Transcripts For CNBC Closing Bell 20240712

Airlines tiktok bids moving walmart is now in the mix. Yes, walmart and that stock is up 5 . Microsoft up 2 . A record close watch for the s p 500. At least 59 minutes left of trade. Anything positive, jon, for s p and nasdaq as we go into positive territory with the new records . Once again. And coming up on todays show. Two key reads on the state of the recovery in america. Well speak with the heads of Regal Cinemas parent cineworld and ihg group about safety and demand in light of the pandemic. And counting down to big earnings after the bell, including dell, gap, hp and more well bring you all of those numbers as soon as they hit. Now straight to the big stories we are watching today. Mike santoli is tracking todays volatile Market Action Steve Liesman and Morgan Stanleys chuten aya are here. And ylon mui has details on the new rapid covid test and bank of america is calling it a gamechanger. Start us off were extending up into record territory a little bit erratic fashion the market was twitchy in the absence of clear upside leadership from those megatech names. They are taking a breather you had the s p. This acceleration is significant. Its almost the kind of action you see more at the beginning of kind of a rebound as opposed to maybe extending the upside so the main criticism of this market is that its gotten extended on a technical basis maybe in terms of trader speculation. 3080, very, very rough area there, is the 200day moving average. 13 above it right now thats really far as a spread over the intermediate term trend. That has people saying, maybe time for a breather. Around 3170 is the consensus end of year sell side target wall street strategists have that as the average. Only one strategist has a target thats higher than where were trading right now. That suggests more caution among more, you know, traditional observers of the market. Thats the push pull are you underinvested or thinking that were stretching the short term take a look thats relationship between the nasdaq and bond yields from bank of america today. This is the percentage of tech outperformance that the bank calculates is really attributable to lower bond yields why is that . Well, tech is Long Duration assets, stable cash flows. They tend to do better in a disinflationary environment. You see a record going back some 30 years in terms of what we can what we owe to low bond yields in terms of tech performance. Bond yields jolted hire and tech taking a break outside of microsoft. This is the relationship of industrials to tech. This is showing you a long slide of underperformance of industrials versus tech. Except here since the lows, its been trying to bottom in this jerky fashion. That pretty much tracks with the tenyear treasury yield. So higher yields, if they are sustained, probably is better for cyclicals like Industrial Companies versus the big growth tech stocks. Based on what happened today with the feds announcement, what in there was a surprise to the market based on the action that we saw . I would leave it to steve to pull apart the specifics but my take on what the market was looking for is maybe slightly more in the way of detail in terms of how this plan to allow inflation to run more might be implemented. Maybe more specifics on an inflation target or qe, volumes or things like that. What it did get was the general message that powell has been trying to convey which is theyll be tolerant of higher inflation rates in the service of getting the economy back to full employment. And that did allow the long end of the Treasury Curve to release a little bit you have the steepening of the yield curve as a result. All right, mike well talk to you in just a bit. Lets talk more about that move today. Fed chair jay powell, inflation taerthsi i targeting. It will allow 2 higher than its goal for more, lets bring in chetan ahya, global head of economics at Morgan Stanley and cnbc senior economics reporter Steve Liesman. What do investors need to know about what this policy shift suggests in terms of actual fed policy and market implications you know, i think mike had it right. For the time being, not a whole lot. I think that ultimately, it means the fed is going to continue on its current policy of very low rates trying to keep financial conditions as easy as possible the question becomes on the rebound, as unemployment hopefully declines and maybe declines sharply as inflation ticks up. What does that mean for policy so to speak, when the rubber hits the road. At that point, and who knows when that is, six months, a year out. Maybe chetan has a better idea but thats when the rubber will hit the road and well say, were happy to see these things go up. Were not changing policy for a minute here. Yeah, what do you think this is a story for a year from now . A few years from now when do we have to worry about inflation and wonder what it means for this new fed policy . I think the most important message, i think, is from the medium term perspective, youve got the assurance from the fed that we will be allowing inflation to grow about 2 if you recall in the previous cycle, whenever inflation has even just reached closer to 2 , fed has hiked. If you remember in 2012, when core pc inflation hitting 2 we saw fiscal and monetary tightening in 2017 and 18 as well we saw something similar. Theres a question mark on feds willingness to allow inflation going about 2 and what todays speech has done from chair powell is an historic moment in our view because this is really confirmed that there will be a transition to higher inflation in this cycle which we have not been able to achieve in the previous cycles. The timing of it is concerned, we are expecting inflation to cross 2 in 2022 were expecting core pc inflation to be in the range of around 2 in second half of 2021 so our sense is that in terms of actual inflation, there is a time when youll see that debate, but, look, markets are not waiting. Were seeing already moving up and you should expect that expectation from the market to be well ahead of the second half of 2021. How do you make an inflation target for 2022 at this point . We just came off of growth which was down 31 32 its really hard to see whats out in front of us in terms of the recovery how fast it happens. Where does that inflation target come from. For the fed or for ourselves . No, for you how do you make that forecast . So, look, i think that goes back to the earlier discussion about the shape of the recovery. So were expecting this recovery to be a vshaped recovery. Look, its not a forecast anymore. You already have the evidence of retail sales about 1 higher than precovid levels or january 2020 levels. So we are already seeing the economy is recovering pretty rapidly. Youre looking at the Second Quarter number we expect that in the coming months you will see further confidence of the recovery that were seeing in the last two months which has been pretty steep. And the key reason for that has been the policy response, both monetary and fiscal has been very different look, we are talking about todays announcement in incremental fashion. But if you just sit back and look at what the fed is doing, we think the fed will expand its Balance Sheet by 30 of gdp. That would be 1 1 2 times q e one plus two plus three combined and on the fiscal front, were expecting the deficit to be about 27 of gdp in 2020 so theres a huge policy support that is coming in the way coming to support the economy, and more importantly, as you have seen, even the second wave of infections rising did not really stop the economy from growing. And we are seeing that in the last few weeks, as new cases have come down, economies continue to gain further momentum look at the credit card spending data, auto sales, as well as what is happening to restaurant activity Steve Liesman, markets notwithstanding, still doesnt look like a vshaped recovery for main street as youve told us i wonder if you have any thoughts on what this announcement from the fed might mean at that level particularly maybe for local leaders asking the federal government, congress, for funding for things like schools you know, in lieu of doing things like bond issues. So i dont think that the previous speaker there believes that the vshaped recovery happens just by magic or on its own. Notice the amount of fed stimulus hes built in in terms of Balance Sheet and fiscal stimulus im certain if we went back and asked him if you get rid of those things, what happened to your forecast, i bet his v becomes a w. To answer your question, i dont think it means anything. I think it may be a misnomer working on the street right now that the fed has pulled forward and was going to do september. Dont confuse what the fed did today, which is a longterm strategy, with individual policy decisions the Federal Reserve is going to make. It may well be that some of that Balance Sheet expansion that was just talked about is announced in september remember the fed has not formally done a q e program. It hasnt done quantitative easing to really reduce the tenor of bonds or long rates its done it for functioning the fed has a qe program in its pocket and other things it can do on a cyclical basis the fed set to set a longterm strategy and convince visitors and the public that its going to be looser on inflation than it has in the past well have to email cheton and get his response on that w thank you, chetan and Steve Liesman. Turning to the coronavirus and some promising developments surrounding abbott labs new rapid antigen test ylon mui has details President Trump will announce a 750 million deal with abbott labs tonight during his remarks to the Republican National convention from the south lawn of the white house now that deal covers 150 million covid19 rapid tests the fda just granted abbott emergency use authorization for those tests yesterday. The company says theyll cost 5 the results will be available in 15 minutes and that