Transcripts For CNBC Closing Bell 20240712

Well in many states. Businesses are holding back from spending amid the pandemic and stimulus talks appear to be at a standstill once again with leaders from both sides accusing one another of moving the goal posts in the negotiations. Unlikely we will get a stimulus before the election. 59 minutes to go, dow down 2. 2 . Lets get to the stories we are watching right now as stocks fall sharply mike santoli is tracking the market selloff for us. Which parts he is watching in particular meg tirrell digging into the latest covid numbers mike, whats the broader take on what is happening today average bit of a rethink on a mull pent fronts the idea that covid might cause more business disruption last week the s p 500 was skirting this boundary between this sort of breakout level we had and around 3,400 we are actually below that right now. Did a little bit of damage s p and the nasdaq fell below the 50day average the s. A. P. Warning probably evented the nasdaq from doing a better job of supporting the rest of the market i think it is going to have to regroup. Also, this move caught investors a little bit standing on the wrong foot when it came to bond. If you look at the comparison between s p 500 and long term tress res, the tlt etf come into today you see the trend recently was stocks up, bonds down in price, therefore bond yields going up for a while they were basically neckandneck this morning on a one year basis just todays action has put the bond back ahead. I dont think it necessarily unwinds all of the embedded economic enthusiasm that was in the treasury market and the steepening yield curve and all that stuff but it raises a question whether we are seeing another one of these, that was a dramatic low in the tlt in early june, a speak in yields, and a shortterm top in the s p 500 as well at the moment we still havent even unwound all of octobers gains let alone go back to the lows in september for the stock market that would have been closer to 3,200 on the s p 500 look at the leading subsectors that got us up to these near record levels. They have all had a roll overlook to them cloud computing. That also made a peak recently Home Builders, not so great in home data and semis. You have this sense out there that the Leadership Groups were tired, they were slipping a little bit then the macro story has been widely embraced that we are either going to get fiscal stimulus sooner or later and, et cetera going to help the recovering economy it is a rethink. One last point last week Investor Sentiment was leaning into the idea of a Fourth Quarter rally and almost any election result would be a positive i thinks that move back to something more neutral as opposed to everybody assuming all the outcomes are going to be great. If you look at which stocks, groups of stocks are performing the best for the month of october so far, autos up 20 airlines, the financials. Yeah . It tells you a cyclical story of an economy thats improving. It does is that up for debate is that a question mark . I dont think it is its certainly up for debate in terms of how far we can carry that of course they are coming off of some lows in september i do think we have to keep in mind, you know, honor the message of the market while also recalling that, again, back in june all those things were flying, yields made new highs, tenyear above. 9 we reversed lower. We got the sun belt covid surge and in general it didnt seem like the economy was going to immediately ratify those moves i dont think we are done. Maybe we get fiscal help down the road but at the moment it seems there was an imball an in terms of immediate expectation what was the economy can deliver. And Fourth Quarter earnings havent gone up very much in terms of forecast even though earnings have been beating really well on Third Quarter. Mike thanks down 2. 2 on the s p. Software company s. A. P. Is shedding tens of billions of dollars of market cap on the back of Third Quarter rolts. Josh lip ton has more. Reporter the German Software maker announced q 3 results. The stock was hammer giving up five months of gains on track for its worst day ever i talked with an analyst who covers the name. He said s. A. P. Assumed the pandemic would ease, consumers would feel more confident, start spending more confidently again. Instead new lockdown inside europe in response to covid19 infection is how bringing uncertain. Corporate customers are tightening their budgets bottom line, s. A. P. Cut its outlook on earnings and wretch for the entire year. Whats the regroup for other Software Names stapless brand says he views s. A. P. s challenge as more Company Specific for example, challenges with certain products getting traction and momentum. His checks point to what he calls a solid September Quarter close from many of the Software Names in his universe with deal pipelines progressing as expected maintains a buy on service now, sayersphores and microsoft which remember is scheduled to report results tomorrow after the close. Back to you all. Josh, thats sort of what i was going to ask you, which is how much of this is a specific s. A. P. Story i think this is their second time they have warned on guidance and they have had some stumbles versus, say, salesphores, which is killing it. Or is this really a macro warning shot that should affect everyone because they have such a good read on business spending how do you read it which one . I think thats the debate investors are having right now when s. A. P. Came out and gave these results, a big disapoint by investors, by the street. Some did try to extrapolate what that meant for other Software Names. You saw the Software Space move learner. However another analyst will argue his checks indicate this is a s. A. P. Specific challenge we will get a date point when microsoft reports tomorrow investors will be curious about guidance are they spending now, investing comfortly and strongly are they hesitating because of economic turbulence . Those results tomorrow after the close. Good ease for closing bell tomorrow josh lip ton thank you. Urning now to the coronavirus. Cases are liesing in the u. S. And in europe with the United States setting a record high for average daily new cases over the past seven days of more than 68,000 lets go straight to meg tirrell for more context on the numbers. Sara, we are seeing the record in new daily case numbers, the sevenday average, almost 70,000. We are also seeing hospitalizations rise and now after a bit of a delay deaths, new dily deaths are rising as well there is currently more than 41,000 people hospitalized in the United States. In terms of where we are seeing the fastest spread in the country, the hot spots, as measured by case doubling time, from ever corps isi, el paso, mobile, alabama, jefferson city, missouri, and oshkosh wisconsin. As we are seeing more and more people going into the hospitals concerns are rising about their capacity to really treat all of these people the Salt Lake Tribune yesterday in a headline that caught a lot of attention saying utahs hospitals are preparing to ration care as aRecord Number of coronavirus patients tlood their icus, they can add more beds, create field hospitals but they cant add more doctors and nurses trained in taking care of the critical patients. Meanwhile n the vaccine race, astrazeneca saying their vaccine appeared to work as well in older patients as younger adults in terms of the immune results and the immediate side effects of the vaccine, they say thats building the body of evidence for the vaccine. Of course we are waiting for phase three data which we expect the see potentially by the ep of this year. This week we could potentially get data from pfizer meg, when we see the data here in the u. S. Picking up versus what we have seen in europe over the last couple of months have european officials imposed lockdowns per case per 100,000 people or is it their data is worse and they are a month or so ahead what have we are seeing in the u. S. Certainly they do seem be the ahead of us temperly they ten to see spikes before we do on a per capita basis they were doing worse than us as of last wee. You do see stringent measures taken by governments there in terms of the United States it is a Regional Response we are hearing about different measures being taken in different parts of the country now a National Mask mandate being recommended. But in terms of the national lockdown, not hearing talks about that so much in the u. S. I think it depends on the hospital system, right, meg . I mean that was the reason for the lockdown to begin with, whether hospitals get overwhelmed and full but the u. S. Is a big country. Hospitals can get overwhelmed and full in one place and not necessarily be somewhere else. When we are talking about regional responds thats typically what Public Health experts are recommending look at what is happening in your community and respond appropriate appropriately, but it is a huge country. So what is happening in new york is very different from what is happening in wisconsin. Meg, thank you. A big sell off on wall street, do you is down 777 points we were down 965 at the low. After the break, funds trust tom lee tell us whether he sees this as a pullback as a buying opportunity. We will also talk about the stimulus negotiations and much more you are catching closing bell here on cnbc you can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save up to 400 a year on your wireless bill. With the carrier rated 1 in customer satisfaction. Call, click, or visit your local xfinity store today. Big down day on wall street. 