Transcripts For CNBC Closing Bell 20240711

Claims came in better than expected, 709,000 signaling more improvement in the labor market. And treasury yields dropping sharply following yesterdays bond market closure. Thats putting pressure on banks, which are among todays worst performers though still strong performers for the week 59 minutes left in the session, sara every sector firmly in the red. Ahead on todays show, chipotle unveiling its first ever digital only restaurant this week without a dining room or a line for ordering we will speak with the ceo brian noccol about the strategy there. And Jeremy Grantham said he thought the market was a mccoy bubble we will get an update on his that it is since those comments. Disney, pal an tear and cisco reporting after the bell we will bring you the numbers as they happen. Mike, whats the market dealing with. Contending with worries pileup of news on the shutdown, on the virus, maybe getting worried about what growth is going to look like in the First Quarter or two the s p 500 was up 9 month to date coming into today sort of got turned away here at the very top of the range we have been talking about for a while. Also the opening pop on the the Pfizer Vaccine news monday morning. 3640, here we are more than 100 s p points below that. Looks like a shortterm sell the news reaction. It doesnt really appear to be much of anything at this point besides a ibt of a digestion, consolidation after this nice run higher some of that car growgraphy thats been keeping the indexes on an uptrend, shifting among sectors and staying in an upward direction maybe is falling down. This is the nasdaq 100 relative to the russel 2000 this is back into the final days of october here tough nasdaq underperforming. Growth trade falling relative to the cyclical trade, right . Yields rising and nasdaq doing down relative to the russel. Then, boom, pop, different story. Thoi we price in higher nominal growth and yields going back up and it is going to be the reopening trade. Then what happens . The election and it is split government and no stimulus you can see the erratic action, all on red or all on black type betting. This is faltering and so some of that gets destabilized in the shortterm i think the sentiment had a great effect today this is a shoot up to more than 50 bulls from a minority bullish for a while. It is rare it is the highest reading of bulls since january of 2018 before a selloff there you have seen these other sharp moves. That was after the 2016 election in itself it is not a rally killer but it tells you people have gotten on board the idea that we have gotten some of the confirmation of news we were waiting for. Everyone assuming a Fourth Quarter rally as opposed to thinking maybe we have seen enough with the 6 gain quoted today. I think this is a slightly cautionary sign conn conjennings with other indicators of professional tactical traders that jumped all in thank responsible and a cause for some of the slippage we are at session lows as we speak. Back down 440 on the dow, 1. 5 . Lets bring in Daniel Sherman and tom lee. Tom, to you first. The range mike was pointing to on the s p, wufly 3,200 to 3,600. Clearly we are much closer to the top of that at the moment. Which of those two numbers though are we more likely to test first given all of a sudden some of these shortterm head winds that the market might be facing i think that its kind of understandable the market is taking a breather today, because it is overbought and we have had a lot of exuberance the last couple of weeks. So i think we are going to test the upper end of that range and then potentially break through it the reason i think there is going to be sort of steady bidding is number one as mike pointed out, the Retail Investor who has been bearish since march finally turned bullish thats 2 trillion of cash coming off the sidlines that will start to bid. The vix is up today but i think its really marching its way towards below 20, which would be when it gets there a huge riskon signal and then we have europe cases rolling over i think it is encouraging. It is starting to rollover finally the santa claus rally. I think things are push stocks towards the upper end of that range. Sorry i thought it was sara. My apologies jeff, coming to you in terms of the outlook for rates, cleel they have got a nice job post the election today after a closure yet polling back is that a sign that the elusive 1 level on the tenyear is going to be quite far off still for a while . I think it is, but you have to remember that the bond market was closed yesterday in honor of veterans day. There is a little bit of a catch up that takes place. We had a big bond auction. It caused a shortterm reversal in yields upward again you mentioned stocks are low, so are the yields as well, tens and 30s. You mentioned the 1 level i think that is something to focus on at this point it has always been the contention of the market that the fed wouldnt really let the tenyear go above 1 that they would talk more about yield curve kreel and try to reign it in at those levels. If you look at the euphoria you saw in the market with the hopes of a vaccine on monday it really tsai skyrocketed rates i think what you. He the rates market, something we have been talking about over the course of the summer is that there is the tendency for rates going directionally higher at this point in time. When we look across kind the metrics there we think fair valley is probably in the 1. 25, 1. 5 range without interference but it is not going to happen overnight. If indeed this vaccine is going to pull through and get people back out there and we will get the economy going again rates should go higher at that point in time. I think what you have is a little bit of you know, there was a sharp move this week but we broke out of the range. Thats what you have got to look at for we were mired in a range of testry trading from 55 basis points to 80 or so we have been out of that range for the last week or two kind of vacillating around there. But if you draw the line to where we had the highs before earlier in the year, the couple days back in june now thats the bottom of the range right now. We are looking to see if this is going to be a pivot point to signal rates going higher. At one point it was fiscal stimulus driving up flags, now it is the vaccine driving growth both factors will be dejested by the bond market and thats going to determine the direction of interest rates. I get the optimism around the vaccine, tom, and how that bodes well for the economy in the longer run, but the broader public is not going to be vaccinated until next year at the moment, we are seeing us go the opposite direction. Cases are skyrocket asking we are starting to see regional restrictions pick up including the latest advisory from the city of chicago to stay at home unless you are going to work for school which essentially shuts down the restaurants so the question is, what growth point are we going to be starting from once we do get the vaccine, tom and does that pour some cold water on the enthusiasm and the upbeat nature of the call that you have on growth and stocks . Yeah, it meets it is a waiting game because the vaccine as you are pointing out, it is not widely available for six months. How it is distributed is going to be really important because it may make sense to make sure it is delivered to the essential workers. A lot of studies are now showing there are super spreader points of interest so you know the majority of covid is actually taking place because of restaurants. So i think if there are restrictions put around that, that could really help but you are right. It is a tricky period. I would just say, i think, you know, everyone is more prepared to deal with covid so i think mask usage it is great to see that. And on cnbc, you guys have a health a medical expert from texas talking about how in texas some of the areas of texas arent seeing the surgest because people are kind of going back to the masks and they are taking steps so you know, its everyones responsibility but you are right. We have to be careful. I mean, because 12 months it certainly looks a lot better but the next three to six is you know, its very tricky. Bitcoin is breaking through key levels whats the story there is there a Biden Bitcoin connection, tom . Probably. Bitcoin came into 2020 with a lot of tail winds because the happening was taking place now i think we are seeing credible investors starting with Paul Tudor Jones and stan druckenmiller. We are seeing interest from our clients, we are getting inbound queries. I think the quality of the team supporting bitcoin continue to be high. As you know, bitcoin is a really secure network and proving to be a good store value and i think a better alternative to gold in terms of those looking for digital gold. Past 16,000, tom lee thank you, jeff sherman good to see you as well. Coming up on the show, investing legend Jeremy Grantham told us in june that the market was looking at a fourth real mccoy bubble of his career have his views changed because of the Election Results and the Covid Vaccine results . We will find out in a few minutes. You are watching closing bell here on cnbc back in june, legendary investor and gmo cofounder Jeremy Grantham called the market the fourle real mccoy double of his investment career. He also advised investigators have zero exposure to u. S. Equities the s p is up 14 since those comments earlier i sat down with Jeremy Grantham in an exclusive interview and asked, is now still the time the sit on the sidelines. Yes, i