The fda approving a 5 15minute rapid test the ceo will join us thats a biggie as power lunch starts right now thanks as august comes to a close, its been a stunning summer rally the dow up 13 the s p up 15 and the nasdaq up 25 . Bob has more for us. Bob. August is usually a nothing month. Not this much. Usually august is typically flat to down. Were up 6. 8 so far best august since 1980s. April, may, june and july have been pretty good monthly gains five months in a row. Why is it happening . Everybody wants to think its apple because apple is up 18 . The s p would be up 4 rather than 6 . Its a lot more going on than apple. The pricing are pricing at some economic rebound could see the returns. The dow transports are up. Thats a cyclical group. The russell 2000 is up high yield is the best performing bond asset. This wouldnt be happening if they were projeking iproprotecn economic downturn. The better argument is theres a bull argument thats winning the argument so far. This is the argument the argument is its not just an economic rebound its earning analysts are underestimating the earnings rebound were going to get tremendous operating leverage what does that mean . It Means Companies are reducing their variable costs they are reducing travel expenses they are reduces the amount ploe employees they are hiring. By combining that, reducing the variable cost, combined with technology, eventually down the road, when you get a revenue build up, all of a sudden that leads to a huge increase in the bottom line. Thats the word, operating leverage and a lot of companies are banking on that. A will the a lot of analysts arent understanding the relationship the bulls, right now, are winning that argument. Back to you. They are winning bigly. Thanks very much have a good friday its been a record breaking month for stocks in fact, as we said, the best month for the dow since all the way back in George Orwell days, 1984 26 dow stocks are higher this month. Nine of them led by apple are up more than 10 . How much more steam is in this investment engine . Valerie grant is senior v. P. Valerie, im sure you get the question from clients every day. How much longer can this juggernaut record run go on . What do you tell them in. I tell them that certainly we are seeing a formidable momentum in the market. People really have to think about fundamentals as well whats interesting is we know we have low Interest Rates currently. Well probably have low Interest Rate fs for the foreseeable future i think what were seeing is some of the improve ments on Fundamentals Companies are exkuecutining well you mentioned walmart. Setting aside tiktok, if you look at how theyre doing in their core business they have done well in terms of executing on their omni strategy channel i just noticed they relouised one of their Corporate Social Responsibility report and improving the benefits they offer to their workers and offering more opportunities for Educational Attainment and advancement. I take that as a positive signal on how they think about the future ron, now to you we have the fed behind us. We got maybe some kind of Economic Stabilization if not slight improve ms in areas have you been surprised by the resilience that was two months after i started in the business. In september of 84, the dow broke out when Phillip Morris akwared general foods. Were a lot longer in the tooth than we were back then i think the market is aging. Its speculative i understand the fed is doing a lot. I have some concern about what fed is doing and whether or not in the long run that will provide the type of noninflationary growth that the market could continue to thrive off of as it has over the last 30 or 40 years there are plenty of them p i go back to you before valerie. If inflation does run hot and the fed suggesting theyre willing to let inflation run hot as long as employment comes with it, how does that affect the value of equities. How does that affect the value of other assets. I look at gold i look at real assets. We know what inflation does for them what might inflation do for stocks well, im not sure yet. I think it will be an inkriesingly complicated question over time what the fed did yesterday walking away from the notion that low unemployment produces high inflation focusing on bringing the Unemployment Rate back down towards full employment. I dont think over the last 30 years that was the issue we had supply shocks we had a variety of different issues that have affected inflation per se or disinflation that had nothing to do with employment it was supply shocks, policy errors Going Forward we have to watch break evens on the tenyear. We have to watch tips, gold, silver, lumber, copper if they start to flash, accelerating inflation with the fed may be willing to live with for short term, long term Interest Rates will move higher. Do they start to control the yield curve and cap long rates that makes it complicated. Yeah, look at lumber prices already soaring. Valerie, here is the conundrum not everybody is as old or experienced as the three of us here if youre 30 years old, you never experienced higher Interest Rates you think low rates are this magical elixer. If low rates had no negative consequences, we should have low rates forever. There must be a down side to this level of interest theres a down side to low Interest Rates for an extended period of time we talked about inflation. You also get asset bubbles finally, you get an exacerbation of wealth inequality people who are sabers, depending on Interest Income arent going to be getting that on the other hand, you have inflation and assets which exacerbates the wealth inequality which we experience in the u. S. That does have long term consequences of the word corporate earnings as well as markets. Yeah, with this basically say well have half a percent on the fed funds for the rest of our lives. Thats the way it goes have a great friday. Speak to you both soon thank you one key event adding some uncertainty to this market rally today. President ial election. Just a little more than two months away. Frank holland is here with a closer look at what global cfos are expecting. 