online, that word of mouth still works. joe, it's great to you have here congratulations again. we'll be watching the stock closely. >> thank you very much >> makes me want to go try one out. i have to take a look at those thanks everybody for watching power lunch. glad you could join us on a monday "closing bell" starts right now. >> kelly and tyler, thank you very much. welcome to "closing bell." i'm sara eisen we're watching the stock market. it is starting on a high note. s&p 500 is up 1% let's look at what is driving the action right now in the trade. there are worrying trends across the country. new data showing home buyers continue to get back into the

housing market the housing market has been a strong part of the economy and also boeing's 737 max test flight looked like it went pretty well. that stock is up nearly 10%. 59 minutes left if trade. >> yeah, helping the dow outperform today coming up on today's show, etsy is major winner at stay at home trade. shares doubling this year. we'll ask josh silverman, sooce how they're using the platform and we'll talk to larry kudlow about the rise of cases in the united states and the economic impact some states including just moments ago new jersey pausing their reopening measures as we stand, the s&p 500 is up 1% let's focus on the big stories mike santoli is tracking to day's market rally we have the details on gilead which just announced pricing for the coronavirus treatment. and julia has the latest on facebook's growing advertising

boycotts mike, let's start with you and the broader markets. >> a tidy little bounce today. getting back a portion of last week's losses. really concentrated on the smaller cap and some of the lagger groups. if you like right here, the market is maybe trying to make the case that defining the bottom end of a trading range at least, 3,000 on the s&p 500, has been an area where the market refused to go below for any period of time over the last month or so. this still looks like, you know, could have importance right there as a high. but for now, holding steady. i want to take a look at the style breakdown in between growth versus value today. value stocks are outperforming by a factor of two over growth stocks look at the relationship on year to date basis. what we're seeing is value stocks and small caps got a stretch to the down side they bounced but as can you see, this is still kind of a flat ening out of the value trade

growth still has a little more of an uptrend to it. no real regime shift right now credit has been softer in the last couple of weeks if you want to look at the high yield etf against the investment grade bond this is for june alone. so you see here some of the more weakness in the riskier credit it's a sign that risk april tights have not really kept pace over the course of the month but so far, not an awful lot of net damage to the overall big cap indices. >> a tidy little rally today what is going on in the bond market >> treasury yields have not done a whole lot. they've been a little sticky by their recent multiweek lows. and as i mentioned, credit spreads have not necessarily improved very much today so i think what we are is range trading at the moment. and you have a little bit of in the absence of other news the market is just going to be oscillating here based on what has been a lagger and whether money flows take flight or not

they really haven't. the idea that you're buffered by the relative value of equities to treasuries and some other factors is keeping things kind of in this zone right now. even though the treasury market has not had a big response to, for example, recovery hopes. >> mike santoli, we'll see you soon dow is up more than 440 points we turn now to the coronavirus new details from drug maker gilead on the cost of the treatment. meg terrell has that story >> gilyard is giving away the drug for free until the end of june so now it set the price in a highly anticipated announcement. and what you'll pay or what your insurance will pay depends on where you live people who are covered by commercial insurance in the united states will pay 30% more than those covered by government insurance around the world $520 per vile for those on u.s. private insurance. for a typical course of treatment. that is about $3,120

now gilead breaking out how it game to this price saying that by the amount of hospital time saved with this in their clinical trials about four days shorter with treatment, that saves about $12,000 here's how ceo said they reached the price. >> although this medicine adds significant value to the health care system by reducing the hospital days, we decided to price this in this very extraordinary time in a unique way. we priced it at the value -- excuse me, at the price that allows for access across the developed world. >> but, of course, not everybody agrees with that including bernie sanders who is a very common critic of drug pricing tweeting out today, taxpayers provided funding for the development of this drug now they're price gouging off a pandemic coronavirus treatment must be free to all. if you look at the wall street

