For an earnings season that is beginning to unfold. Later, the rush is on as Apple Unveils its new 5g enabled iphone are the stars now aligned for a super cycle that wall street has been waiting for for apple power lunch starts right now stimulus negotiations hitting a wall once again as the two sides are stuck on whether to do one big bill or several smaller ones elon has the latest for us there will be no relief before the election. We knew this in our guts, we knew it by looking at the calendar and today treasury secretary Steven Mnuchin acknowledged it publicly during a speech for the milken institute. Getting something done before the election and executing on that would be difficult just given where we are in the level of details were going to try to continue to work through these issues reporter now, this is dispute the fact that the senate will still go through the exercise of voting on a 500 billion package of targeted relief next week thats much less than what democrats are asking for mnuchin said there are not just money issues, there are also policy issues. The white house has been adamant about liability protections, which democrats dont like and mnuchin said that House Speaker nancy pelosi rejected an offer for helping just the airlines the treasury secretary and the speaker of the house did talk over the phone again this morning for about an hour. Her office called the conversation productive, and were going to talk again tomorrow but guys, mnuchin also acknowledged today that the politics have taken over back over to you appreciate it the latest on the talks in washington stocks have been sliding throughout the day in part of the stimulus news and the earnings from banks arent helping. Lets get to bob pisani for more let me show you the s p 500 we were flatish until about 11 30, 11 40 eastern time. Thats when secretary mnuchin made his comments that it will be difficult to get a stimulus bill done before the election. You see them drifting into negative territory there were some problems even before that. Not surprisingly, stimulus sensitive stocks, auto stocks like ford and gm, some of your retailers, for example, moved down they were mostly trading to the upside but interestingly, even other sectors like workfromhome beneficiaries that are a little less sensitive to the stimulus talk, all dropped as well. So lowes, target, ebay, they all moved into negative territory. Not much, but they were positive on the day and then also even the big momentum names, the mega cap momentum names, apple, facebook, microsoft, alphabet all moved into negative territory quickly. In other words, the overall market moved down, not just stimulus sensitive stocks. As for the earnings, the good news is this, going into earning season we had two dozen companies, including fedex, have terrific numbers, beats way above expectations, with the exception of wells fargo, all the banks have had good numbers, above expectations wells fargo was the one disappointment the only one up on the week is Goldman Sachs which had a blowout number overall. Weve got good numbers from the banks and yet nothing is really happening. My sense is were going to need stimulus and a lot better guidance from Companies Going forward to really get stocks to continue to move forward back to you. Bob, thank you very much. Both of our next guests expect a strong earnings season, but if thats the case, will it be enough to lift stocks if there is still no stimulus coming out of washington david l weve the senior Portfolio Manager at river front Investment Group david, let me begin with you and just sort of pose the question that was in our introduction there. How deeply might the lack of a fresh stimulus package hurt the market, if at all . Or has the market already priced in the idea that it aint coming before the election, it may come afterwards or it may come in december or anuary yeah, tyler, i think at this point the market understands that getting a stimulus package before the election is pretty unlikely so, you know, that being said, there could be a little bit of downside related to that, but i think the important point is that the market pretty much knows that a stimulus package will be coming, so any downside related to this is likely to be fairly limited and the size of the stimulus package, the other issue, the size and timing of the stimulus package, is going to be somewhat contingent on the election outcome. So i do think theyre going to be in a choppy environment, playing the odds around different election outcomes, and thats really going to be one of the main Market Dynamics over the next several weeks. Let me turn to kevin and ask a similar question if we fundamentally take the idea of a rescue package or stimulus package off the table for now, what is left, then, are earnings and the earnings, this earn season look like theyre going to be pretty dog gone good but those are backward looking, as the market looks forward what does it see . How is it discounting future earnings and the future of the election outcome well, when you look at the market right now, its been uber focused on stimulus, obviously and the earning season thus far has gotten off to a relatively good start going into or looking forward into 2021, youre going to see earnings go up, but theyre only going to be up about roughly 4. 5 from where we finished 2019 and i think that that is where the market is focused, that they know that youre going to see earnings go up, but theyre not going to be substantial. Its basically getting us back to where we started 2020 so with that in mind, the market has really been priced for stimulus it is all about stimulus it has the support of low Interest Rates as the fed has clearly stated to us, and it has the support of the monetary stimulus that the fed has given. And now the market is really looking for the fiscal stimulus. Let me just pause and ask a question did i hear you say that year over year 2020 corporate earnings will be up 4 from what they were in 2019 . No, we look into where the estimates are for 2021 right now, theyre calling for roughly 164 and so that is really only up about 4. 