75 of cfos believer that joe biden will win the election. A dramatic change from last quarter when the cfos were almost split down the middle they remain split on the congressional races with 52. 5 saying republicans will retain control of the snats and democrats the house. Nearly a third believe democrats will win both. Only 5 believe republicans will get both 20 believe they will go lower the dow, well talk about that with the shake up. Its around 3 from its all time high. Half of global cfos says this current environment is good for dealing making 40 say the uncertainty is making things difficult. Back over to you curious what they say about jobs in light of mgm and coke today doing layoffs. Half of the global cfos expect their company to reduce head count over the next 12 months. 20 say they expect their head count to increase. Obviously, it really depends on what sector youre in. Were seeing a lot of Consumer Staples and discretionary Companies Adding during the pandemic its case by case basis. Thank you well see you tonight for summer school. Brian. We got a long way to go and on deck despite the index being positive, 20 dow stocks are lower in 2020. Our traders will go bargain hunting to see if theres value left in some of those down dow names. The fda emergency use authorization for abbott labs rapid test could be the game changer we need. Abbott ceo will join us. Were back after this. Terans li. An army family who is always at the ready. So when they got a little surprise. Two . They didnt panic. They got a bigger car for their soontobebigger family. After shopping around for insurance, they called usaa who helped find the right coverage for them and even some muchneeded savings. That was the easy part. Usaa insurance is made the way liz and mike need it easy. Thats it. Im calling kohler about their walkin bath. Usa[ sigh ]nce is made thenot gonna happen. Need it my name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . 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The ceo robert ford joins now along with meg to talk more about this breakthrough. Meg. Kelly, thanks so much mr. Ford, thank you for being with us. A lot of people referring to this test as the game changer in covid19 testing tell us about how you envision it being used to help with this pandemic id say this is what abbott was built for. Moments when Society Depends on the kaen to come through with this kind of testing we put a considerable amount of investment here in technology and manufacturing. We now have six uas across a variety of different types and formats and its the latest effort really know focus on two key Guiding Principles we wanted a reliable test. We wanted it to be easy to use and easy the deploy so we increase testing in society. The second thing we really wanted to focus on was scale manufacturing scale and ensure once we had the product and had it approved and ready to go we would be in a position to be able to supply the market with a lot of volume, a lot of scale. I was really pleased on wednesday when we got the approval we got the approval that we were really able to bring those two defining principles into the test a lot of folks hear a 515 minute test that doesnt require an instrument. They think this could help us let people on arms into sports stadiums and restaurants tell us about how that authorization really affects how this test could potentially be used the label for the test is to do the test within seven days of postsymptom onset or together with Health Care Professional that might suspect that youve been exposed or have exposure for the test we are working on developing data for asymptommatic claims. Well have da to to support that in the meantime we see it being able to be be deployed because it doesnt require an instrument like you stated. Deploy through the federal government, the state governments, through school, through employers or even through retail clinics we think that is great opportunity to be able to line up this volume through retail, retail drive through, retail clinics and be able to kind of deploy the tests that way. The number of tests youre planning on headacmaking is huge 50 million tests starting in october. Also announced yesterday was a government purchase of 150 million of those tests for 760 million. Does that mean all of your supply of these tests for at least the first three months is spoken for or can other private purchasers try to access them . We were working with the government, with the task force and a few weeks ago were aware they were interested in making an acquisition once the product made its way through the process. This is good starting point. We decided to make manufacturing investment back in may to start up two manufacturing sites here in the u. S i expect to get to that 50 million by the end of september, beginning of october parallel to that were adding a new team to look at how to ramp up with that capacity. We know that 50 million tests, while it sounds like