45 minutes of trade. The dow having its worst day since june, off almost 800 points 30 out of 30 dow stocks are lower. Our next guest says he is buying the down you are optimism and bullishness have stood out this entire crisis and you have been right when it comes to buying the dip when it comes to march lows. Why are you still optimistic and bullish . We have had a lot of tape bombs today. I think its understandable that markets are nervous heading into election day and covid cases are rise asking we didnt get the fiscal stimulus. I think besides the shortterm setbacks i think the setup over the next six to 12 months is really constructive because we have an economy thats in the early stages of a recovery there is a ton of cash still on the sid liens by investors from a credit perspective, i think the credit perspective is still good Interest Rates are still at levels that are good for businesses and it looks like from both a Investment Grade and high yield perspective defaults are actually improving if you have a positive credit backdrop, a recovering economy and lots of cash on the side lines i think once we get through the sort of choppy one or two weeks there is big upside in equities. But isnt the concern, tom, that it could be more than a few weeks . We are looking at a really strong uptick in cases both in europe, which is already starting to see lockdowns returning and in the United States, which even if we dont have the political appetite for lockdowns and we start to see it regionally, dont you think it will have an impact on Consumer Behavior and ultimately the recovery, which was already pretty uneven . Yeah, i think people need to take covid seriously it is super contagious hospitalizations are picking up. I think we are at the point now where in the states remember, there is really 22 states where this is near alltime highs. They are already starting to see reaction, mask compliance improving and curb iing going o. If you look at the northeast, florida, california, texas, cases are picking up, but they are not surging. I think we have got consumers that understand what they need to do. And thats good. Im not trying to be dismissive of coronavirus because i think it is quite dangerous, but i think in the u. S. Hospitalizations and deaths have been a lot lower compared to the other waves. I think thats one reason why it is still not too late for actions to actually have good results. Tom, i get the bullish case on a 12month outlook if we get fiscal stimulus f we get a vaccine and still have loose Monetary Policy. What about the shortterm . What about 70,000 new cases per day, no stimulus and a delayed or contested election result all play out for the next week or two . What level of short term downside could we see . Cases are wilfred, you are right, i think cases are going to pick up i mean they could hit 100,000 pretty soon. But the rate of hospitalization is still around 1 , which is one fourth of where it was in the summer and like 1 13th where it was in the first wave so i think we are going to start to at least be more sensitive to more hospitalization utilization. As long as those stay muted, i think we are okay. You are right there are other stresses in the next couple of weeks because we have an election where the outcome may not be decided although polling seems to be solidifying here i know market dont like uncertainty but at the end of the day if we are talking about volatility for a twoweek period and investors want the think about six to 12 months what they really have to think about is where are good entry points . Today with the market down nearly 1,000 points and a surging vix, these are usually the levels that you think would make sense to start putting some risk on it into your portfolio where specifically, tom if you look at where the most pain is being felt today, its a lot of the recovery plays, airlines, hotels, they are getting beat up. Also some of the stimulussentive sectors, consumer finance, credit card companies. Which entry points do you like the best, for which industries yeah, i mean the hardest hit today are the epicenter groups, the cyclecally sensitive, whether it is cruiselines or casinos. And i understand why people are like i have got to get out of these things for the next two weeks because covid is rising. But plip this around these are businesses that have flip this around these are businesses that have really good long term relationships with their customers. Franchises, their credit line has been holding up. Thats where the best opportunities are going to be, whatever people are dumping on the risk off day, these are what people are going to be buying when the upturn returns. I think with a 1,000 point down day it is a good time to add some risk. How closely are you watching the long end of the yield curve for what it imply about the recovering economy and also sectors like the banks i mean, its actually its been a welcome snlg signal to see long term rates rising at the long end it doesnt signal that people think there is rising defaults in the u. S. Economy or u. S. Government it is reflecting inflation measures, better growth, and all three of those are in the right levels for risk assets. A rise in the long end is actually quite welcome. Tom lee, always a pleasure. Thank you for joining us. Thanks for having me. We are down 760 points, 2. 7 on the dow with 40 minutes left in the session after the break, travel stocks getting slammed in todays sale amid fears of rising coniroravus cases. We will walk you through some of the biggest movers thats next. Our Retirement Plan with voya gives us confidence. Yeah, they help us with achievable steps along the way. So we can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Oooh, well. Im good at my condo. Oh. I love her condo. Nana throws the best parties. Well planned, well invested, well protected. Voya. Be confident to and through retirement. 37 minutes left to go. Lets check in on some individual Market Movers amid the selloff. Dow down 737 right now dunkin held preliminary deal talks with inspire brands. It could take dunkin private at 106. 50 per share inspire is the owner of arbys sonic and Buffalo Wild Wings the stock is up 15 almost reaching the premium. Hasbro falling after reporting earnings the toy company posting a earnings beat but weaker sales in tv film and entertainment vision that stock beat up today, almost 9 . Toys remained pretty strong as woe learned from matels report last week as well. Also beat up today, travel stocks, falling sharply, coronavirus cases soaring of course playing into that seema mody has a look into that. Reporter a countdown to the no sale order for cruiselines lifting this saturday. Suntrust analyst patrick shoal says a biden win would be seen as a negative for cruise stocks. He believes that biden will be more likely to follow the cdc guidance when it comes to health matters. Remember a month ago, Vice President pence reportedly overrode the cdcs decision for cruises to be restricted until at least february. Now shoals says thats less likely to happen under a Biden Administration outside of cruises, hotels and booking operators, which are all reporting next week r trading down by as much as 6 as europe imposes these new restrictions that could certainly dent demand for travel sara, back to you. Payment stocks are also under heavy pressure today American Express among the biggest losers in the secretarier right now. Kate mooney has more on that space. Sara, investors fearing an increase in covid cases and a lack of stimulus could hit Consumer Spending which of course is not great for the Payments Companies look at amex the city council down almost 5 . They did report earnings last week with a steep drop in travel and entertainment profit was also down 40 year over year look at visa and mastercard as well down 3 today. Those Companies Reporting earnings this upcoming wednesday. Square and paypal, those have been big winners during the pandemic as people pivot more to on line spending but investors are taking some profits today. Kate rooney, thank you. Still ahead on the show, Carlyle Group cofounder david ruben stein joins us to share his perspective on the rising covid cases and their equity on equities. Right now, yields moving lower, buying the safe haven bonds, the ten year yield,. 8 still well off of the lows we wegoa few months a ll be right back here on closing bell. [narrator] at Southern New Hampshire university, were committed to making college more accessible by making it more affordable, thats why were keeping our tuition the same through the year 2021. I knew snhu was the place for me when i saw how affordable it was. I ran to my husband with my computer and i said, look, we can do this. [narrator] take advantage of some of the lowest online tuition rates in the nation. Find your degree at snhu. Edu. Welcome back 31 ips minutes left of the strayed. Dow is down 731 points the s p 500 isdown over 2 utilities have just gone green every other sector is red by at least 1 energy, industrials and materials hit the hardest. Three things driving the act rising coronavirus cases in the u. S. And abroad. The United States reporting more than 80,000 cases on friday and saturday hospitalizations are growing by 5 or more in 34 different states stimulus talks appear to be slowing down with little time to hammer out a deal before the election and German Software company s. A. P. Warning of a slow down in business spending due the covid is putting pressure on Technology Stocks around the world. Time now for a cnbc news update with sue herera. Heres what is happening at this hour. In Southern California, 60,000 people have been ordered to evacuate as a new wildfire threatens their homes. Across the state, utilities have cut power to an estimated 1 Million People to prevent starting new fires Southern California edison is considering planned outages for hundreds of thousands more. In colorado, firefighters there are breathing a bit of a sigh of relief after snow started falling in their fire zones. But their fires arent out yet and officials are urging people to stay alert. Republican Minnesota Senate candidate jason lewis is out of emergency surgery for a severe hernia his Campaign Manager says it was a success. He anticipates lewis will be out of the hospital in the next couple of days. In spain a record 52,000 new covid19 cases over the weekend. A roughly 40 increase from the previous weekend this as that country enters its second nationwide state of emergency with nightly curfews and other new restrictions you are up to date thats the news update, wilf, i will see you again in an hour . We look forward to it sue, thanks so much. All of the major averaging plunging as we head into the close. The dow is down 734 points 2. 