Transcripts For CNBC The Exchange 20240712

Dom . It looks like well try that recovery trade from yesterdays late day selloff here. Stocks are broadly higher and to a decent degree. 250point gain for the dow about 1 upside. The s p 500 still very much above that 3,400 area. Thats an area that a lot of traders are looking at as a pattern of support there possibly for the markets up 1 , and the nasdaq, believe it or not, is underperforming, only up threequarters of 1 as well so the nasdaq a key focus there. If you take a look at some of the things that traders are watching from a more macro perspective. Interest rates, especially longer term ones are a very key focus here we dont show the 30year long bond very often. We focus on the tenyear more but that move to the upside has taken that 30year long bond beeld 1. 592 above its longer term trend line or the 200day average yield for that particular Interest Rate 1. 52 is the level to watch there. That could have reverberations on the financial side of the market also then check out these particular stocks because they are showing a broadbased indicator. We got better than expected housing data throughout the course of this week. D. R. Horton shares up nearly 2 . Same for lennar. Home depot and Home Improvement ant mohawk industries, do flooring, all of the housing and buildingrelated stocks, kelly, moving to the upside so Interest Rates a key focus. Watch the housing data thats helping to propel that market to the green as were seeing today ill send things back over to you. Yeah. Leading us out of or through the recovery, we hope. Dom, thank you very much. Investors are continuing to watch washington as the clock ticks on House Speakers pelosis deadline to make a stimulus deal. Moments ago, in fact, the House Speaker says she has hope a deal could be reached by the end of today. Despite all the back and forth weve seen though, markets which have been having a rough time with some of these headlines and generally dont have a great october in an election year, well, they are not doing so bad. The nasdaq is up about 4 this month. 3 for the s p and 2. 5 for the dow. My next guest thinks this market is due for a pause joining me is jeff crumpelman, the chief investment strategist at Mariner Wealth advisers jeff, good to have you you were somebody who told people to stay invested all along, so this is not, you know, hey, the sky is falling kind of thing, but you do think were due for a pause now. Why . Well, i think just it would be normal after an historically swift run to newer highs for the market to take a pause after a 35 pullback in one month in which we remain contrarianly positive. We thought and we maintained our target of 3,500 in the s p weve just been surprised that it has recovered so swiftly, so after an historically swift move to newer highs, to have a pause would make total sense to us, but there are some worry items that are out there, the election, the stimulus bill thats yet come to fruition, and its continued to to be debated. Those are some of the areas that could cause a little bit of angst and keep us in a trading range after a really hard run. Yeah. I mean, this is kind of the pours that everyone has been waiting for, but maybe you could count september, but it hasnt really materialized, and i guess thats your point. Markets like to climb this wall of worry. Lets talk about some of the kind of tactical recommendations that you have here because, number one, were talking a lot about growth we have headline trouble for big tech today, but you think theres elsewhere that people can look for growth other than just the faang names, so to speak. Where is that . Yeah. So, to be clear, what im saying is well have a shortterm pause, longer term looking out over the next 12 or 15 months, were biassed to want to take our price targets up, and that gets it to some of the areas that were focused on because we do have Vaccine Development on the horizon. We do see improvement in earnings in the economy and the data is very solid leadership remains in the cyclical growth areas of the market, and i think its misadvertised that its just all about faang. We have a very broad participation in the stocks within technology. Its just not faang within technology, so there are a number of names outside of technology that weve done extremely well, and we expect to continue in the software area. You know, splunk, salesforce are good examles, 26 which makes Silicon Carbide used for 5 guy transmission so pockets of technology we continue to like, and we think its much broader than advertised, and then Consumer Discretionary ive mentioned before on this telecast with you, kelly, that ive spent a lot on lululemon as have a lot of other folks in the midst of this covid, so lulu is a great example of benefits from covid and fedex, federal express, wonderful quarter, 17 times earnings with 20 plus growth in ecommerce really executing at this point with the industrials those are those are good examples of stocks that we think that well do well, and ill end it up by saying more with lithium minor and distributor. They are supplying lithium for this move towards electronics