Transcripts For CNBC Closing Bell 20240712

Benefited from the stay at home trend, both popped into the open both have gone lower all day long big swings and stocks are set for the second straight week of losses the s p 500 just fell through the 50 huday moving average. 59 minutes to go on a volatile day, week, and final hour of trade. The s p 500 is flat right now. Fwha but that belies the volatility that youre talking about. We have a big lineup on the show coming up, the ceo of kroger will join us on the back of the companys strong Earnings Report better than expected guidance as well plus, labor secretary Eugene Scalia will be with us to discuss the job situation in the country and the renewed push by some companies to bring workers back to the office and one brookings economist has a bold idea to get america back to work and speed up the recovery pay people to have a covid19 vaccine. But lets get straight to the market another wild session to close out a roller coaster week. Mike santoli is tracking all of the action today mike it is a familiar story in terms of premarket strength being sold and then testing some recent lows. Sar sara mentioned the s p 500 crossing below the average that is around 3320. Three of four days this week, we had had the lows of the day between 3320 and 3330. So essentially market trying to figure out if it thats a good place to buy typically in a bull market, the 50day moving average if it gets down there, its a decent risk reward for buyers. Sometimes you see maybe the market trying to make a stand. It seems very tentative. We had a very top heavy market going into the highs its been top heavy on the way down look at the month to date numbers on the nasdaq 100 against the s p 500. Of course, the stocks that drive the nasdaq 100 are tremendous in the s p 500. But what you see here is a huge performance split. Mostly its whatever partied the hardest in august and had the hardest hangover in september. That is the pattern. Take a look too on a year to date basis everything except for the United States and the s p 500 equal weight theyre the same chart on the year to date basis. The difference is the mega cap Growth Stocks that are unique to the u. S. This is kind of that cushion were figuring out how much maybe the u. S. Has to give back on a market weighted basis guys what do you make of this turn around for some of these names that originally popped and were celebrated on earnings like peloton, oracle, kroger in that category very strong top and bottom line numbers. I think can you also you put chewy and lulu in that category. Very strong Stock Performance going in in general. But also the stay at home verb riz and the market and puts is questioning how much to assume thats going to continue in terms of the tail winds. And below the surface of the market, youre seeing things that are more geared towards the reopening, things like transports work much better. So suddenly speaking, there is kind of a shift going on inside the market the recent winners, i think, are having some of that bleed away mike, thanks so much. Am zan aazon and apple are tg in the red bradley, great to have you with us again and clearly theres been a significant pullback this month in tech stock, tech stocks as mike is pointing out do you think that was warranted . Do you think it has been pulled back sufficiently enough for it to Start Building to the upside again . Warranted . Yes. There are companies that benefit from the pandemic like amazon and zoom but overall, the tech sector is so bad its indigtive of the economy overall. And the u. S. With 50 Million People filing for Unemployment Insurance clearly benefits its catching up with companies that are servicing those products as well yes, it was warranted. Have we hit the bottom of it i mean, to me, that is really a question that is dependent on vaccine timing, right . If news came out today that we wouldnt see anything for another year, then, no, i dont think were close to the bottom of it. But if some of the more optimistic projections are right, we can be do you think these big tech stocks are correlated with Economic News . Ie good Economic News is good for those stocks as opposed to there being any sort of work from home premium in some of the stocks i think a couple of them do benefit from the work from home premium. So there are a handful i think tell he Medicine Companies clearly fit into that just like the zooms of the world. But overall, yeah. So much of the economy is compromise of tech nopz one way or another every Single Company uses technology in some way like this napkin that im holding, whatever company made it used technology to manufacture it, distribute it, produce it, advertise it so ultimately the two are intertwined for there not to be a correlation. What do you think all this volatility is meant for the ipo market next week well get a big test with snowflake and unity what are you hearing in the valley about the conversations around going public right now . I you this people are excited. One of the lessons over the last couple years is that a lot of companies stayed private for too long uber, lyft, air bnb and ultimately ended up at lower valuations than people had anticipated. And they probably would have made more money. That can really make a claim to the work at home market in any way. Theyre going to do well just like peloton did well at one point for that on the flip side, if if youre just a general tech company, you know, ultimately youre going correlated with everything else. The fact that we sud ldenly o a slew of the calls coming, is that a positive sign overall or are they seizing an overpriced tech market . I think its positive in part as a venture capitalist, to me, the changing in norms within Silicon Valley of when to ipo is really important i want my Portfolio Companies to ipo sooner rather than later so, for example, were in lemonade they had the ipo a couple months ago. Theyve only been in business for a few years. I really like that trend rather than, you know, i was in uber waiting ten years before there was any liquidity. And so overall, its the right mentality whether or not people are just taking advantage of the top of the market well see. But its a good trend. Does it have to be a stay at home or pandemic winner to kind of Business Model to go public right now . No. Not at all an Insurance Company is a good example. If people cant travel and the entire country is shut down, its a tough pitch to make yeah, buy my stock we can barely operate these days maybe one day it will be okay. There is a group of companies that maybe need to wait or are going have real problems because they rely on sectors of the economy that are pretty paralyzed. Theyre involved in covid19 activities one way or another, probebly fine. What do you think of softbank getting involved on publicly listed stocks. Would you pivot into that area too . Yeah. Its a good question i thought they were smart to do it i was happy to see it. There is a bufrnl of deals where softbank came in and marked them up so im a fan yes. I think that i will ultimately if i werent already so invested in the private markets it is a smart time to do it. I do think that things are very still dependent on the timing of a vaccine. I spoke to really smart people who are are convinced it will happen in the next three months and i spoke to really smart people that wont see anything until next fall. To me that, is all the difference in the world. Bradley tu if t, thank you for joining us. On another day where were seeing tech lead the market down the nasdaq is down 1. 25 dow is positive. We lost a lot of the earlier rally. After the break, were going to talk exclusively with the ceo of kroger on the back of that companys very strong earnings and guidance well get his take on whether the customers feel safe coming into stores and on line Grocery Shopping youre watching closing bell on cnbc. This piece is talking to me. Yeah . So what do you see . I see an unbelievable opportunity. I see bestinclass platforms and education. I see awardwinning service, and a trade desk full of experts, available to answer your toughest questions. And i see it with zero commissions on online trades. I like what youre seeing. Its beautiful, isnt it . Yeah. Td ameritrade now offers zero commissions on online trades. I keep working my way back to you, babe with a burning love inside yeah im working my way back to you, babe and the happiness that died i let it get away servicenow. The smarter way to workflow. The big events are back. Xfinity is your home for the return of live sports. He you. Welcome back kroger beating earnings ximents. The grocery giant seeing a surge in Digital Sales in the second quarter. Kroger ceo joins us now for an exclusive interview. Welcome back, rodney good to see you. Good to see you, sara well this was a surprise. Better surprise on sales, on Digital Sales and also on the guidance and the projection of 13 Comp Store Sales what gives you the confident that people have really changed their behavior and n. In a lastiy and buying more groceries in the longer term . Customers are continuing to shop in our stores you know, when they in our stores, count is down. The amount they spend per visit is up significantly. Also, Digital Business is up 127 customers continue to engage in that and what were finding in markets where covid19 is less lower incident rate or higher incident rate, it really doesnt have that much ofa difference. People in the thing that is exciting for families, people are finding they enjoy cooking they enjoy eating as a family. So its really all those things together that gave us the confidence to go out with the guidance that we did initially the stock was higher it turned around and lower along with, you know, the whole market one thing