Transcripts For CNBC Closing Bell 20240712

Manufacturing index hitting its best level since november 2018 but tech stocks as we mentioned lagging. The nasdaq is in the med as apple, amazon, microsoft all trade lower 59 minutes left in the session. Back off the lows. Coming up on todays show, ever corps founder roger altman on how the outcome of the election could affect your machine. Plus mond leez and paypal report earnings after the bell we will bring you all of those nbc first on cnbc with mond leezs ceo as soon as those numbers come out. We start off the month of november with gains after a down ep to october. Bob pisani is tracking some of the action. It is turning out to be a fairly simple narrative to understand today that is investors are choosing stimulus over stayathome plays. Let me show you what i mean. There is a belief there ises going to be very gig stimulus coming somewhere down the road again. Thats taken hold here look at the s p 500, up. Wait look at the small caps, up almost twice as much generally the bep year of a stimulus play. The equal weight s p up twice as much as the weighted s p another thing thats clear today, value is dramatically outperforming any kind of growth whats value its Energy Stocks like apache and hall burton. Its bank stocks like fifth third and regents financial. And its an awful lot of industrials like caterpillar this is a stimulus play overall. At the expense of mega cap you see amazon weak there. A six week low on amazon today apple, microsoft and facebook also well off of their highs and down today meantime other groups in the stayathome air that sort of went along with the mega cap tech moves, zoom, slack, docusign all to the downside today. Stocks socialed with the reopening plays typically retailers for example, or some small numbers of industrials like United Rentals on the upside gap under armour and tapestry all doing well simple story here. Whether it is correct or not, not clear. Buy stimulus the game. Bob pisani thank you. Sebastian page joins us now, head of Global Market acquisition at t. Roe price. He has a new book out. Good to have you on again. How are you thinking about stimulus when how much what to do about it . What you see today is a little bit of the recovery trade. But if you step back we would argue that now is not the time to be a hero we continue to believe in the recovery trade but we expect a butchy ride due to politics and pandemic and bumpy ride. The pandemic is still very much on the markets radar even though today tech stocks are underperforming. Part of our process is to formulate a riskon versus riskoff view. In the shortterm the election will drive that sent member. But we have not eliminated election tail risks and the risks of a contested election is still there. So you have also, though, an aasset allocator, to worry about covidon versus covidoff. Typically the recovery trade has been associated with covidoff you need to get rid this Health Crisis in order for the economy to fully recover so the bottom line is that in this environment with politics and pandemic we would argue not to be a hero, to sty diversified between stocks and bonds, not take large positions on the margin we would long the recovery trade i am trying to parse your words and figure out what that means to individual investors. If you want to be lon the recovery trade you buy stocks. And if you want to be prepared for the bumps in the road you buy bonds. But that hasnt worked out bonds havent protected you in that way what should investors do bonds arent as good as a diversifier as they used to be we saw that in september the market went down 9 and bonds actually went down you have to take that into account. The way to position for the recovery trade i think is to not be a hero and be neutral between stocks and bonds at the top level because if you think that stocks are expensive, bonds are even more expensive. However, under the top level, there are ways to be long cyclicality while taking advantage of attractive relative valuations you saw small caps do well today. Small caps relative to large caps are down 11 year to date you have been talking on your program a lot about value versus growth value is down 33 year to date relative to growth and we are starting to dip into value. So because of all the uncertainty and this bumpy ride ahead, you dont need to take a lot of risk in stocks. But under the hood, how you allocate your stocks, you can take advantage of cheap cyclicality, small caps, emerging markets, a little bit of value stocks, and some credit, high yield bonds for example. Sebastian, last week clearly we had a massive pullback in the markets as we approach election. If we dont get a clear result lets say within the first 24 hours or so does the market quickly pivot back to being worried as to what that means for stimulus and Everything Else or have we already priced in the risks around that with the pullback last week there is a fair mamt of risk priced in. It is not that common to wait 24, 48 hours, several days for an election result what would be worrisome would be an indication that we will be into this contested election for a long time. Now, the polling data and we know the polling data is not perfect. It tells us that that is more of a tail risk than the central scenario but the short answer wilfred is that you would see the market react negatively if you think this is going to be a real problem for several weeks and drag on. If you are still counting ballots and sorting out certain states results, then thats actually not that out of the ordinary. So you mentioned you like value and small caps here in the long run on the recovery trade, sebastian. Does it matter who wins the election tomorrow in both the presidency and the senate . I think it does now, we tend to think six to 18 months ahead and our thesis is that six to 18 months ahead, we will be in a better place and we will move towards a covidoff environment. The election result, if you get a blue wave, if you get a biden president , you could expect value stocks to perform better than growth stacks and thaeb thats sort of the price action that you are seeing today. Because of the way the tax reform would be structured, because of the stimulus, because of the Infrastructure Spending and remember, we are just talking about the valuation spread, right . As we go into the stimuluson, covidoff environment, you know, value stocks could pop because they are so cheap. Even our own stock analysts are starting to lock at bank, for example, and upgrading bank. So there is room for upside there in value but i want to be clear i still think that now is not the time to be a to. I wouldnt sell completely out of Growth Stocks and go completely into a value stocks i am talking about a tilt toward value stocks that we can build on incrementally as some of the election uncertainty gets taken out of the market. Sebastian, thank you for joining us appreciate it. Thanks very much. Sebastian page from t. Roe provides dow is up 200 point. Up next we will talk with ever corps founder roger altman will joe bidens economic plan and whether businesses should be concerned about higher Corporate Tax rates. You are watching closing bell here on cnbc any welcome back 47 minutes left of trade on this election eve in america. The economy and taxes certainly key issues for many voters out there. But there is a lot of noise surrounding joe bidens tax plan robert frank separating fact from fiction for us. Robert sara. It would be the largest tax hike in over 50 years but bidens tax plan would barely rank in the top ten of the nations history between 1940 and today there have been over 20 tax hikes. The biggest was during world war ii when we had a tax increase of over 5 of gp. Bidens plan is. 7 of 1 of gdp. That would put it in tens place, not the biggest in history as the president likes to say as for the tax burden it would increase federal revenue as a share of gdp to about 19 . That would bring us back to the levels of about 1998, 2000 now, the big question for biden is whether we are going to have enough tax revenues from his olympian to do all he wants to do his plan would raise between 2. 5 to 3. 5 trillion but his spending plan are over 5. 