so those are areas that we think are right for continued good performance. Then would you say to investors, jeff, that any pause that youre anticipating should be a buying opportunity . Yes i think the nuance every pullback that weve seen going back to 2009, all weve said buying on dips, buy on dips our mantra was in march and continues to be hold your ground, and i do think that weve raised just a little bit of cash after this historic run to be redeployed, an absolutely if we saw a pullback here as we move through election and get more information about managing covid, yeah, i think that were biased to say buy on the dips, absolutely always clear, jeff. We appreciate it a lot of good names and recommendations for people as well thank you, sir well check back in soon thank you. Lets turn now to the other big headline out of washington, the doj along with attorneys general from 11 red states are filing an antitrust lawsuit against google the suit alleges google has monopoly over search, locking competitors out of the market through exclusive contracts with distributors while also stiffling innovation googling firing back calling this lawsuit deeply flawed and says people simply choose to use google instead of available alternatives joining me now to discuss the ramifications is a former antitrust attorney for the federal trade commission its great you have to here, and how realistic and what remedies do you expect to come out of this so, i think this lawsuit is, well, certainly its very significant. The department of justice hasnt brought a monpollinization case of this magnitude since it sued microsoft back in 1998, and as you know that was a huge case that went on for years and years. I would expect this case also to last for decades so the possible remedies, its a whole range possible remedies could be, you know, google is prohibited from presetting or having agreements to preset or block competitors from being on mobile platforms thats one possible remedy goingp could be broken up. I think the most likely remedy will be some sort of settlement. I think its a difficult case, and it will go on for many years. Yeah. Difficult case that will go on for years. Were looking at shares of alphabet up 10 today. They have of they have shrugged off the headlines all along and should they be changing any Business Practices should investors be worried about any dramatic changes, or is this way, way down the road i believe at this point its early for investors to be worried about changing any of their investments, and i think that google will have a fairly strong case, so looking at the the complaints which im still working my way through, but looking at the complaint filed by google and just keeping up generally with the investigation, its clear that much of the case is going to be based on witness testimony which would be competitors complaining and documents produced by competitors as well as google. The difficulty or part of the difficulty in this action is that google is offering its product for free, and so because the product is offered for free it will be difficult or more difficult to get economic arguments and typically the way that you win most antitrust cases in the last 20 years or so as you would have economic models that show how consumers are harmed as a general rule the u. S. Antitrust laws protect consumers. They dont protect a particular competitor, and so while googles actions may harm other companies in the search, in the general search category or the advertisement category or even other companies that would like to be on peoples mobile devices, its difficult to say at this point that there is what is the value of the economic harm because its offering its products for free, so then youre sort forced to have a model that talks about what would the model be like if these constraints werent in the market, but you dont really have an economic cost, maybe consumers would have more choices, perhaps some smaller competitors would have more market share. Yeah. But its its not a clear case, so i think its a very difficultcates, and i think part of it is, you know, many of the attorneys at doj working on this case felt that it was filed too soon and moved off of project, so i i think its premature to change your Investment Strategy at this point fair enough, and that certainly seems to be running through investor minds as well well see if this kind of novel approach, similar to microsoft but kind of with a different set of circumstances what that does bear out in the years to come. Thanks so much for your time today. Oh, youre welcome. We appreciate it. Still coming up on the exchange, the pandemic will have a huge impact on how consumers shop this Holiday Season so which retailer will come out on top in the number one retail analyst on the street tells us ahead. Plus, millions of students across the u. S. Are learning in their kitchens instead of in a classroom. Could this unexpected shakeup lead to an evolution of the Education System well ask the former u. S. Education secretary arne duncan coming up. And move over lululemon, here comes kohls well tell you what they are up to in when the exchange