that i kept hearing about is you are talking about taking price or promotions why are you doing that at a time when consumers are willing to pay up and have a lot of demand for groceries and theyre still in somewhat limited supply were really looking at this for the long term. What is right for the customer today and what is right for the customer two or three years out . And weve been able, obviously, with the increase volume has allowed us to take some leverage, some costs and what were doing is taking some of that and sharing it with the customer in terms of waiving our pickup fee and also we continued to do promotions throughout the pandemic and we continue to share some of that with the customer and we really do fundamentally that the customers will reward us once we get out of the pandemic as well for us, its just the right thing to do and the right thing to do to help a customers budget go further. The on line sales is impressive kroger doesnt get credit on wall street for its growing Digital Business certainly relative to competitors like an amazon or walmart. Walmart is launching a plus service. Focused around groceries where do you fit in here for us, its the total experience when you look at what our customers tell us and one reason why our Digital Business is so strong is things that are personalized, we do incredibly well on fresh. Customers tell us and they expect that our fresh is really good good relative to our competition. As you know, weve had a Membership Program for a long time you didnt have to pay for it. Its fuel rewards. We continue to look at what does the customer want and need and how do we serve those . Delivery is really important in making sure we have that total balance of the experience both from a people standpoint, price standpoint, promotion, and then kind of sealing it with a deal with Fresh Products as well. Rodney, you mentioned that you felt people were enjoying cooking at home more do you think thats a lasting long term change or as in when we have a vaccine and things reopened people are going to restaurants more do you think youll see sales tail off a little bit because of that everything that we when we talk to our customers, what they tell us and its fascinating. They love baking with their kids and something the family is doing together if they have older kids, its like well we really enjoy time together so everything that we can see, its something that it will be a long term trend. They found they really enjoy cooking. The other thing is special is when families eat as a family, they Stay Together better. The kids dont get into as much trouble. Those kind of things the so its really all those things coming together but for us, the thing that gives us the most excitement is our customers are telling us they actually enjoy it. What about food inflation we saw it moderate a little butt last month with the at home category of the meat and poultry prices came down as plans got back on line but overall, what is your view on inflation and whether it is a big threat facing consumers in our economy right now . We see lower inflation over what its been the last several months its one reason why we didnt pass through all the inflation that we incurred in the second quarter. So that was part of the reason and obviously helping a customer with their budget. But when you look at meat and those areas, looking out in the future, with he do not see the inflation the way it was earlier in the year as the plants come back on. There is plenty of raw material out there. Its a matter of the plants being able to process it with the huge growth of online delivery, rodney, who do you see as the biggest competitor is it now National Players with that ability to deliver food online or is it still a more regional local factor based on whatever the local footprint is for Grocery Stores we have a ton of respect for our competitors. The but we would certainly view, you know, walmart as a competitor, costco, amazon, and the regional players that you talked about and youre always looking at everybody and learning from them but at the same time, we want to make sure that we understand what our customer desires are and deliver against those. And do a better job against our competition. Economic question, really a policy question. How do you feel confident projecting rising sales in an environment, roddy, where we dont know if there is going to be another stimulus package and whether that heavy stimulus will be extended . Feels like a huge swing factor for Household Budgets and spending power as you know, most of what we sell is food so its a necessity for most families we reflected the uncertainty in our estimates. You see basing their budget on payroll cycles and snap payments and things like that but those are things we reflected when we were estimated Going Forward for the balance of the year are there any other surprising shifts as a result of the pandemic and what people are buying alcohol which obviously ties into the beer. The other thing that were starting to see people they kind of got out of the rhythm on eating healthy and starting to get back into that so our produce business is really been strong our simple truth business is really been strong which is our own brand. But you are starting to see people kind of get back into a rhythm they have aspirations to eat healthy. We see the things you expect that frozenen pizza, things that are easy home chef our Meal Kit Company is on fire it really makes easy for people to have inspiration meals at home its no the so much of a surprise its just a continuation of were able to help a family have something inspirational. Tastes really great. My wife and i eat them all the time im more on the freezer space. Thank you, sara appreciate it. Rodney mcmullen markets improved a little bit during that interview. The nasdaq is only down. 6 . Shares of nikola are down 30 since wednesday. And now the company is fighting e te dai aerhilaims of fraud thlastetlsft ts break. Nikola responding to a report from behindenberg research perhaps not in the way in a some are expecting. After the short seller alleged that they were an intricate fraud, the founder took to twitter calling it a hit job he then said it would take the rest of the day. Then perhaps until tomorrow morning. Then, been working on rebuttal of hindenberg to have a low emotional response to the report working through the night. I feel great about everyanswer they wanted max damage, it didnt work, now back to growth. Well, this morning we got the response which was less of a rebuttal and a statement saying the company had retained outside counsel and called the sec he said he couldnt continue to comment. Since then, he tweeted four photos of a truck in germany with the comment, do these look fake bleep the haters Citron Research weighing in saying congratulations to hind nberg which exposed a total fraud with nikola. Citron will cover half of all Legal Expenses were getting a Conference Call with the cfo theyll have a full response next week. I guess the key very short term lesson as in the last 24 hours for mr. Milton is dont overpromise and underdeliver when trying to put a fire out number doubt that is added to the selling today. Though a lot of the damage already been done and the momentum which was slipping behind the stock and, of course, the other offset, sara, is they got a big vote of confidence so recently with gm taking a stake. So there is very clear two sides to this story. But given it had such a strong runup alongside some of the other names like tesla, it is slipping pretty aggressively this week. As a point of credibility which it no doubt does offer boost. We massive share price reaction. The only thing ill say about that is that, you know, he also had that partnership with walgreens and safe way which were also pinted to huge votes of confidence that they did Due Diligence again at this company and turned out to be a total fraud. Im no not saying there are any parallels, but it is worth noting it doesnt mean that theyre in the clear. Obviously, cnbc has not verified any of the comments or allegations made by the short sellers into clearing this company a fraud. Its something that we know now the sec is going to get involved with so well see how that all pans out. No doubt wall street is punishing nikola, down another 16 . Still ahead on the show, well speak with labor secretary Eugene Scalia about the jobs picture in america and when thinks companies should be encouraging employees to come back to the office right now and as we head to break, heres a check on bonds for you. Yields a bit lower to close out the week which jives with the trends weve seen. When the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. 30 minutes until the close will things have certainly improved here in the markets just since the top of the show about a half hour ago. The dow is now up about 200 points its being led higher by nike. Weve also seen strength in dow. And caterpillar. The s p 500 has positive its gone positive again its up. 1 . Industrials and financials are the leading groups technology is still the loser. Things improved on that front as well lets see if the rally holds its been the opposite this week its been a sell into the close. The were seeing buying on a friday well see if the nasdaq goes positive that will be a key tell. Yep all four of those indices negative for the week as a whole. Time for a cnbc update with sue. Hello, everybody. Heres whats happening at this hour a florida judge ruling that felons in that state will not be allowed to vote until they pay all fines and legal fees this reversing a lower courts ruling a decision for broader Voting Rights could have had National Implications for the november elections. In atlanta, a parking structure under construction has partially collapsed. At least five people have been injured. One was flown out by helicopter. 