would say even more so the role of the bear in the last 50 years or longer has been a pretty tough one you have long, drawn out bull markets and little tiny bear markets. It really isnt fair. The critic could say, jeremy, you know on june 17th you suggested it was the fourth real mccoy bubble of your career. But markets have rosen close to 20 since then. Why is your conviction still that it is a real mccoy bubble as it were. It was quite the other way around the more spectacular the rise and the longer it goes, the more certainty can have that you are in the real mccoy bubble you want to see lots of crazy behavior, which we have really seen a lot of since we last spoke. And you want to see not just the market rise, but if anything, an acceleration and the rate of market rise since the turn in march, april, has been nothing short of sensational. And that was that was a feature totally lack flag the tenyear bull market preceding covid. In fact, both things were lacking. There was very little crazy behavior it was more the kind of wall of worry. Everyone was nervous and conservative the market just ground up. And the speed was unimpressive a kind of steady drum beat and this is quite different. This has been powerful, rapid, and in many areas, truly crazy does the prospect of a successful vaccine early next year change your view of how convinced you are that we are still in a bubble . No, not really. The bubble mechanics actually have relatively little to do with the economic realities. A bubble forms its own kind of psychological node, if you will. And weve seen that in this last few months since we spoke. The market can go up on bad news and go up on good news it can interpret a Trump Victory as bullish, and then seamlessly interpret a Biden Victory as bullish. There are all the characteristics of a bubble. There is nothing much you can throw at it when it gets going and as for the timing, i have never had any illusions about my ability to time the bubble breaking i have a very low definition of success, by the way. It is just that sooner or later, the market will be lower than the point at which i suggested you should get out of the market. I guess supportingthe marke both this year and for the prior decade has always been stimulus, both monetary and fiscal if we get to see both, still, at full speed, rates very low, possibly even more qe from the fed and we get to see a big fiscal stimulus package whether thats late thissier or early next year, could that keep this current bubble inflating for a reasonable amount of time . 12 months, 24 months i think 12 months would be a reach. I think 24 months would be extremely unlikely but you can always keep it going for an extra month or two. We have never had a period of such low riskfree rates as we have today and it has been at the price of all assets everywhere. The one reality you can never change is that a higher priced asset will always produce a lower return than a lower priced asset. You cant have your cake and eat it you can enjoy it now or you can enjoy it steadily in the distant future, but not both the price we will pay for having this market go higher and higher is a lower and lower tenyear run from the peak. Jeremy grantham there still more to come from that interview. His views on the election and the impact that could have on the market and the areas where he does advise putting money to work three or four areas in particular that stand out for him, sara. Last time around when you talked to him and he called a basketball it did seem more plausible. At that time hertz was bankrupt and people were still buying up the stock like crazy, on robinhood. And there were more maybe obvious signs of speculative behavior but it sound like he is doubling down. June 17th, last time, it was after a crazy sudden rally of sort of all sorts of odd stocks, as you said. And i definitely came away last time with the feeling very bearish. This time he said oh, it could go on a few more months and of course there has been a fivemonth gap from last time. You start to weigh up the possibility whether he could be missing further rallies in the market interesting comments to come, particularly where to put money to work given those views and the election, clear views on that as well. He is known for calling some big bubbles in his career. Looking forward to much more of that interview in the next hour. After the break, shares of schtick parent edgewell getting a boost on the bask strong earnings are people shaving more . We will ask the companys ceo about demand for more personal products beyond just shaving as we spend more time at home they next on closing bell. Edgewell personal carrey leasing its Fourth Quarter earnings this morning. The company goins brands like banana boat, schtick razors, wet ones wipsz while total sales fell 4. 7 in the quarter compared to last year their sun and skin care divisions rose sharply higher. That company also put out guidance joining us is edgewells ceo rod little good to have you here. Hi sara nice to be with you today. The results looked better than last time was this the summer of sunscreen . What did you see yeah, sara, they were sequentially better than what we were last quarter. I think what you saw in the market today and the reaction is the categories we play in are getting a little better and our relative performance in those categories is better so not only did we beat expectations on top and bottom line we were actually even better than our internal projection it is pretty varied in whats driven that result obviously, the demand for personal Hygiene Products is very high. Our wet ones business was up 85 in the quarter that obviously drove the results. Our sun care business continued to perform well. Interestingly enough, while shaving overall remains challenged the category improved versus the last quarter, down 6 versus down 10 two quarters ago and our womens business actually returned to growth. What we saw is women were shave being the same rate they did last year. So do you tie that to the fact, rod, that we did see economies reopen and people start to emerge about their daily lives . And therefore is it a risk that we are seeing this second wave and potentially more restrictions across the country . Yeah, i think it was a summer that people figured out how to be outside and then it was a later summer where the use of sunscreen for example, was heavier in the back half of the year so people figured out how to get whatever their normal was back into the routine a little bit. And on shaving, as women became, you know, figured out how to be outside, you also saw them shave at more normal rates guys are still shaving less. That is the case so as we go back into the next couple of quarters here, into the middle of the winter, for us from a sun care perspective, it is not a huge problem because thats not the peak of the season that would happen in the spring. Other than in the Southern Cone and australia and new zealand. So i think as we look at it the shaving incident rate, womens is also cyclical thats not a heavy cycle in the winter it is more in the spring and summer months. As we look at whats to come in the next couple of months we actual reare pessimistic that trends will improve over the next couple of months and thats how we planned our business going into the new start of the year for us. Talk to me more about what you mean, where you are more conservative or pessimistic about where the trends are many of your competitors like p and g are seeing such strength as people remain at home talk to us about how it is a little bit different for you. It is the product mix, primarily. As you know and you said in the opening we have a big observation posure to wet shave and shaving in general shaving for guys is down as we get back into a more normal environment and people get back into the workplace thats going to be challenged. Thats our biggest challenge beyond that actually we are quite optimistic if you look at grooming and how guys are taking care of themselves, what we are finding is the grooming segment continues the grow and boom. There is more at home happening. Thats the case on the womens side as well so we are seeing two examples on guys side, there is more men putting more products into their daily regimen as they take care of then selves, the self care at at home. On the williams side in addition to shaving the legs for example, there is other zones where women are becoming more active, on the face for example, with dermaplane. We had a product out there but repositioned it. It is called hydrosilk touche. The campaign is brows are the new lips in an environment where you are wearing a mask and you can see the lips and face you get the expression from the eyes and eyebrows we launched a tool around a campaign helping women shape their brow sthoos really is that a big market women are using the razors or blades that they would on their face specifically on their eyes because they are Wearing Masks is that what you are saying . It is facial dermaplaning is a growing ten anyway the repositioning of that around shaping brows, more in an at home environment, typically you would do that in a salon i will give you a stat the hydrosilk touch up product was the number two product across all personal care on amazon last quarter. I need one. Rod little, thank you, great color on the quarter ceo of edgewell. Turning around that stock. It is up nicely today. Wilfred. How about that brows are the new lips. And men spending more on facial care at home. I probably would be a part of that as well. Time now for our daily coronavirus tracker. The