5 higher than the s p operating earnings were in 2019. So youve got basically into next year, sort of flat Earnings Growth, and, oh, by the way, a lot of that Earnings Growth, am i wrong, kevin, is concentrated in relatively few stocks yes, thats true. So david, lets talk about that how worried should we be that this has been a market that has treated certain stocks brilliantly, if you didnt have them in your portfolio youve got nothing like the returns of the s p and the dow . If you did have them and you were weighted heavily, youre looking pretty good this year. What does that tell you about the Underlying Health of corporations in this country, the Underlying Health of the economy, if so much of the power of this rally resides in six, ten, a dozen stocks . I think the picture i think thats true, tyler, for what were seeing this year, but the picture really changes as we go into next year. All of the sectors and companies that have really been hurt by the pandemic are going to see a pretty substantial increase in Earnings Growth as we go into next year. For instance, Financial Sector earnings will probably be up 25 at least as we go into next year energy coming off an extremely low base, but its going to surge, same with industrials and materials. So, yeah, i think its true if you look from 19 to 21, theres not a lot of growth. But where you will see the growth in 21 is those really beaten up areas of the market. And i think as we get through the election, as we get a vaccine, as we get further clarity on stimulus, it makes sense to start looking at some of those depressed areas of the market. So let me get a real quick final question, kind of a yes or no everybody goes in and in terms of their Portfolio Management they have a baseline thats 60 equities and 40 fixed income. Maybe its 65 35 , Something Like that. In this environment would you be at the upper bound of your equity allocation, david, or somewhere lower . And the same question for you, kevin. Yes or no. Tyler, were at the we have a preference for stocks versus bonds at this point we have a little bit more stocks than bonds and kevin, the same for you same here were overweight equities relative to fixed income right now. And i see you went to Randolph Macon college, right . Yes congratulations im a uva guy. See you, man the virginia guys got to stick together coming up, Airline Stocks kelly went to washington Airline Stocks are in the green dispute the stimulus spat over a standalone bill what is the flight path without a deal a top analyst will weigh in. Plus, apple could be about to enter the iphone super cycle that wall street has been waiting for. But what exactly is a super cycle . What does it mean for the stock . Ntueluhplain when power nc coins. So you only pay for what you need. Wow. That will save me lots of money. This games boring. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save up to 400 a year on your wireless bill. With the carrier rated 1 in customer satisfaction. Call, click, or visit your local xfinity store today. Apple debuting its newest iphones yesterday, revealing four new models all equipped with 5g capability and the first redesigned look since the iphone 10 dispute its continued popularity, apples revenue really peaked three years ago. Analysts are hoping for a super cycle with the iphone 12 that apple hasnt been able to pull off since 2014, with an estimated 30 of consumers using an iphone thats at least three years old and 24 million eligible upgrade phones projected for 2021 could the iphone 12 bring the bulls their next super cycle here is tech reporter steve co vac. Do you think its possible the onlyisanalysts believe i possible they believe the puzzle pieces are in place, given that theres people waiting for the upgrade and the fact that the new phone has 5g and they believe thats going to be an attractive thing to get people to upgrade this year ive hung onto my iphone for three years. A lot of people are holding onto their iphones longer and longer and we seem to have hit the Inflection Point where people are thinking its time for an upgrade. Thats where the bullish call is you know, you look at apples shares and you think does the Company Either it doesnt need a super cycle or its counting on one because the shares are up 60 or 70 this year this is a 2 trillion market cap. Does it have to be a super cycle or doesnt it . Exactly, and thats the genius of tim cook here. Years ago he saw the writing on the wall and knew iphone sales are not going to be able to grow at these levels forever and they started pushing the Services Narrative and saying were going to grow this business, this will be our new engine of growth and they delivered on it and that is what investors have been rewarding the stock on more than iphone sales. You might remember iphone sales tanked a yu years ago 15 and the stock went to the moon if you had told me that the stock would go up and iphone sales would fall that dramatically, i would have thought you were crazy so thats what people are really evaluating the company on, its this whole idea that we have this huge install base of iphone users and we have different ways to squeeze more revenue out of them, whether its through the Services Packages were seeing or these great accessories, whether its air pods or the apple watch. And theres plenty of room for those to grow, too steve, now that its been 24 hours since the launch event, tell me how you would describe the buzz around these phones compared with the launch of past phones with big features that were big breakthroughs. Its not a brand new form factor so if you look back to 2017, we had the iphone 10, got rid of the home button, the full screen design. If you look back to the last super cycle six years ago, that was when