5 trillion. You have got a 2 trillion gap there. Hes either going to have to cut spending, borrow, raise more revenue, or perhaps a little bit of all three sara, back to you. Probably a lot of the middle one there, borrow more robert thank you for that. For more on what this all could mean lets bring in ever corps chairman and founder, roger altman good to see you. Thanks for having me. The first question, regardless of what the plan is is how quickly any of it gets enacted given the sort of environment, the economic environment as to whether some of these plans like a Corporate Tax hike may only come in later during any biden term rather than sooner. Thats a complex equation and it is a very good question it is complex because the very first thing that i would expect a new Biden Administration to do and i dont have any special secret information about this would be economic stimulus the type of package will eluded the two sides in the run up to the election and which could possibly happen, some of it, at least n the lame duck session. But thats more unlikely to me than likely. I think step number one will be a large stimulus package and because its stimulus, it wont be paid for. Otherwise, it wouldnt be stimulus you know, the elements of that will likely be extended supplemental unemployment insurance, Fiscal Relief to states and localities. Probably funding for covid relief and a series of items like that. By the way, i think increased food stamps probably those four so that would likely be number one. Whether or not the long term biden agenda that you are basically asking about is joined to the stimulus bill or dealt with probably a little more likely, dealt with separately following the stimulus bill, thats a kmikted question. And as far as the taxes are concern a complicated question as far as the taxes are concern and directly responding to your question i dont think there is any negative economic effect at all of raising the corporate rate back to 28 it was only four years ago in the waning days of the Obama Administration that the business round table and others were arguing for reducing the corporate rate to 28 . So i dont think that should be delayed. I dont think it will have any negative Economic Impact whether or not other biden tax steps are immediate or passed with a later effective date, these are all complicated questions. I dont know the answer to them. Fundamentally, this country needs more revenue your colleague just mentioned or indirectly mentioned that federal revenues today are run being 16 of fpd historically thats one of the lowest levels ever in american history. Even if the entire biden tax plan is enacted as he said we would only be back between 18 and 19 , which is still below long term historical levels of revenues of gdp. How much of an impact do you go the makeup of the senate has on all of this a lot its one thing to govern with only one or two votes to spare in the senate. Of course it is much better than the alternative of being in the minority vastly better. But you cant you cant afford to lose more than one or two votes, depending on your margin if you end up with 53 or 54 seats, then you have a lot of running room and you are going to get probably a lot more of your agenda, of your full, longterm agenda, which in the case of Vice President biden is appropriately ambitious, you are going to get more of that enacted. Your margin in the senate, whether it is very thin or relatively expansive, makes a big difference roger, its sara. I know hey sara hey, your world has been doing very well in terms of m a activity and you guys have been involved in some of these deals how many it is reelection activity and what happens after the election what are people worried about if it is because they are trying to get it in before the election . I dont think any of it, sara is preelection thats based on my own observations working on some of these. And secondly, you know that larger transactions take six, nine, 12 months to complete. So no transaction announced today, at least in most industries, is going to be able to be completed between regulatory reviews and shareholder votes and so forth, depending on the precise deal, anywhere they are not going to be able to be completed before the onset of a Biden Administration should we have one. In fact, we will only be just beginning, in term of the process of completing it so i dont think any of the stepped up activity and there is quite a bit of it is represents efforts to announce something before the election because the opportunity to do that, if you were worried for example, about regulatory approval, you would have had to do it nine or 12 months ago. Not today or yesterday what do you think, roger, about market levels and this huge activity in m a is that a sign as contrary indicator . I dont think so. I think it is pent up demand the m a market froze over like a pond in minnesota in january following the covid outbreak in mid march, and the lockdown. And it was essentially frozen for four or five months. And a lot of things which were being discussed or even negotiated prior to that just were halted. And now a lot of those [ no audio ] thats what i mean by pen up. So i dont think it signatuifie top at all m a levels in terms of total global volume are running around the levels of year ago and so it is not like we are breaking alltime records. We are not we are just returning to where we were earlier. Why do you think President Trump still scores relatively high, in polls relatively high on handling of the economy thats a good question. Some aspects of that mystify me. I suppose it has to do with voters remembering that precovid, Economic Conditions were pretty good we did have record low unemployment across all sectors, including black and hispanic unemployment and the stock market was at relatively high levels but, actually, as im sure everybody has read a lot about this, the trump economic record, and for that matter, the trump record on the stock market is not anywhere near one of the very best. His record on the stock market for example, right through this morning is worse than that of the last four president s, of both parties so i think people remember this because the president talked about it and we all know he can be bombastic, to put it charitibly and i think there is that residue of memory partly explains why he still gets pretty good credit but i honestly think if the election were six months from now and not tomorrow that would probably fade. Roger, thank you for joining us good to see you. Always a pleasure thank you for having me. Tomorrow night of course be sure to keep it here on cnbc for special election coverage starting at 7 00 p. M. Eastern time. We have 38 minutes left in the session. We are recovering nicely again after that brief pullback an her or so ago. We are up by 1. 7 on the dow and the nasdaq is back into positive territory just about. Still ahead, Liz Ann Saunders of Charles Schwab will explain how Election Results could impact stock prices Going Forward. And why the balance of power in the senate could hold the key the determining the markets next major move. We are back in a couple minutes. Not whats easy. So when a hailstorm hit, usaa reached out before he could even inspect the damage. Thats how you do it right. Usaa insurance is made just the way martins family needs it with hasslefree claims, he got paid before his neighbor even got started. Because doing right by our members, thats whats right. Usaa. What youre made of, were made for. Usaa were made for. And sweetie can coloryou just be. Gentle with the pens. Okey. Okey. I know. Gentle. Gentle new projects means new project managers. You need to hire. I need indeed. Indeed you do. The moment you sponsor a job on indeed you get a short list of quality candidates from our resume database so you can start hiring right away. Claim your seventy five dollar credit, when you post your first job at indeed. Com home. Welcome back time for a cnbc news update with sue herera hi, sue. Heres whats happening at this hour. The Massachusetts Governor announcing a nightly stayathome advisory. Restaurants and other businesses are also getting curfews in addition baker is requiring face coverings be worn in Public Places by everyone over the age of 5 the new restrictions go into effect on friday. Texas surpassed california as the state with the most coronavirus cases. Thats according to Johns Hopkins university both states confirmed roughly 940,000 infections in wisconsin a judge has set a 2 million cash bail for kyle rittenhouse. Hes the teenager accused of killing two people during a process. And in vienna, Police Reporting several people injured in a shootout, including a Police Officer this after a local newspaper reported an attack on a synagogue. The suspect has been arrested. We are continuing to follow what is a developing story. You are up to date thats the news update this hour sara, ill send it become to you. Sue thank you. Are americans stocking up on Food Supplies once again as virus cases surge . We are going to talk to the ceo of snack giant mondelez. It is one of the nations largest packaged Food Companies when he joins us next hour on the back of earnings. Heading to break, a check on bonds. The tenyear is currently yielding around. 85 little change. Staying at the elevated levels we have seen over the last few weeks. Closing bell will be right back at calvert, we know responsible investing is hard. If youre concerned about the environment and climate change, how do you find companies that are driving the right outcomes . If you care about economic equality and social justice, which firms are addressing it in their workplaces and their communities . For nearly 40 years, calvert has delivered competitive returns by investing in Companies Making a difference because we see value in doing good. Talk to your Financial Advisor about investing responsibly with calvert. Talk to your Financial Advisor about investing responsibly we did it c crowd cheering [narrator] wherever you start, snhu is where you can finish. crowd clapping crowd cheering here we go. [narrator] and its it. [group] yay [narrator] you did it, high five Southern New Hampshire university. [man] that gets a hug. laughing look at that masters degree, i did it i did this for my children. I am very proud of myself. [narrator] finish your degree at snhu. Edu. Welcome back time for our daily coronavirus tracker. In the u. S. , the sevenday average of cases is up 19 at 80,000, a new record in new york, Governor Cuomo announced this weed the state will end its quarantine. Visitors must get a negative test before traveling and test negative again after arriving in new york that state with cases over 28 higher week over week. The uk announcing it will