Transcripts For CNBC Closing Bell 20240712

The bell apple, facebook, amazon, and alphabet we will also get results from starbucks, twitter, act vision and many more names. We will bring you all the results as soon as they hit. Analysis as well to help you figure out how what to do with the stock. Speaking of earnings in joel we will speak with the brandnew ceo of tapestry, her first interview since taking the job that stock soaring after getting a beside on sales in china music mike tracking the broader markets, Steve Liesman, and meg tirrell has the latest on the covid emts troo and vaccines mike, talk to us about the comeback we are seeing. A respectable bounce. Coming into the day the market was stretched to the downside after the declines not just of yesterday but the past couple of weeks. We had lost 119 in the s p alone yesterday. We are regaining not quite half of that. 3,200ish is the level just about everybody is looking at. It isnd responding, but definitely not necessarily in a decisive way bond yields up today really, a little more of the idea that maybe the economy is not falling apart right away is in the market. Look at the nasdaq 100 etf all of those names that are reporting after the close huge influence on this. It is a little bit of a less constructive chart the declines off of the sent peak are moore dramatic. You can kind of draw one of these triangle deals where it is sort of compressing down and is has to make a decision one way or the other this little peak right there is 5 or 6 above where we are trading right now. That would be the first stop if you got any kind of a positive react. Look also at some measure of how we were a little bit oversold in the market this keeps this track. This is the number of percentage of s p stocks that come into towed technically oversold not as much as at the september lows but pretty close so you are in the ballpark of saying the market has been on the skids long enough that just for technical reasons you are going to get a little bit of a rebound impulse. But not everything was lining up and saying you absolutely were going to get a decisive rebound just yet but moving in the right direction at least so far. Can we talk about the fangs he wering setup. Faang minus netflix, i guess. Sure. What those stocks have done and what it tells you about what they might do. This is kind of a weird earnings season where some names are getting rewarded for better results. But a lot of the winners, microsoft and not. The only real pattern is overall been net negative or at least kind of a yawn in response to good earnings you have gotten some punishments on the real big misses faang in particular are well beyond their highs all of these stocks as much as they are bouncing right now are not riding on their highs. If you went back to their july quarter, at the enjuly all the companies were reporting again their numbers were strong and they took the nasdaq to melt up mode in august i dont think we are positioned the same way but these companies are phenomenally profitable in this environment and all environments the question is, are you going to have that history repeat within 90 days of what just happened i dont think anyone is going to be caught offsides by strong earnings from this collection of Companies Just now we look forward to those numbers crossing in about an hours time. Third quarter gdp smashing records at 33. 1 the fastest pace of growth ever. But that number needs context in light of the big drop in the Second Quarter or senior economics reporter Steve Liesman has the context. What does it mean it leaves growthbly the propandemic level but it sets the economy up for further growth depending on what happens with the virus and what government does to help or not two gdp measures webb look at here the way we normally do annualized 31. 4. Down in the second, 33 up. Obviously thats not enough to get you back where you were. You need about 35 there is the annualized number bottom line is, we are still 3. 5 below the level before the pandemic thats pretty much a pretty bad recession on its own Ian Jefferson were pantheon writes a record but nothing like enough of a record unfortunately here are the details, Consumer Spending didding ahead 41 help by the stimulus, helped by pent up demand business equipment doing well. Housing up, taking advantage of low Interest Rates Government Spending cutting back because they need to balance their budgets amid sharply falling revenues keys being inventory rebuilding, what happens with trade and the consumer and of course the virus and whether the government provides new relief money. I am glad you brought up the comparison to the level before the pandemic the year over Year Comparison to the same quarter q 3 last year. Sure. I mean down 3. 5 . You can lament about how big a decline that is or you could say only down 3. 5 compared to the same quarter before the pandemic and given what we have been through, is a 3. 5 coklein year over year for the same quarter actually decline year over year for the same quarter actually quite impressive . Thats a good question, wilf. I am i dont like to use the word impressive with a 3. 5 decline in gdp you know, off the top of my head, what is that, about a 600 billion of growth is gone from the economy . Somebody is hurting some because of that. Its on the level 4 that we had in the 0908 recession we had for a full year. Yes, it would have been much worse. You had reopenings you had a lot of government stimulus but its still pretty bad. I think we want to be krafl not to look at the levels of the stock market and come to the conclusion that everything is peachy keen out there. Brian sullivan is on the road finding people who are still in pain we have a number of people falling behind on their rents. It could have been a lot worse but it is still not good enough. Steve liesman thank you. We will turn now to the latest on the coronavirus and some updates from companies on the treatment and vaccine front. Meg tirrell with all the details for us. Moderna reporting earnings this morning and essentially giving an update on the time line for its covid19 vaks end it is one of the front runners reiterating it expects an interim analysis in november pfizer this week said it is interim analysis is expected soon many hoped for this week we are not going to see it this week dr. Fauci told us today in an interview with the director of the nih he expects availability of a vaccine by december early january. Then they would be deployed to the prioritized groups moderna and pfizer revealing this morning in their calls they have 1. 1 billion worth of vaccine supply agreements with various governments from around the world. Thats every from u. S. , canada, japan to negotiations currently happening with europe. So you are seeing that stock up today after they revealed that this of course as cases are rising around the globe. In the United States Scott Gottlieb and modelers pointing out we are three or four weeks behind europe and the case numbers there are staggering the trajectory is vertical in the uk we are the green line here in the u. S. , 74,000 new cases per day over the last week what we worry about are hospitalizations and deaths. If you look at the number of new daily deaths in the u. S. We are trailing the eu and the uk aswell the eu is seeing numbers they havent seen since the springs we are seeing increasing numbers here in the u. S. As well it is worrying as Health Care Systems get for and more overwhelmed we will see that number unfortunately rise in terms of where in the u. S. They are being hit the hardest the fastest growth now in wisconsin two cities there in different parts of the state taking over in the top five in fastest case growth. El paso and an corpsage alaska it is spread all over this country, seeing this fast growth. At the same time we did get a positive update on regenerons treatment on the antibody front. I guess the concern is do we have enough of it . As it continues to show good results is there enough for people who need it it is interesting regeneron reporting last night their antibody drug, now in 800 patients reduced the risk of needing further medical attention going to the hospital or Doctors Office by 57 overall when given the people newly diagnosed with covid in people athigh high risk it reduced the need by 72 . Thats huge. The stock is down 72 . Why . People already knew it worked well it is also in short supply it is a heart breaking thing the drug looks like it works and we have to ration it. Meg, thanks for that. Meantime we have got breaking news on Netflix Julia boorstin has that for us hi, julia. Netflix announcing it is increasing the cost of its standard plan by 1. Shares popping 4. 5 higher on this news. The standard plan basketball 14 a monday up from 13 a month the premium tear plan will go from 16 to 18. New subscribers will pay this new price and existing customers will see their fees increasing over the coming weeks with with their billing cycles it is interesting also to note that disney shares are also moving higher on this news perhaps on the perception of pricing power. Shares up 3 . Quick question. Interesting to see netflix jump so much by increasing prices whats the difference between premium and standard what does the extra 4 got you premium standard is what most people have in the United States, wilf the premium plan is if you want to be able to watch in 4d. If you want to have additional family streams so the basic is good video quality. Its not the best video quality. The vast majority of people will see their prices go up by 1 a month. Julia, thanks very much netflix up almost 4 after the break, shares of tapestry moving higher today as well on the back of earnings, seeing strong Digital Sales and growth mainly in china the stock is up 7. 