they made that jump to big screens. So consumers really like to go after these brand new form factors. They like to feel like they have a brand new phone. Technically this iphone 12 series is a new design, but its similar to the current design. It wont feel as new as the iphone 10 and 6 did. Weve been talking all week about the skepticism around 5g and the lack of coverage they talked a lot about 5g yesterday. They mentioned 5g before we even showed us the iphone 12. They have yet to come up with a compelling real world use case, other than saying youre going to be able to download things faster what does that actually mean we havent experienced that yet. Meanwhile, a friend of mine is all excited because he has the iphone from 2010 that still had the old design thats now new again. Hes like everyone is going to think i have the new phone oh, my gosh. Yeah. Thats going to feel like an upgrade. Yeah, exactly even if its not. Theyre hearkening back to the old design. Exactly and i think that the question remains for apple investors, what are the expectations priced into the stock the price to earnings multiple has risen dramatically, the shares are up in year in anticipation of some of the delay in people buying phones this year being pushed into next year and them having this monster 2021 whether thats because of super cycle or just a little bit of pentup demand, i guess the key for apple is going to be clearing that bar and justifying the multiple, which like you said earlier, is predicated on its Service Business continuing to grow. Right, and theyve proven already that iphone sales can be down or a little flat and they can still grow their revenue, they can still grow profit and be successful that way again, they get rewarded with their share price and they hit that 2 trillion mark the other month. So, yeah, thats exactly right as long as the iphone sales stay somewhat consistent and they can keep that user base and keep people from switching to an alternative platform like android, then theyre going to be okay because they keep layering these services and new accessories. We just got a new home pod yesterday, for example they keep layering things on to get you to buy more stuff on top of the iphone, people are keeping longer than normal exactly now weve got the watch and i guess were going to have to buy a bunch of new accessories to go with the new phone. And the chargers. Dont forget the charger thing. Thats what im saying. They might think its ecofriendly not to put it in the box. Youve still got to go get one cnbcs tech reporter for more on the launch, you can visit us on the web at cnbc. Com. Thank you a big part of apples announcement, verizon turning on its nationwide 5g network. Weve been hearing a lot about 5g for years now verizons Ceo Hans Vestberg told us yesterday the moment is finally here i think we are having a longterm stat g longterm strategy that we have been working on for years with our Partners Apple an important partner for doing that all the infrastructure players this is really an important moment for us. 5g just got real verizon stock popped on that announcement yesterday, but it has been sliding today, down about 1. 5 lets take a look at the other wireless carriers, at t and tmobile and also chip stocks that could benefit from 5g, they might include there is at t and tmobile you look at tmobile moving up, at t down. Chip stocks are all up nicely year to date kelly. That is an amazing spread between at t and tmobile. Still ahead, United Health group is the worst performing stock in the dow and that could be a bad sign for another reporting earnings tomorrow. Plus the Major Airlines are burning through about 13 billion a month as they struggle to stay afloat during the pandemic how long can they hold on without stimulus theres more power lunch after this quick break we ng on Homeowners Insurance with geicos help was pretty fun too. Ahhhh, its a tiny dancer. They left a ton of stuff up here. Welp, enjoy your house. Nope. No thank you. Geico could help you save on homeowners and renters insurance. Lunch. United health, the largest u. S. Insurance company, lower even after reporting growth in its drug benefit business. What could this mean for walgreens, the second largest pharmacy chain, reporting earnings tomorrow . A report from jpmorgan showing a surge in consumer depending on household cleaners, soaps and vitamins, products you can buy at a pharmacy but the stock is one of the worst performing this year, falling 40 . Could earnings mark a turning point . Lets bring in the trading nation team. John, you say that the stock is on your radar, but you are waiting a strategy shift in order to be a buyer of the stock. Tell us what that looks like. Walgreens is cheap from an evaluation standpoint and they generate a lot of free cash flow, but they have not solved the riddle on the front end of the store. We all know the pharmacy side of the business is strong, but the front end of the store has been declining comps for what seems like an eternity their direct comp, cvs, who a couple years ago bought aetna,tn and they fight the fight on the front of the store i want to see from a fundamental standpoint what is the plan to stop the bleeding in the front of the store before getting interested in the stock. Matt, a big under performing this year but it has been growing dividend, an average yield of 5. 2 . Like john says, its a very cheap stock and with that yield, thats fabulous. Not only that, it has raised its dividend 44 years in a row its a very solid one. The problem, and i agree with john, on a longerterm basis when you look at the chart the stock has been making a series of lower highs and lower lows for five years the last five years the stock is down 60 while the market has been up 70 . Having said that, i dont love it right here. But on a shortterm basis traders could see a pop. If these earnings take the stock above 37. 25, that will take it above its trend lin