join germany, france and other European Countries in closing down all nonessential business until december, not as tight a lockdown in any of those three countries as the first time around, though much tighter than we were over the last couple of weeks or months sara, also interesting to note, the rally we saw this morning in europe as well in light of this news you can say it is the buy the rumor sell the fact. Uk stocks were already incredibly cheap and people expected this lockdown measure cyclicals are rallying similar to the value market today here in the u. S but a surprise one could argue to see cyclicals within the rally leading the charge after a weekend when we have seen fresh news of tightening lockdown measures in the uk which whether they were expected or not hadnt yet been announced. Maybe a sign we were priced for that and the markets sort of expected it already. Or maybe it is more fresh stimulus on the way as those lockdowns go into play more help for business. Definitely a point of note. Which might be something to keep an eye on here of even if the cases continue to spike, if lockdowns arrive, if stimulus arrives maybe that will outweigh everything. Stimulus is the theme lately in the markets speaking of, regeneron may be making good problem so far on its covid antibody drug but if it got approval today there would only be enough for 50,000 people lets bring in meg tirrell who is outside of regenerons headquarters in terrytown new york why cant they ramp up the supply and mass produce it. Reporter the short answer, this is an incredibly complex drug to manufacture. Regenerons antibody drug is a combination two of different antibodies one that it engineers in mice here at its headquarters another it derived from a survivor of covid19 once it got through all the research and development they start the manufacturing ramp up process. That takes three to four months end to end thats because antibodies are grown in the cells ive varies from chinese hamsters. It sounds strange but thats the way these types of drugs are maken. Then you get to that process, then it is another three to four weeks for incredibly intense quality control. Then the drug is shipped to another location where it is put into vials all of that is why at the enright now we have 50,000 doses available if they get the fdas greenlight they hope to get that up to 300,000 within a few months and they have partnered with drug giant roche to be able to manufacture 2 million therapeutic doses through the end of next year to give you an idea of the effort going on here, regeneron moved all of its other manufacturing over to europe months ago still we are facing this problem. Thats why you hear folks like Scott Gottlieb so frustrated that the government didnt do more earlier on to ramp up this manufacturing. It should have been prioritized. Meg, now how do those 50,000 doses get rationed who makes the call as to who gets them. Reporter we are waiting to hear what the fda says in response to regeneron and eli lillys emergency use authorization applications we will hear if the fda weighs in on who should essentially be prioritized for these drugs. There are clues about who might benefit most but these are iv drugs, difficult to administer. It is going to be complicated as it gets rolled out. Meg, thank. We have 25 minutes left. All three of the major indices are higher nasdaq offering around the flat. Just went red. Up next, we will look at how delayed Election Results could hurt the market. Sales are down from last quarter but we are hoping things will pick up by q3. Yeah. Uh. Boss doug . Sorry about that. Umm. What. Its. Um. Boss you alright . [sigh] [ding] never settle with power e trade. It has powerful, easytouse tools to help you find opportunities, 24 7 support when you need answers plus some of the lowest options and futures Contract Prices around. Dont get mad. Get e trade and start trading today. All the major averages except the nasdaq rallying ahead of tonys election, of course following a big selloff last week as well lets discuss a little bit what the election might mean for investors and bring in andrew busch, economist at bpi and former cfdc intelligence officer. You have been looking at what the result of the senate might mean for markets and the economy. What is your takeaway there . Lets run through a few scenarios. If biden wins and you get a split congress and the Senate Remains republican, this may not be bad in the sense that you are not going to get any kind of Corporate Tax rate hike. So i want people to keep that in mind that would be very good for the markets. You are also not going get a very large stimulus package as well thats a negative tichl you have to ba thats a negative. You have to balance those two things out under a Trump Presidency with a split senate thats also not that bad but again you wont get the large stimulus package the market has been hoping for. What do you think the market moves mean today we are seeing a rally, the value stocks rallying, do you think thats an indication of a blue wave thats what i do expect, i except a blue wave, i do expect a biden victory. I do expect a significant win in the senate you know, they are going to need to get to about 5347 for the democrats really to be radically change things the way that they want and certainly the programs that have been put forward by biden if that margin of victory is only 5149 i would caution people people about any progressive brush because you will still have joe manchin and joe tester, conservative democrats, who will balance things out in terms of overreach in some of the progressive policies. Which sectors over a fouryear period not necessarily immediately after the election result, which sectors would suffer the most if that were to play out . In the blue wave, i would say the energy sector, e and p is going to be hurt because clearly a biden presidency will focus on clean energy and he said hes not going to ban fracking i believe that, because legally, you cant do it. But boy can you make it hard to get a lease on federal lands thats over 40 of fracking. Keep that in mind. With low oil prices right now maybe it doesnt matter for a little while but thats going to hurt on the regulatory side i would expect bank and financials to take hits here because you are going the see a big push to reregulate the banking industry, maybe increase the amount of capital that they need and perhaps even nonbank sievies as well. Thats a sector i would keep an eye on hmm thats a new one andrew busch, thank you for joining us appreciate the time, on the election. Oil had a big swing today. Finished up more than 3 it was down sharply earlier. Tomorrow night be sure to keep it right here on cnbc for special election coverage. It starts at 7 00 p. M. And goes all night long. Coming up next on closing bell, a big beat for clorox apples surprise announcement. And what to watch for when paypal reports we will take you inside the market zone next dow is up 358 with under 20 minutes left [squeaky shopping cart] [sniffing] is the salmon wildcaught . She only eats wild caught. [cash register beeps] uh, i need a price check on honey. Dont get mad. Get e trade and get more than just trading. Investing. Banking. Guidance. 15 minutes left in the trading day. We are now in the closing bell market zone, commercial free coverage of all the action heading into close here with us, charlie and mark good afternoon to you both lets kick things off with the Broader Markets. Stocks rallying ahead of the u. S. Elections tomorrow. The dow on track for its best day since october 7th. All of this comes off the back of a very heavy week of selling last week. So its not necessarily that surprising to see a bit of a bounce charlie, i come to you first interesting to see the market makeup today because value has been outperforming growth, however you want to frame that now on good news days and on bad news days, over the course the last couple of weeks i will ask you the question i have asked you a few times in recent months, is this a serious turning point or a temporary turning point in terms of that market makeup . I am glad you asked me that exact question it has been actual low a good quarter since the end of september. The Small Cap Value stocks beat the s p by about 6 . One thing we are seeing that makes us think this is not just temporary is the gap dweep the p e ratio of value stocks versus the s p has gotten to historically wide levels the aerial fund trading at 14 times earnings and the s p at 23 thats one of the biggest gaps we can remember. It ten to be a good indicator of what is going to happen in the future we think on days like today a lot of this is ridiculously cheap stocks finally getting a bid. What actually causes them to continue getting bid because it is always such a fake out. It is not always such a fake ow value stocks crushed growth over the last 100 years sara, i dont mean to laugh at that question. None of us can see the clock on the value. But at some point valuation doesnt matter. It has been a growth trade long term. It hasnt been value. Value has gotten beat by growth badly for the last four years. I think a lot of that is retail investors, things like robinhood. I sent an article n chicago we have a program in 64 inner city schools 56 out of 64 inner city schools beat the s p 500 last year thats impossible. They did it by buying Growth Stocks, bying tesla and amazon, you know that cant last sure anything can happen in the shortterm in