Transcripts For CNBC Power Lunch 20240713

For a closer look at the economic fallout from the coronavirus situation. Steve is dig through that right now and wee chell check in wit. Kelly. As mentioned the nasdaq was heading back to its record high, but now its under pressure. Down about. 5 at last check. Bob. Its under pressure because the mega caps are finally underperforming, its about time in the is all part of that broad evening o broadenning out of the market. You can see it again today. Whats outperform something whats doing better . Stuff that wasnt doing well a month ago. Weve had double digit gains in some of these banks. Fifth third up 15 so far this week. All of them are up double digits. Look at the retailers, nobody cares about macys or nordstrom. A few people are trying to do something. Some of these stores are up double digits. Gap, kohls, all up in the is for the week overall. Same thing with industrials. These stocks were not market leaders a little while ago. American, theyve had a great week. Theyre all up double digits so far this week. Whats underperform sngt mega caps. This is why the nasdaq is weak. Look at facebook, apple, theyre not doing anything. Theyre being used as sources of found buy the other stuff thats now rallying that i just showed you. Take a look, my favorite quote of the day, zoom fatigue. My friend coined this phrase, i think its great, it illustrates whats going on. These stocks have had great runs and now theyre not because the economy is broadening out a little bit and the market is broadening out and theyre not the favorite kids on the block anymore. Thats called rotation. Guys, back to you. Thank you very much, bob. Lets go out to the bond market now and check in with rick santelli. Hi, rick. Hi, tyler. Big feature today of course was a very lackluster, if not below average fiveyear note option. I gave it a d. As one person pointed out, its not a wad thing that investors are looking elsewhere to put their money. Looks like equities is the game of choice these days. Yield curve, short maturity is unchanged. Long end, moving down about three basis points, you see the flattening going on there. But the big story continues to be in europe. Look at the italian ten year. In six weeks its gone from over 215 on yield to around 1. 5 . Thats a big move when the you put it on taich boop of a boom t yo, you can see how its overperformed. And finally, the two day dollar index, close the at sixweek low, its only having a small bounce today. Im anxious to see what steve sees in that beige book. Kelly, back to you. Rick santelli, were still waiting for Steve Liesman to thread through this beige book report. Meantime, lets go to diane, not for reaction as we had anticipated to the beige book, but maybe for a little bit of preview and her sense of where the economy stands right now. There have been some articles welcome, first of all, diane, always good to see you. There have been some articles lately in which some prominent democratic economists have said the economy may have a period of explosive growth in the Third Quarter and into the fourth quarter. That will have definitely political impact. But how meaningful would that kind of explosive growth actually be economically well, thats a good question. Economists are really debating now thousand discuss how to dis coming off of zero. All Economic Activity to some economic, the percent changes are large but as the percent of capacity of the economy and thinking of firms and how much of their capacity theyre actually using or how much of a restaurant is being used or if its even open at all, thats a very different equation. So you could have very large percent changes, but if you divide by zero, you get infinity, right . So double of nothing is still nothing. Think we really have to be cautious about how we talk about the rebounding growth and ramping up, because were coming off such an extraordinary low level. Yeah, thats exactly really to the point there, diane. I know now that steve is ready with some perspectives on the beige book, so lets go to him now. Hi, steve. Yeah, not a pretty beige book, tyler, but a little better than last one. Its an Economic Activity fell sharply in most districts. Consumer spending fell due to closures. One bright note here, auto sales were lower, but several districts did note improvement. There was sharp drops in manufacturing activity, home sales plunged in part as diane has reported due to lack of inventory. Thats the big issue in home sales right now. A large number of retail tenants missed or deferred their payments in the commercial real estate sector. Energy activity plummeted with wells rigs shutting down. Unemployment decreased in all districts. Prices were steady to down. The only good news, tyler, i was just doing this when you came to me is the word reopening appears 25 times in the beige book here. Ill read to you some of them live here. Outlooks were bleak, they said, in the dallas district and uncertain largely centered on the speed and scope of the reopening. Thats not that positive. Heres one from the overall thing here, scattered