6 the nasdaq and s p down 2 transplants as group down 2. 5 some of the biggest losers include avis, budge group, alaska air, united airlines, csx. Lets bring in the head of global autos and research at global equities. Thank you for joining us thank you. Lets start with the cyclical names that you cover, is this a pullback give the strength they had in the last month leading into today sure, makes sense sometimes with days like this you learn about positioning and unwinding and reversal of trend. Many of the auto names seemed relatively envogue right now with some clients that we talked to due to their potential to outperform in a reopening trade or in a you post election uncertainty trade. Particularly one which could involve people traveling again, moving about freehly so a vaccine trade and then one that involves any number of infrastructure outcomes you could have once we get again through the political uncertainty. Yeah, sure, a little bit of unwinding now from what has been a pretty strong run. Switching the folk to us tesla. Have you been impressed by the resilience of the share post after an initial post stock split pullback it sort of solidified and plateaus the last couple of months before 400 have you been impressed by that even when we have had days of Broader Market selloff given how strong their runup has been year to date listen, the year to date performance is impressive. In term of the recent trading color you are highlighting, not surprised. Tesla just occupies a really disproportionate amount of what is still a relatively scarce way to play publicly traded ev and av excitement in the market right now. Their quarter i think as noted by your program was very, very strong they seemed to be using cost savings, right the story on tesla we think is cost, they are in a cost leadership position. It is growing. That cost then begets profitability which enables them to cut price further growing their user price, expanding capacity, design cues, further lowering cost, expanding price and expand reducing price and expanding the user base. For investors focused on putting to the a clean tech portfolio, tesla holds itself out as a mustinclude in that list we did highlight a be in of names, 64 names across ten sectors that we think you could also consider in addition to tesla. It is not just tesla. When i hear you adam talk about tesla, it sounds like you are making a bullish thesis on the stock and i believe you keep raising your price argument even after the last quarter but still are on hold and not recommending a buy on the stock; is that right . Why . I think we are at a point, for an investor to put fresh money into tesla or we think to even hold tesla for three to five years versus others across semiconductors or batteries or ket torres emerging it has to be more than cars here at its valuation. It should be something moving from price times units sold to monthly active user and rpo, genuinely, that might seem like a stretch but we think the incremental buyer of tesla shares here will be internet tech hardware that can see tesla as an ecosystem that can produce Reliable Software driven wretch and some of that could be somewhere between the 70 and 100 ebitda margin when you compare that to the model in the Software Space thats when 40 times ebitda might seem reasonable. Thats something from an automotive seat, a difficult call for us to make unless we bring in our experts across a number of other sectors, across the tech platform. Thats what we are working on discovering a bit more so we can make more of a confident call, or not, as may be appropriate. Right now we are still in the diligence phase. I think there is more discovery to do, a lot of unproven parts of the model we need to respect. Your base is 360. Bear case is 114 bull case is 713 it sounds lie the way you are talking that you think the bull case is more lickly than the bear case. Is that fair we are not putting probabilities on the bull case but i would say in our given where the model is going right now, you have to include rpu times monthly active user, you have to include tams that extend way beyond auto or even the trucking industry. We need to include Industries Like insurance or the entire Energy Complex you need to include content. You need to include other ways to monetize data either directly or indirectly. Thats how you can get to cases frankly even beyond our bull case we regularly talk to investors who think tesla can be worth in excess of the most valuable companies in the world right now. You are not going to get there with just autos. They have to autos to become something all together different. Thank you for joining us. We have got 23 minutes left of the session we are down into 2. 2 on the s p. Back in a couple of minutes. Hey, dad hey, son no dad, its a video call. You got to move the phone in front of you like. Like its a mirror, dad. You know . Alright, okay. Hows that . Is that how you hold a mirror . [ding] power e trade gives you an awardwinning mobile app with powerful, easytouse tools and interactive charts to give you an edge, 24 7 support when you need it the most plus 0 commissions for online u. S. Listed stocks. Dont get mad. Get e trade and start trading today. We have got 20 minutes left in the trading day for more on todays selloff, about 2 lower here on the s p 500, lets bring in Charles Schwabs global chief investment strategist jeff, what are you telling your clients to do today at schwab . I think today its another sign this battle between covid and earnings i think the key right now is to stay put dont make any radical changes we were headed into an election. Headed maybe to a vaccine. I am not sure when thats coming but certainly taking a look at this difficult climbing in the markets in earnings and the everyall prospects for the economy i think it is still on the upswing. While it may take some months i dont think this is a day to make any major changes you have been looking at the Energy Sector. And what it tells but the election and what is priced into the market. The Energy Sector is the biggest place where you see the prospects fbetween a biden or a Trump Presidency a sizable stimulus package might be fading. You can see a gap between alternative Energy Stocks which have done phenomenally well and traditional Energy Stocks which lagged now an 80 percentage point gap but the gap has narrowed in recent days suggesting investors are rethinking their prospects for a blue wave election outcome and prospects for a large stimulus package. You are saying you think the race is tightening given what is happening with Energy Stocks how as an investor do you prepare for the next few weeks with some of these races being really close, whether it is the senate or for the presidency well, i think you have got to focus on the longer term i think in the near term we have got obviously a lot of factors affecting the markets. We are in the middle of the earnings season. We are certainly seeing the covid case counts rise every day. And with the election i think you have got to have an Investment Plan that goes beyond that i think as we look out to the next year i think what we are seeing is an emergence of International Stocks outperforming this is important because most domestic investors probably have an overtrags of u. S. Equities, particularly the faang stocks. They may not be the leaders in the next cycle we are starting to see better performance, in fact, outperformance by stocks this year that doesnt apply to european stocks, suffering as of late and year to date as well. Do you think if the u. S. Does not follow europes course with more economic lockdown measures that u. S. Is a buy on days like today when cases rising is influencing the pullback its not that easy, unfortunately. You know, if we thought just rising cases mean more lockdown and worse Market Performance that would be easy take a look at what happened earlier this year when europe and asia china in particular shut down their economy very aggressively compared to the u. S. Yet their markets actually performed better i think it is the effectiveness of the lockdowns we will need to assess we have a break out in 46 states in the u. S we are certainly seeing breakouts elsewhere. Ireland is starting a six Week National lockdown. Israel a four Week National lockdown those are successful in containing the outbreak. So we may see markets responding better in those areas that are past the outbreak than those who take less aggressive action. Thank you. We are going straight to the market zone here 17 minutes left in the trading day. We are in it the market zone, commercialfree coverage of all the action going into the close. Mike santoli here as always to break down the crucial moments of the trading day today we have got steven wise. Good to see you. We will kick it off with the Broader Markets. Stocks plunging as covid cases in the United States continue the raise, the dow is on track for its worst daily performance since september 3rd. All sectors are lower. Many of the sectors down almost 3 mike, what was the trigger the warning from the German Software company s. A. P. , the rising cases what do you think it was. All offet a slight miss on new homes sales. Made it tougher the look beyond some of the hazards out there that in fact you might have to have a further shutdown. I dont think it is out of the realm of what the market was up to beforehand, though. For two weeks we have mostly been in sagging pullback mode. A few times last week threatened to break below this range. Right now we bobbed back up not far below last weeks lows it seems like a bit of a gut check. Tomorrow at the close it is one of the stronger seasonal periods of the year. People are probably aware of that at the moment it doesnt seem like an aggressive flight away from risk. The rally in bonds was not that pronounced after the selloff that we had. I think it is a net negative day and people are rethinking the bull case for the