the long running valuation does matter. Mark on the topic of the shortterm, do you feellike today is a bit of a shortterm bounce and if we dont get a divisive election result within the first couple of days that we could start to pull back again wilfred, i do i think there is a high probability that the market is it is not really going to be able to maintain a sustained advance until we have resolution one way or the other so hopefully, we have that sooner rather than later and actually, what was talked about both in the previous segment and by the other guests, which is this economically sensitive rally in stocks that we have seen that sara correctly said, is this just more of a tease or is this something that can persist . I think it is likely to persist, under certain conditions, certain Election Results that would promote the kind of stimulus in fiscal larges in general that facilitate that kind of environment. Having said that, we dont though whether that necessarily is forthcoming i think the market is going to back and fill until something crystallizes on whether the policy settings might lie, where the direct of the dollar might go, what happens with International Economic data compared to the u. S. Economic data the coronavirus. Things will keep us cautious the next two or three months and cyclical out beyond that horizon two or three month bullish. I think things will fall into place to allow that setting to drive an atmosphere in which corporate Profit Growth is going to enlist Market Participants for biting into risk. We will get into those different election sthar yoes and what they would mean for stocks first he want to hit some movers shares of clorox higher after a big earnings beat. Net sales up happened by stayathome and covid related spending household products up 39 . Clorox also raised its full year Sales Guidance excepting to see 5 to growth. Shares up are 40 so far this year they have a brandnew ceo, linda randle clorox also makes grilling equipment. They make cat litter, Food Products for cooking all of which seem to be in the sweet spot right now with double digit growth right now we will see if it continued. We have mondelez after hours charlie, if you think people are going to continue spend asking the covid cases are going to continue to rise is it too late to buy some of these stocks like a clorox fascinating, they make charcoal, a big stayathome product. Charcoal. Yes, charcoal i think what is fascinating is how the market is treating some stocks that are doing very well in the covid environment as if it is going to stay like this for example. And then other names its being treated like it is a onetime gain that you should discount. We own lab corp. s doing wonderfully with all the testing. It is trading at 11 times earnings because people think it is going to go away. Smuckers, people are drinking a lot of folgers at home right now. But it is trading at a low level because people think it is going to be temporary. We go down the middle. There is going to be more home consumption longer term but we are not going to have the great times like we are having right now. Apple launched a Product Launch event for next week josh lipton has the sales. Josh, they just had a product announcement. Circle your calendar. Apple is hosting another efficient. The invitation to this one simply reads, one more thing november 10th at 10 a. M. Pacific. This could be the event where new macs are introduced. Over the summer at the developer show apple announced it was moving from intelpaced processors to its own chips. The mac, a stand out revenue of 9 billion. That did best expectations bernsteins stacey raz gone says apple is not a critical customer for intel. But it is not trivial either probably, stacey estimates, mid Single Digits in terms of total revenue. Sales that will no longer flow into bob swans company. Tech stocks are dangerously overvalued i dont know if you used that term before. Is apple in that camp . To what extent, even if you are pretty clear you are going to get relative outperformance for your makeup of stocks, to what extent given the market cap in those dangerously overvalued stocks will things fall over period of time if they really pull back . It is going to be Company Specific i probably wouldnt call out ane. It has already given up a favor amount it used to be a 2 trillion company. It isnt anymore i think the fundamental trend of more inflation and higher Interest Rates is going to be dangerous for all Growth Stocks. But just if you do a discounted cash flow analysis, the difference between a value stock and a growth stock the value stock is making money today. Very low Interest Rates are very good for the valuation of Growth Stocks but when we get back to normal rates and that is going to happen with 3 trillion deficit spending, there are going to be higher Interest Rates and thats going to be hard on all Growth Stocks, really, across the board. Mark, do you agree . Or do you think apple is a buy after its earningsrelated selloff and continuing selloff today ahead of an Event Next Week well, i think apple is a buy. I mean, it is a stall wart it is an iconic brand with a wide moat. An incredible ecosystem. It continues to annuityize its business the cyclicality associated with phone launch is being eluded from the fee revenue it is generating i think for long term investors it is one that you can own and tuck away. Having said that, i do agree that i think technology is vulnerable i mean it is interesting on a day like today before i stepped into the studio we saw that the nasdaq was down yet the market was still up a lot i think the market can overcome the drag that would be impressed upon it by way of whatever Pressure Tech stocks might come under by way of higher Interest Rates or inflation for the various reasons outlined earlier. Having said that, i think there are other sectors though they have to Work Together industrials, materials, and financials that can conspire in a positive fashion to overcome the drag from technology, even if it doesnt mean Technology Goes down a lot. Just relatively speaking, its leadership may be usurped by cyclical sectors which is actually what we believe to be the case. Lets hit the home builder stocks they are outperforming the Broader Market again today after Atlantic Equities issued dr w horton and lennar as overweight. Those stocks doing well. Home furnishings are doing well. Do you stick with this trade, which has also worked pretty well it has worked exceedingly well i think it is a little topee on the nearer term. The Home Builders have gotten that way certainly been catalyzed by the pandemic but i think at some point obviously the pressure that might come by way of higher Mortgage Rates and already reduced affordability by way of the impressive move we have seen over the last couple years in Housing Price is going to once again conspire to thwart some incremental perhaps activity more at the margin having said that, the cohort, the millennials, some 90 Million Dollars or so, continue a large percentage of firsttime home buyers they are moving into the Housing Market because of the still reasonable affordability and therefore, i think other areas in and around the Housing Market does have a pretty formidable runway ahead of it. Charlie, where do you stand on these stocks . Housing trends can last decades, wilf. I think these are not Quarterly Trends i think there has been a real reversal we are certainly seeing it here in chicago and a lot of major cities you have got to go stock by stock. I think some of the Home Builders have run a long way Stanley Black and decker, which is in the tool business, there are some trends here, first american, that guarantees mortgages. This i think this trend could go five or six years we are still at home start levels that are bay below peak levels we went lots of years with many more than a million starts a year we are not really at peak levels, by any means. Paypal set to report earnings after the close. Kate rooney has a preview for us. Analysts will be looking to see if paypal can keep up the momentum and record numbers it saw last quarter total payments volume is key here investors are looking to see if the battered travel and events category saw any signs of recovery and if ecommerce kept up its growth. They want to see if venmo sees any signs of being able to monetize that app. Investors are looking to see forecasts for 2021 the stock has been a big winner as people move to Digital Payments it is up 72 so far this year. Kate thanks as you said, the bar is high a phenomenal performance so far. And in recent years so far year to date. Charlie, where do you stand on this name . I know you are a Goldman Sachs fan. I guess the valuation gap between the two is the main reason for that . Goldman sachs versus . Paypal. Paypal. Yeah yes. Huge difference. Both great business. I dont want to disparage paypal a. Wonderful business. But we do think, again, valuation, Goldman Sachs, is trading at less than book. Trading at nine times earnings paypal is a stock that a lot of people already love. Goldman sachs is an unloved opportunity. Mark, how do you see paypal it really has been one of the seemingly beneficiaries of the move to on line everything, including online payments since the pandemic it was winning before that as well is it still worth buying at these levels i think one has to be careful about buying i would be a buyer on dips if i was an owner of it i would probably be reluctant to part with it. Obviously the Movement Towards e retailing and ecommerce is not going to fade. Its not it was created in an environment in which we had covid19 this was something that was only accelerated by the pandemic and sheltering in place. So i believe all the things in and around the ecommerce space which is benefitting from what had been a very strong consumer position going into the pandemic, and in spite of everything that would be worrisome relative to the state of the consumer has remained intact give the personal spending and income numbers we got as recently as last friday all indicate the me i want to be long those thing that are going to expand the benefit of the ith diddal spending. All three of the major indices are higher the nasdaq is the laggard. The s p is up 1. 