And Congress Takes new action around hong kong and protests there. Summer sold out a search in demand for outdoor enjoyment is leaving you in a search it is thursday, july 2, 2020 here on cnbc good morning welcome from wherever in the world you may be atching thank you for joining us here on Worldwide Exchange. Lets get to how your markets are setting up the day it could be. We say that. Remember the markets are closed tomorrow ahead of the 4th of july holiday you get a 3rd of july holiday. There could be a lot of action packed earlier in the day before volume tapers off. Look at stock futures now up 187 points the nasdaq hitting new highs on wednesday. Eight stocks hitting multiyear or alltime highs including names you know microsoft, netflix, ebay, paypal, Video Game Companies and others lets look at the oil market there. That duelling battle between inventories and the ward of words. Inventories continue to draw down but saudi arabia has warned some opec members to start cutting their output, get in line or risk another price war that sent oil negative Something Big to watch that oil is fractionally higher lets get around the world to karen tso in london. Good morning brian, good morning i thought these markets might be a bit more cautious this morning ahead of the numbers state side. Responding to news of another vaccine showing promise from an early trial. Markets have popped around the german stock market where we are seeing a lot of encouraging trade. Up 1 at one stage up in the french market. We started out the second half a lot of appetite for spanish and italian stocks also showing a decent bounce in spain with the ibex up strongly. We talk about more vaccine hopes. The zurich stock market where stocks have been located and stocks are on the flat line today. Taking you to ab foods youve got the little brown bag. Theyve reopened 153 stores in the uk stock prices have moved up 4. 6 . Wirecard, that stock falling again down 27 weve heard news of a raid on the headquarters and more from members and the ceo. To the ongoing surge of new coronavirus cases in the United States the country has seen the second highest increase amid the outbreak and the president s visit to one hot spot. We have that and other top stories. Vice president pences visit to arizona comes as that state reports new record cases and deaths arizona officials reporting 5,000 new cases. The Vice President praising the work of medical workers and support for the governor pence will talk to cnbc exclusively at 10 00 a. M. Eastern. President trump restating his believe that covid19 will, quote, disappear some day. Making tha those remarks discussing the economy and he says he would have no problem wearing a Face Covering in public and feds bullard warning the outbreak could lead to a financial crisis saying it is possible the u. S. Could take a, quote, turn for the worse but added that is not his base case. He said it is important to keep lending facilities in place now although liquidity in the markets has improved dramatically back to the markets with tech stocks continuing to hit new highs. We just talked about them. Microsoft, netflixs and others. Many of you may have made money in the work from home trade. You may be thinking that has flown the coup the new ticker wfh with trillio, cloud strike and zoom. David, good to chat with you you do a great job putting together these unique etfs what makes you convinced that whf trade is not over . We need to take a step back and think about this pandemic causing the change one of those is the greater acceptance society has towards remote work and the Ability Society has with the ability to work from home the stock we believe given the best exposure to continue and ra pel and not just be a fad. The reopening process has been choppy and will continue to be choppy. I think companies and employees are learning if they can find a way to be productive whether that be partially at home or full time in the office and sometimes at home. You need the pillars to power that Going Forward i am going to channel the inner genius of one of my colleagues in his famous two parters. What are the Biggest Holdings in that etf and are they overvalued given that so many people have been piling into same trade for a long time . Thats a reasonable question. Investors should understand the value of this particular etf we look at the topdown holdings youd expect zoom to be in there. Up 280 on the year. The poster child for work from Home Investors flocked there early because many were using it not just for work but to communicate with family during the worst of the pandemic there are names like trillio they provide a network for text messaging. New york citys Contact Tracing is run by twillio. Cyber security threats will be on the rise. So the cyber names are required to be in a basket representative of the workfromhome theme. Here is what is interesting, if i compare to nasdaq. This particular etf is at 2. 