it can make up to 50 million a month starting in october. That would represent nearly a doubling of the Testing Capacity and in a statement, a white house spokesperson framed this as a Major Development that will help our country to remain open, get americans back to work and kids back to school. Now all of this comes at a time when the administration is facing criticism over changing guidelines over who should get a test the cdc was backing away from guidelines that encouraged people who were asymptomatic to get tested cdc director Robert Redfield said anyone that needs a test can get a test but not everyone who wants a test should get a test now it looks like the nations testing xaf ining capacity wille expanding. Well see if that calculus for who should be able to receive a test starts to change. Its interesting that this announcement that you say is planned for the president s speech during the Republican National convention, thats an interesting venue in which to announce that. Is that a usual practice interesting venue in an interesting location as well of course, the president also criticized for delivering the speech from the white house. This is part of the administrations response of democrats who say they have no plan for dealing with the coronavirus. Obviously, the administration has also been under attack for not having a National Testing strategy this is the white house trying to show that it is literally and figuratively delivering the goods by expanding the nations Testing Capacity and announcing this new deal. Ylan mui, thank you certainly helping sentiment for some of those reopening groups like hotels and airlines today. Coming up, our latest states of play survey showing an uptick in the number of americans who said its safe to go out to the movies after the break well talk to the ceo of regal parent cineworld and ask whether customers are indeed coming back in the days theyve been opening. Welcome back 190 regal cinema locations are now open across the United States on track for a total of 294 theaters by this weekend this as more americans think its safe to go to the movies, according to our latest states of play survey now lets bring in the ceo o of cineworld, Parent Company of Regal Cinemas. Good to see you guys. So tell me, youre operating, i believe, at a max 30 capacity as a safety measure in these theaters as you open back up, has there been any time when youve been able to hit that 30 ceiling we were very pleasantly surprised with the numbers people really missed the cinemas and wanted to go back into the big screen we had many shows that were sold out. Sold out in what we call today sold out under the restrictions, of course. And this was not with a huge leading movie. I can say that yesterday we opened in the uk and really, we were very, very happy with the results and once the weekend will be over, well have very big news, or very good news for the industry as a whole. As you know, its opening internationally ahead of the week of the u. S. But this weekend was great we are adding another 100 cinemas as you mentioned this week, and really people were very happy to go to the movies and, second, their reaction to the safety measurements that we had were amazing and people really appreciated it, they felt safe, they felt good social distancing, they felt Good Technologies everybody, of course, was wearing masks. Very, very small numbers we deal with hundreds of thousands of people if you talk every day in the u. S and very, very small cases of these people understand. People want to feel safe, and they enjoy the movies. Thats what i wanted to hear more about the feedback also from your employees and a sense of, is the Consumer Behavior inside the theater, to some degree, back to normal i know food and beverage is such an important part of your Business Model people willing to take off their masks and eat and drink in the theater, or are they hesitant to do that . And do the employees feel safe first of all, the employees well, i dont have to tell you. Not to be at work for four months and come back to your place of work is a big job and everybody will say, everybody had, of course, the temperature tests and all the employees wearing masks, of course but everything went in a very smooth way although it was just the beginning. We trained for a few days, but we prepared everything for a few months this was really on our side. And people, we need to remember that when people are eating, already, they are sitting in the row. Its very safe now dont walk you dont talk you take off your mask for a few minutes. You eat what you want to eat, drink what you want to drink and you put your mask back again its really safe, and the feeling of the public was very good nobody said you know why you do this or why you do that. Here and there, you know, people have always remarked but in general, the atmosphere was very good and we felt we could have served more we really missed in a big way the states that have not opened yet, mainly to mention california and new york, you know these are two of our major territories. 80 cinemas between california and new york, and we really hoped they would be joining in the coming weeks and we get messages from our customers in these two important states that they are saying, you know, when are you opening when are you opening but everybody understands its not our decision we need to go according to what the governors are saying, and we hope to get a green light very soon new york, Governor Andrew Cuomo is alouing museums to open and now gyms and salons. And has drawn the line for movie theaters, as you just referenced, saying theyre still looking at the science you still have to sit there indoors for several hours with a bunch of strangers can you understand that argument and its not essential, by any means. Can you understand the argument for why new york is waiting . I think i can follow every word Governor Cuomo is saying in the last few weeks because it is so important for us. And the last i heard was in a radio interview that he said that cinemas are going to be next so i dont know what is next i hope it is within a week or within ten days and not within months but i really believe that our cinemas in new york are very well prepared. All the way, from all angles, the technical way, the social distancing way, our special systems that are selling the tickets in a way that keeps social distancing. Our special act which is taking care of people that dont want to queue to the concession all this is taken care of. We just wait for the green light, and im sure with the limited capacity, we will be safer than many other businesses mooky, i also wanted to ask you about another change impacting your business and that is the acceleration of digital and streaming. And this new world weve already seen it affect the theaters with disney and mulan going on disney plus and the deal struck by universal which i know you have poopooed publicly how your preparing for streaming and the fact these content players are looking at different ways than the traditional Theatrical Release and the 90 days exclusivity look, we strongly believe that part of our Business Model is keeping the right lingo between the Theatrical Release and the athome. We cannot take the covid19 time now and take any conclusions of this disney is the biggest Theatrical Company in the world its true. I was very sorry to miss mulan in our territories and the others are being released as scheduled in the cinemas, but i dont see no big tom cruise movies, et cetera, et cetera, going directly to the small screens. I saw it in the imax we have here and these movies are being made for the big screen. And the general business of theatrical worldwide, generated in 2019, and alltime record high, 43 billion. So i dont think that anyone is going to give this business up there might be some movement there but to take now an example from moving into streaming now is not the time. Which i hope will be very soon together with vaccination, together with other measurements, business will go back as usual. To tell you that there will not be any changes, there might be its not going to be 17 days window okay. Okay well, mooky, we know there are a lot of people who cant wait to get out of the house for a variety of reasons thanks again well certainly continue to watch your industry, literally thank you, guys enjoy the movies looking forward to doing that before too long for sure lets see. With about 35 minutes to go before the closing bell, the dow is up about 1 s p up about 0. 5 . Nasdaq little better than flat still ahead another read on the state of the recovery in america. Well speak with the has of ihg americas which owns brand like holiday inn and crown plaza. Well get his outlook for travel in this country as the smeumr season winds down. Well be right back. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. On some Major Developments in the tiktok saga today as the new Ceo Kevin Mayer steps down and the bidding war takes an unusual turn Julia Boorstin and alex sherman have been following the story. Tell us about kevin mayers decision to leave so soon. Its been about three months. Kevin mayer announcing his resignation indicating a deal could be imminent. Why is he leaving now rather than waiting until a deal is done or going to work for tiktoks buyer a source tells me one reason is mayer was excluded from deal talks leading talks with microsoft and General Atlantic ceo bill ford, leading talks with oracle. Mayer did not want to run a division at microsoft. He preferred the Greater Authority he would have had if an Investor Group bought out the company. So certainly interesting to see how this shakes out without him at the helm. Which brings us to those deal talks which appear to be moving fast alex sherman, you introduced a new player here. You reported that walmart is interested what do we know at this point . Yeah, so walmart has released a Public Statement now confirming the report saying that they have joined with microsoft on a joint bid to challenge oracle which are probably the two major bidding parties still remaining here as tiktok is very close to announcing a deal with u. S. Operations and canada, australia and new zealand on top of that why does walmart make sense . They want walmart for an ecommerce play. Obviously, tiktok is wildly popular. 