11 senators are calling on the nations internet providers to suspend their data caps temporarily. For millions of schoolchildren who are studying remotely because of the pandemic. And in north carolina, this lovely lady won her battle with the coronavirus at the ripe old age of 100 p she says the disease and four days in the hospital didnt scare her. Shes now back home and shes looking forward to doing what she loves which is cooking, taking care of kids, and family. Maybe thats the secret to living until 100 youre up to date, guys. Sara, ill send it back to you i have trouble taking care of kids at my age i cant even math imagine at 100 i love those stories. This is a strange disease that were dealing with sue, thanks h. Weve got just under 30 minutes left to go just another quick check on the markets. Things continue to improve here. The dow is higher by 224 points. A lot of dow stocks are turning green. The nasdaq down. 3 . Russell also down near. 4 up next, astrazencas paused trial and new polling about who is willing to get a vaccine. We have more from dr. Scott gottlieb [squeaky shopping cart] [sniffing] is the salmon wildcaught . She only eats wild caught. [cash register beeps] uh, i need a price check on honey. Dont get mad. Get e trade and get more than just trading. Investing. Banking. Guidance. When youre miles from home. Your bank should help you check on your account to see whats free to spend. Henry. Virtual wallet® is so much more than a checking account. Easily see whats free to spend. And put money aside for your next big purchase. Like a trainer for henry. Stop it. Carl, do you have those figures . Yeah. Henry sit . Its carl. Virtual wallet® for Digital Banking from pnc. Its time to get more from your bank. Im a sustainability science researcher at amazon. Climate change is the fight of our generation. The biggest obstacle right now is that were running out of time. Amazon now has a goal to be net zero carbon by 2040. We dont really know exactly how we are going to get there. Its going to be pretty hard. But one way or another were going to reduce our Carbon Footprint to net zero. I want my son to know that i tried my hardest to make things better for his generation. According to data compiled by Johns Hopkins the seven day average of new cases has fallen to 35,219 its down more than 12 in a week dr. Anthony fauci was asked about President Trumps claim that were rounding the corner on msnbc earlier this afternoon. Take a listen to the response. Im sorry, but i have to disagree with that if you look at the thing that you just mentioned, the statistics, theyre disturbing you know, were plateauing at around 40,000 cases. The deaths are around 1,000 a day. The he went on to say our baseline is simply too high going into the fall when people naturally will gather more indoors. Something dr. Gottlieb is warning about. The. Well, on that note, lets bring him in dr. Scott gottlieb, former fda commissioner he sits on the boards of pfizer and ilumina. Do you think were rounding the corner half way through the corner . Im worried that were going to make higher highs and higher lows were heading into the fall with a lot of infection we may be hitting the sort of low point right now. And as we get into the fall, were going to see infections start to rise as dr. Fauci said. Were heading indoors in the fall the epidemiology spread changes. Respiratory pathigens spread it tip li it typically spreads in fall and wunter were seeing outbreaks that will be the focal voint of spread in communities. And businesses trying to restart. The other element here is that were kind of exhausted. Weve been social distancing and Wearing Masks and staying home for a long period of time. So you may get some frag among people just the adherence to things preventing spread and the belief is that its really only up from here we have not reached any element of herd immunity there is no reason why this wouldnt stop spreading in fall and winter what do you think of states allowing more indoor indicting because the weather is going to get worse or Companies Like j. P. Morgan that are starting to encourage workers to come back even if they had had almost normal functionality from working from home . Yeah. Look, i think if youre going to try to do that, now is the time to do it we could all be wrong. Maybe the virus wont surge in the fall but there is a lot of reason to believe that it could. And so thats why a lot of Public Health officials are really concerned about the setup. But if youre going to try to bring people back to work, i wouldnt wait until october. Things wont get any better. I think in a best case scenario, maybe well bounce around levels were at right now but i think that there really is a risk that well see an increase communities that have a lot of spread, we should prioritize what is most important what is most important i think is getting kids back into school and so if youre a local community and you restarted schools, i would see how that goes before we start opening up indoor settings that are purely entertainment like restaurants and other settings like that that we know are focal points of spread there is data out of cdc just yesterday identifying restaurants as a plausible source of spread when there was outbreaks within communities so those are the kinds of things i would be doing later after we see how it goes as we reopen schools heading into the fall. My question on offices and off j. P. Morgan telling people to come back to work, i dont understand why you have to play professional sports to get a covid19 test every single day to work. Why are we not we knew testing was a thing. Were six months into this, why dont we have tests where people can get tested every day to go into the office . It seems like the tests are am coulding out it seems like there is saliva tests coming out that would make this a potential game changer. Why is not being prioritized to get people back to work . Yeah. There was a compelling piece of research out today making just this point if we can deploy low cost rapid fairly accurate tests into the workplace and schools with, he could control the dep epidemic the technology is available. You have tests like the sophia two and id now, and now you have the lateral float tests which are paper based tests like a pregnancy test you put a sample on a piece of paper and get a readable roult th result. They should be coming on line as we head into september and october. The federal government has been hoarding a lot of the supply of the tests and channeling a lot of them to Nursing Homes it is effective of the tests but after that sort of initial burst of supply goes into the federal chain, we should start to see it head into the consumer chain. I think businesses will have access to the tests. And were also going to see more clearances come on to the market soon so roche has a lateral float test that should be coming into the market soon. Theyre seeking authorization in the United States. Theyre bringing it on to the market in europe there are a couple of other large manufacturers with a lot of smi abbott is putting a lot of supply into the market theyre manufacturing 50 million a year now thaur going to use 150 miles of nitrose celuose which is paper. What did you make of astrazeneca pausing the trials and the disclosures around that . I think the underlying issues are concerning we dont know a lot. What we know is there is one case that someone that was vaccinated in the trial that is believed to have developed a condition that is a form of meningitis you have inflammation around the spinal cord. And we know there was another case earlier in that trial that was presumed to be this was later judged to be multiple sclerosis. And was deemed not to be associated with the vaccine. So theyre going to need to figure out that new case if it is transverse mialitis they need to investigate that older case much much more carefully now to see if that is related. The if one or both of these cases is deemed to be related to the vaccine and you can never fully identify whether there is a causal relationship, thats concerning and the question is going to become is it the vector itself, the vaccine platform itself in this case using a virus to deliver what is called the spike protein the epitope from the virus to stimulate our immune systems or is it the spike protein itself is it stimulating the side effects . Depending on the answer to that question, may not be a question can you answer, it could start to implicate the other vaccines. Will make them want to look more closely. The if you think it is the spike protein and not the vector if its the epitope, it is something you want to look closely at with the other vaccines as well a lot of unanswered questions. These are the kinds of things that regulators are going through right now. Have there been any delays like this with pfizer candidate which is also in late stage trials and is there anything similar or different to what you at fiz pfr is doing to where you can learn anything here . Right im on the board of pfizer im aware of that vaccine. The Moderna Vaccine is similar these are different in that theyre not using a viral vector what these vaccines do and the pfizer and mow dern why vaccine do is delivering the genetic material from the virus. So that is similar to the virus genetic xwenz that codes for that spike protein they imbed it and inject it and the body takes up that material and starts to manufacturing the spike protein in your body when they see that spike protein, it starts to develop antibodies against it. Its not using a virus to express the spike protein in the human body it is delivering genetic material that allows for the manufacturer the spike protein in the body and using your body as a manufacturing machine so very different platform and if the concern is that the side effect is related to the viral vector and in the case of after the are a citizen he cana, theyre using a chimpanzee as the vector if it is the viral vector, it is very specific to that vaccine. Oit could be the spike protein and then becomes something more generalized and youll wagt to investigate. And the end result is what could potentially happen is that you just look at the safety data more carefully you start to investigate people who have signs and symptoms of neurological side effects in the Clinical Trials more carefully so every migraine headache is something youre going to investigate. That is prudent. That is something theyre going to be doing anyway they would be looking harder dr. Gottlieb, great to see you. Thank you for joining us thanks a lot. Up next, peloton ceo speaks out about growing demand and look at the retail names could actually benefit from the new world post covid19 era. Those stories and much more when we take you inside the market zone i keep working my way back to you, babe with a burning love inside yeah im working my way back to you, babe and the happiness that died i let it get away servicenow. The smarter way to workflow. Everything we have, weve earned. The unmistakable lexus is. Get zero percent financing on the 2020 is 300. Experience amazing at your lexus dealer. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. With 13 minutes left in the trading day, were now in the closing bell market zone commercial free coverage of the action going into the close. Cnbc senior markets commentator mike san toll yes toli here to the crucial moments of the trading day. Barbara is with us as well well kick off with the Broader Market dow is outperforming to day. Nasdaq is on track for its worst week since back in march it is one of the big three that is lower things had improved, mike, as we were heading toward the close. Were off the worst levels of the session. Certainly not best were still in a sell the opening rally mode its tentative trading. Once you have the undisputed leading stocks, high foremaning stocks in the market badly break stride and remain under pressure, its tough forrest of the market to kind of know if there is going to be the wherewithal to have a dip buy that really sticks i will note this afternoon though we hit the lows of the day in the s p 500 right around 1 30 it was right around when the s p 500 first crossed below the 50day average didnt bring any immediate follow on selling. Apple went to a 20 decline from its peak i mean who knows if its just too cute to think that people are looking at these things as tells and maybe, you know, the shorts and the bears decide not to get too aggressive right there. But that is where we did find some support and just a final point, this sort of pressure and this corrective action were seeing in the indices continues not really to be accompanied by a lot of stress about the economic outlook. Whether the sectors are working or not or credit or the bond market in general. Mike, have we seen any changes in sentment . Its tough to measure the fast moving sentiment indicator seems like theyre active they cut the exposure. Youre still seeing a lot of interest in individual investors buying options to get upside its hard to know for sure i think its moderated i think it got more neutral and not so overaggressive. But maybe not to the point you can say okay, the obvious call here is to be contrarian and be a buyer. Barb . Whats your take on the action weve seen this week and what are you doing . Well, you know, i cant degree wi disagree with mike i think there is a lot of down side the high flyers, you know, have been hit by profit taking. We saw what happened in terms of the extreme valuations they ran up to. You know, got a little disconnected from the fundamentals theyre still good so i think weve im waiting and watching and when the false starts happen, maybe that was the bottom i think they could go awelittl bit more as people wait to see what is happening. Players are finding its not as easy to make money right now really the m rachlt cro environment has not changed. The fed is providing Unlimited Software as Scott Gottlieb said, were heading into a seasonally high risk time in terms of health and what could happen with the virus, et cetera so i think youre still going see a big impact on Consumer Behavior i think the market, the tech names will come back into the tech names at the same time, continue slow the rotation into more economically sensitive names its too soon to see a massive rotation into that. This is not just done because of covid19. We believe what is happening here is a secular move from working out at a different location into the home when you have a choice of working out at home with fantastic community and a Network Software and the best hardware now in the world, you know, why you would travel so we think that post covid19 this is still an incredible growth story they sold off intraday the what do we make of that and the kin of excess in the work from home trades they just accelerated so much into this news they had a couple days where they had intraday rallies and sold off it says, you know, what really is your next catalyst after youve seen the blowout numbers and nobody knows if weve seen the peak of intense interest in this backlog and all the rest. I think its familiar dynamic. You have to reassess the stocks that have really worked at player moment in time. And try to figure out if you can count on them continuing lets hit retail. B mode took a deep dive into covid19s impact on retail. Found that a few struggling brickandmortar names may see a benefit from being forced to close during the pandemic. The firm arguing that the reopenings provide much needed reset for retailers that had been growing for growth sake and some retailers should stabilize their profit rates by deciding to permanently close stores gap, nordstrom and Victoria Secret would benefit most from Closing Stores while tapestry, pvh and ralph lauren will benefit the least. Its an interesting notion theyre pushing for a while. It is a once in a lifetime opportunity for the overextended retailers to shrink businesses and right size the businesses to provide better growth stories. Weve seen strength, for instance, in l brands. Do you like that idea . Yeah. I think its interesting its funny what hes talking about is really a long term investable idea its more oriented towards the management side. He argues if if youre well capitalized, you are past your peak brand sales meaning sort of on the downward slide there. This is a Good Opportunity to stop expanding footage, stop trying to grow its not going to be profitable and then the pandemic and down turn is Good Opportunity youre not making money anyway unless you are really well positioned like a costco, walmart, et cetera he is saying the other part is not close stores but also to raise prices and stop promotions. Well, you know, that may or may not work depending oen your brand. You may just lose more customers bauer youre still very competitive environment. But in any event, what he is talking about is really, you know, long term restructuring of the industry and hes just trying to identify those names that would benefit whether the management takes advice or is in the midst of dhoog is interesting i think ultimately hes right about that but well see. Its up to each management to do what they need to do apple revising the App Store Guidelines in a move that could have ripple effects throughout the tech industry. Josh lip ton has the story for us so, big news in the world of gaming apple now saying that Game Streaming Services like google stadium or x cloud are allowed in the app store heres the catch the games offered in the service have to be downloaded directly from the store and not from some all in one app in other words, lets say a Service Offers 100 streaming titles then each game needs an individual App Store Listing apple says this is necessary to ensure consumer safety and security but there could be fundamental tension between App Store Rules and how some of the services are actually designed to work. Guys, back to you. Josh, thank you. Mike santoli, i mean, this is something to keep an eye on as, of course, the battle with epic is as well in terms of the App Store Rules. Not what is moving the stock of late down again today in a way that perhaps others have bounced off their lows apple still down 1 today. Yeah. By far an outlier on the upside too. It is giving back kind of in proportion to how much it outperformed in august i do think youre right. Its kind of a watch and see this issue not necessarily worry about the immediate financial implications but it is interesting that in some sense, i mean, i think there is debates on both sides i think apple does not hold the high principle ground on this issue. Thats unusual for apple on things like privacy, you know, and others they sended to try and steak out that territory and thats a little bit of a shift. Where do you stand on apple, barb do you think the strong gains this year are justified . Would you be a buyer on the weakness absolutely. I own it and all my portfolios ive just been watching it the i think its part of the broader tech selloff the question is where is that. But somewhere in here because im one of the people i buy into the whole ecosystem, the Services Business percentage is increasing the customers are extremely loyal and will pay higher prices the this year they did introduce a lower priced phone for me, the real kicker coming up is 5 huffg i think it will be huge expectation. I am not sure if i can catch the exact moment of the short term