8. Closer to the Broader Market if you want to make the argument stocks are overcrowded as a group, which could be annual, we believe there is momentum for stocks to go higher. These stocks are not overvalued. And are less than the multiple of the nasdaq. I want to steal thunder from a coming guest with an amazing stat, does that mean to you, the big tech stocks of pretty much everything are wildly overvalued . Again, there is an argument that tech is overvalued. The work ive done to compare Technology Price to sale, price to earning relative to its history. Definitely 95th percentage by no means cheap. What we think is interesting is investors maybe can start thinking about it again. Not just piling into the trade we know tech has had an acceptable run some of our household names you might know many of them are not. 56 of cfos said for jobs allow it and activity barring child care issues could increase if they have the flexibility if they work where they want there is two levels here the top line Difficult Health care crisis and if we step back and ask what do employees want they want the flexibility. Speaking of work from home, i put up a pull. Do you want to go back to the office right now, nearly 70 responding said no. Go there and vote. Best to you and yours. Happy fourth when we come back, well give you that amazing stat on big tech and why even the continued rise of covid cases may have a modest impact on the market and breaking down the steps he says washington needs to take to shore up the economy and a leader from a major movie chain and the challenges they she facing as hollywood keeps puing their big releases back. We are back after this you say that customers make their own rules. Lets 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 200 off a new Samsung Galaxy s20 ultra. Biotech under a bit of pressure parents, im sorry, mcdonalds play land is still off limits. Lets get more from frank. Starting with pharmaceuticals. Shares of inovio are down again. Following a downgrade on tuesday. Announcing limited Clinical Data on the potential covid19 vaccine but said the virus opportunity is already priced into that stock which is up 500 this year. Mcdonalds is reporting a pause in plans to resume Dinein Service in the u. S reported by the companys u. S. President. Restaurants that started offering Dinein Service in may and more than 2,000 locations. They can continue to do so if state and local locations allow it jetblue and other airlines under a lot of pressure. The pandemic continues to hurt travel demand. Back to you. Frank, quick question, have you been to a restaurant yet since they reopened . I absolutely have going to a Mexican Restaurant where im able to sit outside. Im not sure if im ready to sit inside yet if it is outside and open air, i do feel safe it is magical, right . You give people money, they bring you food and drinks. And sometimes guacamole its amazing on deck, several major tech ceos agree to take the hot seat. The big names testifying before Congress Amid its antitrust probe. Announcer todays big number, 7,197. Thats how many children under the age of 18 in florida have tested positive for covid19 since march. Tseofho 155 children were hospitalized during their illness. Welcome back the number of confirmed covid cases continues to climb with the numbers getting larger, even the same percentage growth could send covid cases to 100,000 per day. Your next guest says this could have a modest impact as stock markets become less reactive to some of those bigger and bigger numbers. Ahead of that to cross asset strategy a lot to get to. Lets get to this health story neither of us are doctors. We are not going to give our opinion to the virus and the disease itself i think we can agree the beginning of march, it was, dont look at somebody or youll get it it is investors and the market have inunderstanded themselves i agree, where we are now has changed since march and clearly a lot of the mitigation efforts the government has had to do we are seeing the growth rate of new cases has already started to slow in the last few days. That is prior to government impositions going into place we think the back drop is supportive and this is not going to stay in the way of the recovery part of that goes to when i chat with people. Remember what we were told at the beginning, we were told the only way out of this was herd immunity with Johns Hopkins saying 70 of the country needs to get this and move on. I think thats right. There is a bridge between where we are now and getting to a vaccine and what pfizer had said they expect in september, they are going to have data for their vaccine. They expect thats right we are not too far away between now and october, you do have a slow down. The economy may continue to grow out of its bottom from march with we can get to that level back you know in october, november, december where we start to see vaccine doses we know that big tech has run the show for a long time youve got a stat that blue my mind not only the faang m, facebook, apple, amazon, netflix and alphabet and microsoft six stocks are now longer than three entire sectors of the stock market is that scarey dangerous . It is a Pretty Amazing stat i dont think it is dangerous combined, all of those are res than six stocks. We do think there will be a rotation into cyclical stocks you have personal income growing you have housing that is back to precovid19 levels. You have a lot of data out there that is just cyclical. I got to jump in. We are running out of time we had a guest that said some of the nasdaq big tech are four times priced to sell or more than we have seen in decades let me ask you this question, by the overall market on the s p 500 index, could those five or six stocks go down . The answer is yes we think they can muddle the six stocks and can be used to force the funds around while the other 75 takes the lead over the next five or six months really interesting stuff there. Kind of a unique time. Well watch it close got a big old horse pulling the market cart. Hope that keeps going. Best to you and happy fourth on deck, joe biden has got a big lead in many polls we have learned that polls, they can be really wrong. What does former cbo director think . Hell join us and new woes