u. S. Get again notching two grim milestones a record 141,000 cases added in one day and current hospitalizations now reaching more than 64,000. Illinois, texas, and wisconsin adding the most cases yesterday. This afternoon, chicago mayor Just Announced a new stayathome order for that city beginning mondays residents are advised only to leave home to go to work, school or essential needs. Dr. Michaelester the home who is a member of prekt Advisory Board suggests that the country should lock down for four to six weeks to get the virus in check. Earlier this week the doctor warned the country is currently headed towards covid health. The cdc updated guidance around mask wearing saying for the first time that masks protect the wearer and not just those around them. Again, another lets get to sorry. Another instance. Cdc coming in very late with something a lot of doctors have been warn being for months we know that masks protect you by covering your nose and mouths and for others cnbc news update now with sue herera. Heres what is happening at this hour. A type Cyber Security official told associates he expects to be fired by the white house thats according to reuters Christopher Krebs runs a division of the department of Homeland Security which has drawn fire from the white house for running a website which debunk falsings to about the election. The cdc says children are going to Emergency Rooms for Mental Health issues the pandemic is having an impact due to social isolation and disruption of childrens daily routines. The United Nations says measles cases in 2019 rose to a 23year high the death toll increased to more than 207,000 officials blame a large drop in vaccination rates. Sara, this one is for you. You know msnbcs steve kornacki. Hes known for drilling into election maps, explaining their meaning and doing so in his signature khaki pants. Well, the gap says kornacki is driving a 90 jump in their sales of khakis. I think he would project that as a win. They are calling them kornacki khakis for the record, the color is poll mino brown. There you go palomino brown. Hi layerious. Who needs kanye west they have to pay him a lot of money to be their big influencer they can get kornacki for me. Get most of my close from gap and you mock me for that kornacki i respect he has been good throughout. Wonderful and now you can get kornacki khakis. A style icon. Impress oif. Also liked the folded up sleeves and the tie. It has to be done all around great stuff, kornacki, gap, sue herera, three of our favorites. Chipotle unveiling a digital only store with no dining room and no customer lines. Whether it signals a larger strategy shift for the company. Lets check the bolds. Back down to. 88 now on the tenyear gearing up to launch its first all digital restaurant this e coand. Thmpys ceo joins us for an exclusive ver view next on cnbc dow is down 466. Stay with us 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. Chipotle looking to cash if on its hot digit stales growth, the Company Announcing the opening of its First Digital restaurant this week no dining room and no line for ordering you will be required to order on line ahead of time on an app or on line. Joining us is chipotle ceo brian niccols. Talk to us how this is going to work and how big of a concept it is going to be for you thanks for having me. We are calling it the chipotle Digital Kitchen. One of the things we had started to work on before the pandemic was the idea of giving people access in trade areas that traditionally we had not gone into because now we have this new digital capability and Highland Falls is an example of that. Obviously with the pandemic and Consumers Behavior moving more and more to digital, it was fortunate we were able to open a restaurant like this i am happy to say we are already getting some preorders which is fun to see. I assume this is kind of announcement that wall street likes because it would seem these kinds of stores are more profitab profitable, lower expenses, smaller foot print what are the implications if this gets big for the work force, restaurant workers, staff and waiters if this thing grows . We think it is really in conjunction with the traditional chipotle i think you heard me talk about this today we have 2,700 restaurants. We think in the future we could have 5,000 or 6,000. We think it is going to be a combination of trade areas where it makes sense to have a digital only concept and where it makes sense to have a fullscale chipotle you will continue to see this experiment we will be doing a chipotle only restaurant, Digital Kitchen only restaurant it is going to be aportfolio approach the good thing is we have got so much growth in front us we will definitely be hiring for a while and we are going to ned a lot of great employees. We are on theist innic about the growth that comes with having this additional access point and the alternative format. Even if the absolute number of restaurants can still increase what was the percentage of eatin five years ago what is it today how much of that fall has been sort of a 2020only, covidonly effect thats a great question before if you go back five years ago we were like 95 dinein. Obviously, as we have been working our way into the Digital Business, just before the pandemic struck in march we were about 20 dilgtal, 80 dinein and currently rereturn around 50 digital, 50 dinein we believe the thought dollars associated with dilgtal which are now beyond a Million Dollars per restaurant will stay and the dinin business will come back. This Digital Business allows you to think of alternative formats and allows us to go into trade areas we would not have considered. How large where the margins be for the digital conditions . Our best margin transaction is the order ahead digital traction thats what this restaurant will prodominantly have combine that with the smaller footprint, it looks promising from an economic standpoint as well as a Customer Experience standpoint. Brian, in general it has been a tough time for restaurants how much share do you think you have taken from some of these smaller independent mom and Pop Restaurants that have had to close by the thousands across the country and dont have the scale and the fire power to change their Business Model like you in this specific case . You know, look, i definitely heard all different ranges of the impact on some of the small restaurant business. I really do believe that once we get past this, those individuals are arguably some of the most committed entrepreneurs out there. I think they will come back. And hopefully we can figure out a way to support them on the way back through what looks to be a cuff couple of months in front of us. You know, we really stay focused on how we want to execute the chipotle model and the beside way to give our employees a great experience and our customers a great experience thats usually how we have been the business that we were able to obtain and continue the grow Going Forward. Brian as i said you are planning to increase overall number of stores, restaurants in the years ahead head that said will you be fighting hard with your landlord for better rates and downsizing certain restaurants even if they are still going to have the eatin capability . We have definitely taken an approach with the landlords, lets talk about this together it has not been a blanket approach. We think there are places whereas the market readjusts we should talk about what then are the right market rates for those leases in other places where we think the leases are priced accordingly to the market we are continuing just to run our business and work with our landlords accordingly. The biggest top for us has been the willingness to a lot of our landlords to remodel a lot of our restaurants to do chipotle lanes. It has given us the ability to transition our entire portfolio the evan more access down the road. Brian niccols thanks. A news alert on jet blue. Check out shares of jet blue, the Company Announcing in an employee memo they will start to fill the middle seats. They have been blocking them pretty much from the beginning of the pandemic. That will ep on december 2an they will raise the capacity of planes from 70 up to 85 . Then all restrictions will be gone starting early next year. They will fill all the seats on those flights where they can sell all the seats we talked with the ceo a few weeks ago. He indicated they were moving in this direction now we have seen studies coming out saying look it is safe to fill every seat as long as passengers and airlines are following safety protocols it is not a surprise that jet blue is doing what we are seeing at southwest and saying we are going to fill all of these seats. Interesting timing. I know we have got the good news on the vaccine earlier this week but thats month away. At the same time you are seeing case speck aggressively. It is a bold step, i would say, from a pr perspective, ahead of the holiday season, with case spiking. I would say their argument is that i know it is their argument with talking with executives at jet blue, they said the same thing at southwest. Studies at harvard and other places said if airlines continued to follow all of the Safety Measures they have put in place whether or not it is safe for people to fly. And the Airline Industry and the reerch has shown it is safe for people to be flying and for every seat to be filled. While i understand what you are saying given the fact that we are seeing a surge in cases right now the airlines feel pretty comfortable about the fact that the research is backing them up on this. Phil, thanks so much. Jet blue is down 4. 