Google all on tap. All that and much more is coming up this hour power lunch starts right now kelly, thanks im scott wapner welcome to power lunch our reporters are all over every ae angle that matters as you know, today the busiest day of earning season. Meg tirel is watching the race for a vaccine as coronavirus cases continue to climb. And Steve Liesman has the details of a muchexpected gdt report hey, bob before we get to earnings, were having a nicely midday rally here let me show you the s p. Some technical aspects we broke above the earlier highs in the day. People do trade on technical calls on in kind of market you see that nice, quick, steady move up here there may be seasonal aspects coming into play, art cashin noting were moving into november, a seasonably strong period of the year for earnings, the early reports have just been spectacular here, generally half of the s p reporting now, 85 beating expectations and the key story is the average beat about 19 , way above the historic average of 3 to 5 . That has never wavered this entire Earnings Period heres the bad news, wall street is ignoring all of this. The wall street 500 topped out the day before earnings started and down 7 . We have increased covid cases, election issues, stimulus worries and no guidance, not appreciably more than we had in the last quarter all that is weighing on the market a lot of hopeful that the mega cap tech names will change the conversation and well all be happy on earnings. Im not so sure. Look at companies that have done really well and reported earnings e bay is a good example. They had great earnings and good Fourth Quarter earnings and 2021 earnings no complaints here about a lack of guidance and all above expectations stock trading down today remember, the stock is up 35 this year and so are all the other mega cap names amazon up 75, apple 55 and al a alphabet up 50 on the year. Just a little word of caution for everybody, waiting for those earnings after the call. Dual live noly noted, bob pii meg tirrel joins us now moderna reported its earnings this morning and gave an update of where they stand with their race for a vaccine. Theyre the frontrunner of course we also learned this week from pfizer they likely wont have data this week, which many were hoping for but that interim analysis is expected soon. We could be hearing about how well these vaccines work within a few weeks. Dr. Fauci has just said today in a live stream with nih director Francis Collins that these could be available starting at the end of december and early january and if the fda gives them the green light, they would be given to prioritized groups at that point. And the race is on for therapeutic. Merck is also working on a pill for covid19 and its ceo ken frazier joined squawk box this morning and talked about its prospects. What we know so far about that drug is very encouraging. At concentrations that seem to be safe, it prevents viral replication and so now the question is in a large study of 2,700 people, can we show it has an effect on sickness and death . Were very optimistic about that fraser say they go should see those data potentially early next year. This, of course, as cases in the United States are going in the wrong direction. Now a sevenday average of 74,000 new cases a day in this country, here you can see the states hit hardest this is on a percapita basis. North dakota and south dakota over are not going in the right direction. Its the cold months guys megan, we spoke about this better treatment news from regeneron. If theres a sense the vaccine is not going to be a Silver Bullet because of timing or potency or you name it, just how quick the spread is happening right now, how much can these treatments be a bridge between now and then i was j u. S. Loust looking at sf the lockdown measures that france is imposing, the Prime Minister saying you basically cant leave your house unless youre going to the Grocery Store or essential Family Activity if the alternative is that kind of lockdown, the most we can hope is this wave of covid is much less potent or much less deadly yeah. We are seeing good data. Theres a new study today showing mortality rates are declining weve gotten better at treating the disease thats very good news. When cases mount to such levels that we overwhelm the Health Care Systems and there arent enough doctors and nurses to take care of all these patients, that will affect the death rates. In terms of a Silver Bullet from a vaccine, ken frazier making that point this morning, the argument being one thing will not solve this problem were going to need vaccines, medicines to help us were going to need to keep Wearing Masks and distancing throughout next Year Public Health experts are selling us this is going to slow down like a tanker decelerating. Its not going to stop immediately. And we need to think about it slowing down gradually as we employ these new tools throughout next year i appreciate that, meg. Mick tir meg tirrell the government reports a massive jump in gdp. Steve liesman to break all of that down. Hey, steve hey, scott, yeah. An historic surge in gdp followed an Historic Second quarter. Claims meanwhile falling to a low for the pandemic but remain by themselves very high. Look at two ways to measure Gross Domestic Product or the change there the annualized way gives way to 33 . You have to do better than 33 when you go down by a third. You have to do about 45 better, which we didnt do, mean us 9 , which is a quartertoquarter chang, nonannualized giving way to a 7. 4 gain in the Third Quarter. Were still 3. 5 below the level before the pandemic, as bad as any recession we had consumers surging up by 41 . Business equipment showing a sign of confidence, up 70 housing benefiting from lower rates but government down this could be the beginning of something bad here as state and local governments move what they have to do by law, wri hich is balance their budget jobless claims too high. We dropped to 7b 5 751,000. Continuing claims falling to 7. 