1 the dow up 1. 5 energy up 3. 5 after a massive intraday turnaround for oil prices, the worst performing sector is communication services, but it has just gone into the green to take all 11 sectors into the green ten of the 11 sectors are in the green. Tech is the sex worst. Approximator, hence why the nasdaq is the worst of the three indexes. Dow is up 1. 6 , s p up 1. 2 at the close. Sara. November starts on a high note at least for the bulls. Welcome back, everyone, the closing bell. Im sara eisen here with wilfred frost. Look at how we finished the day on wall street keep in wind we are coming off of the worst week in stocks. Honeywell and wallgreens were the biggest winners in the dow today. Disney and mcdonalds, the biggest losers the s p 500 up 1. 25 all sectors managed to close in the green. Communication services, which was the worst perform, just went positive on the session. Energy, though, the big winner, up 3. 7 . Materials, industrials and real estate also topping out the best performing sectors the nasdaq lagged. Technology was not the standout today. And thats where it only closed up. 4 the small caps had a very strong day. They closed up 2 and were overall the winners. We continue to see the theme, small versus large value overgrowth cyclicality. A lot of people say it has to do with renewed hopes for stimulus after the election mond disease is set to report earnings in just a moment. The ceo will join us and talk about whether or not americans are starting to stockpile snacks again in this coronavirus environmen environment a. J. Odin joins the conversation welcome back, a. J. Good to see you. First to you, charlie. You played the role of mike santoli in the past. This is a good day for you to do it because your beloved value stocks outperformed. What happened today . Well, they tend to be viewed as tied to the economy i think thats fair. I think one of the reasons why they have had a tough 2020 is it has been a tough year for the economy. When people start to focus on thing that maybe mean the economy is going to get better that tends to be very good for value stocks joe biden is controversial but we think a stimulus bill is probably likely under a biden administrati administration thats going to be good for the economy. Deficit spending is probably good for the economy when people focus on a better economy, value tends to do better. A. J. , whats your take on why we rallied today are you worried when we saw the data of rising cases in the u. S. , more lockdowns in europe, that the markets got abit ahead of its self. Thats a good question, wilfred. I think the market is possibly pricing in the Election Results a little too soon. Just like you said, i think, you know, we have case counts rising in the majority of the states right now. We look at you were. T we look at europe, the uk. Uk is going back into heavier restrictions we arette heading into the winter yes i am concerned we are pricing in a election result too soon and we could see more volatility shortterm and long term into the winter. What sort of stocks, a. J. , do you want to own if you have that view what places in the market do you want to be in . I still like i. T. I know i talked about this before obviously, as the nasdaq pulled back a little bit. But if you look at what brought us through march, it was obviously a little bit narrow growth in most of the it sector. But the work from anywhere stocks will perform well again if we go into another lockdown if you look at the businesses the retail that have ecommerce businesses there is potential to have growth there. But i like i. T. Overall. We mentioned some of the european lockdown measures a lot of economists forecasting a double dip recession in europe if that were a conversation piece here in the u. S. What would it do to markets my gosh, wilfred, i think it would slay markets even on improving estimates for 2021 of 164 and change and rising leaves the market vulnerable when you are trading at 20 odd times forward those earnings expectations. Anything that looks remotely close to the contract i dont knowian measures that were taken in march and april of this year when we saw a contraction of the s p 500 anything that hinted at something akin to that would be problematic i think obviously one would expect to see a ricochet basketball once the reopening occurred nonetheless, we have seen a massive rebound in the Third Quarter. And ism leading components of it showing very good numbers, best we have seen in more than a decade suggests that we can afford some mitigation protocols. We can afford a little less mobility thankfully at least at the moment there doesnt seal to be the appetite for resorting to that type of stricter protocol like we had six or seven months ago. If it were to come to Something Like that then i think the market would be subject to a significant mark down. Charlie, question about the economy and your sort of world view, that value is due its chance overgrowth, that growth got too expensive and you dont want to touch that can you see an environment where the economy booms and the market does very well if the Growth Stocks, the giants that underpin our economy dont participate, like apple and amazon and facebook and google . Thats a fair question, sara. I do i am sorry to be repetitive on this i think you have to view it as two separate markets google and netflix and tesla do not trade the same way that warner and viacom cnbc do. They are very different animals. We had in the Third Quarter we had the best Economic Growth that we have had in the history of measuring gdp it was a vshaped recovery i think we can absolutely have continued growth from here in that kind of market, the names that are still cheap and are tied to that economy can perform very well. I happen to personally think that a lot of these faang names have extremely good futures baked into their stock price if you look at teslas valuation people are assuming a lot of great things are going to happen if you look at boring warners valuation, people are assuming terrible things are going to happen i would rather own the latter. Got it. I want to hit the mondelez earnings the snack maker is out it looks like a beat, especially on sales lets hit earnings 63 cents adjusted. The expectation was for 62 a beat on the bottom line. On the top line, 6. 67 billion better than the 6. 48 that analysts were looking for here they saw growth across all geographics but north america stands out net sales up 12. 9 there from last year. They saw higher volume asks prices helping those north american sales in particular they did better than europe. They are putting out higher margins and higher guidance as well the earnings per share guidance is not but they continue to look for organic Revenue Growth up 3. 5 . We will talk about the ceo of mondelez in just a moment to find out what is driving this strength, whether or not it is consumers snacking up again in the wake of the coronavirus on snacks like oreos or whether sales like this is just the new normal, which we have heard from the ceos they expect the greta to continue because they say we are changing our habits and are centering around the home more for now, they continue to report much better numbers. Also if this is people being healthy or allowing themselves indulgences during this challenging year with the lockdowns we are seeing in europe, they have got a lot of exposure there. They do it is their biggest chunk of sales. Monz leez is interesting because 80 of their sales come from abroad it is a u. S. Based company but they have huge exposure in europe we will talk with the ceo to see what is happening in europe f people are stocking up on snacks we have smaller pantries in europe, which we heard from the ceo of uni lever kept sales down there. Smucker and other food stocks were doing well because of the category because it was snacks and it was goble before the pandemic it hasnt been only a pandemicrelated boost, charily. I assume thats where you were going to go with mondelez. You wanted to talk smucker. You read my mind. What is interesting to me is how the market is treating them so differently. People are acting as if the big increase in folgers sales are temporary. I think people are discovering that instead of paying 5 for the latte they can spend 25 cents on the cup of folgers in their house and find a very good cup of coffee. I think there is going to be more permanence to some of these shifts i think people are going to consume more food even after we get past this. If i am right or wrong on that it is interesting the desperate way the market is treating some of these covid beneficiary stocks versus others. I think smaller pantries in europe, so unless you move