reports of macy pick up in early play as parts of the economy have started to reopen. And the st. Louis district onethird of Stores Expect to be open in three weeks. Plummeting Economic Activity, but hopes of reopening making a brief appearance in the beige book today, tyler. All right. Thank you very much, steve. Lets pick up the conversation there, diane. Steve, stick around for it. What do you what do you read into or take from what steve just reported, diane well, i think, you know, the hope is there on reopening, but the idea that theyre not going to, again, be ramping fully up, thats the real issue. Its a real challenge for many businesses out there and its one of the problems with the payroll Protection Plan is that many businesses were actually getting these loans and supposed to be hiring up as we were still in lockdown in many states. So the hope on reopening is there, but being able to get the volume of business you need, a restaurant needs 75 capacity to break even and thats with high volume days of thursday through sunday and usually a bar tab that helps to boost their margins. You cant do that in a socially distant environment. The retail deferrals of commercial office space, weve been getting reports across the board across clients whether they need it or not, theyre asking to not pay to conserve their cash at this point in time. That really points to pretty hard times for commercial real estate out there. And one thing were watching very closely is how many wages were cut. This was sort of an instantaneous reaction thinking it would be temporary. Are the furloughs going to be become permanent and will some of the wage cuts weve seen become more sustained as the economy reopens but doesnt completely turn that covid tainted spigot back on. Lets go to that point tyler, i can yeah, certainly. Im sorry, lousy delay with this. Im sorry. I wanted to pick right up on dianes comment right there with a line here from the cleveland fed in the beige book which says only onethird of contacts who reduce staff levels expect to rehire close to the full number when their businesses reopen. This expectation suggests employment is unlikely to climb back to pre pandemic levels quickly after businesses reopen. So theres a lot of talk, tyler, about this number which was in the last jobs clort wreport, wh think it was 18 million on layoffs and that was seen as a good sign. Now we look to the question of these businesses reopening, how many will come back . And it was also saint lieu twhas sa li lewis that said about onethird plan to bring them back. If businesses are not going to hire the full suite of workers who they let go, then that means a longer road back in terms of the jobs and also for the economy. Lets tease that thought out just a little bit more, diane. Weve lost many millions of jobs. What percent and we may have really very powerful job growth as people come back, in the millions months at a time. But how many of these jobs do you think are going to be lost permanently and then were going to get we hear today boeings going to lay people off. Get to october 1 and you Better Believe the airlines are going to start laying people off. Well, and thats the issue is that this is a enough fits and starts and reopening, but its a struggle to reopen to full capacity. One study out of university of chicago suggests that out of temporary furloughs, 42 will be permanent. If we took that number from the data on april alone, that was 18 million that said they were on temporary, that would be 7. 6 million that actually would be permanently laid off. We lost 8. 8 million jobs in the last recession in the Global Financial crisis, so thats really stunning the kinds of job losses that are more permanent out there. Or they certainly are going to be for a very long period of time. Science is moving at a break neck pace to try to get treatments and a vaccine. But 2021 is an eternity from now when youre still social distancing and trying ramp up. That really is zis tushing dist terms of whats to come. And the next shoe to drop is the drag on higher wage jobs. The first wave hit low wage, leisurely and hospitality. Health care was also hard hit, but were seeing it broaden out. My fear is youll see more permanence, even as were coming back, its wrong to think of it as a recovery like a normal recovery. As we were talking about earlier, those percent changes. We have to think of an economy operating at a small percentage of what it was previously. All right, diane, thank you very much. And steve, thanks to you as well. Kelly. Lets turn back to the markets with the dow up about 300 points after pulling back earlier. There you can see the gain is 1. 