100 million u. S. Monthly active users, closer to 700 million, 800 million global monthly active users theres a clear ecommerce element to this as brands start to monetize the popularity of this app and its really still on the ground floor even though tiktok is wildly popular, unlike some of the other major social media apps like facebook and instagram and youtube, it hasnt really monetized itself yet from a branding perspective, from a marketing perspective. So thats the play for walmart to get in on the ground floor. Is it i dont know there are companies that always get this tech envy and social envy and then when they dive in im not sure they always do such a great job. And julia, its weird to me that kevin mayer, who had Great Success with disney plus, one of the few people in this era to successfully challenge the netflixs of the world that he is heading out of this deal but walmart is heading in . What is going on well, jon, you talked about this a little bit earlier today on cnbc. I think the thing with walmart is its always been interested in the business of streaming video. It had vudu which did not turn out to be a great business for it it hoped it could go in the direction of an amazon thats a little whats at play here whats interesting about the appeal of tiktok to walmart is that tiktok is a way to speak to the demographic thats impossible to reach on tv. People on tiktok are less likely to be watching commercials on television and thats why tiktok could be so valuable at the same time that brings so many other issues. The fact that some people using tiktok are less than 13 years old. Maybe it could be problematic about the way you target such a young demographic. So its certainly a complex issue here i think at the end of the day, jon, this seems like its a deal thats likely to go to microsoft and kevin mayer wanted to go run his own thing and not be reporting to the ceo of a tech giant. I dont know, jon, i kind of get it who is amazons biggest competitor on cloud . Microsoft. Who is their biggest competitor on retail . Walmart. These two companies would do anything to go up against jeff bezos. Walmart needs to reach younger consumers. Think about how much data theyd get on tiktok from some of those younger consumers. And how can oracle top a bid if were talking about deal terms now and the size of a deal, how does an oracle go up against a walmart and microsoft . Yeah, sarah, thats a good point in the sense that microsoft doesnt need walmart from a bidding standpoint. A 1. 5 trillion company. Adding some other giant behemoth in here, this probably isnt a money issue as much as maybe it is Something Else like the administration, the Trump Administration that is, perhaps prefers oracles leadership. We know the ties between Larry Ellison and donald trump are fairly strong. So you do wonder if walmart came in so late in the game here and microsoft probably doesnt need the financial firepower, is there some other reason that microsoft was willing to partner with walmart here . Maybe to tip the scale away from the oracle counterbid and toward their own bid . But even that, there are a lot of Unanswered Questions here how is the ownership between microsoft and walmart going to line up . Who is going to own what they are only buying a portion of this company to begin with which was another reason kevin mayer left he says he wanted to run a global company, and it makes sense. Tiktoks valuation has to do with the fact that its global this deal is only four countries. So its a weird deal already basically what youre seeing is were going to level off the growth of this company because it already exists in all these other companies and by the way, its banned in india, too. There needs to be resolution there as well. So to jons point, its very complicated, and its been a weird, unorthodox deal the entire time. Looking forward to Lockheed Martin jumping in with a bid for tiktok im kidding, but at this point, i would not be surprised Julia Boorstin and alex sherman, thank you. Time for a cnbc news update with sue herera. Tiktok and the teenagers. Thank you, jon heres whats happening at this hour lawyers for more than a dozen former employees of the Washington Football Team are calling on the nfl to launch its own investigation into Sexual Harassment charges against that team they are also asking for Team Owner Dan Snyder to be removed if those charges are substantiated. The American Civil Liberties union is calling for the resignation of the kenosha mayor, police chief and Kenosha County sheriff following the shooting of jacob blake and the death of two protesters. Dramatic footage of a rescue during the battle against California Wildfires these two firefighters were saved by a helicopter that swooped in after they were trapped by the advancing blaze and in holland, a painting by one of the Dutch Masters has been stolen from a museum that is just south of amsterdam that painting dates from 1626 and, get this, its been stolen twice before most recently in 2011. Check the locks. Thats the news update for this hour ill send it back to you sue, thank you. Coming up on the show, a volatile session today following jay powells speech from the Federal Reserve. What does the policy shift mean for your money in the long run well discuss with Sarah Bloom Raskin coming up as we head to break, a check on bonds we saw a big move in yields higher some steepening on the yield curve. Tenyear yield firmly above 0. 7 helping out the financials 0. 74 now. Well be right back. 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. Just 22 minutes left of trade. Nasdaq going into positive territory. Were on track for a record close. The dow is off about 0. 9 . The leaders there are, walmart, travelers, microsoft, after word that walmart is in the game for Tiktok Russell 2000 index of small caps also catching a bid. 0. 6 were looking at our sixth day in a row of stocks for gains as weve seen, some major kneejerk moves for retailers on the back of earnings well preview what to expect from gaps results due out after the bell thats next. Ing for 6. 6 over do i hear 7 . 7 in the front 7 going once. Going twice. Sold to the onion lover in the front row next up is lot number 17, a spinach and artichoke dip, beautifully set in a hollowedout loaf of sourdough bread. Dont get mad get e trade and get more than just trading investing. Banking. Guidance. Get e trade and get more than just trading i keep working my way back to you, babe with a happiness that died i let it get away servicenow. The smarter way to workflow. Woi felt completely helpless. Hed online. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Weve got a news alert on united phil lebeau has that story take a look at shares of united were not seeing a whole lot of reaction to the news that the company that came out from an internal note within the company within the last half hour that united will be furloughing 2,850 pilots starting on october 1st going all the way through november 30th. The pilots union reacting saying, look, it didnt have to be this way. There were other options as opposed to going straight to a furlough pilots were laid off october 1st, the remainder happening november 1st and november 30th shares of united, no reaction here mainly because, guys, i think most people said we know theyll be a Smaller Airline come october 1st. Now were just starting to put some numbers to those types of cuts that were going to see phil, thank you airlines having a good day on news of that very fast, very cheap abbott lab test. Abercrombie getting a pop after the mall retailer reported an unexpected quarterly profit in addition to seeing revenue come in above wall street estimates. Its just the latest major move for a retailer on the back of earnings its rival gap reports after the bell today shares have been on a tear of late up nearly 40 over the last month. Here for a preview of oliver chen with cowen. A name like abercrombie, was it just low expectations or is there some underlying strength here thats not being appreciated, and how does that set us up for gap . Yeah, for the gap, sara, the stock has doubled in the past three months so our view is expectations are fairly high as the p e multiple has also risen its at 17 times so were cautiously optimistic definitely cautious on the future of the mall and apparel and what were seeing. And expectations are somewhat elevated for the gap as well there are some glimmers of great businesses athleta, less than 10 of the business but casualization, athleisure, comfortable dressing, those are key themes as well and old navy offers consumers strong value apparel is a tough place to be and so is the mall oliver, got to ask you about walmart throwing in in this bid to take over the tiktok u. S. Operations you like this. And i wonder if thats because you think they turn tiktok into some kind of branded experience and kids are going to go for that or somehow it lowers their marketing cost yeah, i think thats happening all of retail. Think about gap. Think about generation z tiktok has been used by brand like elf its been an important vehicle for reaching a new, younger customer and retail is all about embracing new customers and the future of retail so theres a lot of potential benefits younger customer relevance, bringing customers into stores and most critically, whats on horizon for walmart is advertising revenue and using the whole walmart ecosystem to drive high margin advertising revenue. There are a lot of details to be worked out data, privacy, deal structure. But this could redefine walmart and we were positive on walmart when they