from europe to new york city in which case i would argue unless you are like ken griffin that your pantry is almost nonexistent in size anyway, lets get to bob pisani for a closer look at all the stocks that were on the move today. Bob . Wilf, new month and the emphasis is on stimulus. Its very obvious if you look at how the sectors and the indexes moved. Look s p small cap dramatically outconfirmed the s p large cap, the 500 today. Small cap outperforming generally stimulus influence also, s p equal weight index, all equally weighted against the s p market cap weighted index, the 500 also outperformed. Equal weight out the performing that also fiennes tech Growth Stocks are underperforming another sign of the stimulus trade. Cyclicals over defensive stocks. Energy stocks like occidental which was at a new low last week and has been rising off of the new low last several days had a great day. Same with the retailers most of whom had terrible years by and large. Gap has done better. Gap had a good day along with the rest of the retailers. Not far from their 52week high. The mega cap growth names all being sold amazon sitting at a sixweek low right now. We also saw the stayathome stocks like zoom and docusign also weak today. Back to you. Bob pisani, bob, thanks thanks to charlie and mark and a. J. For joining the conferring as well. Good the see you all. When we come back, stockpiling snacks use ceo of mondelez discses whether consume remembers stocking up on groceries because of looming coronavirus concerns. Back on closing bell j must 90 seconds. Were excited to do business with you but before we sign i gotta ask. Sure, anything. We searched you online and maybe you can explain this . I cant believe that garbage is still coming in. That is so false frustrated with your Online Search results . Call reputation defender today to join tens of thousands whove improved their online reputation. Get your free reputation report card at reputationdefender. Com or call 18778668555. Mondelezs stock is higher right now on an earnings beat just reported. North american revenues up double digits in the first quarter. Also we saw organic Revenue Growth almost double what analysts were expecting at 4. 4 . Mondel mondelezs ceo dirk van deput joins us now good to be here. Looks like the sales trends were stronger than what wall street was expecting what drove it . What parts of the world . What are you seeing from consumers. Well, if i look around the world the good thing about this quarter for us is that we see growth in all our regions, in north america, very strong europe, also quite strong. Also in amea and latin america we had a very good quarter the Second Quarter was slower but all region versus come back. If i look at consumers the biscuit and chocolate consumption remains very high. Even chocolate which is consumed a lot throughout even if you include that, results are quite good the one category which is really consumed on the go, gum and kund candy, thats a little bit affected by quite a bit affected i would say by the consumer staying more at home and being less mobile. Overall, we see the consumer snacking well, snacking more than they used to, particularly at home. And that is helping our business i mentioned you also provided guidance expecting organic sales growth of 3. 5 how do you look into the future of the sustainability of these types of numbers without knowing where the virus is headed, whether we are going to get a vaccine, whether we are going to get more stimulus. All those wild cards what gives you confidence in the view forward the good thing about this quarter, in fact about all quarter this is year is that we have been able to increase our market share so if you look at the categories i was just mentioning that we are active in, over the times and even in recessions they do relatively well. Lets say in a serious recession coming at us, our categories could grow to could slow down to 2 growth per year. With the market share increase that we have been showing, i think we can deliver a 3 , plus, growth even next year. And that is in line with what we have promised our investors. That is our long term algorithm as it relates to our net sales and we think thats possible at the moment we also have been working quite hard on our costs and putting in place Cost Reduction activities. So even as it relates to the bottom line, our bottom line this quarter was particularly good with doesnt digit growth but we expect Going Forward where we have promised we would be mid single digit growth of our bottom line, we think that is sustainable. What are you seeing dirk right now in europe, in recent weeks, as they are heading back into lockdown mode in terms of stockups and staying at home the european consumer during the first wave didnt stock up as much as the north American Consumer obviously, going into lockdown has a number of effects. The consumption at home, anything at home will become more important cooking, but also snacking, biscuits and chocolate, as we saw last time. But the stockpiling in europe the first time was evennot as high as in the u. S i expect the stockpiling to be limited this time. But it will safly affect the behavior severely affect the behavior of the consumer as i said, everything at home will be important. They will do more and more of contactless life so buying a lot on line. Ecommerce will boom i think it will be focused on hygiene, immunity, keeping their weight under control all the things that they are worried about. And they are going to feel safe. So i think that we have seen in the past months is going to be reinforced all over again with these lockdowns in europe. Dirk, we have ceos like yourself on that articulate the point that benefitted from lockdown and people eating at home more, that that wont go away this the long term and also arctic late there would be a further boost when we have the lockdown in europe it sells like both cant be true my question is, in two, three years time when hopefully covid19 is something distant, in the rearview mirror, do you think you would have net gained or net loss from all of this in. We have product categories that benefit from athome consums. We versus will product categories affected by consumers not being mobile gum and candy. We have a business that is about 35 emerging markets and consumers staying at home where they are normally much more mobile buying in stores affects our business in a negative way we sort of have a dual effect. We are happy at the moment because the increased athome consumption is offsetting the decline that we see in the traditional trade or in gum and candy. Going forward, i dont believe that the consumer will remain at home once this is behind us, they will be out and about. They will go back to work, back to school. They will travel again i think thats coming back in our case, that shouldnt make a big difference because the athome consumption will come down but the on the go consumption will come up and it will balance out thats the reason why this year and next year we will deliver results that are largely in line with what we promised long term. We talked in the past dirk about stress eating, which is a real thing how do you track that . And where is that now relative to where we were this the u. S. Say in march and april with the election tomorrow . Do you see any pickup there . Yes i we see the consumption in the u. S. Has come down its still at an elevated level. Its higher than it used to be last year, lets say but its lower than it was in march and april when this crisis started. And thats understandable. I think we have all settled a little bit in this situation as these waves come back and now particularly for instance in europe, you can expect that the consumer will get more anxious the elections certainly are not going to help. And as a consequence, yeah, you can expect these elevated snacking at home to continue for a while. The other thing weve seen is that there is also this nervousness about feeling safe and feeling healthy. And consumers go to products that boost their immune system they think a lot about keeping their weight under control and things like that so you have got both you got stress eating but you have also got health eating, if you want. Im somewhere in between. Dirk, thank you. Good to talk to you. Thank you for having me always good to have you fresh off the mondelez results. We have a news alert right now on Royal Caribbean seema mody with the details. Sara, Royal Caribbean cancelling its sailings for the rest of this year. It follows similar news from Norwegian Cruise Line this is morning which also canceled all of its u. S. Cruises for the rest of this year this comes after the cdc lifted its nosail order, changed that to a conditional sail order and sort of outlined the path forward for the cruiseline saying now there is a fourstage approach they want the cruise lines to use to get back to sea, which includes setting up the Testing Facilities for all of their crew member asks also undergoing those mock voyages stimulated ships were employees and volunteers would get on and Health Officials would be able the test the cruise lines Covid Protocols including social distancing on board and the ability to transport passengers to the ports clearly it is a path that will take time and cruiselines feel like they need to push back their crazing indicts. Norwegian and royal pushing back sailing dates until next year. Up next, Liz Ann Saunders will join us to discuss whether oc will be able to build on todays bounceback with so much uncertainty still out there. 