2 while the nasdaq is back into positive territory just fractionally and the s ps up 21 points. Lets bring in jeffrey solomon, the ceo and chair macman of cow its been on a tear these past few days. Would you tie this back to the bad treasury auction we had last hour maybe if Interest Rates are going up, that helps explain, you know, some of the market rotation here. Well, i think the market has if you look at individual sector, theres been a significant amount of sector rotation in nasdaq and tech stocks. I think the rally in financials has been a function the fact that people are expecting that we wont have as deep a recession, maybe, as we previously heard. And that low loss reserves for banks wont be as as bad as they were the last time we had a recession. And so i just think people are saying the books these are trading at discounts to book value. If you have any sort of a sanguine view, this is going to be great. Certainly see the travel air little bit more concerned about how they look long term. I think theres an interesting Inflection Point where the stay at home trade, to sow to spe tos not working and the cyclical are. These new trends, working from home, going out to eat a little bit less, if those are here to stay, what does that mean for the stocks well, theres a very big difference between whats happening in publicly traded markets and whats happening on main street. I think thats a difficult thing for people to be able to reconcile. In the Public Markets, Public Market investors generally look at three to five year time, discounted cash flows in plates place to evaluate the stocks today. People are saying theres going to be a dip in 2020 and maybe into 2021. But if you build a fiveyear cash flow analysis and expect a moderate rebound from here in terms of Economic Activity, you know, if you grow back into the kind of economy we had pre covid or even some large percentage of that, stocks look really cheap for a long time. Now, is this rally long in the tooth . Have we recovered further than we should have recovered maybe. But, again from you look underneath the inde indexes, pee working from home, health care, job discovery and tools of diagnostics, those are place wheres investors are putting significant amounts of capital. And that is the indexes significantly. Theres one other kind of thing i wonder about for next year and maybe 2022, which is commercial real estate. Its one thing to get through rebound and say things are looking better than we thought. But as we come out the other side of this the next few years, if people needless commercial office space, restaurants go out of business, places like kids gyms that i used to take my son to if theyre just not around on the other side of this and theres more commercial real estate defaults and the banks are exposed to that, do you have any concerns about what could play out there i think you have to allow yourself tothink about that possibility. And ive told people over and over again, our clients, that you have to, you know, prepare for the worst and then see where you go you know, see where you grow from there. Obviously if i were in commercial real estate, which im not, but if i were i would be preparing every possible way to make it to accommodate my clients and renters to come back to the office. Certainly were thinking about strategies on how do that. Were not going to be relationship deuci reducing our footprint entirely. But over time will we needless commercial real estate probably. If you look at the long term effect on commercial real estate, thats probably where it gets hit more significantly in the outer years. On the retail side, people are going to come back to stores. You know, i think there will be some rent abatements. I think there will be some depressed activity there. Its one of the sectors im least bullish on. But do i think its going to cascade into significant mortgage defaults and significant damage to bank capital issues i dont think thats actually going to happen because this is going to be playing out over an extended period of time and theres more than enough capital in the Banking System to absorb those. Ive even heard people say companies will need more commercial real estate because they need four times the space to put in the same number of people as they dr. Did before. Open question, i guess. Its possible. I was in the Office Yesterday for a little whys while because i missed it. Its empty. Weve got some prretrofitting ta we have to do and were not going to be back in the office for a while because we need the social distancing. But people realize were going to have a point in time where social distancing is not going to be the thing that were doing. If youre a long term vester in real estate, you have to recognize theres going to be a return to density in cities at some point. Its going to take time. But if you have the ability to bridge yourself from here to there, youll be fine long term. I think probably commercial real estate stocks reflect that. That would be my advice to investors. Were dealing with a very, very fastmoving situation. None of us could foresee where equity markets would be, you know, two weeks ago, three weeks ago, four weekends ago, yet here we are. Thats because the market is adjusting quickly to the fact that long term there are going to be solutions here. If you look out into 2022, twenty 3, beyond, were going to have a return to Economic Activity thats not similar to anything like what weve seen. Even to density that. Does seem like a contrarian