5 up next we will speak with the companys brandnew ceo about those results. Her first tv interview since taking the job this week you are watching closing bell here on cnbc dow is up 242. Any dow up 214 points, 45 minutes left of trade. Tapestry saw a strong rebound in china and up frommel digit ecommerce growth as well. Tapestrys ceo now joins us exclusively for her firstever tv enter have you. Joe yawn, thank you for joining us. Thank you govern, sara, its great to be here. I mentioned the Digital Sales growth and china as well which were both expressive talk about how you are turning this company around. We delivered a Strong Quarter exceeding expectations across coach, kate spade and Stewart Weitzman we exceeded expectations on the top and bottom line by getting focused on our Acceleration Program. We are shaerping our focus on the consumer and leaning into digital and analytics capabilities and strem lining our model to be more responsive. It is working in this environment as you can see in our First Quarter results. Up of it is nailing the fashion trends, joanne, versus nailing the way consume remembers spending right now going on line. It feels like all of those strategies need to come together for specialty retailers like tapestry talk about what you are doing on that front. As we get to know our customers and get closer to our consumers and learn about what they are looking for out of handbag products, out of footwear, we are delivering beautiful products of the. It is about creativity and understanding the insights and then delivering for them where they are and thats where our digital capabilities really come into play we were up triple digits this quarter on the heels of triple digits the quarter before. Two quarters in a row. We are also doing that as we are seeing the brick and mortar trends continue to improve we are delivering beautiful product at a great value for our consumers. And you can see that through the product we are delivering. The coach i dont know if you have been in our stores, but we have a coach collection beautiful product that the customers are responding to. Like the flower jacquard in kate spade and the white boot in weitzman, which is on trend and on consumers mind and showing how our organization is responding to what consume remembers interested in these days. I havent been in a store in so long, any store thats part of the problem also relates to handbags how tough of a category is that to be in right now when people around going about their daily business, going to work as they normally would, going out to bars and restaurants and parties and concerts as they normally would . How do you sell handbags in this environment . We love the category we are in you know, this is a category that had mid to high single digit growth for a number of years. We have seen consumers engage with the category precovid even in covid we have done a lot of Consumer Research consumers continue to engage with this category and tell us that they intend to purchase in the handbag and small leather good categories in the months to come even in the midst of covid. What we hear from them is a happen bag purchase is an emotional purchase they are really emotionally tied to the product and to our brands as we deliver this beautiful product the customers are responding where and how they are responding is definitely changing these days. And we are making sure that we are there for our customers wherever they choose to shop our organization and our Sales Associates have been incredibly innovative in how we reef them we are running zoom shopping parties and virtual appointments for consumers. Even if they are not coming into stores, but we are seeing them come back to stores gradually. Even if they are not coming into stores we are engaging them on digital platforms on social media platforms. As you can see from our results they are increasingly buying on line. Joanne, tell bus the geographic breakdown it looks like china was particularly strong. Do you think they are back to their best again good afternoon wilfred. China was a bright spot in our business it is nice the see that recovery continuing we flipped to positive growth last quarter, and this quarter, strong double digit growth including nearly 40 on Mainland China in the coach brand we have been in that market over a couple of decades now. And really understanding and delivering for that consumer is what is working. We are designing product for that consumer and we are reaching that consumer on Digital Channels it is a consumer that is incredibly digitally engaged we are reaching that consumer on Digital Channels coach last cher was the number one handbag brand on the t mall platform. We talked about the rising covid caseloads, joanne, before the break. It is in europe, in the u. S. How concerned are you about the second wave impacting the economy and the consumer into the all important Holiday Spending season. What we can expect is the situation will continue to be dynamic. As it has been all year. I have been incredibly proud of the way our organization has responded to the changes we have seen in the environment. Everything from closing all of our Stores Worldwide to reopening our stores and serving demand in new and different ways as we mentioned on Digital Channels but also engaging consumers in new ways. That innovation has really come from our field you know, as we go into the Holiday Quarter and we are facing holiday, we are very well prepared and ready to adjust and flex as we see demand changes happen financially, just a leadership question, joanne, since you were just named the new ceo. It has been a turbulent period, after your predecessor was investigated for misconduct, and some bizarre allegations and he was only around for less than a year after an abrupt resignation by the previous ceo. How much has this been a distraction and help contribute to the fact that tapestry underperformed going into covid. What are you telling investors about that now that you have taken the reins as ceo. We are focused on delivering for consumers and behind this Acceleration Program which i mentioned we spent the last year creating the Acceleration Program identifying the areas of focus for us and for our organization and we are executing behind that. There is a lot of passion in the Organization Behind our brands and for the company. And we are a Competitive Group and we love to win it is a real privilege to be leading the company. It is a Great Company with great brands, particularly at this important time in history. And we are writing the next chapter of growth at cap strtapy i think the First Quarter shows we are just getting started. You have also got jlo in your court, which doesnt hurt thank you for joining us we have just 36 minutes left of the session we are nicely higher a big rebound today following some sharp declines so far this week the dow is up 237 points coming up, we have got another ceo interview coming your way. The ceo of new mont will join us after his Company Reported results this mniorng we will talk about the moves we have seen in gold and other commodities. Closing bell will be right back this is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. But before we sign i gotta ask. Sure, anything. We searched you online and maybe you can explain this . I cant believe that garbage is still coming in. That is so false frustrated with your Online Search results . Call reputation defender today to join tens of thousands whove improved their online reputation. Get your free reputation report card at reputationdefender. Com or call 18778668555. Time for our daily coronavirus tracker. Cases and 4079izations continue rising in the u. S. And across the world. Since yesterday we have seen new lockdown measures instituted in perhaps, germany greece and taq pakistan there is concern about thanksgiving and the month ahead. Here is what experts have been saying on that front we are really not going to see this sort of start to peak until after thanksgiving i think after thanksgiving, thats going to be a turning point when the infection levels get high enough in many parts of the country that we start to see policy reaction and also Consumer Behavior start to change. As far as what i am telling people, my own family, we usually have a very large thanksgiving dinner. We are not going to have that this year. We think it is not responsible to bring that many people together when we are seeing a surge of coronavirus right now. There are a large number of states that are going in the wrong direction. If that continues, we are going to be in much worse shape a month from now than we are today. Despite rising cases United Airlines attempting the revive International Travel the airline says beginning next month they will test a new Program Offering preflight rapid covid19 tests to travelers from newark to london free of charge. I booked with them this morning because of that. I think it is amazing. Wow maybe thats why the stock is up many more may be as well but not for thanksgiving dont spend that with your family thats message. Still ahead we are counting you down to a huge arch of big tech earnings, results ahead for amazon, facebook, apple and alphabet all of those stocks