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 hundreds on your wireless bill. Plus, get 300 off when you buy the Samsung Galaxy note20 ultra 5g. Learn more at your local xfinity store today. Welcome back markets ended the day higher after losing steam earlier in the session. This comes after last weeks sharp decline. Joining us now, Liz Ann Saunders from Charles Schwab. Thank you for joining us. Thanks for having me. Clearly, we had a nice bounce today. But small relative to the declines of last week. What led the sharp declines last week are all of those issues now behind us . I think if you think about the catalyst it was more catalyst than causes just because we had seen sentiment get a bit stretched again by certain cohorts and certain pockets of the market. Election uncertainty, resurgence of coronavirus cases, the lack of essential relief packages, no different in terms of what has driven prior pullback phases, the three week in september when we saw a similar declient and some of the rotation that we are seeing i dont anticipate we ease any of those uncertainties in the near term. I think what you are seeing under the surface especially in regard to some of the circling around the vix in the market is the assumption that after the election we will get a demunicipalation in volatility we will hopefully have an idea of what the outcome is either late tomorrow night or the next morning. I dont think from a volatility standpoint a contentious election is built in in we get that we could see more vikes in volatility. Aside from that i think the weakness we saw last week was enough to generate the kind of reversal we saw today. How closely are you watching yields and the dollar in terms of what they mean for equities and which sectors are likely to do better . One of the reasons why i came to the conclusion that that sort of trifecta of uncertainty, the virus, the and the election arent necessarily indicative of a significant shift in what we perceive the trajectory of the economy to be is what we saw in the bond market in the fact we did not see a significant decline in yields that would be in conjunction with grave concerns about the economic trajectory i think if we started to see more significant action in the bond market, in the dollar, some combination that suggests maybe a changing outlook for the economy, then i think we probably have another bout of weakness for the stock market separate from those sentiment adjustments that were made by vir true of those catalysts. Why do you think, liz ann, the market isnt as fearful or going back to the playbook as a second wave and rising hospitalizations take over in europe, we are seeing it here in the u. S. Even in the selloff last week the stayathome stocks werent big winners. Why . I think the stayathome stocks had been leading into this the big winners sense we are in this more stitish market environment and rotational market environment when it comes time to trim where profits have been you trim where profits have been most significant. I think the tech names are kind in the cross hairs of washington there arent many areas of bipartisan support in washington right thousand but looking at the money on listic ten sees of these companies perceived or otherwise has been brought up as a more recent risk factor for those names. I think there is a hope that absent a significant pick up in mortality rate that we have learned a lot more about the virus and that we have the ability to not breeze through it but get through it without the kind of economic carnage that we saw during the marchapril time frame and i think an assumption this we are not going to go to federally mandated lockdowns, even if as human beings we make decisions based on our own safety. Liz ann, what if we do see some level of government or state mandated stepback in that we are allowed to do doesnt have to be a full locktown doesnt have to be as strong as what europe is doing right now how sensitive to those measures will the markets be . I think fairly sensitive, particularly if you start the see it in the Economic Data. We are certainly past the phase in the Economic Data where the percentage increases off the low are not going the repeat themselves thats simple math having no to do with the trajectory in the virus. Certain metrics, some labor Market Metrics and retail sales we are already back in the case of retail sales to prepandemic sales. You are not going to see a repeat of those percentage increases. I think say what the keep an eye on would be those metrics that we are all looking at, mobile based, data, open table at seated diners. Also the labor metrics that are so important, continuation of a pickup in permanent job losses which has been in contrast to the decline in temporary layoffs. I think friday will be important in terms of the percentage of the unemployment that are now long term unploit, more than 15 weeks. That becomes an economic hurdle given they are more likely to drop out of the labor force and it make it more difficult the longer they are unemployed to find a new job i still think those are the metrics to focus on either with lockdowns or without lockdowns to judge how big an Economic Impact we are likely to see associated with this particular wave well keep an eye on them as always, liz ann, thank you. Paypal earnings have just come out looks like a beat. Kate rooney with the numbers sara, the stock is down about 3 but it was another Strong Quarter for paypal, the company beating on the top and the bottom line and raising some of its full year guidance the top line first, revenue grew at 25 year over year. It came had at 5. 46 billion better than expected on the about ol line, nongap epz, 1. 07. That was a beat by 13 cents. Total payments volume, thats a key number here, it came in at 247 billion, 10 billion more than analysts have been hook for. 44 came from venmo, that was up more than 60 year over year the company raising guidance looking for double growth next year in payment and revenue. Company adding 15. 2 net new active accounts in the Third Quarter. All of this on the backdrop of a booming Digital Payment environment. The stock is up more than 70 this year. Enit taking a hit after hours here it is down almost 4 . That was a tough set up with such a strong rally into that number kate rooney. The race for the white house Takes Center Stage during tomorrows election of course. Coming up, we will discuss why investors need to keep alo cse eye on which party wins control of the senate. What it means for wall street. Well be right back. keeping your oysters growing while keeping your business growing has you swamped. you need to hire i need indeed indeed you do. The moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base so you can start hiring right away. Claim your seventyfivedollar credit when you post your first job at indeed. Com promo time now to get a cnbc news update with sue herera. Hello, everybody. Heres whats happening at this hour a. Federal judge has rejected a republican attempt to throw out 127,000 votes cast at a drivethrough Polling Center in houston and harris county. The group that brought the suit says it will appeal. In kentucky, early voting is wrapping up. Nearly half of the registered voters in that county that includes louisville have already voted. Across the nation, nearly 98 Million People have cast their ballots. That is 71 of the total vote in 2016 in washington, d. C. , businesses are boarding up their store fronts in preparation for possible unrest on election day. The nationals capital is one of a growing be in of cities where stores are taking such measures. Austrias interior minister says several are believed dead in shootings in vienna the shooting is being treated as a terrorist attack and that the attacks occurred at six locations. Thats int news update at this hour. Paypal shares lower after reporting earnings whheat t companys ceo has to say about the results before the Earnings Call begins announcer tomorrow, election 2020 Shepard Smith anchors cnbcs unparalleled coverage from coast to coast what the vot. Up next, the election and your money investors close rewatching the race for the produce but our next guest says another key race will impact the markets. Look at shares of cirrus logic. Up 8 afterhours. Well be right back. Do you have a Life Insurance policy you no longer need . Now you can sell your policy, even a term policy, for an immediate cash payment. Call Coventry Direct to learn more. We thought we had planned carefully for our retirement. But we quickly realized that we needed a way to supplement our income. 