5 rz airlines soft across the board. Counting down to disneys earnings after the close the metric to watch in that report come up next with the mark zone w 14 minutes left in the session. Aflac pays you money directly to help with unexpected medical bills. And is Aflac Health Insurance . No, but it can help with expenses Health Insurance doesnt cover thats right. Are there any questions . Coach yes . Can i get one of those cool blue blazers . You know i cant play favorites. Alright lets talk coverage. Its go time get help with expenses Health Insurance doesnt cover. Mmm hmm get to know us at aflac. Com 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. 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. With 11 minutes left in the trading day, we are now in the closing bell market zone. Commercialfree coverage of all the action going into the close. Cnbcs mike santoli is here to break town these crucial moments in the trading day and today we have got stephanie link as well we will kick it off with the broader markets. Major averages are under sell pressure we are at session lows as we speak though the dow and the s p are higher on the week we are down 450. We were down 480 just a moment ago. We have trended lower all arch mike, tech outperforms value everybody is loeg lower. The two things i have heard as catalyst, increasing restrictions, new york city rn wag they might have to close schools again. Chicago putting out an advisory to stay at home except for school and work. Also the diminished prospects of a stimulus deal until after the first of the year with news that trump is punting to it congress. Didnt the market know about it . There is no doubt these issues have been in the air. We have been aware of it the market, typically, though, it attempts to look through those thing to other catalysts like whether it is a vaccinelip rated economy or whatever it is. Sometimes you get a Critical Mass of issues layered on top of oner no. At the same time the market was overbrought and overextended and you had all of these reopening trades traded much higher monday morning after the emotional news and the pfizer pop then we were bumping along these weeks lows in the low 3,500s. It seems like a pullback consolidation type of activity at this point. Zoom higher today after taking a plunge earlier this week with the rest of the stayathome stocks on pfizers positive vaccine news. Bernstein out with a bullish note on zoom today the firm says in 2017 its meter eeyore analysts said if jesus were a stock he would be netflix because you either believe now saying they believe zoom is the second coming. It has caused a structural shift in the way people communicate and it is a beneficiary of that trend. Bernstein predicts it has revenue potential of a 300 billion market cap potential have stocks like zoom pulled back enough this week or this recent month for you to get tempted to top up, going into them in a big way . Not yet not yet. Its still up so much. And its still so loved by the street at this point i read the bernstein note. I am always wary when they talk about a dream snair scenario right . This company has a market cap of 118 billion the total address. Market precovid was 48 billion lets just say you double that you still have a huge market cap. And i just feel like we have so much that we dont know. They do very well in video, right . But we dont know about phone. Are people going to pay for phone . There is a lot of question marks. I would like to see it come back much more before getting involved i thought stephanie you were going to be suspectcal because they talked about stocks as jesus and having a religious following. No. That goes without saying. But that kind of tells you something, right, sara yeah. They are basically asking you to buy into this vision. They talk about 25 or 30 billion in potential revenue when that assumes 6 of Global Knowledge work remembers playing for zoom video thats the premise on that number i am not sure of their time frame. Because the firms 2020 revenue is 20 billion they are asking you to front load a lot of credit for tremendous Market Penetration down the road. Cnbcs Steve Liesman wrapping up an interview with goekzs David Solomon. After the bouyant news of the possibility of an effective vaccine the financial world is turning its attention to the grim news of a resurgent virus n. A panel i moderated, goldmans ceo David Solomon says the vaccine is surging but he expects the economy to be affected. The virus is everywhere it is ash. As we watch very closely hospitalization death rates i think it is having an impact on behaviors, whether it is governored bodily trying to restrict activities in some way, shape, or form or just human nature i think about Goldman Sachss return to office, and thats how i watch it. In the same panel, Stacey Cunningham said half the people are on the floor and thats not changing any time soon. I dont see us staling up unless there is a vaccine further from where we are today. In comments earlier today the fed chair jay powell said the vaccine again is welcome news but that the economy will be challenged in the next several months and the resurgence of the virus is the main risk to the recovery wilf, i didnt know, but about 50 of goldmans workers are in the office in europe 30 in london, just 20 in new york. Interesting, higher than perhaps you might expect but they have been ticking it up for a while. The other thing they announced steve thank you for that the other thing they announced was that 47 of their partners this year are diverse, women, latin, hispanic, africanamerican interesting announce men pivoting back to the gist of the comments about the virus and going back to the topic of conversation at the start of market zone. As sara pointed out, that and also the risks around a challenged election have been talked about for a long time are you surprised that we are pulling back so much over the past two or three days on those headlines. Mike pointed out earlier we have rally we are up 7. 5 from the october 2th lows would he have had a nice run i think it was deserved because we had a lot of uncertainties that we kind of chipped away at with regards to election and having now a mixed congress which investors actually like very much. This is the world we are in now. Any news on progress on vaccine, test asking that sort of thing versus increased cases in covid. So this is exactly the reason why we have been talking about since march you want to have this barbell approach and you want to have some Technology Stocks and you want to have some cyclical stocks because the liquidity is filtering through the system perhaps if we get a large covid resurgence, if that persists maybe we will get fiscal sooner rather than later. The good news is we just got through earnings they beat s p 500 beat 50 of the s p 500 Companies Beat profit margins. Very telling make your dawn degree list i have ten names i want to watch and i will be picking at if we get more pullbacks in the market. They have all been able to cut a lot of costs mike on the conversation steve shaird with us with David Solomon and Stacey Cunningham and what everyone is talking about right now, everyone is optimistic about the vaccine and what thats going to mean for the economy. The problem is the near term, and what we are going to face. How the market grappling with the risks of the economic damage we could be doing right now and could be getting worse versus what we are seeing on other side. I think the margaret is not proactively panicking about what happens over the next couple of months very watchful, of the mind that says we might have to hunker down and expect less growth. I dont think a really across the board restrictive shutdown is in the market but it is also probably not in the cards. I keep going back to this sense out there that it didnt feel smart to panic out the entire market back in june when we saw the surge. I think in terms of the horizon the mark will operate in it seems like it is near term pain and better times thereafter. We can trade in a wide range amid those probabilities and we are at the high end of the range right now. I dont think it is necessarily likely where we are going to go to a position is a thats deep slowdown. Disney set to report earnings after the close. The most important thing to watch is the companys digital growth is what the promise is for Subscriptions Services to compensate for the decline in revenue from the parks subscriber numbers will be in focus. Last year they topped 60 million. Analysts expect disney parks to dee klein 60 . And the bottom line is expected to sing to a loves 71 Cents Per Share. Disney shared gain 18 since the companys last Earnings Report we will have to see what happens to the shares after the report coming up. The vaccine news the other day certainly helped on that front. Two minutes left to go in the trading day. Mike has more on the market internals as always. What are you seeing as we recover a little bit here in the close. Plenty of weakness under the surface. Almost three to one negative follow to advancing volume in the new york stock exchange. Also sear a surrender in some of the gains in the reopening type trade. The pej, hotel, leisure, entertainment, thats down signature caply today as against the clicks which is the on line commerce versus brick and mortar commerce here we are in the mid 20s in the volatility index. A little bit of a bounce this the last 20 minutes. We were down 495 on the dow. Now 330, 1. 