interestingly are higher. Bond on an upward path, the tone is better in the market today, buying stocks, selling bonds. Yields are up. Well be right back. I got it all from you im always pushing through i know well make it to the finish line i know youre waiting on the other side im like you ondemand glucose monitoring. Because theyre always on. Another lifechanging technology from abbott. So you dont wait for life. You live it. Heart monitors that let your doctor watch over you, just like you watch over your best friend. Another lifechanging technology from abbott, so you dont wait for life. You live it. Semi we can. Time for a cnbc news update. Sue herera has golden gate it for us. I do, indeed. Heres what is happening at this hour, everyone we are getting a look now at some of the damage left behind by hurricane zeta after it came ashore in louisiana as a candidate category 2 storm these are buckets from gulf port business mississippi three people are dead were the storm. They are proing winds in North Carolina those winds prompted a postponement of a rally for trump scheduled in fayetteville today. Nationwide more than 80 Million People have already cast their ballots putting the country on pace for the highest Participation Rate in more than 100 years. And Tony La Russa is returning to manage the Chicago White sox. At 76, he is the oldest manager in the major leagues best of luck to him. You are up to date a, ill send it back to you. Thank you check on two food stocks moving today kaft heinz reporting a earnings beat growth in packaged foods and connedments as consumers eat more food at home. Kelloggs raising full year Sales Forecast citing higher Consumer Spending on Breakfast Cereals and snacks happening at home during the pandemic the stock off a bit. Wilfred, my take away is that every time investors writeoff the packaged food stocks they are seeing a one time blip in terms of stock ups in terms of the pandemic they are proven wrong because that has continued as cases remained constant. The spend on packaged food from week to week were not at the plus 26 we saw last year at the height in april but we are creeping back up we are 13 higher than we were this time last year. We were continuing to see the stock ups as the cases rise. It is definitely impressive i guess the test will come for them post vaccine to see if the trend are still holding. Absolutely. Up next the ceo of new month will weigh in on he wering and ghimctnew wave of coronavirus mit pa gold prices well be right back in a couple of minutes [squeaky shopping cart] [sniffing] is the salmon wildcaught . 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Call unitedhealthcare or go online today. [sfx mnemonic] dow is up 243. Commodities are having a rough week oil slipping again today hitting its lowest level since june 15th the commodity moving lower on potential impact of lockdowns in europe it is lagging behind solar stocks over the past month which have seen some significant strength gold also lower today following record q 3 gdp and caution heading into next weeks election and demanded falling to the lowest level in years according to the council gold is down 2 this week. It has been trading along with stocks if you measure it up like that. It has been a little bit of a risk asset over the last month. Mining company knew mont moving higher today having a record quarter benefitting from rising gold prices investors flock to the metal as a safety play during the pandemic the stock has rallied 45 . Joining us is kroefl, thomceo t. The results, clearly the market welcomes, the beat comes more because of pricing than demand it is interesting that demand overall for goal fell. I think we are seeing some of that behavior this quarter i think if you look forward over the longer term i am bullish will gold. If you look at the uncertainty and covid thats still with us, the level of stimulus that i think is going to continue to come into economies, volatility i think that we are experiencing particularly with the president ial election coming up, pretty confident that maintain its current levels and potentially moving into the 2,000s Going Forward doesnt change how we run the business but we have a bullish outleak for gold. Where does the demand in 2021 for gold come from investor in are you seeing a drop of in jewelry demand. Is it made up by investors seeking safe haven status. Certainly. I think over the long term the jewelry demand particularly in china and india will come back on as we move to the other side of this pandemic you are going to see investors come back into gold or continue to stay in gold Going Forward. We are seeing them come into gold equity as well, which is exciting what do you tell people who wonder if bitcoin is a better alternative than gold as a hedge against inflation or the dollar or all the geopolitical risks and central bank printing . Bitcoin over gold, what do you tell them . Gold is much more reliable, and if you come into a Mining Company like ours it has very long life, has a strong esg record we have got a globally balanced portfolio. We run our business with discipline at the bottom of the price cycle. We are leveraged for every 100 increase to the gold price, we generate 400 million of Free Cash Flow per year at current gold prices we are generating a lot of cash and we have got an ability as we demonstrated yesterday by increasing our dividend by 60 we are yielding a good return to our shareholders tom, what would happen to your company and to the gold place if we had another major lockdown in developed worlds and in the u. S. In particular . It was interesting and in saras question as well, to see what happened to gold in march meant to be a safe haven it traded down so heavily it seemed as it was a high risk stock or equity. Wilfred i think that the big change is that in march we moved five of our 12 operations into care mapt unanimous and we were able to work with governments and local opportunities to put in place protocols to bring those operations up out of care and maintenance into the Third Quarter and keep the seven running. We have demonstrated protocols in place to manage the tread is of this virus. To give you an example we have a very large mine in new mexico. We have across the country of mexico seven airports set up with their own testing equipment, seven bus stations, four testingtations at our mine site and across those 18 test centers, we have 56 nurses who are testing people for the virus to make sure that they are safe coming onto the site and then we test people before they leave and go back home again to make sure they are safe all of those protocols are in place not only in mexico but every other operation. If we were to see a resurgence i think we have demonstrated we can safely continue to operate lieu this pandemic tom palmer, thank you for joining us appreciate it. Knew monts stock up more than 3 right n. O. W. It is the busiest day of earnings season. The key thing investors should be watching into alphabet amazon, and other big stek 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. Talk to your Financial Advisor about investing responsibly keeping your oysters busihas you swamped. You need to hire. I need indeed indeed you do. The moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventyfivedollar credit when you post your first job at indeed. Com promo but we are hoping things will pick up by q3. Yeah. Uh. Boss doug . Sorry about that. Umm. What. Its. Um. Boss you alright . [sigh] [ding] never settle with power e trade. It has powerful, easytouse tools to help you find opportunities, 24 7 support when you need answers plus some of the lowest options and futures Contract Prices around. Dont get mad. Get e trade and start trading today. 14 minutes left in the trading del. We are now in the closing bell market zone, commercial free coverage of all the markets going into the close mike santoli is here to break down the crucial moments in the trading day. And steph high tower as well the bradder market, a massive swing today on the dow, to the tune of 600 points right after the open we are lower, hit down 230. A hit of high 380. Currently up 342 or. 9 down sharply for the week as a whole, the dow down 5. 5 mike, i guess that sums up the bounce today because of the selling in the first three days of the week. Still a relatively high volatility index and the election is not past yet. Thats right. I think it is relatively tentative, relatively uneasy i dont think todays rally thaks people making uj new bets. You see the leadership in some of the big Growth Stocks that we are used to leading back through the summer getting ahead of perhaps these earnings we are going see in a little while because you dont want to be necessarily too negative on Great Companies their well off their highs going into the numbers. There is earnings, steph, a number of them very good rising covid cases and lockdowns around the world, an election in a few days what are you focused most on right now . Well, i am trying to focus on earnings, the biggest disappointment so far has been the reaction to urnings. Right . I mean it is nice to see at least today we are seeing some reactions or some followthrough to some of the things that got a little bit oversold. I mean so far we have had 50 of the Companies Report earnings and we had had 82 of them beaten on the bottom line, 7 on the top line. These are great, Great Results and guide is the best in 12 years. Forward guide. All of these things and then you have stocks down on this stuff to me, thats why they call earnings season silly season thats why i always have cash on hand and i buy on the silly moves, if you will like yesterday, u. P. S. Down 8 crazy. Nxpi beat and raised their preannouncement from just last week so and it was flat. I actually bought that raytheon, you could say there are some issues but their Free Cash Flow was a billion dollar beat stock is down 6. 