumping more, what does that do to the existing cohesive. You have to wonder about the total global order you are correct. If there are limitations on the drilling in the u. S. , that could be supportive in the prices. That is not a problem now but suffering from an erosion of Investor Capital and the lack of concerns the industry and that is the requequestion now for the Energy Sector. You are part of a shrinking cohort of analysts that cover the industry because investor interest is so low as a part of the s p, it is the smallest. What is your view in terms of the industry does it have to get smaller. Are we going to see more deals will we see some of the majors combine . Youve seen some transaction unfold that was announced in july and just closed this month so a pretty quick process include the change of both the acquirers and acquiries have said i think it is worth considering. There are some real challenges ahead. With the renewable and the growth of renewable over the last couple of years with most projections, the deez ill markle is less than 2. 5 . That is a decade from now. With respect to alternative fuel and alternatives to oil and gas. There are real size and scale in front of us that say oil and gas will be around for quite a while. One other thing, if you look at what the industry is already doing, which is recognize the core return. Cutting back on spending from that return, seeing a limitation of drilling in some areas. There is not a nearterm impact that will surprise people here regardless of which party wins the white house and controls the government finally tomorrow on the issue of esg and growing Asset Strategies from institutions is there going to be a pull of new capital and the potential to move prices up or a gain within the industry itself . Is. I think that companies that are able to be console i had daters and demonstrate concerns, they have the ability to perform really well. If you look at tobacco stocks. They can perform well on esg perspective. From that part agreeing forward from the u. S. Capitol coming into those names and stocks continue to trade at multidecade lows. If they are able to demonstrate returns there, they could be a meaningful return on it. Thank you both. Appreciate it. Thank you now for our etf spotlight. Ticker xph, up a quarter a percent. One of the top holdings eely lily is trading lower one day after the pause of the trial after the promising covid19 treatment. Sqwawk on the street will be right back we did it c crowd cheering [narrator] wherever you start, snhu is where you can finish. crowd clapping crowd cheering here we go. [narrator] and its it. [group] yay [narrator] you did it, high five Southern New Hampshire university. [man] that gets a hug. laughing look at that masters degree, i did it i did this for my children. I am very proud of myself. [narrator] finish your degree at snhu. Edu. The port of los angeles just reported the best september ever in l. A. , shes not afraid of no stinking airplanes from iowa to who knows where next you dont want to get near me god knows what ive been exposed to right now im on top of the 8 00 p. M. Terminal. Almost 500 acres the port of los angeles just released these numbers saying in september, they had 900,000 container units. Best september, best quarter most is thanks to imports, most coming from china, up 17 . What trade war you see exports are still down, not much empty containers going back to asia to pick up more stuff also way up well talk more about if this is pentup demand or just demand. Based on the number of ships on the water, to accelerate, the port is still down for the year. What are people buying one can assume electronics and pelotons look at the containers headed to america. According to import genius, one week ago today, 38 standard containers of peloton and i dont know how many pelotons you can fit in a standard 20foot container. Back to you. A great microindicator. Today taking peloton to 144, thats a street high jane wells looking at the ports this morning watching wells fargo this morning as well. Retreating a bit down 4 they do have plans to down size nge real estate portfolio in the lo and medium term we are back after the break. 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. Welcome back here is your cnbc news update. In wisconsin, a judge has temporarily blocked the capacity limits for bars and restaurants. Plaintiffs argue the 25 limit is a de facto closure. Wisconsin hospitals recorded a record high number of Covid Patients in virginia, extending registration to vote the lines went down after utility worker cut a cable more than 10. 6 million americans have cast their ballot so far according to the u. S. Elections project. 7. 5 the time in the same point of the 2016 election you go to cnbc. Com to see which states have more than 20 . In thailand, pushing through and trying to overturn a police bus in their way their demands, fresh elections and new constitution a busy news day. Back to you. Thank you, sue. Apple, as you know right now has introduced new models. Better camera function how is the stock reacting to those . Great to see you. Price action, i guess, sourt of classic any surprises how the share has responded to the news yesterday. We look year to date, the stock has performed extremely well the s p 500 has rallied. Simply put, apple during this pandemic is generating a tremendous amount of cash flow they are inventing and coming out with new products. Interesting here they are hiring. A lot of industries are laying off people doing furloughs of workers. Apple is hiring. They are coming out of the pandemic stronger. The products you are showing apple announce are going to be ready and on the shelves and available to large quantities for the Holiday Shopping season. That is very important the piece in the times about not just apple, amazon and google as well buying real estate in midtown. Joining us as well to talk about the event. In terms of the actual product announcement, any surprises in your view and how effective is this messaging that 5g will change your life thank you for having me i would say in terms of the overall event, the specs of what the supply chain had been televising for a long time that price point was very attractive that is what theyd be speculating from late last week the 5g is interesting. We found a lot of respondents willing to upgrade we think this could be a longer and stronger cycle this wont be a huge bump right away it could be a longer cycle because the move to 5g could be a little bit slow. If you assume the installed base is likely to upgrade their phones if they push out their upgrade, they go four or five years because of the uncertainty of the pandemic sure. What you are seeing this year, apple will ship less than 200 million. Maybe around 185 million that is in the fiveyear replacement cycle. Well have it about 200 million for calendar year, 215 million having the 200 million plus sustainable for the next three or four years. That is the big spring for the 5g with the 200 million run rate compared to the sub 200 million this year and average over the last several years jim, we are early certainly in the 5g roll out not just the handsets but the lines as well. Is there nor we had talked about. Thats a very smart question the answer is yes. The prior history of these cycles up 4g, 3g, lte and 2g on the cellular connection. 