1 . S p also down just over 1 pbz. Nasdaq down two thirds of one all 11 sectors are lower energy, materials and banks lowest Consumer Staples and Communication Services the best performing sectors at the close, 1 lower on the s p. Two thirds down on the nasdaq. Just over 1 on the dow. Welcome back to closing bell. If you are just joining us im sara eisen here with wilfred frost and mike santoli look at how we finished up the day on wall street down 318 on the dow. A decline of 1 . Second day in a row. We are positive on the week with the dow up 2 so far the s p 500 down 1 . Weakness across the board. Groups like energy and financials were the hardest hit. Technology held up better. The s p is higher on the week as well the nasdaq is underperforming on the week but actually did better today. Really the growth over value, the flip of when we saw earlier on the vaccine news. They finished lower only. 65 . The russell 2000 got hammered the most today, down 1. 6 . Again, that has outperformed it is up more than 3 so far for the week rising coronavirus cases and rising restrictions essentially a folk of us etd wroo. And less chance of stimulus coming before the end of the year big Earnings Results expected. Disney, sisco, pallan tear coming up this hour, Jeremy Grantham talked to wilfred about the rotation out of tech stocks and where he is seeing the biggs opportunities outside the u. S. He still thinks we are in a big dubl bubble. Stephanie link, Richard Bernstein also joins us. First, mike, over to you what caused some of the weakness what institute out in terms of the sector action . I think first of all a rethink of some of the enthusiasm that we had going into the week, which really get get a lot of the people optimistic about a Fourth Quarter rally. The conversations we have had have been what kinds of stocks will lead a Fourth Quarter rally as if it was a foregone conclusion you were absolutely going to get one in a stlat line from here. Thats not the case. I think it is digesting solt some of the gains and having a reality check about the speed of any reopening. Yes the market anticipates better times based on medical advances but in the near tell things can get very, very concerning when it comes the cities closing down and businesses having to rethink reopening plans. Thats the push pull the nasdaq 100 was down half a percent today. If it happened to be up for whatever reason by a percent today we wouldnt be talking about why is the market down it would be a rotation story today we fumbled the baton in the rotation. In europe, some countries cases are already starting to decline even if the deaths are still rising does that give you hope that it will only be temporary here and it wont have to majorly derail Economic Activity . Will, a couple of things you said first although kind of morbid to talk about this, one has to remember that deaths are lagging indicators cases will go down before deaths go down, cases go up before deaths go up it is a horrible topic but thats the real. We should see cases go down before we see the deaths go down thats perfectly natural i think for the economy overall, here in the United States you know what we are kind of when we are going to mimic and when we are already mimicking is the chinese experience what you found in china was that production came back very quickly but anything that resolved around social interaction took a much longer time to come back to normal. They didnt have the big second wave they certainly didnt have the third wave that we are havinglight right now. We are having to push out the time line for social interaction and the effect it has on the economy. Doesnt it impact the outlook that you had stephanie for the economy . I know you have been relatively upbeat around the Economic Data and the prospect for stimulus. Are you starting to worry . Not yet bass i sti because i still believe that the fiscal and monetary policies already in place are doing its job. We saw a v shaped recovery in housing auto and manufacturing it is impressive the me, there is 4. 8 trillion of money in money market funds on the sidlines the average is 2. 5 trillion so there is money to be put into this market once we get a little more confidence. But you know when when geet confidence we are going to be a heck of a lot higher in terms of the stock market my opinion so you do have to have this approach of a balanced portfolio. Picking quality companies. And you dont even have to pick the second or third tier companies, right, especially on the cyclical side. Because those stocks are still down so much but thats where you want to be on cyclicals, quality, balance sheets, dividends, dividends growing, liquidity that sort of thing. Technology i would love to buy more alphabet. What a great quarter they had with total research up 15 ad revenues are recovering up north of 30 and they are lagging the other faang stocks i am make, my shopping list. I have a list of ten names they are a combination and i will pick my spots to be buying them. Richard how concerned are you about the ongoing Political Drama and what it implies for when we will see fiscal stimulus well, will, drama is the right word i mean thats the name of the game these taste look the only i said this american times, the only certainty thats out there for 2021 is continued uncertainty, whether it be politics, whether it be the virus. No matter what it is stephanie kind of mentioned this i agree with her on this i think the correct strategy here is some kind of a barbell between safe haven stocks and i would argue deep cyclicals she prefers the Higher Quality cyclicals. I would have something on either ends of the see saw because you really dont have any insight whats going on. There is going to be overbulls and overbears. Somebody is going to be right. They will be in the performance hall of fame realistically for a Portfolio Manager like mize is that the prudent way to manage client assets you dont guess. You have to sit there and measure the risk on each side and try to construct a portfolio accordingly. What sort of deep cyclicals what do you have in mine i look, the sector thats probably negatively correlated to every other sector, sara, is energy right . If you think the Global Economy is going to come back to life you have to look at energy im sorry. I was going to ask if you are going to go there . We dont get many people coming on and buying energy. We are overweight there, material stocks, industrials, transports at the same time we are overweight things Like Health Care and consumer sectors. The sector we do avoid is technology right . I think the notion of the fab five is way out of whack they are certainly Wonderful Companies but i would remind everybody that in the decade after the tech bubble everything that people said about technology and the economy came true, and technology was the worst performing sector in the s p for the next decade. So we have to separate out the economic effect from the valuation of the stocks and the hype of the stocks. Disney, pal an tear and sisco all higher after reporting earnings break downs of those numbers for you in just a moment steph as for the other options in the value sector are you still as confident about the banks . Clearly they had a nice jump earlier in the week. Was it sort of too much of a jump too quickly well we have talked about this you need a steep yield curve certainly for the financials to outperform, right . We started to see rates rise thats why they did start to outperform what i like about some of the financials is that you can have some special situation stories you know i am a fan of Morgan Stanley. I think they are diversifying and taking their own destiny in their hands in terms of m a. Steph he cant wait to buy at that stock, cant wait to increase that dividend. Sorry to cut you off. I want to get to disney earnings a sharp increase after hours much better than expected results on both the top and bottom line. Disney reported a loss of 20 Cents Per Share but the street had been expecting a loss of 71 Cents Per Share. Revenue also beating estimates tomg in at 14. 71 billion versus the 14. 2 billion that was estimated. Another huge number here to point out in terms of those disney plus subscribers. The Company Announcing more than 73 million paid subscribers for disney plus. Thats up from 0. 5 million at the ends of last quarter ceo basketball chapek saying the bright spot has been our direct to consumer business which is key to the put future of our company. This was a much better than expected number saying they managed theday clients the disruption caused by covid19. They have been able to effectively manage the business while taking bold deliberate steps to position our company for greater long term growth it seems like across the board especially looking at the Parks Division a less bad quarter than answered the stock up over 6 . A good way to put it. Julia, thank you with the disney plus numbers, 73 Million Dollars paid subscribers. Stephanie, sorry to cut you off on Morgan Stanley. But wanted to get your thoughts on disney. This is way more fun, disney, because it is going up, instead of Morgan Stanley going down the disney plus numbers better than expected. 