bought jet, too. So there are deals to be done and theres people and talent and it can be a game changer but were seeing all kinds of unexpected deals as retail really transforms itself quite profoundly one for the ages if they figure this one out. Oliver, thank you. Thanks for having me. And up next, fake meat goes digital. Reaction to the feds policy pivot and what to watch from oss results the stories and more when we take you inside the market zone. Hey, kids welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. With 12 minutes left in the trading day, were in the closing bell market zone commercial free coverage of all the action going into the close. Mike santoli here to break down these crucial moments of the trading day. And today hightower chief investment strategist stephanie is back with us. The s p 500 on track for a record close and the dow on track to actually close positive year to date for the First Time Since february fed chair jay powell addressing the virtual gathering of the jackson hole symposium where he explained why the fed agreed to revise their statement on longterm goals. Listen our revised statement emphasizes that maximum employment is a broadbased and inclusive goal this change reflects our appreciation for the benefits of a strong labor market, particularly for many in low and moderate income communities. Emphasis on employment over inflation. Stephanie, any investment applications for you we saw the dollar rise yields tick up on the news stocks pretty much, it seems like it was what was expected and doesnt signal any kind of nearterm policy shift just watching headlines here, House Speaker nancy pelosi says no progress after reigniting talks with the white house on stimulus but the fed is fully in the game whats adding to this record tally . Because the fed gets it, at least in the near term the pivot was a big it is a big deal it wasnt a surprise because Steve Liesman was talking about it on monday but the point is that rates are going to stay lower for longer, right . When you couple that with the abbott news and the tests and maybe a safer, more successful rate open at the same time, that means to me anyway that with all this liquidity in the system and a safer test and faster test, the economic momentum we have been seeing can continue and we did see economic momentum this week continue we have durable goods up 11 new home sales, best since 2006. Pending home sales up 15 year on year. Sure initial claims are still terrible but at least the fourweek average is starting to decline a little bit it has to get better and thats why i think this pelosi news is just silly i think theyll come to some sort of fiscal deal and thats also positive for stocks yield curve steen steepened. Thats good for banks. Im in banks i think its good for other cyclicals like industrials which im also overweight. So pretty pleased but i still want a barbell technology, defensive, secular growth with the cyclicals. You mentioned those tests among the good news and shares of abbott labs are surging today after abbott won fda approval for its 5 covid19 rapid antigen test that test which delivers results within 15 minutes is portable, requires no additional equipment it could be a meaningful step forward for widescale testing and could help the world return to more normal daily life. Abbott says its ramping up production and plans to produce 50 million tests a month starting in october. Earlier today, the white house confirmed that President Trump plans to announce a purchase of 150 million of abbotts tests for 750 million tonight in his speech at the Republican National convention. Mike, so thats good news from the market the market seems to be shrugging off this idea of no deal happening in congress. Is there anything the market is not shrugging off at this point bad news wise . The market has a high appetite for just taking in things that seem to reinforce the optimistic case. I definitely grant you that. Is there anything that the market is not shrugging off . I dont know if theres anything in particular. Its much more about the mechanics of the market. What you see on a day like today is a green light for those economic recovery plays. You see leisure stocks and travel stocks doing well financials working with whats happening in the bond market, and then four of the six biggest stocks in the nasdaq go down and holds the s p in check and they were down a little more, maybe wed be a red day. Its all about just exactly how many times the market can discount a good outcome or a relatively smooth reopening within a horizon of months this market is on track to be up all but three days in august feels like its just starting to really push things here. But, you know, its a Different Group a lot of times each day. So its giving, you know, the leaders a chance to rest on a day like today without much damage to the overall tape mike, this is new news. I get this this antigen test, yes, there will be questions about accuracy, but its so cheap and its so fast and it doesnt require a lab that you can imagine taking it for everybody to gets on an airplane or everyone who has to go to school every single day that totally, stephanie, changes the game, doesnt it, for Consumer Confidence and Consumer Behavior if we could test before going on a plane, i think a lot more people would be willing to get on that plane. Even if it doesnt catch every case, if it catches a few here and there and if they do it every day in school, thats a really big deal. Its an absolutely you said it, gamechanger. Its a huge, huge deal because what it does, it not only gives us the chance to reopen successfully and get back to half of normal or better than that but it brings on confidence. And thats really what we are lacking here is can we actually recover . Can we reopen on a sustained baseis or do we have to reopen and then some states have to close. Some counties have to close. Can we finally open restaurants and leisure can thrive these are industries that are absolutely hurting in a bigtime way. If you get a little fiscal stimulus along with this test and monetary policies that are absolutely great, i mean, this is just such a tail wind and thats why the market is going up it seems like it makes it much more livable to be with this virus if we can test before going into Public Places shares sizzling today for beyond meat. Aditi roy here to explain why. Thats right. The shares are up about 6 , about 5 at the moment after the Company Announced its new ecommerce platform. That new platform allows customers to buy beyond Meat Products directly from a company website. And access online only specials. Now the direct to consumer rollout allows beyond to tap into the skyrocketing demand for fresh Meat Alternatives in retail that channel is up about 140 since march. But theres new competition in the space. Kelloggs is launching plantbased ground meat through its new incognito line and analysts flagged that as potential competition for beyond, particularly in the fall back to you guys aditi roy, thank you. Are you a buyer, stephanie, beyond meat . No, but i have to tell you, just in looking at the analysts and the support, theres only three buys on this stock. And there are 19 neutrals or sells on this stock. Theres not a lot of im sure its valuation but it also has to do with total Addressable Market 20 billion to 30 billion end market or 12 billion end market thats the question that investors like myself have to ask. Theres definitely momentum here they already have a great retail presence in 26,000 retail outlets. And the dtc will be good, it will be great. It will help the household penetration and get them better market share and the logistics with u. P. S. Is interesting they have a big business in food service and that was down 61 in the quarter. Thats getting hurt by stay at home theres some puts and takes. This is very good news a stock for me but i think this i ive got to duck back for a moment and talk about that abbott test i wonder if were overdoing the optimism 50 million a month is great, but its certainly not enough thats, what, 1. 5 million a day . Thats not enough to test everybody before they get on a plane or every kid before they go to School Every Day thats not nearly enough so is that really going to get us to a new normal i dont think its that getting us there its the cumulative effect of all of these different announcements on mult peiple fronts it just gives investors collectively this sense of, were moving through this. By the way, the country is not shut down right now. We think were very restricted in certain areas but its not as if theres any chance, almost in any scenario that you have a very hard lockdown again and so if the market is looking out six months it figures a lot of smart people. A lot of money being thrown at this problem and somehow, through all these different mechanisms, its going to inch toward normal. So that could be proven wrong but i dont think its just the abbott test. Its the one after the other moderna announcing every fifth person that signs up are the trial they do a press release on the effect over time is were figuring this thing out. Traffic on the its also one of i was going to say, jon, its one of many, Many Companies working on antijen testing. Abbott is a poster child the first to come out with the other rapid test so Many Companies are doing this if they can get the model and template, then they can ramp up manufacturing. Obviously, theres going to be huge demand. If, if, if we still need 100 more like that supply wise let lets get to josh lipton about hps earnings after the bell so heading into this earnings report, there should be tail winds for hp the pc market has been showing strength more people now working, learning and playing at home the question is how long that strength continues but there are potential headwinds, too investors going to closely monitor the printing segment, specifically supplies meaning ink and toner. Of course, they think supplies revenue will be down 21 year over year. What is the trajectory of the supplies business . Investors want to know in the quarters ahead back to you. Josh, lipton, thank you weve got two minutes left in the trading day. Mike, youve got more on the market internals what are we seeing as we march to a record close . They improved from earlier. Mixed at the start of the day. New York Stock Exchange in particular not too far 23r0from 2 to 1 pose advancing. Look at opening versus shutdown trades an etf we look at, entertainment and leisure, up 2. 