call these days. Great to check in with you. Appreciate it. Good to see you, kelly. Tyler. All right. Check out moderna while youre at it. Stock is selling off after a sharp selloff. We will get a reality check from the dean at stanford about how close we maybe to a vaccine. Plus, spacex gearing up for its first space launch with nasa in just a couple hours, two hours from now. Elon musk describing it as a culmination of a dream. Could it be a dream for tesla share hold centeers . Wheel explain when power lunch returns. I am totally blind. Returns. el explain when power returns. Lel explain when power lunch returns. L explain when returns. Talk to your doctor, and call 8442342424. Thats why working together ist more important than ever. At t is committed to keeping you connected. So you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. Across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. Welcome back. Weve got a news alert on waway. Deidre. Kelly, huawei cfo has just lost a court battle, one that could have seen her walk away free. Instead, the ulg paves the way for an extra diction hearing starting in june. It has been a flash point for diplomatic tensions between china, canada, and the u. S. Shes the daughter of huaweis founder and shes been in vancouver under house arrest since her december, 2018, arrest. Huawei continues to be in focus amid china u. S. Trade tensions of course huawei remaining on the blacklist. Back to now. Thank you very much. Deidre bosa. Lets move ton shares of moderna, they are under optimism as the vaccine is tempered. The stock was down by as much as 20 today. It has paired some of those losses as we learn more about the vaccine study. Lets bring in the dean of the Stanford School of medicine and meg terrell. Doctor, nice have you and, meg, nice to have you again. Meg, ill turn to you on the moderna question in a moment. Doctor, what are you seeing in terms of the covid caseload, the number of icu admissions are the numbers trending in a positive direction well, thank you, tyler. Its good to be with you. Yes, the numbers are trending in a positive direction. You know, the bay area went to shelter in place early. As a result, we never experienced the massive surge in patients that so tragically affected the new york area and other areas around the world. We continue to diagnosis new cases of covid19 in the bay area. And continue to provide care through our Health Care Delivery system for those patients. But, its a much lower number of patients and, by and large, fewer severely ill patients than were seeing in many parts of the country. But, that doesnt mean that we shouldnt, because we have to remain vigilant and we have to continue to observe the shelter in place and other guidelines that our local authorities have put in place. Ill come back to you in a moment, doctor minor, about progress toward a vaccine. But let me turn to meg for a moment to tease out whats going on with moderna. As i understand it, there was some positive immune response in about eight patients out of a group of, i think it was 45, but there were also some adverse responses to that vaccine. Thats right, tyler. On monday of last week we saw the first data from modernas human trial of covid19 vaccine. They included 45 people in that first round of the Clinical Trial, but as of the time that they reported these data, only eight participants worth of data on neutralizing antibodies was available. Those are the ones that actually glom on to the business end of the virus and block its ability to replicate. Neutralizing and bodies are what youre looking for when it comes to vaccine results. 8 out of 8, that sounds good, but they were criticized for not having more data. Also we knew that there were some patients that experienced side effects in the study. And my colleague reported yesterday on the specifics of one of those cases. A person who is thought to have had the highest dose in the trial who developed a fever, fainted, some severe reactions. Now, moderna is proceeding to the next phase of Clinical Trials with lower doses of the vaccine. But this happens in Clinical Development as they try to figure out the right dose. Very interesting. Ill come back to you, meg, so you can get a question for dr. Minor. Dr. Minor, tiim not going to ak you to pick apart the moderna results unless youre inclined to do so. But i will ask you what your optimism is about the medical worlds ability to produce a vaccine, lets say, for general distribution sometime over the next six to nine months. Well, im optimistic that there will be a vaccine or multiple vaccines that will be effective in preventing infection with the sars covid 2 virus i think six to nine months is a short time frame, maybe too optimistic. Also we have to temper the optimism with the realism that a lot of work has to be done from getting from the laboratory to a phase one study to ultimately a large Clinical Trial and proof of ef fa of efficacy. There are multiple approaches being used, the approach being used by moderna, which is use ago i portion of the viruss genetic material. But over a hundred