is back in a couple 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 is. Welcome back the coronavirus is transforming education as we know it and shedding light on some of the structural issues that our Education System is facing Remote Learning has shown that the country has an educational divide and is lacking resources, especially teachers that it needs. So what is the path forward for school looking like . Let bring in arne duncan, th former u. S. Secretary of education. He joins us first on cnbc ahead of his mill kin conference panel. Appreciate it, mr. Secretary welcome. Good afternoon. Thanks for having me you know, i think one of the significant but small changes that will probably come out of all of this is a big rise in homeschooling certainly a lot of parent have sent their kid now to private and parochial schools who wouldnt have done so in the past, and Public Schools who once kind of had a lock on education, you can kind of feel that slipping this year as a result of everything thats happened whats that going to look like if we spin the clock forward five or ten years from now yeah. Im not sure ifity agree with that longterm trend its been obviously an extraordinarily difficult time for kids, for parents, for teachers we shouldnt be in this situation. This was a Natural Disaster that morphed into a manmade catastrophe. At the end of the day kids want to be in bricks and mortar schools and want to be around their friends. Parents have never respected and appreciated what had teachers do more than during this time so at some point, and it may not be soon very honestly, but at some point as we get past this covid epidemic, im hoping the vast majority of children will be able to return to bricks and mortar students and enjoy the academic part and all the social and Emotional Learning and benefits that go along with that yeah. Certainly understand, and some of the parents im referring to who have gone to private schools are doing so precisely to have that experience because they want their kids to be around other kids, especially their younger kids you know, one of the other innovations thats coming about this year are the learning pods and from the teachers point of view its opened up a whole different kind of way of doing business you know, i dont know what the lasting power will be of that long term, but what what would you kind of say about the phenomenon of teachers starting pods and kind of reinventing the way that education is disseminated thats a great question ive said all the time that for me the goal is not to go back to quote, unquote normal whatever that was because normal didnt serve too many children well enough and we have to really use this time to try to reimagine and reinvent education, and so there are a couple of sort of fundamental things that we should be thinking through that weve always done that maybe arent in the kids best interest just to rethink and give you a couple examples of that. One is rethinking the School Calendar we have so many kids around the country so far behind right now. We always have had the Summer Office because we, you know, kids working in the farls. Thats not true anymore, and there are a lot of kids that that need to catch up. They need help so we have to rethink that secondly, i would love to see a National Tutoring program to very intensively reach the kids who are behind and help them catch up whether its physically, virtually or both and third i think we should move from a competency form of education. Pass algebra when you know algebra but not after passing class for nine months and just to stay on the algebra exam. Lets say you have an amazing algebra teacher at your school that normally teaches 100, 125 kids in a day. What if that ticci was able to teach all of your freshman in the High School Algebra and do that using technology and other teachers could use the rest of the day for office hours and for small, you know, small gruel groups of students and individual tutoring, sort of that podlike concept that you talked about, so its really a time, again, with all of the lack of leadership at federal leaders, local leaders are working so hard to try to be innovative and creative so hopefully we can come out of this with something much better than what existed before. Yeah. To your point, its making people think why should it be the best local algebra teacher, why not the best in the country or the world, right, who speaks our language i do think its kind of opened up this whole new frontier, and as long as this can also ameliorate the Digital Divide weve seen this year and not exacerbate it thats the real focus. Arne, i know you have a big panel to get to but really appreciate your time today thank you, sir. Thanks so much. Have a great day. Arne duncan, the former secretary of education talking about the future of schools. Coming up, netflix reporting today, and expectations are high in fact, its had four price target hikes this month. Well deliver and explore that ahead. Lbrands and the gap are a few retail names that are practically left for dead a couple of months ago could their huge return be a sign that retail could be headed rba ia ndend rebou wee ckn couple 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. 