5 software, which has been the Leadership Group in the haven down 0. 3 , even with microsoft up a lot thats telling you something about whats happening the volatility index has a bid to it. It popped above 25 again its up a point right now. 24 people are flinching given how strong the market has been, feeling theres down side mean reversion on the way perhaps before too long. As we head into the close, the nasdaq doesnt look like its going to be positive, down about a quarter of a percent s p higher by about that much. The dow up about 170 points. A little bit better than well, a little better than half of a percent and financials and transports have led on the s p. Theres the closing bell, and sara, it has been quite a day of trade. Strong on the back of that fed announcement the nasdaq couldnt quite close in the green no, but the s p 500 did, and that will be a record close, jon. Its 19th of 2020 in terms of record closes. Welcome back to closing bell. Im sara eisen with jon fortt i for wilfred frost and mike santoli. We did lose a little bit of steam into the close we got as high as over 300 points at one point but, still, a solid day. Walmart actually leading the charge there on the dow after word that it has jumped in to the negotiations around tiktok perhaps mounting a bid with microsoft. All that cnbc reporting throughout the day s p 500 closed up a little less than 0. 2 . Wasnt much, but enough to put us at a new record high and groups like financials, real estate did well on the back of higher treasury yields Communication Services and Consumer Discretionary lagged today. But, still, for the week, its been a strong one. The s p up almost 3 going into a friday best week since july 2nd and its fifth week in a row of gains, assuming we hold that tomorrow the nasdaq didnt make it there as jon noted closed down 0. 3 technology lagged some of the other groups today the russell index had a good day. Decent day, yup 0. 3 . Thats if youve been bullish and waiting for a rebound in the small caps lagging all year long so far down about 6 investors are now bracing for a busy afterhours earnings session. Well break down results from hp, dell, vm ware and gap. Stephanie link is here gabriella sanchez. First, well turn to you, mike a question a lot of people have been wondering about this market gets a bad rap for being so narrow and tech driven. Then you have days like today where financials and real estate lead us. Is the market narrowing, or is it widening in terms of its inclusiveness for who is taking us up to record highs in general . Its been narrow in terms of the number of stocks that account for the greatest share of the upside. And the reason that the s p 500 was able to recover the losses so quickly is because those half dozen stocks that now represent almost a quarter of the s p pretty much added so much market cap that we got there. So thats the sort of magnitude question but in terms of the daedth, the number of stocks in recovery mode from march and on days like today, you do see this broadening out cyclical stocks, i wouldnt say value, but cyclically oriented stocks that will benefit from better economy have been improving in recent weeks. Its not been consistent every day. Its not been to the exclusion of those big defensive Growth Stocks but theyve been participating. You can slice it any way you like theres no single one correct way for the market to behave sometimes when rallies are narrow, they seem vulnerable and thats when a market tops. Sometimes market is super broad or in january of 2018 at the very moment that it falls off a cliff. So its very difficult to say what the implications are for participation, but i think you get the benefit of the doubt, but the persistence of this up trend, its starting to get a little bit stressed in thin air. Gabriella santos did anything surprise you about what the fed said today any shift in what you recommend . So the change in their strategy itself didnt surprise us the shift towards a flexible average inflation targeting, as well as a decrease in the emphasis on the natural rate of unemployment what was a little surprising was actually the timing of the release of the new statement on longrun goals and policy. So we thought that would be more of a september occurrence. But overall, the change in strategy doesnt surprise us and what doesnt surprise us also is the reaction of the market you see equities up at the same time that bond yields are higher that makes sense low shortterm rates help to support equities and helps to keep the economic recovery on track at the same time that combined with fiscal policy can lead to higher inflation and higher rates down the line weve been thinking with clients a little bit more about balancing growth and value a bit more and i think this just further emphasizes that the balance is a good idea for investors that have a multiyear time horizon a lot of people are talking about shifting as gabriella is, into value, because the economy is recovering. But what kind of recovery are we in more than a Million People filed unemployment claims last week. Just last week new claims. And we have millions of people that are still collecting unemployment benefits. So what kind of recovery is this and thats terrible and the job market is terrible, but it has improved from where it was, and this is why youll get additional fiscal stimulus may be a skinny bill, but i think you get it, and that helps. Thats number one. And in terms of this whole cyclical trade, i was buying a lot of these cyclical names in financials and in industrials. Those primarily on some discretionary and some reopen stocks like leisure and some of the gaming stocks. Buying them back in march and april and may because i was looking for good Balance Sheets with good dividend yields and trying to normalize earnings as weve seen better housingidate abetter auto dating manufacturing is at a v. Thats a v recovery if you look at the pmis and isms you have three big points in the economy doing well the consumer is mixed, and that goes back to just thinking about today. Dollar general versus dollar tree if you have the products, if you have consumables, incentives, investing in your stores, they will come. They will spend. They had a 19 comp you look at dollar tree and they had a 7 comp nothing what Dollar General saw. Thats because they have more discretionary. The consumer is choosy if you have the product, they will come and consumers are spending and at 70 of the economy. So we are gradually recovering off a terrible level its not perfect because we do have the job issue, but i see a lot of good signs in the economy to propel us higher. Consumers arent the only ones wait until you see these workday numbers. The stock is up better than 11 . Diedre bosa has the numbers. A solid beat. Eps coming in at 84 cents per share. That beats the 66 cents the street was expecting revenue 1. 06 billion. Representing growth of gent 20 year over year also the Company Announcing that chaino fernandez is promoted to coc. O. O fernandez has been there since 2014 and is the copresident the company raising its q3 and full year guidance thanks to a strong Second Quarter. That brings it above estimates both those revenue outlook numbers. And also, jon, you know this, but we should note its been underperforming its other Enterprise Cloud peers like microsoft, salesforce and adobe. So this quarter and its guidesance could ease investor concerns about its Competitive Position shares keep going higher, up more than 12 now. Back to you. 12. 6 thank you. A few other big movers ulta beauty is up. Hp ink trading higher, or hp lets go to josh lipton with those numbers. Sara, hp reporting q3 eps of 49 cents versus expectations of 43 cents q4 guidance between 50 and 54 cents on the bottom line street at 50 cents turning to the segmentes personal systems, pcs, up 7 to 10. 36 billion. Printing 3. 93 billion. Capital return, about 1 billion in Share Repurchases in the quarter. I had the chance to speak with hps ceo about the quarter i asked him about the trends and themes hes seeing in his pc business enrique saying theyre seeing very Strong Demand on the consumer side. He expects the pc demand to continue demand for notebooks and chromebooks for education unprecedented in his words demand is so strong that hp is experiencing supply chain issues we also talk about the printing segment. In that, the supplies revenue. Ink and toner, thats his companys profit center. Was down about 19 but enrique saying that hp is seeing improvement of supply performance with commercial usage growing. Q3 does mark the bottom. Guys, back to you. Shares are reacting up now 3. 5 3 jumping around here after hours. Mike, hp or workday, which is now surging almost 13 workday is a little more of the moment more than 50 billion market cap right now. And its interesting because yesterday i was saying salesforce surged and really was just a catchup move to microsoft and adobe in the group from lets say a couple of years. And now workday is stairstepping higher. It shows you the entire area has massive tail winds and theyre benefitting from those hp, nice upside but still kind of valued as a zero growth runoff story. Very, very cheap high dividend yield and they managed to do what they could with the quarter all right, guys weve got to leave the conversation there stephanie, gabriela, thanks for joining us when we come back fed chair jay powell announcing the central bank will allow inflation to run moderately above 2 up next, well ask a former fed governor Sarah Bloom Raskin why that could keep rates lower for longer and how it impacts your investments. Were back in just 90 seconds. Woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Another earnings winner here after hours. Ultsa beauty is surging. So Second Quarter for the beauty retailer. Revenue was a slight miss at 1. 