different approaches being explored in Vaccine Development using all different sorts of technologies. Thats really encouraging. Dr. Minor, let me conclude by asking you, since the number of Covid Patients seems to be receding just a bit where you are, do we infer from that that your hospital, your Medical Center has been able at least in part to get back to doing what it was doing before covid hit . Namely, elective surgeries of whatever stripe, hip replacements, cardiac catheterizations and so forth, and is that i imagine houff a financial crunch because of it. How much does this help that youre back to doing what you did . Yes, we did resume elective surgeries. Were up to 85 , 90 of our pre covid level of activity. Thats so important. Because we know that the need for that care didnt go away, it simply got delayed. Im so proud of my colleagues that i work with every day that just as we came together to end elective surgeries, to open up our hospital for a possible surge, wee alve also come toger to begin to provide that care. We tested over 12,000 hospital care workers for the virus, showed that there was a very, very low incidence of covid positivity. And that allows us to make the statement to ourselves and others that we can provide the type of high quality, safe care that people have come to expect from us. Dr. Lloyd minor, great to see you again sir. Great see you. And meg terrell, of course. Kelly. Thanks. Check out the f. A. N. G. Stocks all under pressure today after leading higher after the march lows. But was their run too far too fast in the traders weigh in. Plus, President Trump adding fuel to the tech fire as he threatens to shut down twitter after they flagged one of his tweets for misinformation. Is more regulation come something power lunch is back in two. Welcome back. Lets get a check on big tech, one of the strongest parts of the market, but not so much lately. The nasdaq did just turn positive after being down more than 1 today. Its about 5 off its record highs. But the big cap names all still in the red today. Facebook down nearly 2 . The trading nation team is bill baruch. Great to have you both here. Bill, lets talk about the charts. What do you design nasdaq was clearly a casualty of the sector rotation. You have to remember it benefited most from the stay at home, and some of that premium is just simply coming out. Technically this market ran into gap resistance from february 21st. So heres the bigger picture. You know have a golden cross, the 50day moving average is moving out above the 200 moving average, and this is bullish. I am worried about continued uptick in u. S. china tensions which makes we cautious at these levels. But 220. Trade futures, im looking at about 9,000 in as in dam futures. Thats the chart point of view, mark. Bill raised a point about u. S. china relations as a headwind. What about Interest Rates . If they creep up a little bit, a lot of people would say that hits the high valuation growthy parts of the market hard zbleft without a dou hardest. I think theres a few issues that have been happening. Weve been over weight on tech for a while. Of course it makes sense to trim your winners when theyve run a little too far. When you look at the qqq, a lot of the highflying tech stocks have needed a breather. The things up 8 yeartodate, up off 30 off its low. Growth stocks have been really trouncing value stocks, beating them by like 20 so far this year. You have china tensions which are flaring up. So mean reversion is normal and healthy, but i think people need to keep this breather in perspective. What hasnt changed is the fact that Digital Transformation has been greatly accelerated, and thats still where you want to be. And the Digital Transformation does not end with the peck teco. I would add to companies that i like. Think cloud, virtual desktop, work from home. Stick with those themes and i think youll be happy. Liking what you see, bill and mark, thanks. For more trading nation, head to the website or follow along on twitter trading nation. Ty. Thank you. We are just a couple hours away from spacexs historic launch. Why success in this venture would be good news for the auto venture of elon musk, tesla. Plus, a social media showdown. President trump taking on twitter after the company fact checked his tweets. What does it mean for the stock . Those details are ahead. Its not pretty good or nothing. 