a lot, we need a lot more. Are you taking orders from private purchasers or is all of your supply that you can forecast right now spoken for by the u. S. Government . Right now were working with u. S. Government to supply and fulfill that order well try to start focusing now on bilzi inbuilding more capaciy we severed a lot of emails, a lot of interest from not only existing customers but new customers looking at ways how to do this. Well figure out what is the best way to deploy the testing our focus is to get our children back in school and get the economy opened up again. Well be working in partnership with them to see how we can deploy these tests all right thanks for joining us. We look forward the hearing more updates on all of your plans here hugely important one this week thanks again fantastic interview and extremely timely i have a couple of questions for you. If you are ready to go on the hot seat here. What do we know about the test in is it something we would do at home or is it have to done with a Health Care Professional. Its kind of like a pregnancy test you do a nasal swab and something will show up if youre positive what does it look like we probably have images we can show it does look like a pregnancy test where you have two stripes on this little card and two will show up if youre positive for the virus. It is a snasal swoab president t the one that goes back up to you brain which im sure a lot of people will be grateful for. It has to be done by a Health Care Provider. That doesnt mean a doctor or nurse. It could be a pharmacist or a school nurse this is for symptommatic people. It has to be done by a Health Care Provider right now. I love your question about the sale you know whats going to happen. If you got the means, youll buy buy 100,000 tests and put them in your own private warehouse. Need to make sure everybody has access fantastic stuff. Have a great day talk to you soon coming up, more on what may just be the most potential bizarre bidding war ever microsoft and walmart versus oraclef for tiktok why are those Companies Interested in an app for short videos well find out did housing stocks get too hot . An analyst tells you the best ways the play the Housing Market right now. Power lunch back in two. Dow up 116 machin heading into retirement you want to follow your passions rather than worry about how to pay for longterm care. Brighthouse smartcare℠ is a hybrid Life Insurance and longterm care product. It protects your family while providing longterm care coverage, should you need it. So you can explore all the Amazing Things ahead. Talk to your advisor about brighthouse smartcare. Brighthouse financial. Build for whats ahead℠ come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. Weits totally not theg a way tsame without you. Were finally back and cant wait until you are too. Universal orlando resort. Buy now and get two days free at the parks. Restrictions apply. All right. Welcome back to power lunch. The dow going positive for the year believe it or not, despite that, twothirds of the index are lower on the year. Some like boeing are down 40 . Some of the hardest hit names in thered for this year, we mentioned boeing exxon will be booted out on monday can any of those rr maybe other dow names help you play catch up or make some coin this year. Your trading nation team this year is Craig Johnson and gina sanchez. Feels like old times glad to see you both gina, any of those dogs of dow that you think are worth adopting it depend ons ts on the reco you think were about to have. Im focusing on a weak recovery. Youre looking at Something Like an American Express or a walgree walgreens, jpmorgan. Things with good fundamentals but should continue to put up with foot in front of the other. Craig, what about you . We have been bullish on this market i got to tell you, we like the market were neutral on financials but i would play jpmorgan in here. The stock is starting to make a nice series of higher highs and higher lows. Its a name we will be playing at this point in time. We need to see tenyear bond deals start to work their way up and the 1020 spread start to widen out. Thank you both see you again soon still ahead, its the tiktok takeover walmart making a bid for the social media app what does it mean for the stock of walmart up big in the last couple of days a huge chunk of millennials are starting to buyage analyst willh stock to buy todays mystery stock soaring 100 in three months [ engines revving ] its amazing to see them in the wild like th shhh. For those who were born to ride, theres progressive. Welcome back, everybody. Here is your cnbc news update at this hour. People in several states are assessing damage from hurricane laura. More than 600,000 homes and businesses are still without power. One louisiana mayor said some people could be without basic services for days or even weeks. The New York Times reporting two top pr people have been fired from their positions at the fda. This after President Trump and the head of the fda exaggerated the benefits of blood Plasma Treatment for coronavirus patients the firing including the agency top spokesperson and a pr consul tants who recommended the fda chief apologize for his statement. A spokesman for the held an Human ServicesDepartment Says the timing of the consultant termination is coincidental. French president said his government is doing everything to avoid a nationwide coronavirus lockdown though hes not ruling out any scenario. This has france reported 7400 new cases. Thats just below the oneday record set way