7 million. Also a low for the recession both sides politically a good case on gdp. This was a strong bounceback, helped by government actions but not a complete rebound as you know, scott, considerable pain throughout the country. Im curious looking at these news for a fed chair who has openly lobbied for more stimulus, what do you think jay powell thinks about the numbers we got today i think hes going to think we need more stimulus. I think theres an idea that, first of all, some of the stimulus is running out to the extent that weve had continued good retail sales, its been on the back of some of the savings thats been out there in the economy. But he also sees the numbers look, nobody has tried to tell the markets and the public more about the potential risk of a second or a third wave here than jay powell has he wants the till to be full in case its needed and he thinks its needed as well. Appreciate it, steve. Pleasure. So as stocks look to recover following this weeks selloff the market still faced with uncertainty with the election, Covid Concerns and stimulus. Lets bring in Kathy Entwistle and mark lehman. Welcome to both of you kathy, what are you advising people are you saying we just have to wait and see what happens over the next little bit . Are there different kinds of investments you would make right now for the next couple of months until we get through the worst of this covid outbreak and see what the Election Results are . Any time theres a dislocation and were clearly having more dislocation in the markets with the volatility, its a great opportunity to take advantage of it and do things like tax loss selling, taking some losses now for ways to address any crossyear gangs and be ahead of the curve, especially if we see higher taxes next year. We dont know if thats going to happen i would say tax harvesting, shifting to dividend paying stocks, maybe a little smallca and midcap and forget the past and look forward we cant count on what worked in the past we have to think about new ways to invest in the markets and more digital transformationtype companies, work from home and returntoworktype companies to work at. Which would impli soy some oh names that have been winner on the year if, if im not misreading this, would look at sap as a stock for investors right now . Yeah. Clearly they had a big miss earlier this week. They have i think reset the table. New management there, there was some insider buying. Its near its 52week high, something my analyst likes there are other stocks out there. Well learn a lot today about how the Third Quarter was. Going into the election and into the new year, i thisnk past is pro log. Were going to want to play some of the stocks that have benefited. Sap, facebook, amazon, were going to be behind those going into the Fourth Quarter. Kathy, i dont know if you would recommend specific names or if its more of a approach but for people who say to you i understand that the next wave of winners will be these digitally focused names but im concerned about valuation, what do you say . I would say if we see stocks go lower, right, were a couple thousand points off now from where we were a short time ago just by a little bit a the a ti a little bit at a time theres no reason to fear the market, no reason to fear volatility money is had and made during these times. This is the time to step in and do something about it. What about the election, kathy . Do you have to kind of have a few on a biden win, on a blue wave, on an outcome one way or the other . I think we have to consider that if you think back to 2018 or so with the administration dropping the Corporate Tax rate down to 20 , that certainly helped the markets a lot. Shifting that or makinge ing ine there could be very detrimental to the market. Personal income tax rates or Capital Gains rates, we have to think of all of those things our clients, were telling them to think about this before the end of the year. Were going to wait to see what happens with the election. Overall were not going to vote with our portfolio were going to wait for the vote to come out and decide how to best position clients from a tax perspective and a longterm Growth Perspective going forward. Yeah, its a good line, not going to vote with your portfolio. Mark, ill give you the last word here we spoke about some of the Technology Names any other parts of the market you think will be attractive today . I continue to like biotech and sciences obviously with covid those are on everybodys radar but over time youre going to want more exposure to these names and more exposure to funds benefiting from more investment in that area i look at what happened this summer i think there was a mondumental shift when pfizer and amgen entered the dow and where the future of Life Sciences and health care is, its an emerging growth were going to have far more innovation to be where we are seven, eight months after learning about this virus and where well be six months from now with vaccines and antiv vivirals and when sts get, there you want to be overexposed to health care a lot of names as we ten cone to see rough markets thank you both we appreciate it scott. Coming up, we continue to watch these markets, a rally going on into the afternoon. The dow close to the high of the day. And kelly just saw up better than 300 points beep are fo we are focused on tonight. Apple, amazon, google, all out after the bell ch bl have much more on big tesig day well do it next on power lurch. I cant believe it. What . That our new house is haunted by casper the friendly ghost . Hey jill hey kurt movies . Ill get snacks no, i cant believe how easy it was to save hundreds of dollars on our Car Insurance with geico. I got snacks ohhh, i got