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. And sweetie can andcoloryou just be. T today. 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. Welcome back markets at session highs after positive commentary from Speaker Pelosi after positive talks of a possible stimulus deal up 331 rounds, up 1. 1 , pretty even gains across the cows and nasdaq and s p slightly outpacing that and all 11 sectors in the green Consumer Discretionary leadering the way and financial, industrials and Communications Services up there as well, all gaining more than 1 less get to sue herera for our cnbc news update sue . Thanks so much. Kelly. Heres whats happening at this hour House Speaker nancy pelosi says she is optimistic that she can reach a deal with the Trump Administration to get more covid19 relief out by election day, but she tells bloomberg that more work needs to be done on state and local assistance and also Liability Protections Goldman Sachs will reportedly pay 2. 8 billion and add mitt wrongdoing to settle federal charges connected with its role in raising money for a corrupt malaysian Government Investment fund. It will not, however, have to plead guilty to criminal charges as part of a deal with the u. S. Government thats expected to be formally announced later this week and take a look at this little guy. Cute alert this is a baby pugle hes being treated at sydneys zoo after falling 15 feet from a tree into an Apartment Building in new york city hes gaining wait and even though he doesnt look like it, it it look like hes growing a little fur youre up to date. Kel, what back to you . What is an akidna pugle ive never heard that in my life. Ive seen them. I know about the akidna pugle but its nate i have to australia. Im not really sure too much more about him, but hes awfully cute kind of he looks a little platypusy. If you say so. Yeah. All right. Sue. Thank you very much. Youve got it. Sue herera with our baby animals update for the day by the way, markets are also at session highs and positive comments from the feds Charlie Evans in the last few minutes. Lets talk a little retail, shall we, because covid has wreaked havoc on the u. S. Economy and could lead to less spending in the Holiday Season Bertha Coombs is here with the details . Reporter americans are feeling anxious about physically going into stores during holidays because of covid, but a lot of folks are also anxious about spending according to the Deloitte Holiday retail survey, 38 of consumers say they plan to spend less over the holiday disease, most because they are worried about the economy. Now, thats the highest reading in the Deloitte Survey since the Great Recession in 2008. Thats when people scaled back and retail sales actually fell more than 7 over november and december, and thats how much less on average people say that they are going to spend this year most expect to spend nearly 1,400 and nearly 500 of that on gifts and cards thats down about 5 from last year they expect to spend 34 less on travel and entertainment away from home, and those savings will go to nongift purchasers, ie a little more selfgifting. Kelly . Bertha, thank you very much we appreciate it Bertha Coombs. Lets talk more about how the changes in Consumer Behavior limb pact retail this Holiday Season joining me now with the winners were and the losers is matt boss, head of jpmorgans Retailing Department stores and Specialty Teams and today named the best analyst for the seventh time in this sector. Like a boss, matt, welcome back. Thanks for having me on. Lets start with the winners that you see here. You know, is it because of covid . Is it independent of code of who do you think is best positioned for the holiday period so fundamentally i would say theres three factors. Its value, convenience and innovation those were actually the fundamentals factors we were looking at prepandemic to determine winners and losers i think what comes out of the pandemic is you see size and scale become a much more important factor i think that the changing of customer behaviors and the market share that some companies have been able to garner during this period can be sticky. If you look at the dollar stores, whether its Dollar General thats been reporting sales gains much higher than prepandemic the question is how much do some of the changing traffic behaviors stick . I think some of the categories that youll see health, wellness and outdoor has legs postpandemic, and the other dynamic would be home, so you just cited it with some of the Holiday Spending which i think continues beyond whichsy think you will see travel and leisure on hold for a continued period as we move into 2021 but i think consumer could factor pretty well whether for the upcoming holiday or through the next half of next year. Yeah. You know, ive seen some other tabulations about how c consumerfree cash flow is at a high point you do have a couple of names like l brands and aeo, i believe thats american eagle, gap, turnaround stories, and you think they are going to bear fruit . Yeah. What were looking