23 billion versus the expectation, 1. 24 billion digging in a little bit, the ceo saying comp sales trends improved significantly throughout the quarter from decreasing 37 in early may as we began reopening stores to decreasing 10 in july when most of our stores were reopened. So the quarter shook out basically for the beauty retailer by the end of june, 90 of stores were open for retail and by july 20th, the full fleet of Ulta Beauty Stores were operational. Digital up 200 . You can see shares are up about 16 right now. Still down on the year, i believe that it is up about 80 from its low in march. Sara, back to you. Average ticket up 15 people spending more on those digital buys we still need skin care, even if were home jay powell announcing today a new approach to inflation that could keep rates lower for longer saying the central bank is changing its view on the tradeoff between lower unemployment and higher inflation. Joining us now is former fed governor Sarah Bloom Raskin. Thank you for joining us, sarah. Good to see you. So what does it mean for vis investors . Anything this has been a project thats been under way by the fed for the last two years and today chairman powell announces the results of it. And essentially it is this notion that the fed is going to be willing to tolerate inflation levels that are higher than 2 now this is a subtle point because the under the current regime, some people believed that inflation would be targeted around 2 . It would be a simmetrical approach sometimes lower, sometimes higher now reality is such that theres never been even close to a fed approximation of 2 . What the fed is doing now is attempting to look at inflationary expectations in such a way that people dont essentially freak out if inflation goes higher than 2 . The fed is being quite explicit that it is going to tolerate inflation levels higher than 2 for almost roughly the same period of time that it has undershot the 2 target. So this is an attempt toward setting expectations for the future im not sure in the immediate and short run its going to be a huge difference, but the fed is laying the groundwork for an approach that will tolerate higher inflation levels. Meaning, of course, the fed is not going to move quickly to raise Interest Rates even when employment starts to rise. I feel like its a problem for another day. I feel like fed chair powell has already told us hes not thinking, about thinking about, thinking about, thinking about raising rates. So the bigger question is what else can the fed do to provide support for this economy which is recovering and yet still shows some Serious Problems where jobless claims remain quite elevated, where the Unemployment Rate is still double digits, where Small Businesses are Still Closing by the thousands, where people are increasingly going hungry which weve seen in surveys. How does the fed deal with that . Right youre exactly right to be pointing that out. In the current situation, framework aside, the fed is way off its mandate, right because the our Employment Situation is not looking good. There are roughly 25 Million People looking for jobs. We know that, you know, out there there are probably only about 5 million that are available. So theres a big labor market gap here that, of course, we know has longer term consequences we dont want the fed is not going to want this to tip into longterm unemployment where people become permanently disconnected from the job market and from jobs. They get discouraged they drop out. They stop wanting to participate. That is going to be really quite, quite painful, kuwait tragic, really, if, in fact, if, in fact, that happens. So the fed is still quite concerned and has two very important is looking at two very important elements that it cant control, right it cant control the course of the pandemic and, of course, we know that the course of the pandemic and the economy are interdependent and as long as people are going to continue to be infected and continue to die, the economy is not going to be able to rebuild to its full potential. And at the same time, there has been no fiscal response, right the Senate Republicans have gone home without having a fiscal response in place. And so two very important things the fed has been looking for to actually help its work in supporting the economy are absent and the health of people and the fiscal response. So sara bloom raskin, whats the worst Case Scenario from this lower, for much, much longer position that the fed has taken . I guess its great in a sense if you are looking to borrow, but maybe not if you are looking to lend are there ways this could go wrong . Sure. There are ways it can go wrong and one way it can go wrong, of course, is that it isnt terrific for savers. Its essentially a very depressed Interest Rate for a long period of time, and its going to encourage people, and its probably meant to encourage people to pull their savings and to spend or to look for riskier looking for riskier assets so this, of course, is going to bring about a real hit for savers, for retirees, for Pension Funds and pension plans. And that, i think, is a serious consideration. At the same time, youre also going to see a compression of net interest margins that banks are looking at this is also a signal to the Financial Sector that net interest margins are going to be compressed, which is going to have effects on the Financial Sector so there are things that can happen and, of course, from a macro sense you can also imagine, you know, sort of a problem with inflationary expectations where investors actually dont believe the fed is able to control inflation and starts to doubt the credibility of the fed and if that were to happen, then the fed would be behind the curve in being able to control inflation. Sarah bloom raskin, we appreciate your take on this big shift. Nice seeing you weve got gap earnings now out. Bertha coombs with the number. Another beat here, sara a loss of 17 cents a share much better than a loss of 41 cents on the street. Revenues beating at 3. 28 billion compared to a 2. 9 billion estimate total net sales were down 18 year over year ecommerce sales nearly doubled. And that was the saving grace. Resulted in total gap samestore sales up 13 now the caveat here as were talking about once stores reopened during the quarter. Analysts have been looking for a decline of 25 old navy once again the standout with more standalone and offmall stores. Net sales fell just 5 , online sales surged 136 . Resulting in comps up 24 year over year. Analysts were looking for 25 decline. Gap net sales took a 28 hit but comps were up there, 12 getting a bump from the buy online and Curbside Pickup Banana Republic was the lagger here theyre less interested in fashion and workwear, but take a look at athleta. Really the standout as sara, people continue to look for workout wear its net sales were up 5 jon . Thank you, bertha coombs. Vm ware earnings also out. That stock modestly higher kate rooney has the numbers. Another beat from a major Cloud Computing company. Vm ware beating on the top and bottom line. Eps at 181 adjusted for the quarter versus 1. 45 revenue also beat at 2. 8 billion. That was an increase of 9 year over year. Vmwares ceo saying that this was driven by strength in subscript job and sas Product Offerings. The latest Cloud Company seeing tail winds during covid. We had salesforce this week as well the companys shares are down 5 this year. Back to you guys well continue to watch those shares of course coming up fear factor up next, mike santoli looks at whether the recent spike in volatilityho suld signal Turbulent Times ahead for investors. Well be right back. Free access to every platform. Mhm, yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. Now offering zero commissions on online trades. We charge you less so you have more to invest. You say that customers make thelets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g, everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad. Your wireless. Your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch and save up to 400 a year on your wireless bill. Plus, get 400 off when you buy the new Samsung Galaxy note20 ultra 5g. Theres been a whole lot of shaking going on lets head over to mike santoli looking at forecast volatility some anomalies here in the way the market is pricing the expected volatility levels of the next few months. This is the vix futures curve. You can buy a vix future for what that volatility index is going to look like in coming months thats the blue line here. The vix itself is around here. The current vix around 24. Thats definitely elevated relive to the norm normally below 20especially when th market has been clicking this is the 20day historical volatility what the market actually was in the last month or so in terms of its jumpiness. Its been very calm, under 9 normally this difference is Something Like 6 or 8 Percentage Points now up around 14 or 15 why is that . One reason is this bulge right here, october. And thats ahead of the election the market has been pricing in the likelihood of some kind of market storm or at least some choppiness around the election thats kind of keeping everything also aloft. Another factor, though, is normally youd have these big funds coming in and selling the vix futures and the index options to capture that big spread because it seems as if its richly priced a lot of that money is out of this market. A big blow up a couple of years ago. Seems theres a hesitancy to try to capture this by taking the risk that you bet against volatility and get some in a couple of months its interesting i think today we saw some trading in the options that suggested people think september might be slightly rougher sledding versus august, sara got it. Mike, thanks up next well get mor reaction to gaps huge sales beat and discuss whether the coronavirus pandemic is threatening the future of mallbased retailers or if theyll be able to shift more and more of their Business Online which was a case at gap surging 4. 