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Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Well, it is a big day for spacex they are preparing to launch a rocket with two astronauts into space. Its a first for elon musks company and michael sheets is live at Kennedy Space center where they apparently, michael, have just closed the doors on that spacex capsule. Were about two hours away. Whats the scene like where well, youre far away, but whats the scene like . Reporter well, tyler, as you can see right over my shoulder its pretty dark and stormy here in Kennedy Space center. The air is really, really thick, just to give you a sense of the weather, as the thunderstorms, but its also thick just because of the amount of tension that you can feel in the air. Were talking about a launch that represents really the future of prieflt or commercial space flight. If this succeeds, nasa and spacex hopes that this opens up the doors to spacex launching not just nasa astronauts, but private astronauts beyond that. Thats a lot of whats at staik stake rig stake right now. You can see we have a lot of weather so were hoping things are still okay to launch at 4 33 p. M. Eastern. What are the probabilities that they go off on time and then do they have a period of a couple of hours where they could launch reporter well, this is what they call an instantaneous launch window. It has to go right on the dot at 4 33 p. M. Because of the orbital mechanics involved of the spacecraft reaching the International Space station. You have basically one object that has to catch up to another object in space. So if they cant launch at that time, they have to scrub, postpone the launch, and go for either saturday or sunday. I asked you a question, i was hoping you had the answer. You did, michael sheets, thank you very much. We appreciate it. Reporter thank you, tyler. Kelly. That was a great question too. It has to be 4 33 on this weekend. Interesting. Well, todays launch is historic for spacex, my next guest says it koob gocould be good for tes. Why do you see this as a bullish event for tesla . Some investors see tesla is a proxy for elon inch. Thats all t thats all the other companies hes been investing in. All the things he wants to do with that future, you cant do that because theyre private companies. But you can get into tesla. Weve seen in the past when they do something exciting theres been a bounce for tesla, maybe not always in the stock market, but definitely in Public Relations and market. One of the interesting things you reminded me of in looking through this is the financial relationships, even the sharing of employees that has often happened between spacex and tesla. And, to your point, all of this is viewed through more nefarious lens when tesla isnt doing well. But when it is, it all seems like this is part of elon musks flywheel. Absolutely. Going back to the early days of both of these companies, spacex was found first and tesla came along afterwards. Tesla was at the beginning elons side project. But he started spending more time there. And in the early days when financially the company was in trouble and he was in trouble letter to borrow money from spacex and eventually paid it back but used it for tesla, theres been a lot of that kind of back and forth. Go forward in time, theres been a sharing of employees and a sharing of technology. A lot of, you know, synergy is seen there. Yeah, synergy is a good way to put it when the tesla shares are over 800 again. Its just incredible. On that point, you say it might be time to start thinking about tesla and at s p 500. Well, one of the things that were seeing a lot of pressure on tesla this quarter to make its numbers because if theyre successful in being profitable this quarter, that will qualify them to be considered for the s p 500. This which is always something that a big Company Wants to do. But its been a horrible quarter for them and just about everybody. So were seeing tesla in fremont, california, at its Assembly Factory trying to make those numbers by the end of the quarter. Thats another important way of looking at the pressure that was put on that factory to open or to not open as regulators wanted. What happened there, tim do you know where things stand in terms of what theyre able to turn out right now the daily count of cars coming out is a little unclear at that point, but we know that they returned to work a little ahead of schedule and ahead of what the government would have wanted. But they are continuing to work there. And, you know, one of the challenges is going to be getting those cars into the peoples hands. People want to buy vehicles at this point given all of the Economic Uncertainty now, when tesla looks to china, which dealt with the coronavirus first, it saw some success in the first quarter, whereas, other automakers really struggled. So theres that hope there. But, yet, were seeing some conflicting signs. Price decreases on vehicles here in the states always raises questions about, well, what the demand is really like here. Final question, tim. I like the way you put it. Tesla and we know this but just a good reminder, its a proxy in a lot of peoples minds for elon inc. You know, so i dont want to necessarily phrase it this way, but what happens. It launch doesnt get off today or there are other complications or setbacks . Should we also view that as a proxy for tesla losing some of its shine . Well, i think. It launch doesnt happen today because of weather then it just adds to the drama, right if theres something more tragic goes on, then that will always, you know, cast a question about the Company Going forward for spacex. As have previous incidents the company has had to deal with. Its a company that has struggled through crisis in the past and really today is