bottom but its a great name. And its one to hold for multiple years at this point well see. Well reevaluate that next year the other big cap tech stocks that pulled back over the last week or two, which is your top pick you know, i have always gone back to amazon i just think amazon is so cre e creative, innovative and really started to make money. This at Home Experience has really accelerated so much of the switch to ecommerce a lot of that is permanent and really helped their grocery business they really emphasize that in early and beginning when they slow down deliveries so amazon, amazon has come down a lot. Hit a huge runup it was just sprinting like the rest of them but, you know, i think again, some where in here if you want to add positionors have new cash, amazon is a total keeper we have just over two minutes left in the session. Mike has more on the internals mike, what is grabbing your attention . If you look at the volume split, its actually held up better this has been a theme as we talked about all week. Youre going to have more volume in advancing stocks on the New York Stock Exchange than declining stocks even as the indices struggled and the nasdaq is in the red all day. So its obviously kind of going from the big few to the smaller many at least right now. Take a look too. The character of the market in terms of sector preference heres the transport onzs on a to date basis this is what it looks like and then the volatility index is even at the lows of the s p 500 today was pretty much unmoved. Clearly greater anxiety. That is a net positive as we head into the close, mike, were looking at an s p 500 that is barely positive. The dow also remained positive on the session nasdaq is lower. That still means were down for the week across the board. Nasdaq looking at a 4 decline. Financials are catching a bid for a change Consumer Staples are doing well. Its the high flying names that are getting hit once again technology, consumer discretion a arys another down week on the stocks that makes two in a row. The nasdaq is down 0. 6 as was the nasdaq 100 in terms of sector performance, industrials, materials, financials are the top tech and Communications Services at the bottom for the week as a whole, we were down 2. 5 for the s p 500. The dow down less than that. The nasdaq down more than that, 4 a difference in performance compared to the rest of the world. You saw european stocks higher for the week up 1. 7 the ftse soared 1 coming up, well ask Eugene Scalia how he feels about companies pressuring employees to come back to the Office Joining us is the Portfolio Manager of bba Portfolio Partners and megan c hcht u from women can trust joining the conversation mike, clearly a nice bounce into the close as sara pointed out. The last two trading sessions before this had been the polar opposite in terms of intraday turn arounds the weeks performance, down 2. 5 stark contrast to various other indices around the rest of the world. Of. Its true one of the differences is monday u. S. Was closed. The ut was a little difference in performance there but, no, its true it is payback mode that is what is going on so far this month whereas the huge gains racked up in august have come out partially and i say partially because really were only back to where we were a month ago, not even and the rest of the market has mostly held together there is not a smart chaufrpg in the economic recovery path or the fundamental things you might expect earnings estimates continue to curl higher. The it is mostly a positioning and sentiment adjustment this is something that people may have expected seasonally of that happens. Guess what tuesday were half way through september. Maybe thats a plus. Every time we see there say conversation on capitol hill, it ends in in no deal, no stimulus, i dont think were anywhere, right, on extra stimulus checks or Unemployment Benefits or ppp money for Small Businesses isnt that leaving a lot of economic pain in the wake . Is the market trying to take lawmakers something here i wouldnt think so only because of where the declines are happening and where theyre not. If i look at the Consumer Discretionary area, housing related, all the stuff that you might think would start to suffer in those scenario where people think there is going to be real pressure on Consumer Spending or anything like that, youre not really seeing it. You see the Financial Condition of the afrnl household its much more about the aggregates and we did actually have a spike in the savings rate when we got that stimulus working through. So the maybe were just living off of that. It may be the market is ignoring this possible risk i dont think that is the source of the weakness to date. Megan, is this recent little pullback an opportunity to buy the short term losers, ie the tech names, or the long term losers, the cyclical thats underperformed year to date . Well, its a great question i think Going Forward you need to be thinking about diverse fig your portfolio we like the growth names we have a slight growth bias in our portfolio. You have to elongate your time horizon. The next few weeks possibly months could be a little choppy given valuations we did recently add to our portfolio some value exposure where we were underweight looking to hedge against a value rotation we actually expected a value rotation would come alongside value doing much better than growth to the upside rather than losing less, so to speak but i do think that Going Forward any value rotation, any o outperformance, it will be short lived but on the violent side. So we were hedging against that. I would say its a little bit early to be getting terribly excited about leaning into this market but were watching it. And i think adding to some of the near term losers and the growth area in technology is going to be benefit investors over the long term just trying to think of what changed. What led to this new found volatility i mean maybe mike is right, positioning and things are frothy, you name it. We dont have the stimulus we also have this major uncertainty heading into the election i mean how do you think about these kind of big uncertainties that could have real economic consequences and where to be and how to position in the market for all that its a very good question you have first off the election uncertainty. Everybody is trying to say which sectors will be, you know, biden wins, which ones to be in, what will happen . Regulation, health care, et cetera frar frarpg frankly, i think whoever gets is in constrained with the huge deficits in terms of any new major programs i think here im also, you know, there is the surprise possibility of a vaccine i remain very skeptical in terms of smooth sailing. Even many i view is even if it we get a vaccine by year end, it will be a whole execution effort it wont get down to the ordinary person until next year which means people still continue to be cautious. Again, you come back to the fed is the backstop here we have run far. And theyre going to see continued profit taking in areas that have run. Theyll settle down. And you know, well rotate back into value and then rotate out i think both names are going be to the place to be but right now, you cant buy them until i think they get a little cheaper the fact that mike said just a little bit ago that there is still options call buying is a little worrisome st that means the momentum traders are not feeling enough pain to stop chasing here. We have to let that settle down. What has the vix been doing this sfwheek what do this week and what does it tell us it kicked above 30 and has come down for the week its in this in between mode the volatility undechl which int going down that much it also is still somewhat help up by the fact that there is a very, very huge demand still on going for months for volatility protection around the election or ahead of the election its hard to know how much they went down. Its not in these levels standing in the way of a little bit of a recovery in stocks. We just wrapped up the nasdaqs worst week since march. The worst week since june. This week energy and tech were the worst performing sectors materials and industrials were the best performers. Dow winners for the week nike, caterpillar and dow. Apple, boeing, and walgreens megan, what stands out for you sector wise in terms of what is likely to perform from here . What is your take on the banks which also had a pretty tough week despite some rotation happening into the underperformers but not them thats right. We have seen better relative performance from materials and industrials as you mentioned earlier. But other areas of that cyclical value trade like financials and banks and energy are just not participating. So i think you really do have to be careful here. Tl there is some long term structural headwinds behind energy and financials in our view, specifically when you look at the banks we just dont see the rate environment as particularly helpful Going Forward. And then i think you have to think about what the loan loss provisions, you know, they set asued quite a bit. But we do expect defaults to pick up particularly in the Small Business space moodys updated their default projections and while were not according to them baseline scenario not going to get back to the peak default that we saw in the Global Financial crisis, there is going to be quite a bit of pain in business services, automotives, tour uchl, hotels, areas like that. So i think do you have to be careful as i said earlier we did add some value exposure. We did look to do that on more of a sector neutral basis. Typically when you look at value, you have that it heavy Energy Financials exposure and we just want to be a little careful there. Also, just mike wanted to bring up the small caps. We dont talk about them that much they have underperformed again closing down 2. 