Unit into a separate Public Company. More on that in just a bit ibm up and all the markets up with 59 minutes left in the session. All the big stories of the day coming up. Morgan stanleys Ceo James Gorman on the back of his companys 7 billion deal today to buy Investment Firm eaton vance. Carnival giving a Business Update as the crews and travel industries continues to deal with uncertainties amid the pandemic ceo Arnold Darnell will be our guest next hour. The ceo of Amc Entertainment will join us to discuss the rollback of more blockbuster movie releases why he is staying open when some of his competitors are deciding to close lets look at the stories we are watching in the final hour of trade. Joining us to talk about regenerons push for emergency authorization for its covid19 treatment is alettia young bob, start us off on the market. There may be no stimulus, but the market is actsing like there is going to be one they have levitated themselves into believing something is going to hatch you can see this in the trading patterns today. Look industrials are breaking out the xli at the highest level since february new highs on fed ex. New highs on ch robinson, deer, caterpillar, new high not multimonth high, new highs these are big global industrials. Same with materials. Cyclical sectors breaking out. Vulcan, marietta Freeport Mcmoran banks are even breaking out wells fargo has had a great week u. S. Bank corp. Is up 10 in the last week or so. A lot of the big regionals are up close to 10 on the week. Is there stimulus . Piecemeal stimulus airline stimulus look at delta 33 mid morning on hopes we are going to get a stand alone airline agreement. Then of course everybody throws cold water on that goes immediately down to 32. Down 3. 5 . You see it is sort of in the middle even with the news, folks, we dont have any deal here, the market continues to believe they are just kidding, there has got to be something happening. The good news is, hopes for a stimulus very much alive moving the cyclical stocks along. The bad news is none of these sectors have had any rallies throughout the year that are convincing because the market doesnt necessarily believe it is going the last. Of course there is a lot of awfully good news priced into the market around the idea that stimulus is coming tough for the markets. S p 500 up up. 6 . Lets get to washington cycle the latest on potential stimulus keels as a stand alone deal for airlines looks less likely than it did yesterday nancy pelosi said it point blank, there will be no aid for the airlines unless a broader deis in place. As she put it, there will be no stand alone bill for that industry, unless there is a bigger bill for everybody. This is central to the negotiations its no use saying we are going to give the administration more money to do whatever they want with it unless we get to the heart of the matter and crush this now, pelosi said that the aid to the airlines and the broader deal dont have to happen at the same time. But that she didnt want to move forward unless there was a guarantee that more help would be coming for state and local governments, schools, workplace safety, and unemployment as for the things that plump said he wanted to do on their open like extending ppp or direct checks, plessy was also clear on that. Not going to happen. Thank you. Regeneron is higher today after requesting emergency use authorization from the fda for its covid19 Monoclonal Antibody treatment. President trump used that treatment after being diagnosed with covid19 last week. The stock has been on i fire rallying 7 since monday, up 60 on the year. Lets bring in alooetia young from cantor fitzgerald. She upgraded the stock this week a good call, potentially a little late. My question is, are investors too optimistic there is going to be demand for this treatment especially with President Trump pushing it now as a test case but also talking about how it is going to be given for free or at very little cost to consumers. What does that mean for the company . I mean, we upgrade based on the platform that regeneron has. They have a robust antibody Platform Technology that alous them to kind of get from a to z very quickly as you saw with covid19 for example what do i think that means for regeneron in general most likely there probably will be some cost to the drug certainly, there will be high demand they have been working to ramp up manufacturing we saw data release last week on the drug i certainly believe the effects they are seeing are real i think it makes reasonable sense for them to move forward with emergency authorization use in light of where we are at with covid19 right now. Are they going to be able to produce enough of it for how much its needed, especially if they start to get data showing that it works prophylactically, as an actual way to prevent people at risk from getting sick with covid19 . Is there going to be enough of it it is a tall order. They have combined between the best manufacturing bodies in the world between the two of them. It is going to take time everything is taking time with this disease you are supplying for hundreds of millions of americans versus tens of thousands or a million i think with time they can get there. I think they are scaling as fast as they can. In the beginning the people are potentially the most sick will get the treatment. Over time people may be able to get it on a preventive basis i think the vaccines have the same problems as well. How much does this cost per dose at the moment what is it reallyistic to get down to in the shortterm . If you use gilead as a proxy with remdesivir, the commercial price is about 5,000 and the government price is 