for wirecard investors as the roenn of europe case continues we are back after this 300 miles an hour, thats where i feel normal. I might be crazy but im not stupid. Having an annuity tells me that im protected. During turbulent times, consider protected Lifetime Income from an annuity as part of your retirement plan. This can help you cover your essential monthly expenses. Learn more at protectedincome. Org. Now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. Save without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Will the faang stocks continue to strike futures are higher an early exit for trading today. Congress fighting china over the new antifree speech laws. Police in hong kong make hundreds of arrests on its first day. So long summer plans millions of us stuck at home and everything we want to do sold out. On ha happy note, it is thursday, july 2nd you are watching Worldwide Exchange on cnbc. Welcome back and good morning or good evening getting to the markets and how they are setting up their day today could be a wild day. It could be. Here is why. The markets are closed tomorrow. Happy july 3 holiday ahead of the fourth on saturday youve got the job numbers this morning. There could be a lot of action earlier in the day it could taper off that tends to be the case ahead of the long holiday weekend. We are seeing a lot of green, futures are indicating this rally will roll on nasdaq, whats new hitting new highs. Eight stocks hitting multiyear or alltime highs including microsoft, netflix, ebay, paypal, act vision, blizzard amgen and others as well to a more serious note that is the situation in hong kong the house of representatives here unanimous my passing a sanctions bill to penalize china for imposing what they call a National Security law on hong kong as demonstrators take to the streets and more arrests are made eunice yoon joins us from beijing. Thank you, brian. Beijing was on the offense today fighting nearly universal condemnation from the world because of this law. Attacking the new house bill saying china resolutely opposes the new sanctions. Chinas Foreign Ministry warned the uk which is now offering at least 3 million hong kong people a path to citizenship saying that move would merit core responding measures saying they have no right to take such action they told australia today that they should stop interfering in beijings internal affairs all of this because beijing imposed the new National Security law yesterday. The state papers today have been arguing all day that it is necessary for the stability and prosperity for the city and have been pointing to and many have been pointing to the rally we saw in the hong kong stock market saying that this was a gachlk how prosperous and relieved investors are there has been plenty of suspicious as well that there are mainland funds doing the buy in you look at the markets there and it is pretty much impossible for an american to buy stock in the local market very, very difficult to short. That aside, what is sort of the headlines in the beijing newspaper versus the hong kong newspaper . What are the two sides saying about their perspective. All focused on how great the new security law would be. The longterm prosperity and the stability of the city and that this was a loophole that this law was necessary to fill in a loophole in the way that hong kong was governed. From hong kong side, they have a freer president as of today. There has been a lot of concern about Civil Liberties there it applies to anyone, anywhere even if you are not from hong kong and even if you are not in hong kong at the time i was unaware of that provision. That is a big provision. There is a lot of wiggle room there. We have to watch and hopefully ill get back over there appreciate it, eunice. Take care. To washington where lawmakers have approved a bill extending the deadline to apply for a forgivable Small Business loan President Trump says he supports another round of direct payments to americans as the white house and congress mull a new stimulus package to help shore up the economy. The next guest says it is time to move away of throwing money at the strategy of hiding. It is great to have you on this morning, doug. What do you mean we need to move away from sort of hiding from it. How would you best handle any new round of stimulus . I think we did something very sensible with the c. A. R. E. S. Act and helping am employees ride out the rough few months you said the story, over 70 of correspondents didnt want to go back to the office the work place has to feel safe. Customers have to want to come we need to focus on the things that will produce that if it is ppe, getting everyone masks, monitoring the work place for social distancing, that will be key getting people to the work place safely reading some of the stuff you posted one thing i hadnt thought about that you brought up, which is why we bring you on television, a lot of companies will not have any payroll or income tax this year your idea would be to reduce their need to do that so they can maintain that muchneeded shortterm cash flow yes my thinking is after the experience of the terror attacks in 2001. After that, we saw the economy struggle we failed to appreciate that we were trying to have an economy in the face of a Terror Threat we had to do things like we had never done before, set up tsa, inspect every piece of cargo coming into the u. S. We spent a lot of money on security we are in the same position now, we have a threat, the virus. Lets help Companies Make an adjustment thats a costly thing for them if we can take other cos