5 on the week. But third down week in the last four the theyre now down 10 for the year the s p 500 is still higher by a few percentage points. Is that a buy or is that a tell on the economy what is that about you know, it always is a bit of a sector effect i think still suffering a little bit from a heavy financial weighting. There is not economic acceleration out there while Credit Conditions are stable, its not like they improved moch mu improved much. Part of the market that smaller Cap Companies rely on when it comes to borrowing are more bank lending than it is public bond markets. So all those things together i think keep people from having very high con fiction. They continually look relative cheap and anything in terms of long term mean reversions suggest they real should have a comeback barbara and megan, thank you for joining us thank you the Labor Department finding smith field foods for failing to protect employees from coronavirus. Up next, well ask labor secretary Eugene Scalia how the government is ensuring workers are safe as Companies Plan to bring more employees back into the workplac e. When the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. And tailored recommendations. vo while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager your life is just as unique. A Raymond James Financial Advisor gets to know you, your passions, and the way you help others. So you can live your life. Thats life well planned. Welcome back the Labor Departments osha issuing a fine to smithfield package meats saying they fail to protect employees from the coronavirus. The this after four employees died and over 1,000 had contracted covid19 earlier this year labor secretary Eugene Scalia joins us now for an exclusive interview. Mr. Secretary, thank you for joining us before we get into osha and smithfield, you want to pay tribute today on 9 11 to the workers that sacrificed their lives on this day. Sara, thank you yes, its a somber day i think its a day for reflection and prayer for Americans Still all these years later. Many of us lost friends, family and we also witnessed some great heroism by first responders. We actually had a number of people at the Labor Department actually at osha that helped in the days afterward but thank you for allowing me to just take a moment to acknowledge what an important day this remains its important to never forget to share these thoughts and experiences. Lets talk about this fine for smithfield how did you arrive it seems like a slap on the wrist, this fine how do you put a price on human life like that i dont think you do try to put a price on human life sara what we do is investigative process thats would follow and those were followed by the career investigators in the field here they conducted a very thorough investigation. We have other investigations on going. Weve said from the start that were going to have a essentially a two pronged approach toward covid19 Workplace Safety second, we said from the start that we do have the enforcement authorities that we need and well use them when employers fall short the statute, the act sets what the penalties are and we sought the maximum penalty here which actually more important in these osha cases which ive handled for many years personally both as a lawyer at the Labor Department and private sector, what is most important is the socalled abatement measures Going Forward to make sure that workers are kept safe and, you know, were seeking measures there to assure that those workers will be protected in a way that cdc and others laid out Going Forward. That said, mr. Secretary, as sara said, 13,500. Its not an enormous fine. Will you look to side with the employer where possible and ultimately do you want more people going back to work if at all possible im not sure i caught all the question we certainly want workers returning to work safelyst were confident that both can be done and are being done in workplaces across the country ive never seen american businesses as focused as they are now. And they should be on the safety of the workers but we fully recognize some will will fall short. We will investigate them and well take action. And by the way, circumstances where the breach is more willful, then there is an opportunity for stepped up penalties. But the penalties that we assessed here were within in line with the statutory maximum available. I believe osha only issued five fines related to covid19 is that right . This pandemic is continuing to spread are you trying to add more people, gain more resources to do more . Weve conducted thousands of investigations, as ive said ive never seen american businesses as focused on the health and safety of thifr workers as they are now. And were making extraordinary efforts to assist them in that with the guidance that weve put out that cdc have put out and the like and so it doesnt surprise me. It encourages me that were not finding a larnl voluge volume of violations we do have on going cases. I expect well have more citations. As weve said, you know, we have the Enforcement Authority that we need. And well use them i think people are seeing that but the news here with the reopening is good news were seeing businesses reopening. Reopening safely were seeing workers return to work we have an extraordinary jobs report last week with unemployment dropping 8. 4 that is a number that very, very few observers thought that we would hit this year or perhaps even next year you know, in in the Obama Administration, it took 34 months to get unemployment under 8. 5 weve done it in in four months. The so were reopening were reopening safely but osha is a cop on the beat. And that is part of our strategy to reopen safely and protect workers. Not pretisly comparable moiment or unemployment situations, of course mr. Secretary, in terms of where we go on the jobs front, do you think we might plateau ifwe dont get a vaccine in the immediate term, majrle when you throw in the gains that have already been made and already the fact that were approaching the fall and a lot of hospitality jobs may come under threat or pressure again i i i do think its appropriate to draw that kpaur son. They said we would be about 16 unemployment in the third quarter. We are doing so much better than that we have put people back to work so much more quickly than happened during the financial crisis so i think its instructive to draw the comparisons that said, were fully aware that there is more progress to be made. It can be made it is frustrating that the democrats in congress stood in the way of getting additional relief, additional stimulus. Including on the unemployment front. They refused to move forward twice now with the Senate Republicans efforts to get additional unemployment. That caused the president to step in as you know and establish a special Emergency Program through fema so the president has been there this morning supporting people out of work even as we aim to bring more back. I think we will see a continued decline in unemployment. Safety remains important and i think part of the success of the continued reopening is continued safety in the work mace and out of the workplace too. I want to ask you separately about one of your new proposals that you put out as it relates to retirement investing and for social causes and esg. Why do you appear to be coming down so hard on esg . Why dont you think that why do you think Companies Need protection against shareholder scrutiny on this issue sara, i would take issue with one phrase you use which is investing for social causes. Labor departments long standing view is that investment should be made for Retirement Security. And so we do have a proposed rule out to assure that as people have retirement plans make Investment Decisions, what they are pursuing is that Retirement Security that they are investing in the financial interests of those retirees rather than pursuing social causes as you describe it. Thats not what our retirees plans are for. And so our proposed rule, were taking comment on it, is intended to make sure we pursue the social cause of helping retirees which is the critic i had important central role of a retirement system. But heres where i would argue is that better esg scores have been correlated with better stock Price Performance and Better Business overall. Well, again, its in the comment process. We welcome input were receiving it well review it carefully. One of the things that you see is that theres a broad variety of opinion about what even counts as esg. There is certainly many instances where Corporate Governance matters and is an appropriate consideration when making an investment decision. The and our proposed rule acknowledged that. What were saying is that to the extent that that is an appropriate consideration, consider it as such. Arisa poses where concerns arise under arisa is when its not the small objective. Instead its a social cause or an environmental cause thats driving Investment Decisions we want people in charge of our retirees assets to be focused, first, foremost and exclusively protecting the retirees income. Thank youfor joining us. My pleasure, thank you. The work from home trend could take a chunk out of workers paychecks, at least for some employees who previously worked in the bay area we have that story hi. As the exodus from san african continues, were starting to see some of the Big Tech Companies starting to adjust salaries according to geography vmware is cutting pay for employees choosing to work from home by moving out of the costly bay area the company responding telling us our program is designed to empower our employees with the information to help them make decisions should they desire to relocate