reaction though, they're saying such a benchmark for the rest of pricing for covid-19 treatment saying the pricing is remarkably low given the direct medical value not to mention the societal value provided by the drug he said this will change all future expectations for the treatment of this disease and may also influence pricing in other diseases so, guys, drug pricing, as controversial as ever. sara and wilf? >> meg, i'll pick it up. my apologies now to boeing. by far the best performer in the dow today. the company faces a key test to get its 737 max plane back in the air. phil lebeau has the details. >> there are a series of certification flights that started this morning they'll continue through wednesday. first one was completed late morning out in the washington state area just a little bit to the east of seattle. as you take a look at shares of boeing, keep in mind that this is a crucial milestone once they do the flights, they're testing the change that's have been made to the 737

max. again, the flight tests, the certification flights will continue through wednesday what happens on one of the flights? well, flight aware has shown us basically the second one that is going on right now is out in an area called moses lake this is a 737 max that has taken off and is circling around -- we don't have it. if you did -- if we had it, you'd get to see it. the basically doing a number of maneuvers. theerz a these are all highly scripted maneuvers. an faa test pilot is flying the plane. they're going through a script there will be a number of review boards that still need to go over the changes in the max including pilots and technical experts from not only the faa but other agencies as well late summer is when they're targeting for an ungrounding of the max. later this year, we could see commercial flights depending on when the ungrounding happens and how long it takes airlines to get the pilots trained and get the planes back in the air

one last thing take a look at shares of boeing versus the dow jones industrial average. going all the way back to march of last year when the max was grounded you can see that boeing clearly was lagging behind the market. ahead of the faa, still needs to fly this plane, guys steve dixon will pilot himself sometime within the next three or four weeks. >> phil, i guess with the changes that we're expecting in the industry because of covid-19 and therefore the likely lack of demand for the biggest planes out there going forward, this is even more important this recertification than it would have been in normal times for boeing >> yeah. definitely and you no he what i was just told, wilf, i was just told we have this video. it's basically animation from flight aware that i think people want to see. this is a sample of a test flight that is taking place. see that green line? that's the max that is going through maneuvers right now. again, this is an faa test

pilot. you can't see at the bottom of the screen is the altitude as they drop down, then they go back up. almost the same type of maneuvers where you test the m cast control software which has been at the heart of all the problems with the 737 max. so, guys, when people say what do they do on the test flights the certification flights? this is one example and that's from flightaware.com >> that is cool to see phil lebeau, thank you boeing shares helping the dow up 424 points now in total. let's get to facebook. more and more companies joining the ad boycott over hate speech concerns julia has more on the developing story. we have developing names the floodgates have opened >> new names it seems like every few minutes. hp just announcing their pausing facebook ads until they're robust safeguards. rebok, adeed as just is spending advertising on facebook through july and ad week reporting that

conagra is pulling the ads through the rest of the year, clorox, best buy and denny's they also announced starbucks which was facebook's sixth biggest advertiser in the u.s. last year. spending an estimated $95 million on the platform. other boycotting brands include honda, coca-cola, unilever and verizon. starbucks is pausing indefinitely this started with the stop hate for profit campaign energied by the naacp and the anti-defamation league while they were likely looking to cut spending because of economic pressures, the extent of the damage to facebook now real really hinges on how many others follow and whether they expand the boycott globally many of the brands are also suspending spending on twitter which could also suffer while pinterest and snap and hulu could benefit as there is lower risk of ads appearing next to offensive content on the

platforms. it was also just reported moments ago that microsoft suspended its spending on facebook back in may but the company said it was doing so because of concerns about inappropriate content on facebook, not about particular policies so i'm sure we'll learn much more as the day goes on. >> julia, any indication from the companies that you're speaking with what happens in a month? what sort of metrics or response they're looking for from facebook >> i think the expectation is that facebook will respond in much less than a month they're really cracking down on racist and hate content in ads they want to see a lot more action around content that is not in ads just wanting to know that facebook will take action even if there is not a threat posed in a post on facebook that if there is a -- any threat, racist threat that, facebook will take