for is a combination. I think you have best in class names that come out of this stronger, so that for us would be a nike, a lululemon, a vf corp, Dollar General and then to the flip side im looking for value opportunities but the value opportunities with embedded growth. If you look at l brands its really the bath and body works concept that i think was validated during the pandemic and comes out of this period stronger similar if you look at american eagle, its the aere brand that focuses on the casual and the loungewear coming out which i think casualization is a clear mega trend coming out of this, and, third, would be the gap which you have the Old Navy Value concept if we see a more recessionary backdrop beyond the pandemic, and secondly you have athleta which factors into the health and wellness scenario. Absolutely. Final question, because you do have the offprice retailers here theres been a little back and forth whether they are overly affected by the closure of stores, maybe some wackiness with inventory this year you think they are still well positioned so i think the inventories are in a much better place today. I think they will even be very sizable ben fish rivers all of the disruptions rpts closures and t that settle out of all of this theres burlington, tj maax and ross stores and i think the opportunity then becomes how much mark share can they take out of this meaning i dont think anything has changed with their value proposition, and i dont think anything has changed with their local convenient model, but i think what has change said lot less brick and mortar competition coming out of this and more market share from the multiyear perspective thats a good point i mean, an unfortunate one again would suggest that the rest of the landscape but investors will be reassured matt, thanks for joining us, congrats. Thanks again. Matt boss with jpmorgan coming up, is tesla losing momentum in California Well talk about that, plus not a pretty picture for revlon. Bmo says its new time to play and the new player in athleisure thats all coming up in rapid fire on exchange. Whos supporting prop 15 . Joe biden. Biden says, every kid deserves a quality education and every family deserves to live in a safe, healthy community. Thats why i support prop. 15. Vote yes. Schools and communities first is responsible for the contents of this ad. Whos supkamala harris. 5 . Harris says, a Corporate Tax loophole has allowed billions to be drained from our Public Schools and local communities. No more. Im proud to support prop 15. Vote yes. Schools and communities first is responsible for the content of this ad. Welcome back let get you caught up on a few stories that thud be on your radar. Its time for rapid fire here do break down the headlines are dom chu, leslie picker and michael santoli. Lets start with tesla apparently seeing troubling times out in k. Tesla vehicle registrations in the state dropped 13 in the Third Quarter from a year ago due to a steep drop in model three registration tesla is californias largest Market Investors see this as a bellwether shares down less than 1 dom, what do you make of it . So, theres got to be a point here when the upside momentum in tesla stock kind of takes a bit of a break and we know that theres been a lot of talk about whether or not teslas overvalued at these levels and certainly given the run that weve seen over the course of the year that now comes down to whether or not we see that penetration for market in tesla permeating beyond states like california. Now, i know anecdotally where i live if you see an electric vehicle out there its more than likely a tes larks but can you say that besides other market besides the new York Metro Area and california that remains to be seen. In this Earnings Report well be looking at that and whether or not we see any kind of sign that the momentum is slowing down for them and whether profitability becomes more and more of an issue for investors out there. Tes larks already a big deal big at least from a market cap perspective so, yeah, those volumes, big, big deal. Mike, do you add it all up and say, okay, they did the price cuts they have had a few of the eyebrowraising headlines lately does that all point towards softening demand or no the signals they along with everyone else struggling you would think there would be pricing umbrella that there would be pricing so long and the industry is not giving many incentives but they operate as a separate mark. Do i think that because tesla reported bigger volumes a couple weeks ago takes a little bit of a sting out of this california number but certainly accentuates how Riasat Ali Khan and the rest of the world will have to be the longer term growth story on track for the half a million units, talking about it for next year next year is supposed to be up 40 from there that could become a big question if in fact they are losing momentum now all right go ahead, leslie. They have been chasing some of their policies changing their sevenday return and pared back their used car policy and some are talking about cannibalization of model y versus s and in the backdrop youve got all these