twitter which announced their letting employees work from home permanently says this is not a new policy we have always had a competitive approach to pay localization and are proud of mt ways were supporting our employees during this challenging time. Theyve had a similar policy thats been long standing. This might be, guys, the tip of the iceberg as we see companies adjust long term to work from home i can tell you that companies here are struggling to find people local talent with their new geographic freedom they have from the pandemic. Back to you. Thank you so much for that. Up next, mike santoli will look at how earnings expectations are turning higher and whether that could drive the next leg of the market rlyal well be right back on closing bell. Right now, the worst place to be is stuck inbetween. Accelerate your investments or pull back . Change the plan or stay the course . Thats why Northern Trust is here. With specialized expertise. A history of success through every economic climate. And proven strategies rooted in data and analytics. Giving you more control. Clarity. And confidence. For now and whatevers next Northern Trust wealth management. The big events are back. Xfinity is your home for the return of live sports. Stocks closed out the worst week since june. Lets take a look at future earnings forecasts and where they stack up. Mike theyre moving in the right direction f you look at Analyst Consensus forecast, they are ticking higher for the copping year off depressed levels and also for the third quarter. It is not usually common usually they degrade a little bit over the course of a three month reporting period so thats this in orange here. It is essentially composed of global pmis, chinese Financial Conditions, treasury yields, asian export groaning. Of so the macro factors which historically linked up with predicting what forward earnings look like. So the actual forward earnings groaning is very weak. It is turning higher this will confirm the idea that things are moving in the right direction. I think a global look at this is interesting. Because obviously china is pretty much back in business and also massive lending growth out there. Reported seems like it may give a little bit of a backstop to this dynamic as well. All right mike, thank you. Democratic president ial candidate joe biden pledging to roll back President Trumps Corporate Tax cuts on day one if he wins the election up next, well ask an economist who has advised biden about how that could potentially impact the ability of businesses to hire back workers and get the aty ckn actrk. Ths next. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. 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. A lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Democratic president ial candidate joe biden pledging to raise the Corporate Tax rate on day one if elected into office he wont move his his move wont impact companys ability to hire back workers joining us is lisa cook. She adviced joe biden in the past great to you have here again, lisa the senate would really have to tee that up and win it to get it passed on day one. We get the sentiment is that really the best idea at a time where we need our businesses more than ever to hire back workers and to pay them higher wages . Well, yes it is. What kinds of bills are we going to have . What are the American People going to have . What are we going to be able to do or need to do to fight this pandemic and think about it, thats actually what we need to do because we wouldnt be here talking about a recession and coming back if there were no pandemic remember, in the great recession, thats where the lingering unemployment came from is from the losses associated with government. And, of course this is what theyre doing now is laying off people left and right and we need those services. We need what they provide. These are our teachers these are bus drivers. These are people who support all kinds of services that the government provides. They provide infrastructure. What else do we need we need digitsal broadband we need this in rural areas. The what weve been exposed to is people going back home, having to work from home and they dont have the resources they need. Covid19 dictates this yes, well be able to hire more workers if it were able to control this virus there is not a national plan, a National Coordinated plan that is effective and theres got to be one put in place. So we need stimulus like a lot of communists, we need more despite the fact its no the moving in congress. Are you surprised that it really has not shown up in any meaningful way in any of the Major Economic releases yet . Stt fact that the extra Unemployment Benefits ended a month and a half ago as a lot of economists like yourself and others were worried about it having a detrimental impact on the economy. Well, i think we can give it time we have 100,000 nishl unemployment claims. Sorry, there are 30 Million People still on some sort of unemployment assistance. It is showing up thats how it is showing up. And what we also see is businesses opening and closing we see people going from temporary layoff to permanent layoff we see businesses going, especially Small Businesses going from being temporarily closed to reopen to permanently closed so i think it is showing up in the data it mao say its not showing up consistently in the data i think we will just wait. The i mean the evictions are coming we know that there will be an eviction crisis if there is no september 30th, if there is no help in that regard. So i think its coming its a matter of time. Were not in the week where that would have been measured, for example in the unemployment data so those arent the dwrat that we have from the unemployment report, the jobs, the last jobs day pt i think its just a matter of time before we see it syruper clearly. But we cant wait for it to be shown super clearly. We know that there is going to be a crisis on september 30th. I think its unbelievable were not doing anything about it and the senate was even able to pass a skinny bill. Skinny stimulus bill lisa, i want to go back to a potential Corporate Tax hike i get the argument that there are various explanations for why a tax hike may be necessary both for equality reasons and for raising funds to pay for the Rising National debt why is a Corporate Tax hike the best bet is there greater implications with other countries where Corporate Tax rates are lower . And you could make a case that perhaps Capital Gains tax will make more sense when we see outside gains there . Corporate tax, i think Capital Gains tax may be something that is considered but i think that the Corporate Tax is the one that didnt give us the bump it was supposed to give us. We did not see many more jobs added as a result of that tax cut. What we saw is rising inequality what we saw is ceos buying bad stock. The American People as a whole did not benefit from this. And certainly not long term. And what we need is long Term Investments in in the economy. We need infrastructure upgrades that we didnt get yet thats where the Long Term Health of the entire economy so who cares at this juncture. If were focused on the Corporate Tax hike, then thats one way to finance it. But what do you mean who cares who pays for it . Surely thats a im being facetious what were talking about is a Corporate Tax hike i mean what i meant to say was that we have got some absolutely urgent needs and weve got public goods that have to be financed thats what i mean and i get that totally. And i understand that youre being facetious on the prior particularcomment. That said, even if you are right that the Corporate Tax cut perhaps didnt deliver the economic boost that was expected, were in different time now and businesses, some are soaring. Thats right. But most businesses arent soaring. So why is now the time to put up a tax on them when, again, as i just outlined, there are other place thats are soaring like Capital Gains in stocks. Which on the surface at least make more sense, be more right for a little bit of extra taxation than perhaps companies that are suffering but i am not sure that there is the kind of evidence and political will that there could be given the evidence given the evidence now with respect to the way the Corporate Tax cut did not work this is not just joe biden that reversed this. Many of the democratic contenders talked about reversing this so i think its just consistent with the democratic platform and i think that this is why it could possibly be done on day one. But its also laying the ground work you really have to signal what is going to be done in the first 100 days or the first day to make sure that everybodys ready for this because, you know, get people ready for it its 400,000 households were thinking about the were talking about the individual income tax but were talking about the Corporate Tax. You just have to signal that this will be the case. And hopefully everybody will get onboard. Because weve got some urgent needs once anybody is elected. I feel like actually the signalling needs a little work or a little help some of the polls, even though biden is higher on the polls on the economy, President Trump gets higher marks. His message is lower taxes and biden is talking about higher taxes so, you know, i dont know where i dont understand those polls. So youll have to forgive me im not a political scientist. I dont understand the polls the were in this recession because the virus was not handled well thats why were here talking about a recession. To me, that gives you a d minus. Like i give you an f if it were possible it gives you a d minus the this economy has not been run well and to the extent it has been run well like were even talking about before the pandemic, the team