73 million. We knew hamilton and mulan helped them. We know that they actually launched in more countries in the quarter. We knew there was momentum there. The question i have is you have great momentum in streaming growth you have a recovery in advertising. Clearly they are doing a good job on margins and cost cutting if they are going to see that kind of improvement relative to expectations the problem i have is they have got spend a ton of money on streaming and content. And parks and films are down i applaud them for doing what they can but this is the ultimate reopen recovery getting a vaccine kinds of stock you just have to be patient if you are going to own it. Lets get back to julia she has more from earnings. In the release here they say that the biggest covid impact was on the park he is experiences and Products Division where the theme parks were either closed or operating at significantly reduced capacity just want to point out here they said the adverse impact in the quarter quart from covid19 was 2. 6 billion and 6. 9 billion for the year on operating income at the parks experiences and products putting that 2. 4 billion number on the impact of covid for the quarter on the Parks Division. That is a meaningful number but i believe it is down from the impact in the prior quarter which he none of the parks were open really interesting to look at how they are managing that and trying to operate the parks profitably when they are operating them at limited capacity. Julia thanks for that disney up 6 in afterhours trade. Thanks to stephanie link and Richard Bernstein for joining us. Up next, reaction to the disney numbers and afterhours move in the stock price. Etr n ty n whheorothecacontinue to see more streaming growth we are back in 90 seconds. Shares of disney moving higher after reporting earnings just moments ago up almost 6 afterhours joining us to discuss these numbers, jim stewart from the new york times. And bernie mcturnan from rosenblatt secures, who has a buy on the stock bernie, the number was a beat on the top and bottom lines 73 million paid subscribers for disney plus. Better than expected clearly, parks and cruises are still a drag where did the beat come from. Meeting networks. The parks less bad as expected the reason why the stock is reacting is way it is is because of the sub number. 73 million versus 66 million consensus estimate is huge and the reason why we think you should own shares is because of streaming. We are going to learn a whole lot more at the next investor day about a month from now i dont know how much more we are going to get on the color but we are looking on chlorofluorocarbons from the mond lorian and mulan, too i didnt see information there and they are looking a the future of the studio jim, clearly the stock welcomed the positive vaccine news on monday once that is distributed, do you think both the stud jio and thee park business bounce back as strongly as each other. I think thats critical with disney because the vaccine is going to be a huge, huge factor. Theme parks, yes, i think it is going to bounce back probably more than bounce back there has to be pept up demand to sweat those resorts it may give them pricing flexibility once the vaccine is fully distributed. What i am hearing from inside disney is there is concern about studio and entertainment about the long term future of those Distribution Models given the decline of the traditional movie theater. They are largely shut down right now. The question is are they doing to come back once there is a vaccine . I think disney management haib has been saying for some time that theatrical distribution was eroding a all right. I dont think studio gets back to it. The question is can streaming make up for all that i think the mulan information, the upcoming pixar thing the growth in subscribers there is key. They have got to remember here they charged for mulan on top of offering it to plus subscribers. They are not charging for that pixar movie. These are very expensive products can they recoup those costs to the extent used to get 1 billion plus dollars out of the box office i think there is concern thats never coming back. Yeah, it will be interesting to see what they say about the mulan experiment releasing it for 30 on streaming bernie, on the prospect for streaming, how much do you wonder if the very Strong Subscriber growth that they have seen has been accelerated, like everything else, due to the pandemic what does that say about how sustainable this growth is and how profitable this growth can be disney, compared to netflix, disney is still launching globally the launch in the west of western europe helped the quarter. Disney is not just not at the point where they are fully penetrated i think the growth can continue. It is interesting. The company 120 million global subscribers, netflix had 195 million. Obviously net licks has a higher arpu over time, disney should have a more efficient superintendant on the content because of the brand and what you are getting thats why we are bullish on dis. He jim, do you think the down low sort of things is to spend on content creation to drive the subscriber numbers do you think that view is getting across to management i dont think thats clear yet. The outside investors have been clamoring for this approach, calling for more spending now, especially now in the ramp up. And you know i think they are going to have to there is no question, they know they have got to spend the question is are they going to spend at netflix levels they are still a long way from that however, you know, you see what happens. When they get a hit like hamilton that they can get on there, the pixar film looks im hearing really good things about it they are offering that for free on Christmas Day a. Lot of people are going to want that. They may not need quite as much, again, because of thfr their brand position, they may not need to spend quite as much as netflix. But i think they are going to have to spend a lot. Jim and bernie, thank you both for joining us. Sisco earnings also out it is a beat on the bottom and top line sisco reporting adjusted earnings per share of 76 cents thats a beat of six cents revenue coming in at 11. 9 billion. A small beat 11. 85 billion was expected. We should note that the companys revenue has declined on an annualized basis for four quarters in a row. Expectations coming into this were very low. Like other legacy names it is moving at a slower pace to move its business to the cloud. Shares were up 9 a moment ago because its Second Quarter fiscal q 2 eepgs yut look is stronger than expected the Company Announcing its new ceo scott heron coming from auto desk where he was cfo and senior vp he replaces kelly cramer who retires after nine years with sisco. The Company Announced she was stepping down last quarter sisco is also in the midst of a Restructuring Plan more news as we get it. Shares coming alive after hours. Up more than 8 . Deirdre, thank you we have got some break news here on tiktok. Kayla touchy has more. Sara, the Commerce Department is not going to enforce its ban on tiktok. According to the wall street journal, which sites a statement directly from the Commerce Department. In choosing not to go ahead with this ban, the Commerce Department in its statement to the journal is citing a preliminary injunction by a federal judge last month that essentially prohibited the ban from going into effect search rarely the Commerce Departments statement to the journal cites pending legal developments there are several Court Case Involving tiktok and its operations some of them brought by tiktok stars that are still awaiting an outcome. Cnbc has reached out to the Commerce Department buy phone and email. We are still awaiting a response of course today is the deadline that the administration had set for either the u. S. Operations to be divested or the app to no longer be offered by app stores here in the United States. But it appears that commerce is not Going Forward with this move we should note though separately the law that the administration used originally to try to enforce this tiktok ban the International Emergency powers act, they are issuing an executive order separately against purchases of certain publicly traded chinese securities they say are tied to communist China Military companies. We are seeking more clarification on exactly which companies they are but the administration is separately arguing that china is using funds that it secures through the sale of these securities to fund its military operations so in the waning days of the trump administration, they are still hitting back against china with some of these executive orders, though unclear exactly how and when they can enforce them guys. Kayla thanks for that. Reporter more earnings acrossing, pan an tear reporting Quarterly Earnings for the first time of course since going public. A net loss of 94 cents. Revenue, 289. 4 million arc jump of 52 we are not comparing here because there are just too few estimates still right now. Looking ahead to guidance, q 4 they are calling for adjusted operating income between 44 and 50 million. Revenue they are looking for between 299 and 301 million that would be up about 30 for the year they raised their 2020 revenue guidance to between 1. 07 and 1 . 