Earnings walmart going on a hiring spree. Home buyers are rushing for mortgages. Is the consumer stronger than you think . Power lunch starts now and welcome to power lunch, im Frank Holland in for Tyler Mathisen nike hitting an alltime high soaring 9 on a blowout Earnings ReportJohnson Johnson also higher on its vaccine progress for more on whats driving the action, lets get over to bob pisani hey, bob frank, we are sitting at the lows for the day, 3,280 on the s p, about where we ended on friday and the problem is this seesaw in the megacaps and workfromhome names take a look at megacap, this is a down day yesterday was an up day. Monday was generally a down day. You get the idea hard time figuring out what the right values or prices this high same with the workfromhome stocks theres a theory out there that these will be beneficiaries of worsening coronavirus cases in the United States, maybe, but theyre starting to split. Theyre not always up on the stays when some start moving on the supsiupside zoom, slack, docusign up, salesforce down, paypal down splits here. Disagreements on that. Id keep an eye on energy. Yes, i know its tiny here these things keep going down every day. Exxon is essentially down four months in a row right now. Theyre 4 from a new 52week low right now. So keep an eye on this as this stuff keeps sinking into the west finally on nike, we said a lot about it today, very simple way to understand nike besides the fact they had great numbers and they guided higher instore sales actually declined a bit year over year on line sales up 83 thats now remarkably 30 of their revenues that is an amazing number to hit 30 of revenues on liline direct channels of distribution are becoming very important want to sell to you, through a nike store and not in somebody elses store new high for nike. Guys, back to you. All right, thanks a lot, bob. As tech continues to underperform this month theres signs of strength somewhere else bob mentioned the strong nike earnings walmart announcing its beefing up hiring ahead of the Holiday Season. Also mortgage demand from home buyers jumping 25 from a year ago so could the consumer help drive the next leg of the rally, what should you buy dan is deputy chief Investment Officer at Richard Bernstein advisers dan, thanks so much for joining us so, whats your take on those nike earnings . Can the consumer continue to drive this economy yeah, i think, bob, had a pretty good summary of what was happening. Essentially, i view what happened with the nike earnings as more of a shift in consumption. As opposed to, you know, any big change in Consumption Trends i mean, if you look at it, you know, you saw 83 , you know, growth in digital, which is great, but as bob mentioned, you know, the brick and mortar business is actually slowing so what you just saw is an overall shift. I think total revenues for nike overall were down a little bit yoi when youre talking about the retail space overall, it was more of a mixed message whereas for nike it was a positive because theyre essentially cutting out the middleman. So, you know, theres some good and some bad, but overall for retail, id say its more of a mixed takeaway. So speaking of that mixed takeaway, is this consumer strength something you see continuing throughout the Holiday Season and what sectors, besides retail, do you see benefiting from this big shift in ecommerce . Yeah, frank, i think i think here its a really tricky time for the consumer. Clearly, you know, with benefit of hindsight you can look back at the last six months or so, its obvious that consumer was a great way to play the recovery because thats where the stimulus was concentrated. I mean, if you go back to april, you know, Household Incomes back in frill were up 17 year over year but now the trouble Going Forward is, you know, clearly, you know, that stimulus slowed and as a result that income has slowed so Going Forward, especially as we get the next falloff on the unemployment benefits, the question is, is the consumer going to be able to remain as resilient going into the holiday . I think thats really tough given the state of the feconomy and how fast incomes are going to fall from here. Stocks near session lows. Seeing a big selloff in tech whats your take on that yeah, i actually think conversely, if you think about what i was just describing, a selloff in tech relative to outperforming other parts of the economy is quite bullish you think about it, this is very similar to the typical growth value argument you want to buy growth when growth becomes scarce, when growth is slowing, but if you are going to have the sustainable recovery from here, then its the what you want to buy is clearly the stuff thats levered to the recovery tech stocks have done phenomenally well this year. They actually saw a lot of those stocks actually accelerated during the pandemic. But if you think that this economy is this recovery is going to broaden out, which i think theres a lot of questions there, if it is going to broaden out, you know, then you probably want to own some of the stuff thats beaten down in leverage of the recovery. We think theres a couple ways to play that stuff thats sort of beaten down, out of favor, yet, you know, will do very well in the recovery like, say, materials, but otherwise, if you want to own stuff thats, you know, a steady, more of a steady recovery story, i think shipping and transports Companies Think about the nike takeaway. You know, i think arguably this move to online is more bullish for fedex and u. P. S. Than for nike, itself. So, dan, one more question, with all the uncertainty around stimulus, even, of course, the pandemic, itself, what other sectors besides retail, housing, things like that, transports as you mentioned, have a high risk he risk risk