that down. so i think advertisers want to see facebook go further and really know that zuckerberg is willing to compromise and make changes around sort of what he is stuck to which is his vision of free speech on the platform i think we'll hear much more from facebook on this. they've been reaching out to advertisers already to talk about the progress they have made in this area. >> julia, thank you very much for thavenlt jut. the share price has pulled back in the last hour or two. it rallied to be up 2% or 3% its now, as we stand, just up less than 1% falling, of course, to big slide on friday. after the break, shares of etsy doubled this year. made a boom in facemask sales on the site we'll get an update on the state of the business with josh silverman next you're watching "closing bell" on cnbc.

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as a growing number of governors institute facemask requirements, more and more shoppers are turning to etsy shares trading near highs today. joining us is the ceo, josh silverman. welcome back to the show how much of your business right now and new business in particular is being driven bypass being sales >> for the month of april, etsy sold $133 million worth of facemasks. that is 12 million facemasks that is enough for every resident of the state of ohio. we also announced sales that nonfacemask products grew 79% year over year we're also great for home furnishings and clothing and jewelry and baked goods and kids toys and crafting projects that's where i think we're seeing this real groundswell of demand for etsy.

>> how do you think about the sustainability of the revenue boost that you're talking about right now with many people still at home as we do move toward reopening this country some e-commerce players are having a hard time fulfilling. it highlights the strength of etsy with well over two million sellers, almost three million sellers who each make products just for you from their home they're still very much open for business and they're selling across such an incredibly wide range of products what i'm so encouraged by is that so many buyers are discovering etsy for the first time or discovering how many of their purchase occasions etsy can meet they're having great experiences. and so giving people an opportunity to shop and try and then be delighted by etsy is

encouraging for the very large opportunity that we have ahead >> that point aside, josh, i mean, how closely have you tracked localized data when states have seen some level of reopening of their retail? did you see a temporary dip in those local areas? >> the data is noisy we haven't released data since our earnings call on may 2nd i really can't talk about trends that are happening right now what i can say is that the data are noisy in terms of city level or state level or even country level. we're definitely seeing that many people are waking up to the idea that etsy has what they need right now is a moment when people want to put their money where their heart is etsy brings people together and makes them feel connected. at a time when people feel like

so much commerce is buying from the few conglomerates feel so impersonal, connecting with the person that made the products and can make something for you feels relevant now more than ever the other thing that i'd say right now is that, you know, so much of our life is defined by habits, particularly purchases you know, you tend not to think much before you buy something. you go to whatever is the habit. and there are very few times in people's lives where habits get reprogrammed, when they get married, when they have a baby, move home, those are the three classic occasions. right now before you go buy anything, you got to pause and think to yourself, where can i go and who might be open and so all of those habits are being reprogrammed and when people have to pause for just a second, often etsy comes to mind. that's an incredible opportunity for us >> people also want to support small business, sole

proprietors. you have a the lot of independet folks on there i'm curious in terms of what you've seen in curators and artists given that people are out of work and don't have access to a traditional retail model and what they're doing on etsy right now. >> we talked about this. well over 2.7 million sellers on etsy, 89% are women. 91% are businesses of one. and for so many people, supporting small businesses, supporting independent sellers is really important to them. and etsy is the easiest and fastest way and most value oriented way for a seller to get in business, for someone to turn their creative energy into a business when so many people are losing jobs because of robots, creativity can't be automated. we take our responsibility really seriously as a platform to allow these independent sellers to get online and to

grow their business. many had to close the retail store and discovering not only are they able to build a business but they really appreciate being able to connect with buyers all over the country and all over the world who have a real passion for what they make >> josh, you are worrying about facebook's shops platform? they're going to sprinkle a little etsy dust on whatever this is. but brands stand for something etsy stands for something truly different. and we've been doing this for 15 years. and the minds of consumers, etsy's brand is different. i think that that is something that is compelling and differentiating and very enduring i'm not surprised others are trying to get in the game. i think we have a brand that really is unique and compelling in this space. >> what do you think overall, josh about, this whole facebook?