4 in four days. These are the thing i am focused on right now certainly i dont think we are out of woods because of what you mentioned covid, elections fiscal, we talked about all of that but at the same time if earnings can continue to come through and it is encouraging and lets watch the reactions and by the way, Economic Data continues to recover. Yeah, including claims data today. Another major chip deal announced today. Marvel announced it will buy inphi. A 8 billion cash and stock deal shares of marvel are lower, and inphi is surging marvels ceo weighed in earlier on cnbc. As we have seen as recently as this week and certainly this year, m a in semiconductors has been robust. One of the reasons for that it is not the only reason is that there is a huge benefit, julia, in scale. Not only in scale in terms of manufacturing and costs but in terms of Product Portfolio and offering the terms of accounts we do business with, these would be the large hyper scale accounts mike, such an exciting time for semis, because of deals. And he described the environment pretty well. Where else are investors looking for the next one i dont know about exactly where in terms of what companies are in play except that you are seeing is that Larger Companies that are on a roll, they have relatively rich valuations they want to round out their kind of product offering, and this is a Perfect Little kind of fillin product set that marvel is acquiring there. Inph aye i believe is how you say it follows along what happens when you have this long term growth pattern in this industry that the market has recognized. Now on the reflex the market handy rewarded the buyers. Amd and marvel down on the news. But amd has recovered. Steph where do you stand in this sector now . Any underperformers you want to get back to . I am overweight in semiconductors nxpi is one of them. Broad comhas lagged and they have a nice yield and they are doing all kinds of things in m a. I like this deal, i think it is a great one. I cant believe marvel is down this much. This is a smart Management Team buying a company that has grown 40 in the to tor four years the customers, they both share amazon and google as customers can you imagine, they are going to have more product to sell into these two behemoths i think it is a home run mens away from apple, amazon, facebook and alphabet all on deck. A lot is riding on the quintessential stayathome trade. Amazon up 26 surpassing the s ps gain of 3 attention will be on Fourth Quarter guidance, though, which will refrequent prime day pushed back to october this year and amazons expectation for the Holiday Season on the bottom line investors will be focused on fulfillment and worker safe and how that impacts profitability. Steph, clearly, the setup for this one is very difficult do sort of normally secondary issues like costs matter or do you think as long as the top line is strong that investors will continue to bid this up . Last quarter they blew us away in operating income it was up 138 i think profitability does matter and they are making progress on profitability. A lot of that is because they are gaining size and scale in aws. 48 market share in aws. It will be interesting to compare and contrast their growth rates in Cloud Business to Microsoft Microsoft had 48 growth in azure. The whisper is at 28 print is at 28 some people think they can do low 30s. We will see. The shift in primeday is obviously causing noise f. The stock is weak on that, that is your buy point it is always hard, mike torque tell what investors are going to tee off of on amazon results. Sometimes it is profits. But sometimes the profits miss big because their costs are up and wretches are through the roof and then people buy it as well sometimes it is aws, losing that 40 growth rate, what will you be watching . I think aws because of the other commentary by competitors in the area. You are going to get a little bit of focus on that and then what the company says, often what they will do is come out and report a buildout number and this will say we are plowing all of it into various new investment cycles and dont get excited about how it is going to go down the road the stock on a year to date basis is up massively but hasnt gone anywhere in the last three or four months i think it is in a neutral spot heading into the numbers. Facebook also will be reporting after the bell that stock is up nicely today. Julia boorstin has a preview julia. Sara, facebook is expected to slug off an advertiser boycott and to benefit from the continuing shift of ad dollars from traditional formats into social advertising, facebook shares are up 5 today ahead of earnings the stock is up 20 since its last Earnings Report when it far exceeded expectations this quarter analysts are looking for the companys investment in Small Businesses and ecommerce to continue to pay off and to learn more about how facebook is making money from instagram, whats app, and from facebook messenger. This all comes after pinterest shares have gained over 25 today on earnings that soared past expectations last night the company saying it benefitted in part from the facebook ad boycott. Facebook is down 1 , but it is up 16 since its better than expected Earnings Report last week w. The surge in social ad spending we saw in opinion tress and snap we will see how much facebook reports as well. That is the question. Mike, snap and pinterest set the bar high for facebook . You would think. It is hard to say because what that has been mostly been about is the strength of the overall Digital Advertising trend. I dont think anyone believes it was a market share gain that was the margin of the petition for snap and pinterest it would seem as if the macro factors are there. The market continues not get particularly worked up about the regulatory threats or the bad optics of the ceos in congress so we will see its certainly not the cheapest facebook has been going into a Quarterly Report but also not necessary low all that challenging given what these Growth Stocks have been valued at this year. It is also steph only down now 1 this week compared to the dow down 5. 5 this week given such a big jump today. Does that make it a slightly tougher setup . I think it is a tougher set up it is now up 42 year to date. But if Digital Advertising really is coming back and that was the thats the lesson we learned from snap, right . They had 52 total Revenue Growth back to precovid levels but then their ad levels in july grew from 32 and in august and september it jumped to 60 thats going to be the theme tonight for all of the companies they are going to benefit from the recovery in ad revenue facebook is no different the only thats different is yeah, did the ad boycott dim their results as a result . Thats one concern for sure. But the ad market is coming back and thats a very good sign. Weve got just a little over two minutes to go in the trading day. What are you seeing in the market internals. They have been positive 75 of volume has been to the upside in the New York Stock Exchange still more new lows than new highs for the day. It is noisy. Remember, two days this week on the new yorkyou basically had 90 downside volume. That was a pretty good downside flush. Some people teal like if you get a cluster of those it doesnt say good things about the longer term trend reasserting itself right now it is top heavy. Looking at the qqq. Same stocks, just not market Weight Company a third of a percentage point. The equal weighted version made matched old highs on the rally in october whereas the market weighted did not. The leaders are well below their highs. Intraday highs around 41 we pulled back four to five points from there. Sometimes you check off the box and say thats sort of a shortterm buy signal. Sometimes if you get that little spike on the chart it is not enough in itself to say that all of a sudden we are going to go up and away from here. But it gives creed tones the oversold bounce and suggests you had a lot of people leaning negative into the lows yesterday as we pretty much did close near the loans . Over one minute left if we can start with the dow intraday a crazy session today. This afternoon has been strong but the open was not so. Down 230 after the first ten, 15 minutes of trade up 380 by 2 p. M. Up 180 as we stand we slipped off the highs but still up two thirds of a percent. The s p up 1. 5 . The nasdaq up 1. 9 that plays out on the sector performance, Communication Services top up 3 energy also up there, 3 , technology up 2 , a tough setup for todays trade for some of the big tech names reporting earnings facebook up 3 apple up 4 . Apple positive for the week as a whole contrary to the rest of the s p and the dow. Still in negative territory. Apple is strong as we approach the close. As is amazon those numbers all coming any minute now we are looking forward to that the dow only up 150 pointso. 5 . The s p at 1. 2 . The nasdaq up 1. 