25 after hours. Well be right back. Me through the year 2021. Me [student] i knew snhu was the place for me when i saw how affordable it was. [narrator] find your degree at snhu. Edu. But inside every etf. There are untold hours of careful construction. Infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Pnc bank believes that if an app can help you track your pizza. Come on cody, where are you buddy . Then your bank should have the technology to help you track your spending. Virtual wallet® is so much more than a checking account. Easily see whats free to spend. And see where your money is going so you can budget even better. Okay, hes got to be close. Hes six blocks. In the other direction. Make a left, make a left make a left. He made a right again. Virtual wallet® for Digital Banking from pnc. Its time to get more from your bank. Dell earnings are out and its higher. Aditi roy has the numbers. Thats right. Dell shares up about 4. 5 after a strong beat on earnings. And 1. 92 a share compared to street estimates of 1. 40 a share on revenue, the top line came in at 22. 78 billion. A beat over 22. 52 billion the company saying that they saw in q2 a strength in the government sector and in education with orders up 16 to 24 respectively as parents, teachers and School Districts prepare for a new frontier in Virtual Learning theres been a laptop shortage and pc shipments in the Second Quarter have been robust on the call well look out for any update on the companys possible spinoff of vmware thank you in line with what hp said as well and dont miss dells Ceo Michael Dell on squawk on the stret tomorrow at 9 15 a. M. Tomorrow on cnbc time to get a cnbc news update with sue herera hello again heres whats happening at this hour House Speaker nancy pelosi indicating little progress on negotiations with the white house for more pandemic aid. This after a 25minute phone call with chief of staff mark meadows. She says the two sides remain at a, quote, tragic impasse, end quote. The oakland as say theyll not play tonights game against the Texas Rangers to show support for calls for racial justice. The rangers say they respect oaklands decision and are committed to ending systemic racism louisianas Governor John Bel Edwards says four people have been killed by hurricane laura all died because of falling trees. None of the deaths were along the coast. And people werent the only ones fleeing hurricane laura 130 animals were air lifted from houston to richmond, virginia, yesterday. Six organizations, including richmonds spca were on hand to take those animals to various shelters and theyll be reunited as soon as their owners can come get them and be safe thats the news update this hour jon, back to you sue, thank you. Meanwhile, shares of gap jumping more than 4 after reporting a smaller than expected loss per share. Joining us to break down the numbers is the chief Research Officer of tulsi advisory group. Dana, good afternoon hi. Were talking good afternoon. Thank you for having me. Were talking about gap but we should be talking about outperformance at old navy and athleta specifically as you look at that and you look at what abercrombie and others have done, whats the lesson to draw from it the lesson to draw is as stores reopen, not only does it help the Digital Business but helps the physical business, too. It also shows that there was pentup demand for this apparel merchandise at a value the prices worked. The online penetration worked. And also when stores reopen, they really invested in safety they made consumers feel safe coming back into the stores. They made them feel safe keep in mind, traffic is down. And once these stores reopen. After the pentup demand, things have slowed we have an extended backtoschool season. Its great that were getting the acceptance by the consumer of wanting goods and getting that filling that pentup demand weve got a long way to go, but theyre managing and these businesses, the word for the Second Quarter, the pivoted, managed the inventory, managed the expenses and now its getting to next we have a different world with 50 online sales at gap. You said something about the right price. But i noticed in abercrombies earnings, the gross margin was actually pretty good which to me suggested theres not as much discounting as one might expect. Is that right . I think you have a bit of discounting going on when you look at their First Quarter inventory levels to Second Quarter inventory levels, a lot of companies have seen their end of Second Quarter inventories coming down. Theyre clean going into the Third Quarter so they got rid of emergency to move it and youre right. Abercrombies growth is soillid. Less clearance merchandise to mark down. They are down 7 inventory now compared to down 1 inventory when they went into the Second Quarter. 75 online sales growth for gap brand. Thats not even with old navy and athleta. To me thats before kanye west products even have arrived on the website. Is gap a big turn around story thats working here . Its turning around, and it is improving, but id say you still need to be able to have the acceptance of whats changing in the Product Offering cant just be basics i think old navy is still driving the bus, especially given that more of their stores are located outside, rather than in an inside enclosed center and i think gap and banana are really the weaker players compared to what you have with athleta and old navy is it turning . After the weakness in the kwr s quarter, its definitely improved but i think old navy is the one that im watching closely and thats the most important division maybe im wrong about this but i never got the sense that gap was a leader when it comes to apparel retail, the investment making in ecommerce. They seem to send out emails about discounts and have a site to look at it if you wanted to not necessarily leading in that arena. Do you think that this response, that its going to get from investors this season of ecommerce being so important is going to change that i think its going to help. I think everyones ecommerce grew this quarter because typically for third to half of the days of the Second Quarter, stores were closed of course your eghecommerce is going to grow. Shes really pivoted the experience and she has shown improvement. Now whether its the collaboration with kanye or what they are doing with the virtual gatherings on old navy, i think thats the pivot were seeing everyone figure out how to create a virtual experience i guess the question, dana, with some of these retailers is, which ones are the real value in terms of the turn around stories . A name like gap is showing some strength el brands. It was the essential mallbased retailergetting slammed prepandemic, and during the pandemic and none is one of the best Retail Stocks they are accelerating their pain and bankruptcies, which is the other path exactly so im looking at whats happening with liquidity, with their merchandising strategies Going Forward and whats happening with their growth and new customers. Two of the ones that have been underperformers, i think Urban Outfitters they really pivoted with the urban business, the free people business, certainly much stronger than expected and it sounds like their runway is continuing i thought abercrombie today was also terrific, too basically for the hollister division and core abercrombie business and is still more cost cuts to go i would say those are two where im looking Going Forward. One of the differences between elle brands and gap, gap overall is still apparel and apparel is a lot of competition, online competition, too but old navy with the Outdoor Stores i think helps and old navy in their value offering on elle brands, bath and body works is the key and the anniversary of some of the bath and body increases is still to come i think theres a runway i think youll see some improve am thats needed at elle brands and gap but nice to see the initial beginnings well see what happens with kanye collaboration with gap as jayz would tell you, those kanye collaborations can go either way dana tulsi, thank you. Coming up well ask ihg americas kre o whether the retail operator is seeing a pickup in danemd and which are seeing the strongest bookings. Stock slices. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. Welcome back a dramatic 24 hours in professional sports. After the Milwaukee Bucks and the rest of the nba, wnba and parts of Major League Baseball protested Racial Injustice in this country by refusing to play their games. Lets bring in the former nba player, broadcaster, agent and lawyer who is now lecturing this fall entitled athlete activism and social justice in sports. What a title for today len, thanks for joining us clearly this thanks for having me. This powerful statement from the players, what do you think is going to be the outcome of it im not really sure i mean, you mentioned a powerful statement and, yes, by sitting out several games, its certainly symbolic i think that a longer work stoppage, if you will, now sets itself up to be more of a demand some might characterize it as a strike but its a demand of a league of ownership to exercise their influence in helping these young men and young women when we go across the wnba, mlb and mls to exert some pressure to effect change. We know sports is a prominent thread in our social fabric. Its also a huge has huge economic impact. So those two forces combine, and as the pressure filters to owners, networks, advertisers, et cetera, maybe folks who want to protect their investment and maybe join in this statement and the demand for equal justice and for change so far weve heard a lot of voices of support from the owners here on this network, from the league. What do you make of that, and how long do you think can that last and do they need to do more . Well, i think the statement of support by the league is genuine. I think because of the abbreviated action thats been taken. Now if that action continues, if they sustain it, then, obviously, the interests of management and labor who are the players become divergent and youll see a different type of relationship where owners dont want to pay players who arent playing but nevertheless, that pressure, that economic pressure will be felt by everybody involved and maybe there can be a meeting of the minds to find a way to make a demand of government and other policymakers to effect some tangible change len, does this change in the long term the fundamental relationship in sport between labor and owners, labor and management because i cant remember the last time we saw a work stoppage like this that wasnt about player salaries or money in that sense. And i wonder if that is more likely you think to follow through into the future. Well, jon, i think it could as i said, though, if its sustained longer, players, i think, would have increased their leverage in the long term, even though in the short term, they would sacrifice you know, you have to recognize, obviously, unprecedented leverage that players have in just about every league, particularly nfl and the nba, if they choose to use it. And the bottom line is, thats because the unintended consequences of popularity in the league that owners have to pay the players in order to keep that entertainment value but in the end, i think players, if they could understand the idea, the true activists have to sacrifice, and theyre able to sustain some type of work stoppage longer and make the demand of ownership, et cetera, i think both aspects would be accomplished and better relations and even again effecting more change. Is there a lesson for brands here months at least months ago when nike stuck by Colin Kaepernick and underarmour took a more conservative tack, it seems like under armour was the one playing it safe. Now nike is way up under armour is down and the league and the owners seem to have swung in nikes direction whats your take i think you have to be led by your values. And i think nike having been a revolutionary corporation since its inception lived by those particular values. And under armour, if they vacillated from side to side trying to pick a winner, they ultimately wound up losing its stick with your values. Be a valuebased company and you will succeed think its extraordinary to see the dynamic play out here. Len elmore, thank you for joining us my pleasure up next the road to recovery the Hotel Industry has certainly struggled amid the Coronavirus Crisis but the sectors reopening is in full swing well discuss how thats going and whats ahead for travewil th the ihg americas ceo still ahead, a roundup of todays afterhours movers and a look at wh tato expect in tomorrows session closing bell will be right back traded goods. Tools, cattle, grain, even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. Welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. Hotel stocks getting hit hard this year amid the pandemic as it weighs on travel demand. But despite uncertainty of when the industry could bounce back, our next guest is pushing full steam ahead with reopening thanks for joining us. You oversee more than 4300 hotels i believe most are open. What is occupancy like thank you for having me today. Im actually joining you from the hotel indigo right on the banks of the Potomac River right outside of washington, d. C its great to be with our team in this hotel thats open and getting to rebuild the business. We have over 97 of our hotels open in the americas you can look at the recovery since the drops in march and april in a few phases. Of course in march and april we bottomed out in the industry at about 20 in occupancy, even less across the industry major urban areas. Over the summer weve seen a recovery driven by leisure, drivethrough business and some essential business in the fall, we see the recovery from some sectors like transportation, construction, medical, technology, entertainment that are doing a little bit better during this economic crisis. So it helped to see that during this segment of the recovery our business thats heavily focused in mainstream brands like holiday inn is wellpositioned against the driveto markets, against these industries that have been doing well while the industry dropped quite a bit, obviously its been a pretty rough year for hotel businesses, we dropped a little bit less than the industry were recovering a little bit better thats really because of our strategy of being concentrated in mainstream brands and franchise business across all 50 states and driveto markets. How tied to your business and your recovery is Airline Travel . In other words, weve seen more people taking road trips how much can you get back to full capacity until we get some sort of boom in travel, which still remains very depressed to get to a full recovery in the industry, you need to see medical solutions, treatments and vaccines, which were hoping to see starting to progress by the end of this year and getting to broad distribution next year. That will allow the large conventions and International Travel to occur. Already youre seeing Domestic Travel occur in countries where the vaccine gets contained if you look at asia and china in particular where we have a very big business, domestic air travel started to grow and were now into Single Digits as an industry down to last year in terms of demand. I think youre starting to see some recovery in domestic air travel in the United States. The intercontinental travel will take some time it will take also the medical solutions to arrive. Were a little less tied to that air travel we eere distributed mostly in driveto markets over 84 of our rooms in the United States are in mainstream brands, so were not as indexed to the air travel. I wonder if were seeing the return of the road trip in a sense. Not that it ever went away, but versus air travel and you think based on the patterns you tend to see in travel, if people who would have flown somewhere are now driving, if theyre more likely to continue that behavior even beyond the period post pandemic when they have to. I think youll see both i think the american public, they have been road trippers forever. You know, at the heart of the holiday inn brand was the desire to build Holiday Inn Hotels for people o peoples road trips. That continues people love to travel to more distant destinations and to get on planes. I am confident when medical solutions arrive and hopefully soon, youll see people getting on planes to get to the more remote destinations and explore. The fundamentals of this industry are still very strong theyre really driven by the growth of the middle class and the growth of gdp around the world. When people achooeieve a level wellbeing they want to travel and explore. Y their desire to travel has not gone away. Its just been restricted by travel restrictions. I think youre going to see both grow again after we get across this pandemic. Weve heard that a lot from folks in your industry thank you for joining me good to be with you. Up next, your earnings roundup. We will break down the biggest movers a lot of them are moving up sharply after hours including gap and ulta 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. An extra 15 credit on car and motorcycle policies . Wow. Ok thats 15 on top of what geico could already save you. So what are you waiting for . Idina menzel to sing your own theme song . Tara, tara, look at her go with a fresh cup of joe. Gettin down to work early following her dreams into taxidermy oh, its. Tax attorney. I read that wrong, oh yeeaaaah geico. Save an extra 15 percent when you switch by october 7th. Give it up for tara when you switch i keep working my way back to you, babe with a happiness that died i let it get away servicenow. The smarter way to workflow. Quick check on this afternoons biggest movers for earnings theyre all up, hp, gap, vmware, dell and ulta beauty up 18 after hours. A reuters headline says that tiktok engineers have been instructed to draw up contingencies for a shutdown of the app. Another wrinkle as they face this deadline. Well see who enters the bidding fray tomorrow. Just to wrap it all up, we have a number of positive earnings movers, some of them pointing to some real momentum, for instance, gap and their tremendous ecommerce sales. Ulta beauty also showing there is demand there. Were looking at a 3 gain so far for the s p for the week what are you watching into tomorrow john, what are you watching i cant keep my eye off of workday because it continues to be up about 11 after hours, after earnings thats after the move we saw in salesforce workday had a big move on salesforce too i wonder is that like shorts getting cleared out or what is that it was just in the past five days that we had both of these moves. I guess well see how that holds up tomorrow. Mike i was just going to say at this point we have six straight up days in the s p on the record side youre waiting for some kind of mean reversion there it seems like theyre squeezing the toothpaste pretty tight to get the last bit out, but its been wrong to bet against this trend now. That does it for closing bell. This is fast money. Tonight on fast the feds big shift. Stocks rally as the Federal Reserve announces an historic policy change. Plus, shares of gap surging in the after hours session on earnings the companys call is just taking off later, beyond meat goes beyond the Grocery Store well tell you about the big consumer play that got shares sizzling