strict restrictions in california because of the pandemic that makes it more difficult to buy a car, even a used car, and then people just dont have the wallet share that they did a year ago. The stock is teflon though. Unbelievable well see if anything changes with earnings. Still, keeping an eye on all of these trends. Lets talk some revlon. This one is pretty fascinating things, unfortunately, are getting pretty reugly for the Beauty Company they are hoping investors trade in their bonds at a steep discount because otherwise they could be worthless revlon shares down 73 and market cap has dwindled to a paltry 300 million and need 95 of bond holders to participate in this exchange in order to stave off prints and thats just for now, leslie. How dire is it its a pretty dire situation. 95 participation from the bondholders it is now small number they have tried this in the past and they havent gotten that participation, so a lot of people are looking at this including the Credit Rating agencies and say if they arent able to exchange the debt and in this case its about a third of the value, then whats going to happen is theres going its going to trigger an acceleration of a lot of the remaining debt on their Balance Sheet to be payable november 15th and the Credit Rating agencies say this could cause a liquidity crisis, a debt krunchlt peopcrunch people are even talking about the need of the company to file bankruptcy if that needs to take place and thats why its imperative for revlon get now have bondholders to trade in their bonds despite the big discount they sent a letter saying even though its a big discounts your bonds could be worth nothing if you dont do this. How did we get here for revlon decades of being used for Financial Engineering and piling too much debt on its not the business so much as it is the capital structure. If you look at Something Like estee laudering at alltime highs and either other brands, they are certainly victimized by some trends in terms of away from Department Stores and all the rest of it, but really its just about the fact that its been, you know, used as a vehicle, you know, round after round of extra leverage and thats where we are right now with more than 3 billion in debt on a 300 million equity market cap, you know it comes town to a game theory thing at this point which is that the creditor has to say what do i think my probable recovery is perhaps in a bankruptcy situation and whats the chances its going to have to go . Its obviously not a good set of options, but you have to choose among them. And listen, i take your point. Look at estee lauder thats what could have been for this company instead, this is going to be a sad ending no matter exactly what plays out here. Lets move along and talk about bmo making a big bet on the recovery the firm upgrade the dave aumf busters to outperform and raised its price target to 26 thats 50 more upside they say the most encouraging sign is that sales in regions where dave and busters have reopened are almost 100 recovered. Thats where they have opened the longer and shares are now actually up four times from their 52week low, more than 300 up 70 to date, dom, but you would still think that this would be the last place that people would show up now with you as they have reopened they are starting to get the traffic back. I was surprised, and just to be honest, i you used term bellwether before to kind of to kind of talk about how tesla in california is that kind of a theme. This is an interesting one with regard to whether or not people actually feel better about the economy amidst the pandemic and feel safe enough to dine out dave busters its like an adult game, play games, joy sticks and all, sit on motorized bikes, goes have some dinner and everything and you do so in an area where youre among other people as well if the this is truly a case and youre seeing a recovery in some of those markets this is a big deal because it could pore tend and be good for all at other restaurants and bars and everything out there im a little bit more kind of concerned about whether or not these kinds ever trends can last into the fall or into the winter given the flew concerns, burks i mean, thats a big deal if dave busters can get back into business the way they have prepandemic. I agree still down 50 year to date so we wont get ahead of ourselves but thats a dramatic recovery off the lows finally we know athleisure has been the big winner from 2020. Kohls today is announcing the launch of flex, its new private label athleisure brand and will be available next march for men and women but investors are already buying into the idea you saw the stock is up 8 on the news that kohls made during investor day mike, its amazing to me that a trend you and i have been talking about as over for like a decade exactly. Here comes kohls as a new entrance into the space and shares run 8 . No reason for you to be so generous about that. Ive been the one thats been handicapping the end of athleisure or at least making a gambit in that direction for a few years now and obviously i underestimated the fact that people would have no trouble walking out