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The moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventyfivedollar credit when you post your first job at indeed. Com promo markets closing higher on the eve of the election. Biden is ahead in the polls. Our next guest says whats key for investors is which Party Controls the senate. Joining us, michael, of Morgan Stanley. Which race should we be watching closest. If the democrats can pick up the senate, they have to pick up four states in order to do that. Colorado, arizona, maine, and North Carolina at the moment the polling leads are much more row liable for them in colorado and arizona closer in the other two. This is something i think the markets are going to be paying a lot of attention to on election night. For us, that means, if the senate is democratically controlled and joe biden takes the house, it means a path towards fiscal expansion. You think there would be no fiscal expansion if the democrats dont win the senate to be clear, i think you could still get fiscal expansion, but it would probably require some type of demonstration by the economy itself or markets that thats needed the challenge here is because right now you have republicans in the senate who part of the reason that the covid stimulus relief package has been stalled have very clearly laid down they are concern about further deficit expansion and they are not convinced the economy needs more stimulus. The problem will still be there even if joe biden takes the produce and republicans keep control of the senate. You might have to experience pain in the data and challenge in the markets before you get there. Ultimately, though, i get the focus on the size of the stimulus, michael. If you did see republicans keep the senate and biden take the presidency, the scenario you are laying out, ultimately, isnt that good for stocks, to have divided different parties in control . Isnt that ultimately the best outcome overhistory for the market certainly what investors tell us certainly i would say there suspect a lot of consistency between different government configurations and different market performances over time. We do see in survey as divided outcome is the best. If you also have the view that the economy has not fully achieved self sustaining status after covid, it hasnt achieved escape velocity you would still need a fiscal boost. I think a lot of whether or not this matters comes down to whether or not you think the u. S. Economy has done enough to stand on its own or if you think we need another boost to fiscal stimulus to keep it moving forward, the v shaped recovery underwritten. The quickest way to get that boost would be if the president reclaimed the white house . I think thats one configuration in which it is likely you would get that fiscal boost. The package being negotiated in washington, d. C. If the president regained the white house, you would think the progress on that would continue and you would get that passed. If the democrats were to take control of both the senate and the white house you would roblly get that same fiscal boost, probably even more, because the democrats expressed a desire to do an even more substantial number it is really just the configuration where the democrats take the white house and the republicans keep the senate where there would be a tougher route to get there. Thank you for joining us. Thank you for having me. Tomorrow night keep it here on cnbc for special election coverage it starts at 7 00 p. M. Eastern time and will go through to squawk box the following morning. Up next we are heangutdi o the a key county in a crucial battleground state what we are seeing on the ground ahead. Closing bell back in a couple. 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 hundreds on your wireless bill. Plus, get 300 off when you buy the Samsung Galaxy note20 ultra 5g. Learn more at your local xfinity store today. The 2020 election is tomorrow leading up to the big day sullivan has been visiting key counties today in grand rapids, michigan, brian, what are you hearing on the ground . Im hearing this is the final stop in our eightday election road map road trip, i can tell you this much, if you are just dog the signage poll, driving around neighborhoods in between going on air, id say it was 50 50 this is i county both kent candidates want and need and last friday trump flew in at the last minute. Just got word donald trump will be here in grand rapids later tonight this was his last stop in 2016 maybe superstitious copies what he did last time the signs and stickers are 50 50, biden with the advantage advertising. But this is a crucial county thats been shifting more and more did blue. The whole state went to trump by fewer than 11,000 votes in 2016. The early vote way up, nearly double the number of people have cast their ballots as 2016 obviously because of covid, were at Polling Center, long lines, people are willing to do it kent county along with mccomb and. Joaquin the three counties to watch but maybe dont expect the result Officials Say it could be up to three days before we know the results from michigan not that it will be, but that it could be theyre processing the ballots but wont start counting until tomorrow morning 3. 6 million absentee ballots have been requested and 2. 5 million already returned as i noted President Trump will be in town tonight joe biden ads and signs are also everywhere grand rapids, michigan, certainly one of the hottest of hot counties in the swingiest of the swing states, if you will, guys well, it looks very cold there right now brian. Yeah, you know what my question has to do with the economy and what the pretty it looks pretty go ahead. No i was just wondering about the bounce back. Its a nice scenic back drop youve got whats the recovery been like there . Last time around President Trump ran on creating manufacturing jobs and helping the Auto Industry and starting a fight with china whats it been like for that state . Unemployment here in kent county is 6. 6 percent. Of course it spiked like many other places it was 2. 4 percent prepandemic you got the home of amway. Betsy devos by the way, trumps education secretary one of the richest people in the United States her husbands family is the founders of amway and they own the Orlando Magic as well. And per go the drug manufacturer and meyer stores im sure if you know your midwestern roots, based here as well a lot of auto to your point have those manufacturing jobs come back, the winner in 2016 is because trump convinced lifelong democrat foz go to g. O. P. Because he was talking about jobs so the question will be this year has that bluecollar mainly union voter, have they permanently abandoned the Democratic Party or was it a test because trumps his own thing with his own message and so maybe will abandon it and go back to blue certainly what biden is hoping also dont lose sight of thirdparty ballots, not the name recognition this year, well see what happens to a lost those votes. A lot of intrigue around the great state of michigan. The mitten, as you know, fear the mitten. Yes and i did shop at meyers as a midwestern girl in cincinnati growing up. I knew it. Thank you as always, brian, from grachnd rapids, michigan. Dont forget to watch election coverage tomorrow night promises to be dramatic night after the break, a recap on wal street and look ahead to what every investor needs to be watching on election day plus what the ceo of paypal said about earnings as it moves lower in the after hour session. Closing bell will be right back irst idea was in one quarter of an hour, your savings will tower. Over you. Figuratively speaking. But thats not catchy, is it . Thats not going to swim about in your brain. So i thought, what about. 15 minutes. 15 percent. Serendipity. 15 minutes could save you 15 or more on car insurance. But we are hoping things will pick up by q3. Yeah. Uh. Boss doug . Sorry about that. Umm. What. Its. Um. Boss you alright . [sigh] [ding] never settle with power e trade. It has powerful, easytouse tools to help you find opportunities, 24 7 support when you need answers plus some of the lowest options and futures Contract Prices around. Dont get mad. Get e trade and start trading today. We started by making the cloud easier to manage. But we didnt stop there. We made a cloud flexible enough to adapt to any size business. No matter what it does, or how it changes. And we kept going. So you only pay for what you use. Because at dell technologies, we stop. At nothing. 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Q4 guidance is light, part of the reason the stock is down 7 percent. Theyre investing heavily in Digital Products about 300 million so that could have something to do with the miss on guidance he also did mention cautious optimism going into the back half of this year and next year. A lot of Macro Economic uncertain, mentioning the virus, vaccine and stimulus so theyre looking at that as well he did say Digital Payments really helping the core business, seeing people ditching cash and using some 6 their products like venmo. Back to you. Stock down 6 percent after hours as we seen stocks have their best day since october 12th, the s p 500 the eve of the election, the uncertainty abounds well see how the market takes it into tomorrow and into wednesday of course. In the back drop we have a crazy environment where coronavirus cases and hospitalization and lockheeds rising in europe and manufacturing data in the u. S. Coming in the best level weve seen in years. Its not a certain trajectory for the economy in the absence of stimulus and without knowing the results of the election. And cyclical tilt on that performance today, also keeping an eye on not just the election but whether this is a one day bounce for europe. The stocks 50 was up 250 well have to see in u. S. And europe whether the bounce back was short lived. Were out of time on closing bell. Fast money starts now. Im melissa lee and this is fast money. Trader lineup tonight we trading the vote, three big market scenarios could play out based on tomorrows result plus Morgan Stanley rolling the dice often biden, why he could hit the jackpot if he hit the white house. And dans fast pitch, he says if you play this social media stock just right could be