high reward proposition i think on the cyclical side of things i want to be exposed to things like, you know, in that sort of beaten down out of favor camp, i think energy, materials, you could even throw china in there although its a bit of a different story their recovery is much more consistent then owning transports in there, you know, and i think that when you look at the u. S. Stimulus slowing, relative to the rest of the world, you know, i think that makes an argument for International Small caps will be very levered to the Global Recovery story. I do think you want to sort of have a defensive barbell in the portfolio. So we still own, you know, heavyweights and things like health care, staples, and gold you know, as a balance against this rising uncertainty Going Forward. Sharp rise in Gold Investments during this pandemic dan suzuki, thank you so much for your insight we appreciate it. Thanks, frank. Now, in the second day of testimony before congress on the feds coronavirus response, fed chair powell saying, we have done basically all the things that we can think of. He added the economy has made substantial progress but warned there is plenty left to do listen a full recovery is likely to come only when people are confident that its safe to reengage in a broad range of activities the path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government here to weigh in on that, and the feds next move, paul mccully, former chief economist at pimco and currently a senior fellow at Cornell University paul, its great to have you here we spoke with david zervos yesterday who was very disappointed in the feds communication over the past week and basically said theyre the reason for the market selloff ever since what would you say about their communication techniques and style including what weve heard from powell and some of the other fed members today . On the other side of that trade, i havent been dis appoi appointed. And i dont look at the Market Reaction as a fair gauge of what the fed and chair powell is doing. I think theyve been very clear in their communication that a sustained recovery that reaches further and further into our citizenry requires an allofgovernment approach, and the fed is allin, unambiguously allin, but it simply cant do the job by itself and the fed needs some help from the fiscal authority. So i dont think theres anything new in the message that jehs been giving to congress. Is congress, do your job. Although, whats new is this average inflation targeting. Where theyre saying, you know, yes, inflation can run above 2 before we tighten policy and people want clarity on that, you know, how far above 2 , for how long thats what Charlie Evans gave some context to today saying it could be 2. 5 and so forth do they need to lay out a more specific framework or at least say one is coming or kind of talk more in that direction so that people understand what those benchmarks will be because otherwise theyre probably going to default, you know, similar to what weve already lived through which is, you know, maybe 2 or just the projections getting us there and we tighten, anyway i think wall street wants a formula and i think the fed is pushing back hard on the notion of getting out a formula and wall streets just going to have to get used to that. I think what the fed has said, it has been very, very clear, is before they will get off of ze o zero, and thats the big issue that Everyone Wants to know, before they get off of zero, two things have to happen. In this order. Number one, you have to get to maximum employment, which is not a particular Unemployment Rate but a holistic assessment. Maximum employment is a necessary condition, and, two, you have to be at least to 2 on inflation. And right now, that is the effort is to get to maximum employment and get to 2 inflation. Wall street wants to know what happens after that and its very hard to describe what happens after that because its all path dependent. So i think the bottom line that youre getting from the fed right now is focus on those two conditions, maximum employment, thats number one, and 2 or higher on inflation, and then we will start thinking about, thinking about, increasing Interest Rates so the specificity that wall street wants, which has been accustom to, literally, for the last decaddecade, theyre not g to get because the fed cant deliver specificity way out in the future what it can do is focus on right now. Right. Be very articulate about what it wants to achieve and be very strong in asking for help from congress to effectively spend fiscal red ink into reflationary monetary wine. People are worried the fed cant deliver, period, paul, even on what it cants to accomplish heres the feds rosengren earlier today, he said it would be a matter of luck for the central bank to reach their 2 inflation goal within 4 years. He added, this is kind of about your point to the need for fiscal, said quantitative easing on the fed side, rates are already low. Again, thats the central can. The feds own projections dont show them getting over 2 inflation in the window that goes, stretches out several years. And i think thats a fair critique they cant get there by themselves with any confidence whether or not it takes luck or not, i dont know. But the bottom line is the fed cant do this by itself. And thats not saying anything negative about the fed whatsoever its just the mosaic of macro conditions that we have right now require congress to increase spending in order to maintain aggregate demand in the absence of that i think its quite reasonable to assume the fed wont hit its objectives policy, i think you have more than a Sporting Chance i think you have a damn good chance of get to those objectives but in the absence of fiscal policy, you cant get there and thats reality everyones dancing around that, but the fed isnt, the fed is explicitly saying, essentially, we need help from the fiscal authority. Well, i understand it when you say it, paul thank you so much for joining us today. My pleasure Paul Mcculley of pimco. Frank . All right, coming up on power lunch, Johnson Johnson pushing ahead with its Covid Vaccine trial. Once the vaccine is available, will americans line up to actually get that vaccine . We got the details. Plus, as cities struggle to get back to business, los angeles is dealing with not only the covid fallout, the Entertainment Industry at a standstill, but also recordbreaking wildfires. Were going to talk to billionaire rick caruso about how hes handling his billionaire empire in the golden state. More power lunch after this. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. So youre a small bor a big one. You were thriving, flourishing, but then. Oh. Ah. Okay. Time to think, plan, pivot. How do you bounce back . You dont, you bounce forward, with powerful connectivity. Serious and reliable internet that lets you go bigger and better, with more sharing, more making. Whoa. More that. More talking. The entire time, you got this okay, less talking and more doing. All driven by the largest gig Speed Network in america. And even if the power goes down, your connection doesnt. But what if no ones in the office . Bring the office to them. But is it secure . Sure its secure. Okay, sounds great. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Johnson johnson today saying its starting phase 3 of its covid19 vaccine trial the fourth Major Company to do so but a new concern is emerging. What happens if people are reluctant to take it Kayla Tausche has the results of our state to play poll on that topic. We begin with meg tirrell who has the latest on the vaccine efforts. Meg . Hey, kelly, this is a massive trial. J j plans to enroll up to 60,000 people. Across three different continents theyre going to be testing this in people over the age of 18 and plan especially to ensure diversity in the enrollment and focus on people over the age of 60 now, what really differentiates this vaccine from others that have already started phase 3 is that its going to be administered in this trial in just one dose. Those from pfizer, moderna, astrazeneca, are being tested in phase 3 in twodose regimens those trials began earlier pfizer and moderna beginning at the end of july, astrazenecas began in august and remains paused in the United States after the safety issue, although it did begin again around the rest of the world. Dr. Fauci was asked this morning in congress how soon until we could potentially get data and maybe a vaccine. Heres what he said. As these trials go on, we predict that some time by the end of this year, lets say november or december, we will know whether or not these are safe and effective and as you mentioned, mr. Chairman, right now doses of this vaccine are being produced so that theyll be ready to be distributed so, kelly, thats for the earliest vaccines, probably pfizer and moderna j j says it all goes well, it could have doses ready for emergency use authorization early next year. All right meg, stay right there. According to our poll, more people are getting concerned about taking it. Kayla tausche with the latest. Reporter for six months likely voters have been polled in the battleground states that will decide this election. We found the receptiveness to take a vaccine steadily eroding since this summer. The share of swingstate voters who were willing to get a Covid Vaccine in our most recent poll dropping to 36 . Fewer than half of democrats and just a quarter of republicans say they would get the vaccine when its ready. And a majority believe that president trump, who has suggested that a vaccine could be approved by the end of october and distributed just after that, is politicizing the vaccine effort to benefit his reelection. And as for the Companies Developing the vaccine who say that they will be guided by guidance, voters dont have much faith in those companies, either, with the Approval Rating for big pharma remaining at just 8 the skepticism hardly comes at a time when voters concerns are easing and lives are returning to normal. 58 of respondents say it will be at least 6 months before life returns to normal. And, kelly, in the vaccine is the key to getting there, based on what were seeing in some of these results, it could take even longer to get the public onboard. Yeah. Reporter back to you. Those are some pretty low numbers, kayla, also stay with us, if you would so, meg, obviously, the it gets easier if more people take the vaccine. We get to socalled herd immunity what if were well below that threshold . That is a huge concern among the Public Health community right now, that we are seeing these numbers that kayla just cited going ever lower as we get closer to the results of these phase 3 trials and, of course, as we get closer to the elect n election that time together of election day with getting a vaccine has rattled a number of people you know, ive been talking to people in the industry about this, and they note that there are going to be limited doses of this vaccine available immediately, anyway. And so there will be time for people to get more comfortable with the data and with the vaccine being available before well even, most of us, be able to get one of these shots. So, meg, one question, were seeing the diversity in the Johnson Johnson testing, age, also race and things like that how doest this translate to a childs vaccine . Gosh, thats a great question, becky actually asked the chief scientific officer from j j that question this morning. These trials are all being run in people over the age of 18 and thats typically