in public looking as if they are going to go to the gym at all times now the private label move is probably smart for a popular product line for any, you know, Chain Department store, but i would ask you are you closer to the beginning or the end of a trend when all of the discounters decide its time to have their own brand leslie . Yeah. I agree with that. I agree with that. I mean, when you hear march, i was hoping by march i might maybe get back in my jeans again or be buying some regular clothes. I dont know maybe im being too optimistic here, but it seems like the only new purchases ive made in the past seven months have been athleisure so by march, i dont know, i feel like my drawers are full of yoga pants and i dont know how many more yoga pants i can fit in there. 100 agree, dom i wish they were coming out with with a work formal line. Kohls, were going back to work and back to school in march and were all wearing pleated pants and blazers with what are they called, shoulder pads . I mean, give us some hope here. It all depends on what kind of athleisure youre talking about, because it could be yoga pants or could be sweats and hoodies but also i just bought a lululemon abc pants, right, these kind of pants that they have that are great for traveling, that kind of look like suit pants just in and of themselves i love those pants i keep on buying them because i can go out they look like normal work pants and feel kind of like comfy sweats or loungy type wear so it all depends on whether or not you kind of get that trend moving that direction as opposed to say, hey, im going to wear sweats and hoodies all day thats a different kind of athleisure and one that may be kind of going a little bit more away, but people will want to be comfortable and buy those types of clothes that make them feel professional and comfortable at the same time. Theres a happy medium to be had somewhere. When this line comes out i want pictures of whats in it, okay, and if there are professional pants you wings, and if its all sweat shirts and sweatpants then we win. Hopefully kohls is paying attention. What do we win . Hopefully kohls is paying attention. As i wear my university clothes stretchy pants right now. What will would a good prize be for the pandemic a face mask you . Know were all going to have a bonfire of the face masks next year hopefully already decided in our neighborhood, throw them all in and incinerate them, but anyway. I like that. Thats how we get through times like these guys, thank you all. Appreciate it. Dom chu, leslie picker and mike santoli in our rapid firech. Market sessions at fresh session highs. Down up 354 points and Consumer Discretionary in the lead and financials are up there as well as we await more details on a possible stimulus deal. Netflix and other key factors to watch in todays earnings release. Thats next. Before money, people traded goods. Tools, cattle, grain, even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. Netflix turning higher minutes ago. Shares are now up about half a percent. Now the company is forecasting the addition of just 2. 5 million subscribers, though Analysts Expect them to add 3. 3 million joining me is young kim from Piper Sandler and sarah fisher is the media reporter at axios welcome to both. Sarah, ill start with you so a deceleration quarter for netflix . Yeah. Thats what its looking like. We saw the stock go down way much in q2 because they forecasted a lot of slow growth and the reason being, kelly, people are no longer stuck at home lockdowns are started to be lifted also some increased competition. New streaming Services Like peacock have launched. Consumers have options and are no longer stuck inside the tv. Young, what are your thoughts on the quarter and the companys share price performances this year whats priced in you know, i think the covid19 stayathome scenario is whats priced in at this point. I think the major concern is what happens when these stayathome rules ease. I mean, weve run our number of surveys show far that show consumers are very adamant about staying with netflix, even after the stayathome rules ease so im pretty comfortable with where the numbers are right now and im looking forward to seeing what happens next. Yeah, young kind of sticking with that theme. One of the big debates in the market is about whether to stick with pandemic winners or not because they have you could argue they pulled forward a lot of demand and, on the other hand, you could say this is the new normal for the way that people consume contempt. For netflix they are on top of that possible price hike do you want to see them raise prices, or do you think they would risk losing subs over that i exabout pect a price hike and thats whether they grandfather in their current subscribers as well. I do think its a fair concern about whether a price hike would dissuade other people from joining the service, but what were seeing right now, although i think part of it is an acceleration of trends happening before covid people were already cutting the cord and switching from their traditional cable tv to streaming services so i dont see this as terribly