5g will be Edge Computing and a lot more think about your automobile being connected, traffic signals, Police Survey cameras to prevent crime these things are to prevent. You also think about health care the ability to monitor Blood Pressure and oxygen levels do you when going to your primary physician, do you up load over the 5g network these things will be changing the way we do life slowly but automobiles, traffic cameras, security systems, watches and other innovation beyond the smartphone as we know today and 5g will enable that to happen we always talk about phones getting bigger, better, faster, smarter. You have a nice wrinkle about many form factors where things are smaller and simpler. I wonder how effective is that strategy what kind of consumer response to that. The response is meaning the price conscious customer many who dont need the latest greatest and to pay 1,000 for the highend phone for many, with the large screen size is too coupmberson to put your coat pocket the performance characteristics with the phone are still a part. I do think those factors are interesting. Skewed to what i would call more price sensitive consumer base. Guys, we look forward to watching your field checks as we get closer thank you, guys. Thank you great to see you, bye bye. Coming up, Shepard Smith will join us ahead of a special report, air travel in turmoil. Stay with us we asked our traders to go on a hunt for an item with promising detail more sqwawk on the street coming up. In the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. State of the Art Technology makes it brilliant. The visionary lexus nx. Lease the 2021 nx 300 for 359 a month for 36 months. Experience amazing. At your lexus dealer. Since the pandemic began, airlines have been highlighting their cleaning what about keeping that middle seat open . Shepard smith explores what airlines and airports are doing to convince travelers it is safe to fly on an airplane, you cannot properly socially distance the president of the association of flight attendance Everybody Loves the marketing slogan we keep the middle seat open they would have loved that before coronavirus what that does do is decrease the number of people on a plane allowing flight you kroo to move people around. A complex puzzle giving travelers more thanthe distanc of an arm rest we recognize some airlines have put more planes back in the air to help with capacity. Thats what we need to do to make sure there is a cap to make sure we dont have every single seat full. Dont miss the report, 8 00 p. M. Tonight on cnbc shep joins us with news on that special report great to have you. Weve had these Airline Executives to come on and say the number of documents cases spread on a plane is diminimous. How much faith do we put on that we did our research the key is the number is low the key is how they filter the air. If you have somebody next to you that pulls up a mask and sneezes, thats it this really is about people, carl it is about frontline workers that have to be there and their lives have been up ended weve had the ceo of delta talking about what carl referenced, these very low rates. The bigger question remains why you want to get on an airplane in the first place most people cant come to new york we cant go to europe. Until that comes back, it is hard to believe the industry coming back. For now, there are a lot of front line workers there are doctors and nurses some people are traveling to weddings and things scientists would suggest and insist you should not do. The people are in the skies. Airlines are seeing their bookings especially for thanksgiving and christmas and new years are coming up. There is some fatigue on coronavirus. People are on the move watching this video and the planes being cleaned it looks like the planes are cleaner than they were prepandemic. When you talk to these people right now is the time when stimulus is being hammered out what is the argument for the Airline Industry to get a second round of stimulus. Their argument is simple and immediate. We didnt do anything wrong. This isnt a time when the airlines mismanaged. Bought too much stock. It came them they are victims through no fault of their own they are being laid off and they cant pay their bills and feed their kids by tens of thousands. You want to lose this industry and go down to two airlines because somebody will go bankrupt help us out. Without the Airline Industry, thats 5 of gdp we are in a lot of trouble without it an incredible number. The industry was so complex already. Youve got government regulation, unions, airline maintenance. To layer this on top of all of that probably makes the most complicated industry that much more complicated it is they have such a great lobby they make a lot of noise on capitol hill their point is dont leave our people to fend for themselves. Ive talked to many. Everyone associated said, there was a time you get furloughed, you go find a job waiting tables there are none there is nothing for them to do. We planned our mortgage is there. We didnt overspend. We didnt do anything wrong. We are just screwed. And they are hurting yeah. Shep, often we hear, look, it is a business if you are in trouble, raise some is money, issue some debt figure it out. In this country, we think of jet service as a given and something we deserve to have that yanked away feels wrong somehow. As one Flight Attendant told me, we checked shes right. If every Flight Attendant gave up their paycheck and