5,000 a course i think that could be the cost for an antiboend cocktail as well. How do you view the u. S. Government in terms of being in charge here of the supply . Operation warp speed, they put money in and then they sort of take a lot of the initial supply how does that get distributed . I mean i think it is it is kind of hard to tell. Thats kind the whole global issue that we have but i think probably my guess is the United States is taking a greater share of any regeneron covid19 cocktail at the moment. But it is still a question in my mind. What portion of the price target is related to Covid Treatment . It is 10 of my valuation it is a possible near term i have been driver for 2021 earnings if they are able to get it approved. But regeneron is much greater than this covid19 story they have a drug for blindless they have a drug for heart disease. They have a drug for diseases 69 skin these are multimillion dollar drugs separately this is like the cherry on top when you think about covid19 and a testament to the robustness of their platform that they are able to bring something this quickly to realization. I think it is not a big driver for me certainly it is a cherry on top. And it will help drive earnings as well. Thank you for joining us. Thank. After the break, morgan stan lease Ceo James Gorman joins us to discuss his companys 7 billion purchase of eaton vance and how it fits into his strategy at the bank you are watching closing bell on cnbc. Before we talk about taxsmart investing, whats new . Audreys expecting. Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. Welcome back weve got news on the deficit. Lets get to elon moi in washington with the details. The Congressional Budget Office now reporting that the deficit in fiscal year 2020 was 3. 1 trillion. That amounts to more than 15 of gdp. And it is the largest share since 1945 the deficit this year was also more than triple the deficit for fiscal 2019. And thats because revenues came in 1 lower, and spending was 47 higher in fiscal 2020. Sara, the budget deficit for fiscal 2020 now stands at over 3 trillion. Back offer to you. Elon, thanks for that. Morgan stanley is to acare eaton vance for 7 billion Morgan StanleysCeo James Gorman joins us now for a first on cnbc interview. James, very good afternoon to you thank you for joining us. Great to be with you. Thanks for having us. Another Asset Management acquisition follows sole yum and e trade. Are we to think of you more of an asset manager than an Investment Bank . Not at all. Our foundings were in Investment Banking in 1985 the Investment Banking is doing incredibly well across banking skegts fixed income that has given us the base to right size the other parts of the business we did that with smith barney, then e trade and sole yum and Wealth Management. Now with mesa west and with this transaction eaton vance and investment management. It is exciting to see all the pieces come together. Is this for scale primarily in the Asset Management business no. Fixed Income Management is scale driven but they have an incredible custom product in parametrics, which has been an Enormous Growth vehicle very good traditional Asset Management large end sustainability funds with the calvert funds it is an unusual deal it is and highly complimentary and it is something we have looked at for several years. The opportunity knocked and we took advantage of it. In terms of the timing we are looking at the share provides, eaton vance up a huge amount you are paying a big price for it and you are paying 50 in cash is this the right time to be deploying a lot of cash when there is so much uncertainty out there . We have made a lot of cash. I mean the first half this year i think we made nearly 5 billion. You know, our firm is required to told 13. 2 in our capital ratio something called the ct1 ratio. We were over 16. 5 in the first half of the year we are in the position that our ratios improved because we are less risky as an institution yet our accreted earnings have grown. Since we stopped the bye back early this year we are building a mountain of cash frankly, too. And this just made sense this was never an issue. If you had been allowed to continue buybacks and or increase your dividend, would you have done this deal still . Absolutely. I mean if you look at the change in our ct1 ratio just from our earnings and from what e trade to us, it went up about 100 basis points this deal is going to cost us 100 basis points we would have been in exactly the same position and still would have been doing buybacks we are holding excess capital right now. What do you see for the entire Asset Management business after this deal. And other mergers. With the shift to low fees and the entire new landscape, what is that going to look like sara, there are so many different parts of Asset Management there is, you know, the true index business, which has grown enormously very low cost, low revenue business, but scale business fixed income, which is really scaled the alternative spaces, private equity or infrastructure funds or mezzanine finance, whole range of areas, real estate, there are many small shops operating in those but the traditional Asset Management you are going the see more transactions. This is one i said this before, maybe on your show as i look across all of financial services, one of the most atomized or distributed Public Companies in the Asset Management space we saw a huge consolidation in Wealth Management over the last 20 years i think you are going to see it across some of the Asset Managers int doesnt surprise me. My other question about the deal, what it means for your Wealth Management, the thousands of Wealth Advisers