5. Lost a bit of steam there into the close finished positive across all the major averages welcome back, everyone, to closing bell. What an hour we have in front of us im Sarah Huckabee sanders here with wilfred frost and mike santoli. Dow closed up 139 points, biggest winner on the dow was apple ahead of its results coming just about half an hour from now chevron and disney also do well. All greens and Johnson Johnson bringing up the rear, s p 500 up 1. 2 every sector was higher except for health care. Communication services led and we really saw some strength out of some of these earnings names we are about to hear from. Twitter, facebook, netflix, alphabet all topping out the winners on the day the nasdaq also came back today, strong we are still down for the week but it went up 1. 6 . The russell 2000 index of small caps also with a bit of a come back it is the busiest day of earnings season and we have quite a parade of reports comingor way, amazon, alphabet, facebook, twitter, starbucks, they could come in at any moment apple set to cross right at 4 30 eastern time we will break through the numbers and get instant reaction from an allstar panel come up lets first talk about the market stephanie link with us ed lee, and jessica lesson, editor in chief at the information joining the conversation welcome back to everyone mike, start us off the action we saw, sort of indecisive, we came back strong and lost steam into the sneend kind of an obligatory bounce there was no follow lou in the morning to the reversal. We had a rally over unite. Didnt hold into the open but it wasnt inviting more selling pressure you have got the bounce from somewhat oversold conditions i dont think it was news driven wasnt about the gdp print or the jopless claims or polling data it was the market trying to figure out if it was going to react to its own kind the pressure it has been under for a while. I will say i dont think todays action changed anybodys mind too much if you are bullish or bearish but it is a positive you didnt rush to the next down side target. Jumping in with the headline numbers on amazon. We will dig into the underlying numbers in just a moment a big beat on top and bottom line revenue coming in at 96. 2 billion. The forecast 2. 7 billion. And earnings per share 12. 40. The estimate was 7. 41. Smashed it up everhours in trade after a decent session sara i will hand it back to you. I will dig into the line items. The stock is up 2 afterhours. Quite a lot lom line beat. Operating cash flow, 56 the 37 net sales gain in the Third Quarter very, very strong. Yeah. We will dig through to get the aws which of course people are watching but looks to be a stellar report from the headline numbers. For sure, the topline number, a massive margin of outperformance there, too, kind of blowing away their own guidance andforecasts that wer not caught up to it. Decent stock response. It is always in the details here in terms of what they are going to say about guidance for the Current Quarter and the aws numbers and the color they give about demand. We are going to continue to go through the numbers looks like google has Strong Revenue beat as well alphabet parent. What stands out about google to you steph, what to know more about . The revenue number is better than expected. The earnings number much better than exempted. Profitability continues to be positive, right . Thats what they are working on. And i just i want to see expenses we talked about that before it was expected they were going to spend about 2 billion this quarters have 4 billion last quarter. Lets see where that shakes out. I am not sure if they did a little less or what. But it obviously is a very good report again, Digital Advertising, its positive lets get straight to the alphabet numbers which are out deirdre bosa has been tracking that name. Sara broad based beat shares are surging more than 7 in extended trade, earnings per share coming in at 16. 40. 11. 29 was expected. Revenue also beat. And a return to growth notably remember that last quarter that actually declined. So revenue coming in at 46. 17 billion. 42. 899 billion was expected going through a few of the other important categories, Google Search and other revenue come in a beat 26. 34. Youtube ads higher than expected more than 5 billion 5. 04 blz 3w8ds versus 4. 4 billion expected cloud also key, especially how it stacks up against microsoft and amazon that was also higher than expected at 3. 44 billion versus 3. 32, which was expected we will continue, guys to dig into these numbers and bring you more also from the cfo as you can see shares climbing even higher up now nearly 9 back over to you wow, mike, this one there were questions about alphabet going in questions about travel, how exposed they were, about search and whether it was as robust as some of the other stayathome winners. Looks hike they surfaced all of those. Yeah, and again just the strength in general of Digital Advertising overcoming a lot of that has been the theme. This was a stock that on a relative basis had been in the penalty box never got as generous a valuation on the upside as some of the others it is responding positively in part because of that, because people didnt have faith they had the financial discipline to deliver the numbers. More deals coming in on the amazon numbers firstly the line item, north american revenue 59. 4 billion forecast was 57 billion slight bess on international as well the aws essentially was in line. So the beat that we were talking about didnt come specifically from the most profitable arm of the business, 11. 6 billion in aws revenue. As we said a nice beat on both lines. They are guiding in a range of 112 to 121 billion on the revenue line thats a decent beat to what the consensus was which was 112. They are guiding 112 to 121. And operating income for the Fourth Quarter they arifieding interestingly a bit lower a. Strong revenue guide for q 4 but a slightly soft operating income guide for q 4 a range of 1 billion to 5. 4 billion the top of the range maybe pulling off the back of that q 4 guide lets bring in for the discussion edly and jessica lesson as well ed, whats your take on amazon first of all. Initially a little bit of a pop, now parring back a little bit. I think people started looking down at the list and had he the aws numbers came in they were like ahh, it is sort what have we thought it was going to be that price was backed in what you are seeing there as part of the bip. I think aws is an important part of their strategy in terms of they like to highlight operating cash flow. They like to put their margin back into the business aws has helped them to do that thats how they got the top line beat i think thats the more important beat generally for amazon and also for this quarter. There has been so much more on line activity and any Cloud Service right now are seeing a boost in general amazon was able to hold, which is nice but they didnt get gains that the market was expecting especially under covid. Lets get to facebook earnings before we dive into all of tees into more detail they just crossed. Facebook beating on the top and button lime, earnings of 21. Versus 1. 91 estimate. A big beat on the bottom line. Revenue, top line also beating 21. 47 billion versus the 19. 8 billion revenue expected i want to opponent out some of the key commentary here from the cfo. The outlook commentary they are saying as expected in the Third Quarter they daily active users and month ho active users in the u. S. And canada decline slightly from the Second Quarter 20 levels which were elevated gu to the covid19 pandemic they expect this trend to continue into the Fourth Quarter and users will be down but they also say the they expect the year over year Revenue Growth rate to be higher driven by continued strong advertiser demand during the Holiday Season you see facebook shares trading pretty much flat right now. Julia thank you for that. Jessica come to you on the facebook numbers and reaction. Perhaps a very strong number particularly on the bottom line. But paps we are seeing the fact it had run up so much, 56 today, coming into night i think thats it. With all of these numbers we are seeing great top lines, very, very strong. But the expectations are so high the question is when we peel back the curtain, what else are visitors worried about on facebook any warning about user growth a red flag for investors and for the future of the business i think thats probably what ear seeing in this case. On amazon it is that aws can aws grow and even maintain market share against microsoft and dwoolg right now i think thats top of mine also with amazon expenses, we expect them to cross a million employees if they havent already. There is a lot of cost in that business skmrks investors are paying attention. Amazon has now turned negative on the session. It thishlly saw a possible afterhours on the results mike i wonder if there are concerns about the forecast coming in a will he light for the Holiday Season whether there is so much expectation amazon is going to win because everybody shifted to shopping on line. Light in terms of the operating income Operation First of all, always a very wide range. The remarkable thing about amazon, we are one third of the way through the Fourth Quarter and they are saying the range is 112 to 121 billion, 9 billion. They are growing so fast in so many different areas they dont know how much of that they are going to actually capture. I do think perhaps the operating income guide for the Fourth Quarter is seen as a little bit conservative that could be the explanation. Honestly, i think it is 11 minutes in is too early to decide if the market is going to revert on these companies. It might bounce around. Ed lee, in terms of the aws growth microsoft azure was growing in the high 40 year over year. A little disappointing from aws not to match that. Buff it is a higher base and it is still 11. 