072 billion a jump of 22 . They talkb new contracts with the u. S. Army, the u. S. Institute of health and an aerocompany. Conference call is at 5 00 p. M. Eastern. Cutting into that big rally especially the post election one. Josh lip ton thank you jobless claims have been showing signs of slower improvement in the last weeks up next, mike mook will look whether that could be a red flag for the economy and for the market. Still ahead, Jeremy Grantham discusses how a divided government with a Biden White House and a Republicancontrolled Senate could impact the economy you can go your own way its time you make the rules. So join the 2 Million People who have switched to xfinity mobile. You can choose from the latest phones or bring your own device and choose the amount of data thats right for you to save even more. And youll get 5g at no extra cost. All on the most reliable network. So choose a data option thats right for you. Get 5g included and save up to 400 dollars a year on the network rated 1 in customer satisfaction. Its your wireless. Your rules. Only with xfinity mobile. A down day on the wall street to you loss over 300 points. Lets go Facebook Mike santoli looking at the slowing pace economic recovery, what are you watching. When it comes to the job market first of all, sara, this morning a slightly better than expected weekly and continuing jobless claims but you can see the rate of progress has definitely slowed it as a result of flattened out here thats the new claims in blue. This is a Charles Schwab way of viewing this then it came back down it is hard to know with a slowdown in spending activity we have seen out there in real time whether this is going to continue it is really still an enormous number of idle workers and tons of dmurn the labor market. General piece of Economic Data as relates to forecast has been coming down. In other words the economic surprises are still positive they are above zero. But definitely at a lower rate than they had been before. This is an indicator thats always going to oscillate above and below zero because economists will adjust their forecasts because it is another sign we have more muted activity on the macro front and we did see a treasury market rally along with all the shutdown news something to keep in mind in the final months and weeks of this year. Pressure from growth in europe, maybe that can start to play across here as well. Legendary investor and gmo cofounder Jeremy Grantham said the key to reviving the economy is a new marshal plan. And how a Biden Administration could contribute to that growth. I think it is clear that biden and his team will try to do it very much the way i would suggest from an economic graph the last few years in the developed world has been one of steadily slowing productivity. If you go back 40 years, our productivity per person was running at about 3 . And now somewhere around 1, 1. 5 we really lost a lot of ground fiscal spending is exactly what we need to kind of jolt to developed world out of a long term malaise almost in underlying growth. And i would not be frightened of inflation. I would keep doing it until inflation appears, and then rethink. But at the moment, i think there is a great opportunity to borrow at the societal level, governments can borrow at no real cost and you can make infrastructure investments, particularly Green Infrastructure, with a fairly hand some return to society. If you can make 5 plus return, and you can borrow at 0 , it is hard to imagine that doing a lot of damage. Now, if you want to give most of your stimulus money to the banks, as we did in 2008, you kind of get what you deserve it is pretty inefficient we have to make sure that our spending is marshal plan style it is going on infrastructure, factories, roads, bridges, and above all, greening the economy. Greening the economy will take tens of trillions of dollars but in the end, it is absolutely essential that we do it. And a lot of it comes with a higher return. Some of those assets, jeremy, greenexposed assets have been bid up thanks to the expectation of a biden presidency. Have they been bid up too much or do you believe he will deliver in that area in the way that you are talking such that there is more gains to be made of course some of them bid up more than others, like tesla. Yeah. No there is no question that there has been a marked increase in enthusiasm for all things green in the last six months or a year which in the long term scheme of things is of course brilliant. And it is necessary. We have been very slow to get the point except perhaps in the oil industry the oil industry was the kind of lead indicator that the market can seem pretty stupid in the shortterm but it did get that point. You know, 16 of the s p was oil industry 12 years ago. And yesterday it was 2. 5 . This is the most massive loss of value in the history of the s p that goes back into the 20s that was quite remarkable. In its strange and reattic way, the market got the point that the oil industry has been given notice that it is an industry going out of business in the next few decades. Jeremy, with this constructive view on the effect it could have on the economy of a large Green Infrastructure bill, would you be less enthusiastic if there is a split government. I think thats important. It will be a test of bidens ability to compromise and work across the aisle, as it were very, very tough these days. It will be a real test and he might be able to get some of it done afterall, it is in everybodys advantage to have stronger growth in the work force and so on and thats in the long run, we have to remember that an equal society is simply good economics. To have moved the pendulum for 60 years away from labor so that the average hour worked in the u. S. Uniquely by the way has not improved materially, less than 10 10 . In franz, et cetera up 150 . Poor old brits are open 60 . But the u. S. Hour rewage has hardly moved it is not good for business. It hollows out the economy for a while you can make it up on luxury goods and selling ferraris but you cant sustain a healthy economy that way we must increase the economic equality. In terms of the election jeremy, to what extent could the short term failure to accept the results if President Trump continues to challenge the outcome of the election could that be the shortterm catalyst needed to burst the bubble that we have talked about i think its possible as a student of bubbles, i have been impressed by how hard it is to define the needle that pops it within the market, even if we know that you are bearish overall, i wondered what your view was about the rotation we have seen a bit of in the last couple of week out of outperforming growth and tech stocks into more cyclical value stocks given what you said about wanting to see inflation rise and wanting to see more stimulus, do you think that rotation within the mark will continue and what do you think rates will be in the next year or two i think the bigger the fiscal spending, the more the market will rotate towards industrials and cyclicals and so on. And there is no doubt that the socalled value stocks have not just been hit. But they have been hit worse this year than aniered in history. So on top of a bad decade, you have had the worst year. So the ratio of apparent value between the lowGrowth Stocks and the highGrowth Stocks has never been this big. That bodes extremely well for the lower Growth Stocks in the long run. Jeremy, for people, just to round thing up, that take your advice and dont want to be a hero in the equity market, if they want to have some kind of exposure to assets but be protected, should that be things like gold, silver, bitcoin where would you place people looking for that sort of exposure well, i have to admit, i personally own some gold i think emerging markets, though, if you fail to own equities, they also like the value stocks in the u. S. , they are also about as cheap against the u. S. As they have been and even on an absolute scale they dont seem overpriced so i would own that. Just to irritate the average listener, my favorite, of course, is Venture Capital Venture Capital is where all the action is and has been for 20 years, really, in the u. S. It is where all the vitality is, where the best people, the best young people coming out of university and no longer want to go and work for goldman sachs, story, goldman sachs, but they line up to get into the Venture Capital industry, even in the professional firms or starting out a company themselves and it has the highest return of any asset class. Why wouldnt it . Its the most significant of any asset class. Most of the rest of the penalty world is shuffling paper from one owner to another and Venture Capital is enabli enabling creative destruction. It is facilitating the rate of development of new technologies. And lord knows we need a new technology to green this economy. And there are magnificent examples everywhere of new Green Technologies that need funding and could change the world many of them Jeremy Grantham there sara, as we mentioned in the first hour, clearly he still thinks we are in a major bubble overall. But i did come away a little less bearish having spoken to him this time than i did in june partly because of that byte we just heard some areas he wants exposure including in the u. S. Equity market in the value cyclicals as opposed to the Growth Stocks. That i thought was perhaps less bearish than last time overalthough clearly that case rests on significant stimulus coming in. And clearly he thinks there is a risk there if we do have a split government. And i guess on the view wilfred that there has been extreme underperformance of value versus growth, which was another point he ehighlighted. Also his comments on a Green Infrastructure deal in the u. S. Are interesting. I am not sure how a Republican Senate would feel about that when they are not even eager to pass a stimulus bill for covid19 relief. But it is something Jerry Grantham has been talking about for a while. Absolutely. It is interesting because this aggression to the big lested growthy type stocks he ds like some of the dna of them, it is just in the Venture Capital stage as well. So there is alternatives there it is not just a simple view of we are in a bubble, full stop, i am not thinking about anything else i always enjoy