was in place. The obama team that was in place and ways in the Obama Administration this is what we set up it seems to me you want the people that set up the extended period of growth that weve seen before the pandemic, you want those people in place. So i have to say, frankly, that i dont understand the polls id like to see them dissected by party what we know is that people perceive that theyre doing better or worse depending on economically depending on their party affiliation. So i would like to see the data desegregated lisa, thank you so much for joining us thank you a recent poll found 35 of americans will not get the Coronavirus Vaccine when it becomes available. Our next guest says the best way to get around that is to pay people to take the vaccine that debate ne xt time for a cnbc update with sue herrera. Hello, everybody. Heres whats happening at this hour the democratic president ial nominee joe biden and his wife visited the flight 93 National Memorial in pennsylvania today a hijacked plane crashed into a field after passengers and crew attempted to regain control. The couple laid a wreath on the memorial and spent time talking to victims families and for the families of 9 11 victims, a key part of new york citys remembrance ceremony changed this year. My son, firefighter george cane for the first time in the events history, loved ones did not gather to read the victims names live and in person at the 9 11 memorial due to the on going coronavirus threat, the readings were prerecorded and played from speakers that hung around the memorial site in other news, seems to be outpacing all the other leagues when it comes to viewership. Last nights nfl kickoff game between the texans and the chiefs is the most watched sporting event since the super bowl despite this, though, ratings remain 12 below last years first game. Youre up to date. Thats the news update this hour sara, back to you. Sue, thanks up next, paying our way to herd immunity . Our next guest says the best way to get people to opt into a covid19 vaccine could be through cold hard cash hell explain after the break. vo while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager your life is just as unique. A Raymond James Financial Advisor gets to know you, your passions, and the way you help others. So you can live your life. Thats life well planned. I keep working my way back to you, babe with a burning love inside yeah im working my way back to you, babe and the happiness that died i let it get away servicenow. The smarter way to workflow. [ engines revving ] its amazing to see them in the wild like th shhh. For those who were born to ride, theres progressive. A new poll from the kuzer Family Foundation found that americans are increasingly skeptical about the safety and efficacy of a Coronavirus Vaccine. 54 say they would not want to get a free vaccination if if its approved before the election our next guest says he has the solution, pay americans to take it joining us, robert liton, senior fellow at the brookings institute. Very good afternoon to you, robert thanks so much that is 54 figure is a preelection vaccine. One would expect that post election, middle of next year, once there is plenty of safety testing that the number would be better than that of nonetheless, you think the way around this to ensure it is to pay them. Well, the reason i say that is just the cold hard math and that is that the Infectious Disease doctors say we need at least 60 of the population to have antibod yuz bodies in thet ward off the virus but no vaccine is perfect. Of and even if you optimistically assume 75 effectiveness, that means in order to get to herd immunity from the vaccine, you need 80 of the people to take the shot now as you said, roughly half the people in the country now refuse to take the shot. Youre right that probably after the election that number will go up as hong as not only the fda says the shot is okay but realistically i think dr. Fauci says the shot is okay. That number may grow higher when they get to 60 , 70 , how do you bridge that chasm when we dont have to worry about masks and social distancing. If we dont force them to take the vaccine which dr. Fauci said were not going to do, there is only one other way i know we can get to that 80 threshold if 80 protect us and that is actually to pay people. Whats the cost of this going to be . And why, robert, if its something that needs to be done people dont want to do on medical grounds, isnt the answer just to force them, to make it, pass a law that makes people have to take it well, i think that would be incredibly divisive at this point. If you look at the widespread Public Resistance to Wearing Masks, can you imagine the public uproar if you basically told people 30 of the country that doesnt now want to take the vaccine or more youre going to have to take one or two shots, i think youd have massive massive resistance i dont think it could get through congress and you dont think can you enforce it realistic i had, id rather apply essentially sugar rather than or honey, so to speak, rather than vinegar and that honey would be a payment and you ask how much would it cost sh my seat of the pants estimate is that 100 person is not going to do it 500 isnt going to do it. But 1,000 gets knew the neighborhood where you can switch peoples minds, especially with a family of four youre talking about 4,000 and a very difficult time financially for the people in this country and i think that would flip the switch and get us to 80 and that roughly will cost us in in the neighborhood of 250 million. Now i know that sounds like a lot of money but we spent trillions of dollars right now trying to protect people from the economic raf a ravages of the virus and youre talking trillions more dollars in lost economic output as long as the economy does not full i had more dollars in last economic output as long as the economy does not fully recover compared to the trillions of dollars of cost, the 275 billion, to me, is a bargain its an interesting idea. Greg mancue jumped on this as well, notable conservative economist writing for the new york times. He was in support of this. Why spend all that money when you can just have employers mandate to come back to work you need to be vaccinated or schools, like some already do make sure their kids have to be vaccinated or summer camps why dig a deeper hole into the deficit when were already trillions in debt . There are some School Districts that mandate kids to take the flu shot, but youve got resistance in large pockets of the country even to have mandated shots for kids. I think if employers did it, youd have resistance, workers refusing to take it. In other words, i dont think we live in a world back in the 1950s when we had the polio shot and it was widely accepted unfortunately, we have a very polarized country. Really you have to look at the 275 billion as the price were paying for polarization in order to get back to normal. There is at way to get back to no normal and thats to have a massive quantum leap in therapeutics in a Perfect World wed have those therapeutics right now we dont have them as soon as we get the vaccine, lets say late this year early next year and we dont have Public Service announcements convincing enough people to take it, really what im advancing is a plan b, which is, if we dont get to that magic 80 threshold or higher, we have to do Something Like this. I urge people to start thinking about plan b right now, because weve seen the cost of not planning for thinks. Still to come, the clock is ticking on tiktok. Well break down all of what to expect next week the lexus es. Every curve, every innovation, every feeling. A product of mastery. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. 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Were also going to get Quarterly Results from fedex, which is trading at the highest level in years and adobe wednesday we have the allimportant fed decision were also wondering whether were going to go into week three of market volatility after what was straight up off the march lows worst week for the s p since june, for the nasdaq since march. What will you be watching . Obviously this is a time when you actually watch the behavior of the market itself reacting to itself, meaning that its really a matter of whether a 10 or 11 decline in the nasdaq, which is what weve seen so far, is enough given how strong the surge was into those august highs, enough to relieve the pressure and bring it back onto a more sustainable trend or not and also how the market absorbs a lot of the macro data coming out next week. You have retail sales coming out, housing numbers you mentioned the fed also, maybe a dozen little ipos. All those things, i think, are in play as we get into next week. I was going to point out as we end the week there was an 8 price differential between the naz tasdaq and the ftse 100. Also, the british pound slipped significantly, allowing the ftse to rally also, rotation if we have it, isnt just within the u. S. Could see rotation into overseas equitie equities were keeping an eye on the dollar as well, which bounced. It bounced. The rotation we talk about in the u. S. Would be echoed elsewhere because it would probably happen if there was a greater confidence that you are on an economic acceleration path and thing wills gos will go a lt better we are out of time have a lovely weekend. Fast money starts now. Im melissa lee. This is fast money. Tonights trader lineup tim seymour, steve grasso, jeff mills. Coming up on fast the chart masters big warning for big tech carter worth has five charts that show more pain ahead for the tech trade plus, a tiktok takedown, china drawing a line in the sand nikola fires back. Whats up, everyone first of all, i never take any