6 billion of revenue. It is still a great business for amazon i think you hit the nail on the head i think microsoft, their performance on azure set the table. If they are gaining that much how much of it is sort of the internet is expanding overall and thats where microsoft is getting their added share from or how much is they are eating it from other people i think aws is still very strong the again, i think relative to the bumpup that microsoft got, i think thats part of what investors might be looking at. I agree with jessica, i think costs overall with a lot of these companies is something important the look at. Google i look at their employee count. They are at 132,000 employees. They add, 15, 16,000 employees since the last quarter thats interesting, too. I think it is good to invest in that Human Capital but the growth on that cost is note torgt worthy, in. Google, alphabet off the highs of the session, still up 6. 4 the notable stand out. Starbucks earnings are also coming out to. Lets got to kate rogers. A better than expected q 4 for the coffee giant business seems to be bouncing back faster than answered. Eeps at 51 cents adjusted a beat over analysts estimates at 31 cent revenue beat 6. 2 billion. Same store sales overall down 9 . In the americas, down 9 better than analyst expectations of 12 international dropped by ten , also better than answered. In china same store sales fell by 3 . The company also opened up 480 Net New Stores in the quarter and has 9. 3 million starbucks rewards members in the United States we will give you a 1 and full year guidance. The company is expecting full year global comp growth between 18 and 23 americas and u. S. Comp growth for the year between 17 and 22 . And china between 27 and 32 nongap epsz between 50 and 55 cents for q 1. That is a bit light but for the year, between 2. 70 and 2 2. 90. In line with guidance. And consolidated revenue for the full year next year is better than answered. And the stock is moving higher. You have given us a lot to digest there kate rogers. Thank you. Stephanie link what stands out to me is globally and in the u. S. Sales are down but they are offset by double digit increases in average tickets people are spending more even though they are going less what do you make of the numbers. They issued the same store sales in annual and august they fwaf that to us in the middle of september. I think what is interesting about the price increases that you are talking about is some of the destination products they have been implementing Pumpkin Spice latte was launched in september i want to get color on that first in the First Quarter their target strategy is to offer m e more 50 of the stars have limited. Other stores are closed. I dont know how comfortable i feel about their guidance because there are so many moving parts, but they are doing what they can lets watch china, china is ahead of us and they are now almost flat. Thats a good sign and we still have a ways to go, though. It is also interesting that they are till opening so many hundreds of new stores in this environment. We have also got twitter earnings out that stock is under big pressure right now. Lets get to Julia Boorstin with the results. The stock is under prour because the company added just 1 million of their daily active users adding just one million over the course of the quarter ending 187 million monetizible daily user the falls short of expectations but company did beat on the top and bottom line. Revenue of 936 million versus the 177 million expected. Earnings per share coming in at 19 cents versus six cents estimat estimat estimated eps. They say the period surrounding the u. S. Election is uncertain but there is no belief that numbers cant sbin continue to improve outside the election window ed smith mentioned the fact that twitters user growth was so slow in q 3. He told us between the election and product improvements we remain optimistic we can continue to deliver daily active user growth overtime he says this quarter is usually slow, but doesnt usually have an election in it. He went on to show twitter is a trusted place for news and information and all the progress they have been making about the health of the platform there twitter shears are down despite the improvement in revenue. It does seem like there is meaningful concern the laster quarters significant user growth may have just been a onequarter blip we have just one million monetizible daily act i have users added this quarter. Twitter will be on squawk box tomorrow in a first on cnbc interview. We will take a quick break our analysts will stick with us for surgt discussion we will have more on amazon and phetalabs earnings. Apples earnings due out soon as well just 12 minutes left before those numbers come out well be right back in a couple of minutes we are back. Shears of amazon down about 1 in the afterhours trade after reporting a very strong earnings per share beat to revenue beat disappointing on the guidance side joining us tom forte, an wist d. A. Davidson. Tom, to you first, why dung we are trading lower. Only 1 after a stellar run of late what is the market disappointed by i think the Fourth Quarter is going to be incredibly challenging for amazon, as the year has been when you think about maximizing revenue and ecommerce to the extend that they are having challenges at their Fulfillment Centers as far as getting in products and out products as quickly as possible. So the hope was to have a prime day in october and it would improve their yield at the Fulfillment Center level and help them maximize sales in the Holiday Quarter. But i do think it is going to be a challenge for the company. Jessica, overall, though, clearly the revenue line very impressive, up close to 40 year over year and the guide on the revenue line for q 4 better than expected should investors be looking past any shortterm issues about costs or anything else thats a good question. I mean we are seeing more than a pandemic tail wind to amazons business it is important not to lose sight of that. I mean they are blowing away on Sales Numbers even with the very legitimate derns about fulfillment. Concerns about fulfillment. There is a lot of positive news as well. I think this secular acceleration to on line retail is something that you know investors should really be keeping front of mine in their strategies as well because we are seeing, wechb the head winds on the fulfillment, amazon can blow away on those numbers but the question is always about, you know, is that baked in any other expectations . I do think that they are we shouldnt underestimate this sectoral shift here, too it is hard to see post pandemic Online Retail gaining a really meaningful share of commerce. What have we gleaned ed, about how amazon views the Holiday Quarter . We know they are going to hire 100,000 employees. That was a sign of strength they announced earlier today. We are getting the guidance numbers. How is it shaping up for amazon. I think, you know, operating income, they are looking a little bit lower than probably people were expecting. I mean there is some covidrelated expenses going on with it as well. If i am an investor i want the see them putting more money into fulfillment hiring more workers for the Holiday Quarter. Maybe the idea that the pushback on prime day investors want the see even a bigger guidance on the top line i agree with jessica, i think these are stellar numbers all around given everything and the jump up in revenues you know from covid in our households we are buying stuff from amazon all the time much more than we had in the past because we are all on lock down i think it is large lee a positive story for them and i think they are continuing to pump money into operations and fulfillment. If anything i want the see them do more of that as an investor rather than seeing them trying to be conservative. Tom what are you looking out for on the call . How they are managing the covidrelated costs. 4 billion this the june quarter. Expectations were 2 billion in the september quarter. To an extent you have seen a surge in cases in the u. S. And internationally i look for commentary from management how they expect to manage covid in the Fourth Quarter in addition to all of their efforts to mocks myself fulfillment with their own delivery efforts and leveraging the postal service, fed ex, u. P. S. , et cetera. Stay with us, we have got more earnings coming up. We are still waiting results from apple the numbers set to hit any minute now we will have instant analysis on that as well straight ahead on closing bell. Expecto patronum and action. 16 people died did he catch our bad guy . Were know as the charmed ones. You got one day to show me what you got. I want to fight. You need us harry. What a goal bockey ball, hockey ball, you name it ball. Im gonna be ready. Just say show me peacock into your xfinity voice remote or download the app today. Heres a look at some of the afterhours movers a busy earnings session of course facebook up about 1 a nice beat on both lines. Though we are seeing uncertainty going into next year amazon is lower the guide for net income for q 4 disappointing. Revenue this past quarter very strong amazon a decent bet on both lines. Up 6 . Twitter, not fantastic engagement numbers, stock down just above 11 apples numbers just ahead on the other side this short break. Before money, people 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. Results cross. With us, ed lee, jess re ka lesson, mike santoli, and dan ives and peter roenlers. Mike, the key thing we are looking out for . Any chlorothey have on iphone sales since the end of the quarter i think is the freshest information. The forecasts have been very stable for apple for some time now. Going back several months. Apple was up 3. 