immediate term but i dont know that it changed the immediate story. Steve what is your take on how big of a Market Impact there will be if we dont get a stimulus until say january. I think thats pretty much in the market right now the common sense thinking approach was that it was just pretty much a public i would say public presentation by pelosi in terms of the negotiation. There was no way she was going to give trump a relief package unless trump did the right thing and really took care of the workers and the testing. Now testing is off the table apparently right now trump came out and said lets go big, lets go big. Then he came out and said you know what, lets wait until after the election that wasnt by choice. To me, thats off the table until after the election i dont know i dont know if it is january but we are not going the see one this the next couple of weeks is my guess as far as the market goes today i think it was trading down anyway of course s. A. Pps comments added to the aggravation, but you cant dispute that covid is running away here and you are seeing more and more lockdowns i dont see the country looking down completely. There will be bars and restaurants. But you are not going the see more Companies Going back to work you will see schools shutting down there is nothing good. Whereas you had reasons the buy before this, which was that we would get a stimulus package now there is really no reason to put any money into the market. The travesty is, and i say this somewhat sarcastically this is the best earnings reporting period we have had since they started tracking this since 2008 however, and this is why i said it sarcastically, it is also the worst reporting period we have had except for 09 when things are down 6 . Lets mention s. A. P down 20 plus, after slashing revenue forecasts and warning that fresh coronavirus lockdowns will hurt demand for its business thou the first half of 2021 other Software Stocks significantly lower off the back of that. Shop pie one of the few in the green today. Up half a percent. Steve, whats your take whether there is read across after s. A. P. Warned. Or is this a stock specific issue . I dont think it is stock specific i think it is business execution specific Going Forward in terms of their pipeline. Ibm said some of the safe same stuff last week. Of course ibm hasnt had a positive quarter in i dont know how long the big key to me will be microsoft. It is the darling of the market. S. A. P. Hasnt been a great performer. The stock essentially flat since july microsoft on the other hand hasnt been a barn burner but it has consistently moved higher if we see this from microsoft look out below, there is the economic effect s. A. P. 40 billion coming off the market today so it tends to be overdone. It depends what end of the margaret you are are more going to the cloud, more working from home. It depends on your Business Model and how you are executing. I dont think s. A. P. Is seeing new orders Going Forward others are we have seen sod Good Technology reports so far it is sort of like wait and see but i wouldnt be near the high flyers fastly is a completely different model but i wouldnt be near them at all. What it has done, mike, it has thrown the stayathome beneficiary trade up in the air especially when it comes to the cloud and software fames clorox is up today, take two interactive, the video game company, sc, a lot of the stay at home plays are actually working. What is different you dont have some of the Software Names in there with them and they have been big beneficiaries. Software names in particular that sell into corporate i. T. Spending programs. Thats really what we are talking about here when it comes to s. A. P when it comes to some of the color that ibm had after its numbers last week. Even intels data center miss. Now, those are three companies that have had some challenges in terms of market share. But it does suggest there is moderation in i. T. Spending intentions it doesnt mean it overturns the software trade which has been dependent on themes. Shop phi i think there is variation in there there is no doubt that s. A. P. s warning today is mostly hitting s. A. P. But it is giving people an opportunity to reassess whether the rest of the Enterprise Group might have to come in with some downgrade of their profit expectations into next year. Some of the faang stocks are also holding up well go ahead. I dont think it is restricted just to technology. I sold peloton last week the stock started to act poorly. It is down more than 10 from its highs. I sold cloudera. It couldnt get out of its own by lulu peaked. Jp morgan down meaningfully. When you are sitting home, how many more things do you need to buy . Then you are taking a look and saying, maybe my job isnt that secure if it is, maybe the earnings that i am expecting arent that secure so i think this whole work at home, work anywhere stay at home trade is starting to peter out a little bit we are seeing that in home sales. Not everybody is going to rush still great innocence but the expectations got frogtdy. I sold my Home Builders the hxb and the itb thankfully before today. I am still stuck with some of it i will wait for it to pop. I think you have got to think about what is sustainable and whats not and take the froth out. Lets talk about stimulus again. Ylan moi has the latest headlines for us on that front. Wilfred we are now getting the readout from House Speaker nancy pelosi and pressry secretary streechb mnuchin, it doesnt seem they have made much progress in their talks despite having a 52 minute phone call today. On with twitter her office is saying they continue to eagerly await the administrations acceptance of our Health Language which includes a plan for test asking tracing. We also await the outcomes of talks between Committee Chairs pelosi is also putting the onus here on Senate Majority leader Mitch Mcconnell saying it is clear that progress will depend to he had leer mcconnell graeing to bipartisan and comprehensive legislation to crush the virus of course the senate todayhas been singularly focused on confirming Amy Coney Barrett to the Supreme Court. The senate is expected to adjourn once that vote happens later on this evening. So it didnt seem like republicans are going to be in town to negotiate any deal that pelosi and mnuchin might strike. Even though she might say she is still on theist innic an agreement can be reached before the election guys it seems there is not much hope anywhere else in washington. Ylan is that what the Sticking Point is right now, the plan for testing and tracing if so, what is the argument there . That is one of the Sticking Points and it has been a Sticking Point for quite some time now. Pelosi said the administration hasnt agreed to their language that would provide greater testing for communities of color in particular. Again, that is only one of the roadblocks state and local funding we last heard had not been addressed Liability Protections still hadnt been addressed 678 what happens to liability still hadnt been addressed. The heart of the legislation that the democrats are putting forward which is the testing and tracing piece, they have not come to an agreement on that and it does not bode well for the rest of the deal. I guess at least they are still talking. Something you can say. Thank you ylan ylan moi, appreciate the update. Dow down 753 points right now. Shares of boeing tropping with the lash stocks. Thats also weighing on the dow. It is the second worst performer. Phil lebeau. What started this morning with the spark being that china threatened tariffs against boeing and other defense contractors it picked up steam with investors saying as covid19 cases rise does that mean we are going to see even a greater drop in Airline Traffic . Boeing down more than 5 a you will the airlines down between 4 and 8 you hit on it. It is the concern we are going to see a pullback in air travel especially heading into the Holiday Season one airline you dont see listed here but we will be focusing on tomorrow, jet blue it is the last of the six Largest Airlines the report its q 3 results. We will get those before the bell tomorrow afternoon we will hear from robin hayes ceo of jet blue and talk about the Third Quarter and important low talk about the concerns that as covid19 cases rise we will see a pullback in Airline Travel back to you . We look forward to that tomorrow phil thanks for that. Mike, what are these stocks doing nerms of how aggressively they are reacting to the latest data that kinds of influences their particular industry . I mean they are pretty sensitive to it. You are closing off europe for who knows how long from now and it is pushing to out the calendar until anything gets back to normal in terms of the airlines in particular they are back to gauging cash burn. I dont think that dynamic changed much but everything we have heard in terms of news flow, caseloads and everything like that is having the wholesale response of sell the very targeted travel, leisure, and going out names. There is also that story this morning, mike, that china is going to sanction boeing and other u. S. Defense firms over selling taiwan arms. Not maybe a huge source of business when it comes to selling those arms to china, but also a reflection that these tensions are not Getting Better and in fact are getting worse. Sanctions, tariffs neither of things are growth supportive at time when we need it most. Not a help to boeing at least in terms of the body language of china. I would doubt they are going to close off one of the major commercial Airline Manufacturers to their market but on a day like today people are not going to necessarily just slug that off. After a strong summer new home sales fell in the month of september. Slight will he down monthtomonth but they were still up 32 from year ago the issue is less about buyer demand, more about supply, which was down 32 annually. The builders are having trouble keeping up with the land and labor short ans and higher prices for materials that and the Broader Market sent the home builder etf thats itb down about 4 . Putty, dr horton and luxury home builder all lower despite an upgrade from Raymond James analysts saying their confidence is growing in the continued strength and sustainability of new home growth even amid the pandemic again, builders have to be able to ramp up production and get more homes available in order to meet this demand. Steve, quickly, i know you mentioned already you have trimmed your positions in this space. Do you think we are just due a shortterm pullback or do you want the get out of the names for the next year or two i think it depends on the economy, pure and simple i mean, we are a consumerdriven economy. 