seen as kind of a milestone for the Company Getting beyond those challenges in the past. Yeah, absolutely. Good stuff, tim. Thanks so much. Thank you. And coming up anze lenos garage, special guest elon musk. If you caught the preview we showed earlier, it was funny. It involves rocket launchers on a car. You can catch that later tonight. Tyler. Sounds like fun. Many workers facing a difficult decision, should they go back to work with the risks involved even though they may actually lose money compared with what theyre talking in from unemployment . Plus, a split market today. The dow support about a percent. Nasdaq is negative. S p 500 holding on to 3,000 or thereabouts. Much more on the markets and nc g ve opern ow luh. Flexshares may look like other etfs. But inside. Theres advanced research, modeling and refinement. Constructing funds that dont simply follow an index. But explore new terrain. Helping you fill portfolio gaps. Connect to client goals. 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. Welcome back to power lunch. Weve got breaking news with regard to bank of america. Its ceo is speaking at the bernstein Strategic Decisions conference right now making comments with regard to payment deferrals and forbearance for mortgage borrowers saying that 1. 6 million in total deferrals were requested but nearly a million of those were for just the first four weeks the of the program. Its slowing down, thats what hes saying. Less than a thousand deferrals were happening in the past week. He says he believes of the people who got the deferral, about 40 of those people when the payments came due actually paid so perhaps some positive developments with regard to peoples ability to pay amid the covid19 pandemic. Well have more on this later on tomorrow morning because the ceo of bank of america is due to speak with the folks on squawk box tomorrow morning 7 30 a. M. Teiethe. Time pay the mustwatch inrvw er well have more when power lunch comes back right after this break. 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For many, the enhanced Unemployment Benefits of the c. A. R. E. S. Act has meant more pay than their wages. A study out Becker Friedman institute found that twothirds of workers can receive benefits that exceed their prior pay and onefifth can receive double more than their lost earnings. And in some cases returning to work means taking a pay cut. A boston based lawyer was making about 30 an ohour when she was laid off in mid march. My regular unemployment is roughly about 50 and then we had the 600 a week added on top of that. So i was on unemployment on unemployment, i was making roughly about what i was employed so when she was offered her job back, it was with a 7 an hour pay cut and despite this, she accepted her job back and just pleased to have some structure to her day again. What a dilemma for people from home and that is a twist i thought you were going to say shes not going back the fact that she is maybe speaks to how powerful work is even if you are making more by not showing up and weve seen evidence of people saying that they either want the job security, you know, we know the enanswered enhanced Unemployment Benefits dont last forever. So whether job security or having structure in your day, whether it is the benefits that come along with having a job, is it looks like certain people are accepting that as opposed to just staying at the home and perhaps in some days making more yeah, i know, i feel sort of oddly fortunate not oddly, just fortunate to come in here every day. Rahel solomon, thanks so much. As do we all, kelly President Trump in a battle of words with twitter, will social nsuea companies suffer the coeqnces that discussion is next on power lunch. Okay, give it a try. Between wisdom and curiosity, theres a bridge. Between ideas and inspiration, trauma and treatment. Gained a couple of more pounds. Thats good for the babies. Between the moments that make us who we are, and keeping them safe, private and secure, theres webex. Beautiful. Were committed to making college more accessibley, by making it more affordable, thats why were keeping our tuition the same through the year 2021. I knew snhu was the place for me when i saw how affordable it was. I ran to my husband with my computer and i said, look, we can do this. [narrator] take advantage of some of the lowest online tuition rates in the nation. Find your degree at snhu. Edu. Welcome back, everybody. A showdown brewing between President Trump and twitter, that company Fact Checking one of the president s tweets for the first time ever, calling it, quote, potentially misleading. The president responding that twitter is, quote, stifling free speech and he threatened to crash down yak down on social media should the Companies Face more regulation and what is the risk to investors if they do . Were welcomed by James Pethokoukis and brent fill brent, ill begin with you how serious is the threat of, quote, regulation of social media like twitter and then what would the effect be or what has the effect been today on the stocks of those companies . Hey, tyler. We