i know etsy sells advertising itself do you think this is going to have lasting impact on facebook's bottom line and force some changes >> we're really about bringing people together to build community. i think it's important in this time that we're frustrated by division, divisiveness, people being galvanized in their own camps. we want ways to sit down and have an honest and open and truthful dialogue, mutually respectful dialogue. i think that's part of what etsy does is allows people from all over the country and all over the world to connect over a shared passion and have some mutual respect and dialogue i think we need that now more than ever.

are you saying they're not getting that on facebook >> i'm not commenting on facebook i'm commenting on etsy figured. thank you, josh for joining us >> always a pleasure after the break, credit suisse sees a summer slump for theater stocks and a rare double downgrade for beyond meat. we'll get word on the street next plus, glamming up with the kardashians. the makeup company is doubling down on the first reality family of tv. stock slices. for as little as $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands.

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welcome back to "closing bell." beyond meat getting a double ground raid at barclay's they cited headwinds related to food service channels being closed because of lockdowns. they raise the price target on the stock to $115 from $110. clearly it's already trading above that, $130 credit suisse out with a note on

theater operators. downgrading amc to underperform. the firm says the surge in covid-19 threatens theater reopenings credit suisse also lowering the 2020 u.s. box office forecast to $4.6 billion from $5.1 billion this is as they say they'll resume operations at 450 locations on july 30th about two weeks later than previously planned. goldman sachs says southwest domestic network will drive a faster and stronger recovery versus the peers however, they los angeles warns that the traffic will take longer to improve. southwest up 9.5%. >> another big mover today is cody, the beauty company they are glamming up with the kardashians again. they say they'll pay $200

million for 20% steak in kim kardashian-west's brand. the transaction valuing the 3-year-old makeup brand at a billion dollars. coty's moves comes on the deal with the younger sister. they paid $600 million for 51% stake in kylie cosmetics kim kardashian clocking in at 1 177 million followers on instagram and kylie at 183 million followers. the stock rallied on the news moving higher by 12% however, year to date, that stock is down nearly 60% coty is the latest retailer to bet on them. gap announced a collaboration with kim's husband, kanye west with the rapper set to create a clothing line for men, women, and children coming out next year mike santoli, coty's stock story tells the story which has been weakness the fact that this deal does not come with any endorsements from

kkw or kim kardashian west, that could be a problem for them. covergirl, sally, max factor, those with the weak spots in the portfolio. them taking chunks of the kardashians could help at the margins. though on this kim deal in particular, i notice they did not take a stake in skim which is actually kim's business of shapewear which is doing apparently a lot better than her beauty and fragrance line. what do you think? >> coty making the moves in a little bit of a sense of urgency and desperation from a position of weakness as you say really still reeling from the overpriced acquisition they made a few years ago. and i do think it is almost similar in some ways to gap. they have to reach for these connections to our younger demographic, a little bit more energy behind that customer base but also reminds me of kmart and

martha stewart not to say they're going to go the same route but it does tell you that this is a company that is kind of destroyed value over recent years and just trying to gain a foothold in some area of this business growing so subscale. $3.5 billion market cap. $9 billion in debt for coty. >> sara, does the end user know that coty has this stake, do you think? and does that hurt the brand image at all or is it still just totally marketed under the original names? >> i doubt it, right kim and kylie are the best promoters. will of course their mother who is thought to be the mastermind behind those deals they promote it's very direct to consumer and they both still have majority stake in these businesses at least kim does. so coty getting a piece of the action with an option to actually acquire more in the future which could be pretty interesting. i don't know celebrity fragrances