67 of it. And the typical pillars of the economy are housing and auto sales. So i think they can continue the froth has come out a little bit. I think you can go back into them at some point we see auto sales are very strong thats the other leg of it so as i said i think you can come back. But froth got there. People didnt know what they owned. Pullty reported a good quarter last week but the stock was down little more time, and then it will be fine. Thats been a theme, too. Reporting a good quarter but the stock is down. Two minutes to go here in the trading day. Big selloff day on wall street nasdaq is down 1. 7 . Dow is down 661. What are you seeing in the internals . Close to washout levels most of the day a 90 downside volume day. That usually is a decent gauge of a burst of selling. Outright volume isnt all that terribly heavy will be at the dynamics with the stayathome going out cliquess on line commerce and short brick and mortar, outperforming today. Lease ear and entertainment etf down vix bod popped above 30. We are going to be on edge for a while here, although if we get a turnaround tuesday that could create a spike on the the chart tomorrow. One minute left in the eggs s. Down 650 points on the dow as we stand about 3u7b off the low of the session. The low was down 965 we are down 2. 3 still on the dow. Significant selling. S p now down 1. 9 . The nasdaq is down only 1. 7 , itself having been down 2 at the lows of the session. All 11 sectors on the s p are low. Utilities the best performer, only fractionally lower. All the others down more than 1 energy the worst, down 3. 5 . Banks, materials and industrials all down more than 2 . Oil down 3 today. Gold is essentially flat the dollar is up a little bit become a third of 1 as woe approach the close, we are down a healthy 2 on the s p 500. 2. 3 on the dow. The nasdaq is the best performer of the big indices down 2. 3 russell 2000 down more than 2 itself worst day for stocks in about a month if you are looking at the s p 500 the dow closing lower by 650 points welcome back to closing bell. If you are just joining us im Sarah Huckabee sanders here with wilfred frost. And mike santoli, cnbc senior markets commentator. Will be at how we finished a big is selloff day on wall street. Off the lows of the session. It was worse at one point earlier in the afternoon a broad based decline. Down 650 there was buying on the close. Apple actually went poe just in the final moments of trade American Express the biggest loser there. The s p 500 down by 1. 86 . We were down more than 2 . Again, off the worst levels. But energy got slammed Energy Stocks down 3. 5 . Industrials, materials, communication services, all of those groups got hit very hard utilities held up the best they almost closed positive on the session. Real estate and health care, too, fared better than the worst. Technology held up better than expected nasdaq closed down 1. 6 only, better than the other major averages there thanks the resilience in names. Apple, amd stayathome plays you i here. Docusign higher as well russell 2000 down just over 2 coming up, cadavid rosenstein right n right now, first to you, mike, what we saw today, what it reflected. Rising case counts in the u. S. , fading stimulus hopes and more election uncertainty. Priced all that stuff in, at least a greater probably that things are going to break in a slightly more negative direction. The end of the day was inconclusi inconclusive 3,400 at the s p thats the line folks were look at thinking that that means the upturn from september is intact. I mentioned before there was not a buying binge in things like treasury that would have said people were really in a wholesale way deciding to rethink risk further shakeout i think we came into last week and this week probably needing to adjust attitudes a little bit to open people up to the idea that maybe it is not going to be straight into a Fourth Quarter ramp higher. And maybe, you know today went some distance toward getting that done. Joyce, to what extent are you expecting stimulus of what size by when . How important is it to the market irrespective of who wins i dont see anything getting demonstrate the lame duck session for the congress i think this is something that goes into next year. It could go into the budget reconciliation process which is more of a march april event. The mark has been anticipating this for quite some time but they have never gotten mcconnell to the table on this even as mnuchin and pelosi have continued to talk. So i think the market is now realizing this could be well into the First Quarter of the overbefore any stimulus actually materializes First Quarter of the year before any stimulus actually materializes. David i know you have been bearish, you told peloton. Apple closed up at the close, zoom video some of the stayathome winners did relatively well. How much do you want to be in those names . Well, i think you want to be in the ones i dont want to be in zoom of the it has been great. I missed it all. Maybe i am jealous of those that bought it. Apple, one of my biggest positions, amazon. Microsoft, which i mentioned before i think you have got to at this point on a shortterm basis bet on a winner of the election. For me a blue wave would be positive for the market. You would get major inf infrastructu infrastructure you would get basically a covid play in terms of we are going to get that relief. And sure, there will be a tax increase, but reagan raised taxes also if you get trump again, then i think his trade policies just havent worked we are seeing that carry his latest one big public profile saying we are going to put more jobs here and they havent bus the economic realities hit precovid we will get a vaccine. Moderna is another one that i own. I dont know if it is them, pfizer or who it will be, but we will get a vaccine according to the people i speak with in the health care. Shortterm i am a little bearish, however days like today are healthy. And the key thing is, we havent seen a sell hof like this for a month. That means we had one a month ago and the market rallied back. These things happen. You dont want to panic and is your gains most of my portfolio is technology, it is 5g technology. I am happy with this for a tenyear play. Joyce, are you concerned in terms of outlook for European Growth and asian growth . Is that looking solid at the moment you are seeing divergence here the asian group is looking solid and china continues to power through this with very strong numbers on the trade side and on the external side. You have a massive current account surplus. In europe we are taking down the forecast we think they are going to have to keep the fiscal stimulus in place and that they really have very little space to take any of that off as you go into 2021 little by little we have seen that they had to shut things down again i think this whole theme into 202 1 is much more about asystem tree and divergence after this remarkable period of synchronization across the Global Economy all the way down in the Second Quarter and up in the Third Quarter. Now in the Fourth Quarter it is murkier and i think the die vergence is going to stay with us going into 2021 but the fiscal stimulus also has to stay with us. Thats what everybody is looking for in the u. S. , surer ins signs on when thats coming. In europe, they are not going to take their foot off the pedal . I fell like we have to put this selloff in perspective mike as you always do. 2 drop, worst in the month for stocks we talked on friday with the head of floor operations and trading at ubs saying there was so much complacency out there n the price moves, in sentiment n positioning. How much of that played a role in what we saw today october 12th was the high we went up 9 in the s p 500 in a Straight Line in about three weeks. You had people getting enthusiastic about the market positioned pretty strongly long for a Fourth Quarter rally then we were slipping from there, the market was sputtering a little bit, all last week that was the case but you didnt see an adjustment in the sentiment indicators, the positioning indicators you still saw speculation and call options today you saw a bit of a reversal in the real time indicators of that activity. I think it is largely this kind of attitude adjustment and more a evening out of the positioning frankly is what you usually need in these swayings. You have an election coming up it is only going to be five traiting days or six trading days before you know at least what happened on election day. Usually there is enough doubt in both sides minds for that all that said i mentioned this strong tendency of the market to have at least some kind of rallying attempt in the final days of october. That also has included election day. Here we are a few percent below record highs still 4 above the september lows which i think would be a big break if you went down and challenged them and they didnt hold but that wasnt todays business for sure. A spike in coronavirus cases drive a big part of todays selling. Meg tirrell has the latest on those numbers. We are seeing a Record Number of new dily cases in the United States that sevenday average now approaching 70,000 we are on sort of a third peak in the u. S. , thats setting a new record if you look at where cases are rising the fastest on a per capita basis you are seeing states like north dakota and south dakota getting hit particularly hard. Those states in particular have more