7 in todays session and positive so far this week, up about. 25 . As the dow is of course down 6 . Outperforming coming into the numbers. What are they josh lipton . Q 4 earnings per share of 73 cents versus expect igss of 70 revenue 64. 7 billion. The street was looking for 63. 7 digital. Iphone revenue, 24. 6 billion. Model 27. 9 dllds. Services, though a beat at 14. 5 billion. Airibles better than expected, . 9 billion. Mack, 9 billion in the quarter. The street was closer to 7. 9 billion. And ipad, 6. 8 billion apple does not provide q 1 guidance at this time. Back to you all. Josh lip ton, thanks thank you. Letsally get straight to the panel to break down the numbers and get reaction ed, iphone revenue coming in light. Thats what stands out to me i am surprised that it is low. I think thats what the market is reacting to as mike said, getting more color on how sales have been happening very recently, since they announced the new set of phones i would like to get a better sense on that. Service, those, that was a nice beat thats something i look at the media side of things is a steady growing business. I think it is their best item after other items. It is stable i am surprised there is not as much emphasis on the visitor side, essentially their media business. Apple is down 4 after hours. Josh lip ton has more color from the ceo, tim cook. I got a chance to speak with tim cook about the quarter let me bring you color there on the decision first of all not to offer a forecast new york of the to offer q 1 guidance, cook is saying the pandemic right now is simply causing too much unsempt he thinks to offer such a forecast he said if you look at the case count, cook telling cnbc they are climbing in western europe, climbing in the United States, there is still a sufficient level of uncertainty out there we dont believe cook says thats an environment to guide into the iphone franchise, contact emphasizing this fiscal q 4 was different. Apple did launch the new iphones late they are time arent. The timing did shift so it is not seeing the benefits of those sales like it did in last years q 4. Cook show trying to sound confident here talking about reasons for optimism about that franchise in the quarters ahead telling us we have a number of tail winds, he says we launched four new models for the first time ever. 5g he says is a once in a decade kind of an opportunity we have a large and loyal and growing installed base to sell into particularly in the United States ver very aggressive carrier promotions the four of these things give us a lot of confidence and the initial data points cook says are really quite good. I asked him about trends he is saying in china an important market for apple he says Greater China beat our expectations we grow strong double digits in other than iphone. Ipony revenue, a larger percentage of china revenue is made up of new eye phones. Thats the reason the number for the total quarter there started with a minus sign. But he says given what we are seeing in the early growing we are confident in chin. The initial data points cook saying good for the quarter ahead but pullinged by thence for the quarter. The wretch for the quarter 64. 7 billion. The consensus estimate for next quarter revenue was 100 billion. A very important quarter that we have just begun and are in the middle of but there is in guidance for dan ives are you surprised not to see guidance . I am not surprised given what you have seen in terms of the environment and uncertainty. I think ultimately this is really the drum roll to the main event the super cycle into the Holiday Quarter as well as 2021. We think that preorders are more than 2x. Iphone 11 if you look at this quarter from a services perspective, an iphone underlying what is happening in china thats the over the next six months. I think it would have imprudent to ultimately give guidance given the variables as we go into next three, four months shhh so you see this as a buying opportunity, the stock giving back all of todays gains and then some. Dan. I view it as a golding buying opportunity. You are going into a once in a decade super cycle in terms of 5g 40 of the base hasnt upgraded a phone in three to five years i view this as a stock 150 in the six to nine months i would be buying here mike, were you expecting guidance was this a blow not to have it not too caught up in the fact that apple is not giving fwoidance because i dont think it tells you very much beyond what we knew about the fact that the atmosphere is not conducive to giving firm guidance. Companies if they have the opportunity to escape being pinned to guidance they will do that i do think that the beat come on things like mack and ipad in addition to services by a smaller margin, that does create the impression of pulling forward command. Those are things that are not going to necessarily be replenished very often it seems like a shutdown play. I get why the stock is reacting this way i mentioned it was stable, the earnings forecasts since february they have been, down 15 cents for the fiscal year. The stock is up 70 . We have massive expansion because it is one of the pull has the free market could move to clearly Peter Rojas Tim cook in his comments to josh lip ton and his initial quote in the Earnings Release want to you look ahead to the opportunity in front of them. Kool cook called it a once in a decade opportunity to josh when it comes the 5g phones is this anything in the report that troubles you and does not allow to you look forward to that i think it is important to keep in mind that apple typically would launch the iphone in september. So at the end of q 3 so we are not seeing any of those Sales Numbers reflected in this report. And they have only launched two of the four iphone 12 models which they are introducing so the iphone 12, the 12 pro the mini and max models go on sale next monday they have a lot of pent up demand for these devices which is going to be satisfied now there are at love iphone owners, consumers who lengthened the amount of time in which they are owning the phone before they upgrade. And they look for a signature time, a signature upgrade moept li moment like this to take the plunge and upgrade again i think iphone 12 is a big opportunity for that i suspect what apple is seeing is they are seeing strong interest in the 12 and the 12 pro. Also a lot of people are saying i want the mini because i want the smaller phone or the pro max because i want the best camera those consumers havent made their purchases yet. Is this optimistic or pessimistic, the fact that we didnt get the guidance and people are going to be waiting, this quarter will be disappointing or they will blast because two of the new iphones are out . I am optimistic and i think we are going to see an impressive q 3 compared with q 4. It explains why the iphone wretch for the Third Quarter came in light. I guess the pressure is on for next quarter given that they dont guidance, hyped up this release and iphone sales this quarter came in worse than expected yeah, and we are several weeks into them selling the new iphones. It is not as if this is all to come we will have to see. A 5 move in the stock is within the bounds of what you would expect with these numbers and modest disappointment in the iphone line. It is still a show me situation. Massive expansion, et cetera a 2 trillion Market Cap Company right now. They cant coast from here even though years from know the absolute level of Free Cash Flow and net income has been relatively flat. Of course they buy back 70 billion aier or something lick that to keep thing roll in the right direction. Jessica, final thoughts what will you be listening for on the call from tim cook in particular i thought his comments were interesting. He said initial signs were really quite good. That is something in terms of demand for the new upgrade cycle and also talked about china, beating their internal expectation. I think any more color on those two things you really could see the stock move but my point of view is that yanking guidance when thats the question, any signal about the new phones, i think thats key i think the decision to do that could have consequences. It is great that services are up apple loves to talk about services all eight day long but thats not what this stock moves on i think we are seeing that right now. Dan, where is wall street on Services Services revenue coming in 14. 