that you have on board and how it helps them, if they are able to be able to use some of these products and sell some of these products. What benefits are in there for them well, we are already i think we are the largest distributor of eaton vances products we know this company very, very well phenomenal company led by tom faust and a Management Team really respect them. Been around for 94 years base 234d boston really quality business. That culture they fit our culture really well thats a terrific thing. In terms of the fit, yeah, the fit is there we know their products but there is more we can do. Particularly in the sustainability space with parametrics and fixed income frank lee, sara we can take their products internationally because they dont have distribution and we can put our products through their wholesaling network. So it is a rare opportunity where you can have a real win win. James, i wanted to ask you about the u. S. Economic outlook. What are you seeing at the moment on the macro front . Does it matter if the next round of fiscal stimulus is pushed back until after the election . Or is it needed imminently listen, it is not going to be a market crisis if it doesnt happen imminently. This is something thats evolving over months would my gut be that we definitely need more fiscal stimulus 100 once you make a decision, sooner to act, better always if i could get it done now, that would be the position i would be in is it a catastrophe if it is after the election no ities going to take the economy longer to recover . Yes. The market seems to be suggesting a blue wave at the election would be ultimately good for markets a, a certainty and a clear result and b, inflation, and banks. Is the market overlooking the risk on the regulatory front if we get a blue wave what is driving the market are the big tech stocks. Lets look at those. Telltive to the Banking Industry the tech sector has exploced within the macro view of the markets you have to look at what is driving industry segments i dont know if we are going to have a blue wave or not. Historically i think markets have done best when there has been a divided House Congress president from different parties. I am not sure how it is going play out listen, the market is fundamentally bullish on the long term growth of, he ma thats basically what the market is saying. In the short run, is it too bullish . It could well be it doesnt add up with the kind of credit issues we are going to be facing in the next year or so listen n the short market i have often said could be really stupid. In the medium term you can have a fundamental disagreement about some of the major drivers like global trade if the long run if you think the market is stupid it is because you are stupid it will play out the u. S. Economy you shouldnt writeoff the u. S. Economy. It is going to come back it is going to take time and need help from the fed, which it has had, and on the fiscal side. I am interested in your markets comments james because you joined us during the depths of the pandemic. It was just when the market started to bottom, really, and you said, weve seen the worst of it. When a lot of people were coming on and saying we are going to retest the lows, this is still a disaster it was good call the market is up 57 from those march lows i am in the wrong job, sara, i should be trading. Well, maybe what do you think now . You seemed to indicate you think it is a little stretched here given some of the shortterm uncertainties and issues out there. Well, what do we know we know we have a lot of uncertainty. We have a pretty fractious president ial election. We have an economy thats healing. We dont yet have a vaccine for covid. We have global trade issues particularly between the u. S. And china. We have much higher unemployment than we had a year ago and we have had a lot of emerging consumer credit, Small Business credit, and potential state and city credit issues over the next year or two. Thats what we know. Thats a lot fighting that is low interest rates. Good fighting that is we are recovering from the bottoms. Good and fighting that, is the governments need to step in, which they are doing all over the world including i just saw the Australian Government did something last night or the night before thats good. But i would not be shy in providing that support if i were the government this is not the time to intellectualize this this economy needs to get back on track and needs stimulus to help it. How has it been bringing traders and workers back into the office have you had any cases, outbreaks . Where do you think we will be on the head count in big cities and offices in five years time. Im in the office i am here two days a week because i want to signal that it is okay to be Work Health Care workers and security folks have done ann unbelievable job in our buildings here. We still only have about 12 back in new york, a little more in london. Different parts of the world, more it is going to take time i think we could safely bring in about 25 . I have encouraged all the managing directors to come in at least a day or two a week to rip the bandaid off, to experience what its like you know what . Its the pretty safe inside these buildings. We get covid testing when you can. People are very respectful of social distancing. Listen, i am a fan of whenever you are dealing with huge uncertainty, you take baby steps in the right direction you dont try to make a bold call i dont we couldnt take everybody back in this building we cant fit them in the elevator why create that problem for folks . Overall the president quoted in the last couple of days saying dont let covid dominate your life. I kno