than 1,000 daily cases per Million People in the state per day. Also hit hard, alaska, montana and wisconsin. Europe also seeing huge spikes in cases in runs like france, the uk, italy, spain, germany, the netherlands. We are starting to see reics haves tightening in those countries as well as in places here in the u. S. Seeing cases rising the fastest, el paso, the fastest metro area in terms of case growth in the country. Now putting in new restrictions and a curfew. One of the standouts in todays session was regeneron. It was up 1 clearly, this is the one the president used, was on, was treated with, calls a cure is that being widely used now that we are seeing the hospitals start to fill up is it still compassionate use . When does it get its emergency authorization to be more widely used those are all outstanding questions, sara. We dont know when the fda is going to rul on the emergency use authorization for regeneron. I thought it interesting, too it is up and others arent, including, at that, eli lilly which is also waiting on the fda for emergency use authorization for it is antibody they ran into trouble because one of their trials was paused however it is a different application than they played for the eua in we deny know how many people have been able to receive the antibodies under compassionate use or whether Vice President pence should consider it as a prophylax prophylaxis. We are waiting to hear when it might be more i had withly available. What can derail the market in a meaningful way if we have near week of 70,000 plus new daily cases is that enough to hurt the market . Or would it require a government response in terms of economic lockdowns. I think thats what started the market off on the wrong foot today are the increase in cases as we saw futures trade down overnight. One of the things i did this morning, i looked at how many cases there are developing in china, in malaysia, and in south korea. Because that could really detrail mark derail the market because that could shut down supply chains. They are taking restrictions off in south korea that exists they are well contained there. At one point you had 70 of worldwide memory chip production within an hour and a half drive in south korea so it is critical that we done see it there i think if you continue to see cases build, in direct answer the your question, you will continue to see the market continue to be under pressure. Dave, thank you we are getting some earnings crossing the tape. On line Education Company is out. Eric chemi with the numbers. Chegg earning out, 17 Cents Per Share athe u. S. Justed better than the 10 cents the analysts expected. But the stock is down. The whisper was closer to 16 Cents Per Share. A small beat in that sense revenue strong, is a 4 million. Analysts 79 anding 144 million a share. This has been a high flyer the stock more than doubled this year investors expecting more than just the beet they got the company putting out Strong Revenue guidance in q 4 and next year as well in the Third Quarter, subscriber growth was up 69 . Again, one of these big on line plays the stayathome, the pandemic, this stock has been soaring. Options traders were expecting a 16 move today it is not as big as that would have expected. Thats chegg earnings. The stock is come back now it is down 2 almost went to the flat line tomorrow we have an interview with their ceo to talk about what he is seeing out there with students stuck at home trying to learn on line. Another set of earnings crossing the tape. Twillio. [ no audio ] would may have lost his mic there. But he was looking great twillio, as you can see is down half a percent or so in afterhours trade. Earnings per share was a little bit ahead. A small profit of 4 cents a share. The estimates was 3 cents a share. Tomorrow we will be speaking to the ceo of twillio about those results. He will join us for an exclusive interview tomorrow i dont think we have got josh back mike santoli, this has obviously been a strong one. 52 Revenue Growth year over year and earnings per share franks al lee ahead of expectations. Part the group thats obviously a winner of a lot of the longer term trends the stock has reflected it so far enough to keep it where it is, anyway, if not give it the next leg higher. We will leave it there for that section steven and join joyce, thank you for joining us great discussion. Up next, carlyles david ruben stein igwehs in on todays selloff and the effects the election might have on the economy. We will be back in 90 seconds. At calvert, we know responsible investing is hard. If youre concerned about the environment and climate change, how do you find companies that are driving the right outcomes . If you care about economic equality and social justice, which firms are addressing it in their workplaces and their communities . For nearly 40 years, calvert has delivered competitive returns by investing in Companies Making a difference because we see value in doing good. Talk to your Financial Advisor about investing responsibly with calvert. Welcome back stocks finishing the day sharply lower. The dow fell 650 points at the close. Lets get to bob pisani for more on some of the big movers and drivers of the day bob . Sara, it was like mass psychosis, everything dropped at the same time by the same amount everything bottomed at the same time and came off only modestly. Big day, bad day for the restaurants. Darden and all the strants were poor here. Sideways part of the morning to 130. Everything bottomed. At 106 three weeks ago caterpillar was essentially straight down until 1 30 all the charts lock alike. Caterpillar here, then the stock rose modestly. Same chart there oil subtraction, chevron down until 1 30 tried to stabilize modest move off the bottom same chart essentially apple made it into positive territory. It is still on a down trend. It was 125 a couple of weeks ago. S. A. P. , a big Software Company expecting a fresh wave of lockdowns to hurt demand through the first half of 2021 heres the debate was this a macro Earnings Call for the sector or was it a subpoena specific call . The market reacted like it was a macro Earnings Call. It is one of the reasons we had a problem today. Bob pisani thanks for that for more on todays selloff, lets bring in david ruben stein, cofounder of the Carlyle Group. Always great to have you join us lets talk about the outlook for the economy overall first of all, if we may if we now dont see stimulus until early next year is this a risk that the economy double dips before then or are we still on pretty steady footing as we stand with, you know, a couple of months likely to be the longest period of time until we get stimulus . I think for the last two months or so there has been an expectation in the market that there would be a stimulus bill probably before the election but if not before the election, a little after the election. I think there is now uncertainty whether that stimulus bill will occur in a lame duck session early next year. That has been one uncertainty. I think the market is also reflecting two other uncertainties. We are only a week away from an election the outcome is unknown the outcome in the senate is unknown, the house is unpredictable and the president ial election is unpredict as well. And there is a flare up of coronavirus in europe. Whatever happens there will affect us there. All of those uncertainties combined today and produced what you saw in the stock market. Douz those david as temporary uncertainty, ie, as long as we get through the next two or three months the election will be decide asked we will get another stimulus bill that it will be onwards and upwards for the economy and the markets next year. I think that the market is expecting there will be a stimulus bill. The question is, is it 1 trillion or 2 trillion, sit one bill or two bills . The market isnt clear no doubt there will be another stimulus bill. The market needs it and the economy needs it the impact of the vaccines and when they are going to come on as well. And whether we are in a phase two or a phase three of the virus depends on your point of view clearly, europe is in a difficult phase right there, whether it is phase two or phase three, it is conflicting the situation in europe for heil while and we dont know the impact on the european activity. Markets like one thing they like to know when things are going to happen. They dont like uncertainty. Right now we have a lot of uncertainty. Especially stimulus hi, david, its sara. Hi. I am trying to read between your comments. I cant tell what kind of recovery do you think we are going to have how strong are you expecting it to be in the u. S. . Normally when you have a recovery it takes about two years or two and a half years to come back to the level you were before the recession in other words if you went into the recession lets say at the beginning of 2020 it normally would take two, two and a half years to recover this is an unusual recession because it has got the pandemic overlaying and it is not just a normal economic recovery i would say given the enormous stimulus the fed and the congress put in it could have a recovery sooner than the normal situation. Again, i think recovery is dependent on the stimulus. If you tonight have the stimulus it is going to take a while to recover to where you were in 2019. What is the best outelection outcome for the private Equity Industry for the country it is certainty. If we know as soon as the polls close what the outcome is. Thats the best for everybody. People on both sides would recognize that what is not good for anybody is uncertainty for a long time. We had that in 2000. The markets obviously survived i think it is a good thing for if world and the country to know who the next president is, who is in control of the senate, who is in control of the house thats the best thing we could possibly hope for, certainty relatively quickly we have seen a bit of an m a boom, david, and leveraged buyouts have come back we saw dunkin looking to be taken private by private equity today. What do you think is the key driver how sustainable do you think it is it is hard to know how sustainable it is but Interest Rates are very, very low and they are going to stay low as long as Interest Rates are low it makes it easier to do certain things but i cant say what the private equity market is going to do, what the market is going to do all m a is probably being helped a bit by the fact that Interest Rates are quite low and there is a lot of cash on the sidelines there is no doubt about that. Do you expect, david, after the election, given that clearly deficits were soared and at some point in the next couple of years there will be a need to offset that some of the tax breaks that people say breaks, they use that word, plying to the private Equity Industry might go away like on carried interest nobody really knows i would have to know who is in the congress but i would simply say right now the deficits are quite high. We have a budget of roughly 6. 