55, better than expecting as what kind of chunk of apples business is it how does it factor into the valuing a . Thats a great point. Ultimately if you look into the next year, thats 60 billion. I think in terms of annual revenue, 900, 950 billion services are the key to rerated. Many analysts calling for a miss here it shows thats saying ironclad and the rock of gibraltar in this storm thats the thesis for apple going into next year. Are there concerns when you hear things like that from dan they pulled guideness and there is still optimism about how strong the 5g sets of phones can be do you think a lot of the good news has been priced in already this year . I think thats possible i think dan raises interesting points about services, right and apple, they have introduced a subscription Bundle Service which not available yet but they are going to be pushing very hard onto their user base in the coming months and definitely strongly next year it will be interesting see whether they are able to capture some of the recurring services revenue. They have tip toed around doing i cloud subscriptions and things like that. But they are trying to crack some of the similar recurring subscription revenue that Companies Like netflix and google and others have been able to tap into. We are looking a the stock recover a little bit it is down 3. 8 afterhours, actually almost exactly what it gained today during todays session. It finished higher by 3. 7 thank you all for joining us to help digest those apple hours. It has been a wild hour of earnings we are breaking down facebook results. Keel dive deeper do into that. Facebooks stock now is up 1. 8 . Closing bell will be right back what if you could have the perspective to see more . At morgan stanley, a global collective of thought leaders offers investors a broader view. We see companies protecting the bottom line by putting people first. We see a bright future, still hungry for the ingenuity of those ready for the next challenge. Today, we are translating decades of experience into strategies for the road ahead. We are morgan stanley. Facebook a bit higher here on the back of earnings while twitter sinks. It is down 14 on weak user numbers. And alphabet jumps joining us by phone, john frooem of cfra. Joining us also, mike santoli. John lets start with facebook. Sure. Revenue grew by 22 they overcame the ad boycott and saw strength there what questions do you have off this facebook report. Well the thing i thought that was interesting was why operating margins fell so significantly just sort of off the top of my head i thought there would be, you know kind of pulling the lever a bit back on costs and really sort of show the inherent operating leverage, the operating leverage thats really inherent in that business. That was a little bit of a question mark. But i would also want to know, you know, the difference between rpo, the monetization of users and the user growth. You know, i think that balance is going to be really important for facebook Going Forward now that we have got 2 billion users and a lot of them are heavily undermonetized i think thats a really a big growth driver for them Going Forward. Then of course we have regulation risk which is the other thing i would like to hear a lot more about. What is driving google, alphabet by nearly 10 i saw that, too i have a strong buy on google, a hold on twitter and facebook obviously, these results are pretty good from my perspective of cant be right all the time, but you know, the deal with google i think is one is youtube, 32 of growth in youtube, it is taking off in this era when everyone is sheltering at home and looking for entertainment. I also think in a the search business coming back to positive shows that covid19, what it has done is it has actually accelerated the shift of ad dollars from traditional media, you know, to on line digital which a lot of people dont know this, it is only passed the Halfway Point last year. There is a lot of legs a lot of room to lrun for this secular trend. John, twitter is down 1 . Since you cover all of these names. Smallest user growth in daily active users since it started reporting that number. Last quarter when it reported that surge was that a onetime pandemic phenomenon . That seems odd but it would make sense i think also twitter has a very sort of there is only so many users i think it can grow in a given quarter it has more narrowly defined user base and a hierarchy of those users. The growth driver for twitter Going Forward was monetization, not user growth. They have made some progress there but the stock has doubled since april, obviously there is more vulation sensitive component to it when twitter you cant blow out the numbers on the top line like other social Network Platforms like pinterest. We are getting more headlines from amazons call this was the media call with the cfo. He spoke will how amazon is impacted by Holiday Shipping as we spoke about on air there is expectations from lodgistics companies there could be constraints during the Holiday Season because of the pandemic they have Third Party Delivery partners and amazon lodgistics which has its own limitations but they had a good dry run from prime day in october and they invested 30 billion in capex and part was aimed at operations such as transportation and Fulfillment Centers and so forth. They do think that the industry overall will be tight capacitywide there are no exceptions but add that they have prepared in advance of that to happen. Also they talked about covid costs in the companys guidance they said they are expecting about 4 billion worth of covid costs in the Fourth Quarter of the year in this call he said that the Third Quarter actually saw about 2. 5 quarter saw about 2. 5 billion which surpassed their estimate of 2 billion a lot of that was lost productivity he said they are more conservative they are hiring more people and have to have an on ramp. And some of that is cleaning supplies that you need to keep personnel safe leslie. Thanks the stock is down 1 after hours. They mention in the they praise target to raising minimum wage to 15. They are clearly it outing how they are taking care of their employees and questions about that given the constraints on their business during covid. And given so much of the criticism they have gotten politically we see the ads in that direction, too. Not that out of character for amazon to warn of challenges and expenses in the near term while keeping the focus on massive longterm opportunities. I think that makes sense the difference with the covid cost relative to other amazon where they say they are going to spend billions on. For investors, it is not as much as we are building for the future so a slight negative the logistics situation, every year they are pushing the max in terms of the delivery capabilities of the company often have fallen on ups and fed ex, not so much on amazon. Those stocks are down very little, so not sure people are taking that as refreshing. Straight ahead, we will count you down to the conference clsal at the top of the hour we will discuss what investors want to hear coming straight up. A quick check on apple after hours. Down almost 4 numbers were okay, but investors are teeing off the iphone revenues which came in below revenues china revenues came in lower given rising caseloads of coronavirus in the europe and u. S. You have more color for us the big tech performer in after hours. The ceo said they will further break out reporting segment so investors can see investment into the space which he said is going to stay aggressive and this is reflective of how important cloud is to the alphabet shares. We are counting down to the Earnings Report a one day well look back and remember the moment that things, for one strange time in our lives, got very quiet. We worried over loved ones, over money, over our planet, and over takeout. Lets remember this time when so many struggled to feel secure, and build a future where everyone can. Because when the world seems like its standing still. Thats the perfect time for us to change it. For members like martin. An air force veteran made of doing whats right, not whats easy. So when a hailstorm hit, usaa reached out before he could even inspect the damage. Thats how you do it right. Usaa insurance is made just the way martins family needs it with hasslefree claims, he got paid before his neighbor even got started. Because doing right by our members, thats whats right. Usaa. What youre made of, were made for. Usaa United States cant easily get to a doctor or afford the treatment they need. Thats why goodrx has built a leading consumerfocused Digital Healthcare platform. We wanted to make shopping for healthcare as easy as it is to shop for travel or electronics. As a public company, we hope to provide even more services that help people get the healthcare they need at a price they can afford. That was a fun hour. Minutes away from the Conference Calls from apple, starbucks, twitter. Those calls all kick off at the top of the hour. Those calls set for 5 30 p. M last time around during the pandemic, when these tech stars reported, they had immunity from whatever was plaguing the rest of Corporate America there were no big disasters that could bring this market potentially higher, but i think what we are learning is that investors are being discerning and there are things to criticize whether its apples i pho iphone and even facebook its no surprise they could operate well in this environment. One reason alphabet is up is because they are suspect whether they will execute on the bottom line and there is some comeback ability. As opposed to the other guys who are beneficiaries of stay at home we are out of time here fast money starts now. Im melissa lee and this is fast money. It is such a big night that we have added gene munster to our lineup he is here to break down the flood of tech earnings just hitting the street many of the Conference Calls are now underway we have full Team Coverage standing by to break down all of the results. Lets break down apple josh lipton has th