the detailed conversations for this reason with that legendary investor. He doesnt talk very much it is always good to hear from him when you can bring those conversations to us it will be posted on line as well check that out. Still ahead on the show we have much more analysis of todays afterhours earnings moves including a deeper dive on ll tears big quarterly loss that stock is down after hours but disney and sisco are up nicely well be right back. California phones offers free specialized phones. Like cordless phones, phone ringing big button, and volumeenhanced phones. Get details on this state program. Call or visit and accessoriesphones for your mobile phone. Like this device to increase volume on your cell phone. phone ringing get details on this state program call or visit welcome back time now to get a cnbc news update with sue herera high again, sue. Hello again, sara hello everybody. Heres whats happening at this hour utahs governor saying hospitals in his state are now at a breaking point with the surge of new covid19 patients. Utah also setting a new high for daily cases ask. The states positive rate is above 23 . In north dakota, the states Nurses Association is opposing a new law that allows Health Care Workers with covid19 to remain on the job if they are asymptomatic one nurse calls that rule irresponsible. Georgias secretary of state, Brad Raffensperger says he is going to quarantine after his wife tested positive for the coronavirus. He will continue the oversee the hand tally of georgia ballots which is set to begin tomorrow and in minnesota, multiple vehicles involved in a big highway accident several caught fire including some tractor trailers. First responders say icy Road Conditions may have caused that crash. They had some heavy snow today and yesterday. You are up to date thats the news update this hour wilf i will send it back to you. Sue, thank you. Up next, shares of pal an tearov ming lower after Earnings Reports moment ago we will dig into the companys first ever Quarterly Report after the break. . Welcome back palantir out with its first Earnings Report since going public, seeing revenue up 52 and rising 2020 guidance though it reported a loss of 94 Cents Per Share. The shares are down 6 or so joining us now, a tech analyst with jeffreys. First ever quarter, not a hugely populated consensus to compare the numbers to on the surface, they dont look too bad. No, not at all. They beat the top line modest raise Going Forward i think the biggest concern was really just the 40 to 50 move in the last two weeks. You had a pretty sharp rise in the stock given the changeout on the government potential, i think there was some concern would this hold up in a Biden Administration so there was a little bit of a hangover on the government side. But they posted their largest commercial win ever, 300 million transaction. Average customer size is going up again, the guidance for one quarter outlook is good. I think the biggest challenge for investors on this stock is really the lack of disclosure and we didnt get a lot of color about how next year is shaping up overall, good results. Just a big move into the print 00 Million Aerospace contract, as you mentioned i guess, there is not Many Companies that could be. Maybe we will learn more about that on the call clearly good news and a big win for them do you welcome more single big contracts or actually want there in time to be many more individual clients with less kind of concentration risk, as it were. I think thats a good point i think what investors want to see them is broaden their wings and go from landing elephants to landing antelopes. So palantir broaden out from winning the large mega contracts at 300 million i think we go back to the big argument from investors is they would just like to see that broaden they today had over 125 customers. And they claim no one else has what they have ultimately the goal is to get to thousands of companies, thousands of government entities, where you can broaden the reach and not be dependent on landing these big contract wins. It does seem like they are making progress, brent on that front, when it comes to diversification which wall street wants the see greater diversification and customers base, top ten customers they say represent 21 of their Customer Base last i dont remember it was 68 . Are they moving the street not yet this is the First Quarter out of the gate i think it is going the take time we ultimately believe they can broaden the reach. The primary focus this company, they have said this, we provide software that no one else can provide. We solve the worlds most complex problems in the bear scenario right now is that not every government or commercial Company Needs this level of commitment for size of contract can you achieve this mission with other Software Companies that we cover . And so i think they will have to prove that they can sell this over time. We think they can. It is not going to happen overnight. And when you have a 300 Million Aerospace company signing up for a fiveyear renewal. You know, those are elephant deals. Explain, brent, the post election move higher for this stock. And what the makeup of the administration, blue or red, and the senate, blue or red, ultimately means for spending and spending at palantir i think the stock went up based on the the shorts were basically riding a Biden Administration would be negative given the peter thiel trump connection that unravelled, the shorts came in and the stock rallied is what we saw from our per sect spectacularive what we see is doesnt matter who is leading the country, this software is seeking terrorists out, tracking where hidden expenses are they can eliminate. We dont believe it is going to have an impact as relates to who is running the country the government will continue to buy packaged software and build situations palantir sits perfectly where it sits th the country still needs palantir to do Contact Tracing i would like to hear more about their efforts in the private and public sector. Maybe on the call. Up next, the biggest earnings movers disney and ccois higher in the after hours. 5g. Just got real. Iphone 12 pro max and iphone 12 mini are here on verizon 5g. The iphone is mini, but the 5g is huge with the coverage of 5g nationwide, and, in more and more cities, the performance of 5g ultra wideband the fastest 5g in the world. Whoa. Mobile gaming just got infinitely better. Preorder iphone 12 pro max today and get another on us. This is the phone to get. This is the 5g phone everyone wants. On the 5g americas been waiting for. Only on verizon. Hey, son no dad, its a video call. You got to move the phone in front of you like. Like its a mirror, dad. You know . Alright, okay. Hows that . Is that how you hold a mirror . [ding] power e trade gives you an awardwinning mobile app with powerful, easytouse tools and interactive charts to give you an edge, 24 7 support when you need it the most plus 0 commissions for online u. S. Listed stocks. Dont get mad. 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Welcome back a headline coming off the disney earnings score, that they will forego the dividend in january they had temporarily suspended the dividend there is debate whether it will be longterm discuss longterm, but it wont be coming back january i believe it is a twice yearly Dividend Payment so wont be back for the next six months still up nicely though, sarah, in after hours trade Elizabeth Warren wants them to send it on employees and hiring back workers as well. As we look into tomorrow, disney should help out the dow in terms of recovery. Disney will be a little bit of a boost precovid highs. What the market is giving this company a ton of credit in disney plus. If you were aggressive and said i am going to put that net flicks gets in the market, you could come up with like a third even though it is not producing any losing money thats the idea. It is both a huge shutdown stock and reopening play its rare in that it straddles that line. It just means that its expensive right now based on all of the leverage it has and earnings power great brands is what this market wants. This weak sector performance, its fascinating to look at. You have energy down 4 for the day but up 12 for the week. You could look at Technology Still also down for the week looking forward, what is the key factor to decide rotation or not rotation it tells you there was a buying panic in the cyclical trades if you bought the open monday, you are well under water it seemed like it is a crescendo after that vaccine news. I dont think the market has shown its hand whether it wants to take shelter in the Growth Stocks or have the cyclical names the market is managing to assimilate all of that well still a decent upturn even if we back up. I think the mood swings have to do with the shortterm and longterm terms of the economic outlook. Its striking how different it is striking about the vaccine and what that will do for the economy. But since then plenty of doom and gloom, and now on the regional lockdowns i dont care what people say, that its just that the blue states like illinois, that it is advising poem to stay home, that new york is threatening to close schools. New york and california are more than a quarter of this countrys gdp so it matters. We are out of time. Disney is well up after closing hours. Time for fast money. I am melissa lee. Tonight on fast, a red alert covid cases spiking, stocks tumbling, how traders are navigating this uncertainty. Plus wfh tax or wtf tax. Taxing employees who work from home its our outrage of the day