8 trillion and about half of that is financed by borrowing and thats not probably sustainable. So over some period of time it may take a few years we probably node to borrow less and deal with that issue. So we either have to, you know, increase taxes or cut spending or do something. Maybe Economic Growth will be so great it will produce more revenue. I think it is hard to sustain 50 borrowing in a budget in any country and it will be hard for us to do that for a long period of time. We have to get out of the Current Situation first before we deal with that. It is hard to believe but we havent had a surplus in 2 budget for some time now i think the last time we had a budge surplus a modest one was under president clinton 20 some years ago. I think it would be nice to have a balanced budget at some point. In a recession you cant have that we are in a recession right now. But at some point it would be good to get back to some better equilibrium. Nobody is talking about that at the moment david. We appreciate your time. Thank you david ruben stein of the Carlyle Group. Still coming up. Much more on the market selloff and you are auto money and mike santoli is going to look at earnings this quarter and whatig l mhtie ahead as we enter the busiest week of reporting. Closing bell well be right back 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. Schwab. Its time you make the rules. So join the 2 Million People who have switched to Xfinity Mobile. You can choose from the latest phones or bring your own device and choose the amount of data thats right for you to save even more. And youll get 5g at no extra cost. All on the most reliable network. So choose a data option thats right for you. Get 5g included and save up to 400 dollars a year on the network rated 1 in customer satisfaction. Its your wireless. Your rules. Only with Xfinity Mobile. Worst day for stocks in about a month. A lot of earnings coming our way. Lets go back to mike santoli for a look at how earnings season has fared so far. Heres the set u7 for this year and sex for s p 500 consensus earnings estimates doesnt here is the current year nobody really trading the market so much base on full year 2020 earnings, giving it a mulligan for next year. I wanted to point out this step higher that is last earning season. Late july into early august you got a lot of upgrades for earnings forecast for the rest of the year. You see the 2021 numbers doing nothing for months it currently sits at 166 a share. A little bit over 20 times forward earnings on the s p. It is rich but not crazy given whats going on. Also when you are coming out of an earnings recession sometimes we see estimates too low in the following year look at the stock reactions this earnings season. It is more exacerbated versus what we saw last week. If you beat on expectations and earnings your stock is not outperforming at all the day after. Actually if you miss you are not being punished eefrt it shows you traders are not fixated on what results were for the past three months. I wonder if this will change if we get the big nasdaq leaders reporting this week. That was the thing that jarred the market last quarter. It was a wild day on wall street dow closing down more than 2 we will look at whether this is the beginning of more selling or not. Thats next. Aflac pays you money directly to help with unexpected medical bills. And is Aflac Health Insurance . No, but it can help with expenses Health Insurance doesnt cover thats right. Are there any questions . Coach yes . Can i get one of those cool blue blazers . You know i cant play favorites. Alright lets talk coverage. Its go time get help with expenses Health Insurance doesnt cover. Mmm hmm get to know us at aflac. Com welcome back heres a look at where we finished today a rough serks down 2. 3 on the dow, or 650 points off the session lows, though, were were deny over 900. Here are the key things that drive the action coronavirus cases are rising in the u. S. And abroad with the United States reporting more than 80,000 cases on friday and saturday and hospitalizations are growing by 5 or more in 34 states there has been little progress on stimulus talks. House Speaker Pelosi and the treasury secretary moek this afternoon about an hour but pelosi says they are still waiting to the white house to accept language on testing and contact tracing. And s. A. P. Put pressure on tech stocks when they warned of less revenue in the coming year that. Gentlemen, good afternoon. What also happened today is new home sales missed. That has been one of the strongest parts of this recovery if you take data points like that and put them on top of rising cases which could lead to some regional at least restrictions on things like bars and restaurants and an impact on Consumer Behavior is the Economic Outlook in question here i dont think so, sara. We had an amazing run of housing data, last weeks housing data was some of the most optimistic we have seen in a long time. The claims data came out much stronger than expected we managed to put over 11 million jobs back in play with at least one hand tied behind our back for the last five or six months with the distancing and all the regulations which i think is a testament really to how resilient this economy is after losing 21 million jobs in a erlt ma of weeks so in a matter of weeks i dont think thats the story the market is congested. It has election jitters. A couple percent here, a couple percent there. I dont make a lot out of this day. I think there is really a good case for an economic story line for the next year that looks fantastic, largely led by a very dovish fed thats going to be dovish whether biden or trump wins and thats really the important thing. Jeff, what about you . What do you make of today . I think david is spot on with the economy. I think the economic numbers are going to continue to come in better than most people expect as for today, our short and intermediate term proprietary models flashed a sell signal in early september. They are still in caution mode i think it is going to be tough to get much going on the upside until you get past the election and see how is elected you have a trifecta of uncertainty out there. The rising virus cases you have question on when stimulus is going to be put into place. And then you have got the uncertainty of a potential contested president ial election. Until we get past the election we are going to stay in cautious mode. What type of scale or pullback, jeff, could that trifecta, if all three comes out as bad as they could over the next couple of weeks, what level of pullback could it lead to i think at most you could get a7 to 10 pullback. But i think thats for buying, we have been in a secular bull market, we have been in secular bull markets since march of 09. We are 11 years into this one. We ought to have four plus at least left in this secular bull market is this david, we saw bonds get bid today. Yeah on. The selling in stocks the safe haven flight. But they have been interesting will itly. The ten year note yield up to. 8. What is that telling you what do you think the election impact is on the bond market. It has been a steepener it is the long end thats going. Laborer hit annual time record low last week at 21 basis points three month laborer. The front end is partnershiped the feds have got it pinned the next three years they tell us and maybe more the me when the surf steepens it tells me people are optimistic about the future that the fed is going to be raising rates five, ten, 15 years down the road. I like steepeners. I take it as a good sign i dont take it as a credibility also or inflation problem. Thats for another i look at that steepening as a positive not a they gotive. David, what could derail your bullish thesis if we didnt get a stimulus for many months and saw cases spike materialcally would you get bearish . Or even with the fed the way it is does that supersede everything. For me it supersedes everything, wilf i look at fiscal policy through a lot of lenses, the japanese lens of taking their debt to gdp from 31 in 10990 to 209 today and still grew every year for 30 years. Fiscal is not the answ infrastructure is not the answer it is the private sector that drives growth. It is entrepreneurial behavior, productive growth, innovation. Thats coming from the incentives at that low real rates for Monetary Policy bring. The japanese didnt do that. They had big fiscal, really really tight monetary and it messed them up i think we have got the fed on the right side of this they have got the framework changed. I think thats going to be the private sector that drives us in the next year and the years to coming. Jeff i know your longer outlook is bullish you have seed over and over again we are in the mill of a long term secular bull market. Does it matter with this election where you want to be in the market, what type of sectors. I think it dose. I think if joe biden is elected i think the market is going to take a hit i think it is for buying if trump gets elected i think the market is going to rally depending on who is elected i think you have the look at different sectors. You look at health care with biden. You look at it, what, to buy