workedfo free, they wouldnt solve their money problems it is not like that. Right before covid, we were at record highs they went down to 15 . Remember laguardia embarrassment to the world wait until you see the new airport. I traveled for decades thats the most beautiful air terminal in america. I dare anyone to say otherwise it is incredible just empty cant wait to go. So much for third world we cant wait to get a look at that a lot of us cant wait to get in there. It is gleaming. Go ahead we cant wait to see that and the dock at large. We are all going to be watching. Shep reports, air travel in turmoil tonight at 8 00 p. M. Eastern. The way they built laguardia and kept Everything Else going was incredible to watch. Shep will show that as well. Before we head to break, look at shares of bed bath and yond. They are selling the Christmas Tree shop retail chain to jersey based linens dont forget, they still own buy buy baby back after this. Hmms and ahhs heard incall. Hmms and ahhs oh yeah, you going to place it . Not until im sure. Why dont you call Td Ameritrade for a strategy gut check . Whats that . You run it by an expert, you talk about the risk and potential profit and loss. Couldve used that before i hired my interior decorator. Voila maybe a couple throw pillows would help. Get a strategy gut check from our trade desk. Welcome back to skbauk squn the street. Trying to hold on to some gains. We dipped briefly into negative territory. The dow was up 12 points, the s p 500, the best performing sector by a wide margin. As we take a look at some of the individual Leaders Within the emergency sector and the s p more broadly, youve got resources, far and away above, saying they might be in talks to acquire the rival producer elsewhere, Rising Oil Prices also benefiting the Energy Sector youve got diamondback, baker hughes, and now i will send it back over to you guys. Domm, thanks. You know who is really excited about a potential biden win next month rich kids. Robert, tell us why. Reporter wealthy americans transferred nearly half a trillion dollars to their kids and relatives every year, and now many families are racing to pass down even more in advance of a possible blue wave. Now, bidens tax plan calls for a big jump in the estate and gift tax under tax law, couples can pass down up to 23 million to their kids tax free. Biden would cut that limit to just 7 million. It boosts the estate tax rate from 40 to 45 . So if a family was going to leave 20 million to their kids, they would face zero taxes on that right now but pay nearly 6 million in taxes next year if biden wins and he gets that tax plan through. Trust and estates attorneys say they have never been busier as clients rush to create trusts and accelerate those inheritance plans for their kids now, if trump wins, they simply wont fund those trusts and theyll just wait. But attorneys say they will be so swamped if we get a biden win that clients want to get everything ready now just in case now, you could see, according to experts, hundreds of billions of dollars or even up to a trillion in wealth transfers in november and december if we get that blue wave, guys robert, but, again, just to underscore this, the funds dont actually have to be transferred to that child. It could be held in a trust for a number of years until the child comes of age or until certain milestones are hit reporter thats right. And a lot of these plans were in place already, lets say, parents plan to give their kids a certain amount in four to five years. Whats happened, this is just accelerated all of this. What theyre saying is lets get all the documents, all the trusts ready so we can drop those funds on november 4th or 5th or december, whenever we get the results, and well need to do that before the end of the year because if that tax plan goes through, it could be retroactive to january 1st its really a race against the clock, especially if we get that blue wave. Is that race even more fevered, robert, because of stock portfolios, the notion that gains will be taxed more heavily under a Biden Administration reporter were seeing conversations on the family side and a lot of conversations on the hedge fund side, on the families who own private companies. If you look at all these familyowned companies, holders of stocks, theyre having all these conversations now about how much to sell, whether to sell, and how to sell those stocks before the end of the year if all of this happens. There are just so many taxes that could take effect so this whole industry in hyper drive right now in advance of what were seeing in the polls. Robert, thank you robert frank meantime, bill gates joined squawk box earlier to talk about vaccine trials, Technology Regulations and where we stand on covid19 headed into the winter here is gates on when we should expect a return to normal. The rest of this year will not be normal and the sooner we deliver that somewhat bad news to people so they can get ready for what will be a tough fall, the better as you go into next year, we should start to see these tools be available in volume i think several of the vaccines are likely to get approved by the First Quarter and there is manufacturing going on in parallel, so theyll get out there fairly quickly so things could be slightly better in the first half by summer, we ought to have dropped the numbers, both the deaths and the transmission a lot. We wont be totally back to normal until we basically eliminated this on a global basis. Gates also mentioned that the repeated stalls in some of the phase three vaccine trials are to be expected well have more on that coming up on squawk alley, which starts right after this break. Announcer realtime Exchange Sector sort is sponsored by sector etfs. vo im a verizon engineer and today, were turning on 5g across the country. With the coverage of 5g nationwide. And, in more and more cities, the unprecedented performance of ultra wideband. The fastest 5g in the world. It will change your phone and how businesses do everything. Im proud, because we didnt build it the easy way, we built it right. This is the 5g americas been waiting for. Only from verizon. Good morning it is 8 00 a. M. In redwood city, california squawk alley is live good wednesday morning welcome to squawk alley. Im caro quintanilla markets off of their early highs today. Theyre trying to avoid two days wn
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