dont believe that it is a big issue. We believe that President Trump has used twitter 30 times in the last two days, so we dont believe it is stifling free speech what think what twitter did is the right thing, which is simply clarify a comment and we think that is a good thing for the end user so due k so kudos to twitter. We dont think that regular laying will have a Material Impact because everyone is suggested to the same overhang, amazon, fbacebook, going, they all have the rolling concern if you looked at microsoft and didnt own the stock during the regulatory overhang of the eu trying to break them up you, you missed a 32 to 180 dollar run. So you look at facebook almost at a 52 week high here, an alltime here, regulation has been a rolling wave and we just dont believe that it will impact shareholders long term. Advertisers simply dont care. We spoke to a major advertiser yesterday. Unless it impacts the ability for these companies to attraction end users, advertisers will continue to spend increasingly more as we spend more time at home as well, were online so i take your point, brent, that over the long run, you are not alarm that had regulation is going to impact these stocks but today both facebook and twitter are down on a day where the dow is up and the s p is kind of flattish so do you think todays action in the stock is a reaction to what President Trump said . Just quickly well, it is growth to value today, so there is a sector rotation out of high growth, number one number two, yeah, look, there is headline risk. When the president says something that he wants to break the companies up, i think people will listen. But the point is that we think that ultimately they wont be broken up, there wont be Material Impact. And weve seen this again for years. Decades in tech. That there was going to be some massive breakup and it hasnt happened so the point is, for wrolong te investors, it is just more noise and we think that these are great position stories and again, more headline risk than fundamental risk. And if one gets impacted, they all get impacted so this is not a direct target to one so i would not be concerned as a twitter shareholder. Clearance, thank you. James, let me turn to you. The social media, quote, bias has been something that has been under the fingernails of the Trump Administration and of the Republican Party and conservatives more broadly so this then is a bubbling up of a long simmering animus, i think is not too strong of a word to use there, between conservatives and social media right or wrong older viewers may remember conservatives had a lot of problem with the regular media, tv, newspapers and now that concern in the internet age has come with social Media Companies where they feel like they are suppressing speech and the reason i think that it is important for investors, because in the past, Tech Companies had friends in washington there are plenty of people who viewed these as Great American national champions, they created a lot of innovation and jobs and you would think that if, say, democrats wanted to raise taxes on amazon or have some sweeping new privacy of regulation, the republicans might say no but because of this bias issue, there are far fewer republicans willing to fight on behalf of these Technology Companies whether it is google or amazon or twitter or any of them because the base republicans think these companies are against them so i think like the long term problem here is that it really undermines the Political Support for these companies. And there are a lot of people who want a lot of regulating, whether it is privacy, bias, changing section 230 law or antitrust. I think that it is more than headline risk. I dont think that it is a 2020 risk but beyond that, im more concerned. James, thank you very much. Were a little short on time here my next question to you, and well take it up the next time, im not sure what the regulation would look like short of breaking up these companies. That is for another time thank you both very much and be sure, folks, tomorrow im sure that it will come up, 6 00 a. M. , Andrew Ross Sorkin will sit down with, yes, Mark Zuckerberg the ceo of facebook that will be a very, very interesting conversation in light of what has been in the air here the last 24 hours or so and speaking of in the air, how about the space launch coming up in about 90 minutes time there is your live picture of the launch pad so many different events now all geared up towards it, but like sheets told you, it is at 4 33 or it is not happening today cant wait to see how it all goes off 4 33 or nothing kelly, good to be with you you too closing bell starts right now. Thanks, kelly and tyler welcome, im wilfred frost with sara eisen stocks surging for the second day in a row were back near the session highs on the dow he at tat the. Up 350 points. And what is driving the action, optimism is boosting the banks and retail stock as dr. Fauci says that second wave is not necessarily inevitable and tech stocks lot a bit of team but back in the green in terms of the s p tech sector the last ten m