or sell . No, to buy health care, yeah. Buy health care on the extension of obamacare . Is that what you are saying, jeff i dont know if they are going the repeal obamacare or not. I think the new Supreme Court judge it is going to be very interesting when you get into the middle of november to see what happens with obamacare. Got it. All right. We will leave it there jeff and david, thank you for joining us thanks for having us. On a big market day we have a news alert here on aig. Contessa brewer with the story listen, it is like i need to count on my fingers all the things come in from aig. First and foremost a leadership change at the top. Brian dupero will become the executive chairman of the board. The man who is currently the president and global coo will accept into the role of ceo. That starts in march of next year and then they will have a new lead director as well. Piece number two is that aig plans to split off its life business so what we are seeing is that it will it intends to separate off life and retirement business from aig, and thats general insurance business, which has been somewhat problematic for aig for years leading up to oh, the last year or so. And the third piece of news coming in, they have preannounced their Third Quarter catastrophe losses, almost 800 million dollars. Almost 200 million of that is related to covid costs, insurance on events that were canceled or travel those are some big numbers coming in for catastrophe losses which also include the tropical storms and the wildfires in california but as you can see, that news about the leadership change and spinning off life driving that stock up almost 7 in extended trading. Sara, will contessa, thanks for that one. Still to come, one week from the election and we are headed to a county in pennsylvania that could prove to be pot iivaln the race for the white house. We are back in a couple minutes. 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. For as little as 5, now anyone can own companies 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. New and exciting chapter. Across muticloud, apps, data and security, we focus on solving the business problems of our customers with technology we are a type of company the market has not seen before. Going public will further invigorate our mission to embrace technology, empower customers, and deliver the future. To you can go your own way r custome go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save up to 400 a year on your wireless bill. With the carrier rated 1 in customer satisfaction. Call, click, or visit your local xfinity store today. Name now for a cnbc news update with sue herera hi sue. Hello, everybody. Heres what is happening at this hour zeta is now a hurricane. It is on track to hit mexicos yucatan peninsula resorts this evening then make land fall on the u. S. Gulf coast on wednesday. Though forecasters say the storm could weaken in the coming days. On the senate floor, lastminute debate ahead of Amy Coney Barretts vote she is expected to be sworn in after the vote and the white house is planning a celebration tonight in her honor. Polar holding protests against that cups already strict abortion laws a new study found about a fourth of covid19 patients developed heart damage at the hospital researchers also found a higher mortality rate for patients with heart damage, even if it happened before they contracted the virus. You are up to date guys, i will send it back to you, sara. That is troubling sue. Thank you. All this week our Brian Sullivan is driving through key battleground states taking us to some of the most important counties for the race to the white house. Today he is in erie, pennsylvania high, brian. Thats right. Why are we in erie, pennsylvania why in pennsylvania. Coming up after the break on closing bell we will lay out not just the states that motor the most to the election but the counties that may matter most to the election and the keys to those counties we are live in erie pennsylvania both candidates in the state today making their case. We will make ours after this short break. Closing bell on other side thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. While helping with occasional joint stiffness. Osteo biflex. From the election. And all this week, cnbcs Brian Sullivan is taking a trip through the key battleground states taking you to some of the most important counties in the race to the white house. Brian n erie, pennsylvania today for his first stop brian. Thank you very much 67 counties in the great state of pennsylvania. Really only five are probably going to someone the election either way three of those up against the river. Donald trump and joe biden both campaigning, joe biden making an unexpected stump speech a few moments ago maybe suspecting trump had momentum trump stopping three times in pennsylvania today trump flipped a lot of these formerly blue voters turning it to a 2 victory margin in 2016 not a lot but a win knowledge. The key comes down to what the vote remembers going to respond to is it going to be economic story . Cnbc Research Shows that the economy is a bigger issue to most people in this state than covid. Covid of course very important to many but as far as what may turn the needle on the election it looks lick it is going to be the economy, according to our research here. Trump hammering more on the economy going after joe biden and oil and gas. Biden saying that fossil fuels arent going away and hammering the president on the Covid Response we live in the northeast when you drive around the streets of ij new jersey you dont see competing signs. What is striking is that west of the Delaware River there is so much passion on both sides there are streets we drove down in erie will literally every house had a sign, trump, biden, trump, biden, 2 margin of victory according to a cnbc poll well see what happens. Right now the passion is running hot, especially on both sides. And it goes around the economy number one this is the third slowest growing metro air out of 515 in the United States, sara. Just related to your other passion, brian, which is oil, it has become such a talk point i hadnt realized how big of a deal oil was specifically to the state of pennsylvania and the oil rush that has gone on there. Yeah, i mean the first oil well in america was built here, 1859, the drake well of course, you know, natural gas is the game now as far as hydrocarbons go. It is the second biggest producer a lot of families lease out their land, make nice money there. Pipelines what goes into pipelines, steel shell is being a 6 billion factory, petrol Chemical Plant near pittsburgh as well. The oil and gas story is a big one here in the state. Directly employs about indirectly tens of thousands more are employed. Trumps margin of victory in 2016 was about 60,000 voters ill leave you with this 200,000 people voted for thirdparty candidates in pennsylvania what happens to them are they going to go to biden . Are they going to go to trump . Or are they going nowhere . Theres only one thirdparty candidate on the ballot there. Theyre so much bigger than we think. They could make a difference well see you wednesday, maybe the most important county in the most important state, as we said earlier. Well be there on wednesday. Brian, great stuff. Reporter well be driving through ohio but out the other side . Well keep guessing. Ia weve got thanks so much, well be back in a couple minutes here on closing bell. Mobile app so you can quickly check the markets . Yeah, actually im taking one last look at my dashboard before we board. Excellent. And you have thinkorswim mobile so i can finish analyzing the risk on this position. You two are all set. Have a great flight. Thanks. Well see ya. 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Its the largest ipo ever, and the next was saudi aramco. After that was alibaba in 2014 jack ma, cofounder of ant and alibaba commenting over the weekend on the dual listing, saying that pricing such a long ipo outside of new york city would have been unthinkable five or even three years ago. Wilf, i remember weld when they were trying to debate with hong kong and new york, and what a change of forting now with the dual listing coming up. I remember that day well. Up next, we are looking ahead, stocks starting off deep in the red, what we are watching heading into a Fresh Trading today. A ew oslf earnings on tap for tomorrow well have more when closing bell comes right back of careful construction. D s infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. 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To help keep your business connected. A big selloff today on wall street, and a big week ahead for tech earnings. The first on the docket is microsoft. The Software Giant reports tomorrow after the bell. The street is expecting to see profits up more than 8 for the year stock is up more than 30 so far this year, mike. And people will look toe that for enterprise spending, because there was such a scare warning all the way into next year yeah, for sure. Microsoft did underperform the nasdaq boo also, for as well as the stock has done this year, its basically a full 10 percent below its high but those earnings forecast have been very stable thats been the whole story here, a very clear line towards earnings growth. Well see if it changes at all, but it seem like necessarily a particularly challengeling setup for microsoft. Obviously we closed off the lows, but still a big decline today. And the 30year as well did dip back below, so i do think you have to keep an eye to see if thats a trend. As of now, it still seems of the steepening trade, and its been okay about suggesting thing. We are out of time thanks for watching closing bell. Fast money starts now. Im melissa lee. This is fast money. Tonights trading lineup here, we are charting the selloff the the three most troubling the charts mike wellsen, well get his take. And later were gearing up for the tech titans, how our traders are positioned the s p dropping more than 1. 8 , with its worst day in more than a month all 11 s p sectors wer