popcorn, i got caramel corn, i got kettle corn. Am i chewing too loud . Believe it geico could save you fifteen percent or more on Car Insurance. Many of the biggest tech names reporting after the bell they are all up this week after last weeks down draft so what should we expect lets ask Michael Levine its good to see you of the big four, who has the heaviest lift tonight . Set up most interestingly is definitely google. If you look at relative underperformance versus the market, its pretty disastrous being up 16 with the nasdaq up 24, when you look at whats happening from a digital perspective, tha Center Perspective is most intriguing sport trading has been a big tail wind, we were frankly youtube didnt react better when the ceo said, quote unquote, in the last few weeks it had gone positive you got 15 20 of their business is travel lated be a thats down 80 to 85 so to me putting those numbers up with that headwind, those are impressive numbers maybe the bar is kind of low, at least for alphabet. The others have had huge runs. Not so much for this one i think thats fair in terms of amazon, a street high target, 4,500 thats a lot to live up to tonight. How good does that have to be for amazon today i think amazon is a little bit tricky i was hearing earlier talking about the negative reaction to ebay earnings. You didnt see a good reaction to etsy as well. In the short term were more construct of about the ad names. A lot of the Ecommerce Companies through co individuvie benefitted b benefitted by way of comparison, you start to look forward and Customer Acquisition costs are likely to rise taking a company like amazon, marketing is not that large as the percentage of operating expenses so i would say probably not a huge ding to them. I do think theyre going to lean in a lot on the side, they made that pretty clear last quarter im not hearing enough of ups and fedex, theyre going to up charge everybody thats also a head wind. To be perfectly honest with you, i have a lot of conviction in anyway 12month target of 4,5 0 4,500, but if you handed me last months press release, oi numbers went up by 20 , 6 billion versus the street 1. 5. I think the bar is high, its the most owned name in the space. I think theyre really going to have to do something out of the atmosphere to go ahead and really have a meaningful new it sounds to me you wouldnt be surprised if the stock pulled back i dont know if it will pull back but its going to being hard to see people have a meaningful shift in their viewpoint about the company. The reality is, lets think about ecommercicommerce in cog was ecommerce, jumped up to 25 to 30. Its not going back to 14. Its not staying at 25 to 30 a will the of tlot of the compa space, etsy and shopify, its a little bit harder to make a call in their defense, youve also got prime day that will hit in q4 thats a nice added additional tail wind. I would tell you all the big guy, walmart, target, best buy, they are all leaning in very, very requial quick tough environment foreign ads. What should we expect from facebook i think expectations are quite a bit higher and they were confident when they set numbers. I would guess 15 to 16 for the stock to go up well get an initial view about 2021 opex, 27 in print for the street people are braced for that to be a low 30 number. Idfa would be an issue, it will be interesting in apple talks about it tonight, getting po postponed in 2021. Q4 and q3 will be great. Well see what happens. Californkelly . Still ahead, crude is lower again today, down about 10 in the week will another virus surge affect demand and are video game stocks in a position fato power up . Position fato power up . Stay with us opern ow lunch. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. Welcome back the dow is up 350 points lets turn it over to seema mody its not just mega cap technical stocks reporting were about to get earnings from call of duty publisher act i vision blizzard take 2 interactive scheduled for next thursday. How should you approach these stayathome plays nancy tangler and john of tokeful Asset Management there are some household where video games have become central to the living room which company in terms of breadth has done the best job capitalizing on this growing trend . I dont know if we can hear nancy. John, let me ask the same question to you. Whats the best pick in the video game sector . I think ten months ago prior to the pandemic was how much screen time kids have and now during covid were using screen time to survive the pandemic so i think the theme of gaming has such a long runway in front of it that i think the best way to play it is through a thematic etf like gamer, rather than pick one stock individually youre seeing that esports is growing, colleges and universities offer it as a class and have labs and theyre viewing this as a longterm emerging business within not only the u. S. But globally instead of playing one individual stock where each of these companies have to rely on the next new game to drive growth, we think its best to play it as a thematic way and invest in the whole ecosystem. Etf, gamr nancy, the market is getting crowded as well. I like the setup for ac activision i think the company, you know, benefits from Digital Gaming consoles it is going to improve already robust margins of 77. 5 , i believe. And the company has done a great job of beating on revenues, 17 out of the last 20 quarters. So i like that the stock has underperformed im not a gamer but i do think that call of duty war zone had a great and timely release and the next call of duty is going to be released on november 13th. So i think going in youve got a lot of the elements you need full disclosure, we dont own it, its a little too expense i for us but i think of the two thats the one you want to take a close look at. Dont have to be gamers to appreciate the seismic growth