unusual and a pull forward slowly but an acceleration as well. Yeah. Whats your price target, young, on the shares . Im currently at 534 and that 60 times my 21 eps estimate of about 890. However, i i think its important to note that the fiveyear historical multiple on the next 12 months is around 70 times and the tenyear is around 120 so i still think im still being pretty conservative. Wow, its wild but can trade that way for as long as it can by the way, the shares are at 53030 so right below your target sara, the larger question for netflix as swell how do they continue to fare amid so much competition . This is not five or ten years ago. Nothing unique about their offerings except for the literal unique original series and that sort of thing that they have so how are they going to naff gate this increasingly crowded landscape . Well, its really crowded in the United States and in canada, so where they are going to look to growth is overseas is in International Markets, and they have International Markets and theyve been pretty clear about thats what their ambitions are. The other thing to think about with competition is that they dont just see other streaming services as competition. Reed hastings has said for forte night, tiktok, theyre not only going to have to optimize programming, theyre going to have to continue to be a mobile success so people can watch on the road, on their ipads, et cetera and sleep is their biggest competitors as well, he said always look forward to hearing his commentary on the call thank you guys for now on netflix today. Still ahead, General Motors is going electric. The details and its hotly anticipated vehicle next and join cnbc on november 10th for a summit with executives who are embracing change and transforming the future. Were back itwn o. Wow, i wish i could get a deal on a smartphone, but im not a new customer. Well, actually now, new and existing customers can get our best smartphone deal. Its historic. That is historic. Which means. Im making history, right . Yea, i dont know if id exactly sa wow. Me, dave brown. Existing customer who got the greatest deal in history. Just like every other customer gets. Oh thats cool too. Its not complicated. At t is making history. Everyone gets our best smartphone deals, including the lates preorders. Lets check out some of the movers this hours. Shares from logitech international, demands for mice and keyboards are strong, up 6 today. Albertsons revenue beat helped by a 243 surge in digital sales. And Parsley Energy is reportedly in talks to be acquired by rival pioneer according to people familiar with the matter who spoke to the wall street journal. The two sides are said to be discussing an allstock deal that could be completed by the end of october it was said to watch Parsley Energy and shaers res of gm are higher about 8 , the company doubling down with its electric vehicle plans today and a new hummer reveal tonight, resurrecting it as an electric truck, an sut i think they call it, a Sport Utility truck. Some are going to call the hummer a modified pickup truck it will get a lot of attention when General Motors shows it to us tonight the Company Announced its making a substantial investment. This will be 2 billion. The biggestchunk will go to retool its tennessee plant, where theyre going to build the cadillac lyric, an allelectric cadillac that will be coming out next year. This is what they showed us of the lyric when they unveiled it back in august its one of 20 new ev models coming from gm by 2023 this is all weve seen, this teaser video for the new hummer electric, gmc hummer electric pickup truck theyll show us tonight. I hear a lot of people say General Motors stock has done nothing. Im comparing it with the s p 500, which it has outperformed, as well as tesla i know tesla has had a heck of a year so its not going to catch up to where tesla was. I think gm shares have had a really nice move, especially the last three months. After the hummer is unveiled tonight, tomorrow morning were going to be talking with the president of General Motors, mark royce he is one of the leaders that is spearheading the effort to convert General Motors into not a completely electric portfolio of vehicles but larger presence in the world of electric vehicles but can that new hummer fit three car seats . Well find out. Is it on the analyst upgrade . The stock moving higher to y today . Yeah. Its moving higher for a number of reasons. A number of analysts have been saying more positive things about General Motors in turns of the ev portfolio i think the move is a combination of the investment announcement they now will have three plants and in anticipation of the hummer unveil tonight. Yeah. All right. Phil are tha phil, thank you very much, sir that does it for the exchange today. Stick around for power lunch and pat brown will join us to talk about their latest product. Teth qckren john ford for that afr isui bak welcome to power lunch. Im kelly evans. Heres whats on tap stocks are rallying but off the highs of the session the dow is up nearly a 1 gain this hour. Plus, the tech crackdown is here the department of justice filing