>> i was going to say, that point that the company's value is so beaten down, kind of explains this huge stock move for coty the implied value is not very high so, therefore, 20% of snag could grow into something much bigger, who knows? actually moves the needle a lot for coty it's the flip side of the negative of the fact that the value of the company had been so depressed. >> much like gap >> i think it's so interesting that there is no m & a happening right now in corporate america everybody is conserving cash and in retrenchment mode just the kardashians and wests making deals left and right. >> fair enough if you got some stock options as well in there, rallying aggressively then even better coty is up 12% today we got just under 30 minutes left of the session to keep things driving the action on let opening front. florida's case growth is slowing down but there are still worrying trends in the state and across the country. new jersey the latest state to

pause its reopening plans. new data shows home buyers rushing back into the housing market and boeing's 737 max test successfully took off and the stock is up 12% on the news. it leads the dow which is up 1.8% which leads the s&p 500 which is up 1% >> time now to get a cnbc update with sue herrera >> hello, everybody. here's what's happening at this hour in minnesota, a judge threatening to move the trials of the four officers charged in george floyd's death unless public officials and attorneys stop talking about the case. the judge said a gag order is likely if the public statements continue circumstance is filing for bankruptcy it is also firing nearly 3500 workers who were furloughed in march and they are cancelling many shows around the world with the exception of so-called resident shows which are in las vegas and orlando. the company hopes to resume operations when conditions permit and pandemic related cancellations are pushing

further into next year the geneva international motor show had been scheduled for next march but now will not take place until 2022 organizers pulled exhibitors and found a majority said they would not participate in 2021. you are up to date i'll see you next hour back to you. >> we look forward it to see you then still ahead, decision day for the banks with many firms expected to release their dividend plans after the close following last week's stress test we'll preview what to expect and as we head to break, here's a check in on bonds. treasury yields holding steady today. the stocks climb the ten year yielding 0.64%.

25 minutes left before the closing bell here's where we stand near session highs. the dow is up 25 points. boeing is the leader that is helping industrials lead the s&p 500 up 1.14% all sectors are green right now. the nasdaq up .1%. after the break, we speak with national economic council director larry kudlow about the rise in coronavirus cases in the u.s. and the growing debate over extending unemployment benefits. that's coming up on "closing bell."

a. under armour creating questions with a move to back out of the sponsor shp deal with uclaz it say more about under armour which has seen the stock down 60% in the last year or the economics of college sports with the challenges of organizing amateur athletics and heavy dependence on in stadium revenue. the answer is it's a little bit of both. so for some background, this was a bull market move struck in the good old days when the stock was trading around $40 and getting ucla was the most expensive college basketball deal at $280 million over 15 years. since then, under armour is scrambling, losing momentum. the founder stepped aside as ceo last year. the pandemic only exacerbated the issues with stores closed globally last earnings, the company said it would be renegotiating and

negotiating extended payment terms with manufacture the athletes so this is clearly part of the overall belt tightening move that under armor is in but there is also the question of college sports. which are challenged amid the pandemic when compared to pro sports the nba can organize a make shift restart plan, college programs have far less ability to compel and organize competition particularly since athletes don't have the same financial incentive. so as for under armour, keep in mind this is part of a trend two years ago they back add way from a ten year deal to outfit the mlb, handing it to nike. they're pulling back the new ceo tries to get the house in order and what we can definitely say is that this does represent a retrenchment for under armour whether they're giving away market share or a savvy pivot, still remains to be seen definitely got both backers at work >> there is separation in this, sara they had it already in the terms that they could have terminated when they saw fit?

>> they say that they can terminate it though we did talk to a number of legal experts here and there is probably going to be a legal fight ahead for under armor to do this but under armour can say they're not getting the marketing benefit they signed up for because college basketball is not being played >> under armour, a story there by sar yacha. a analyst weighs in on the facebook boycott and also we'll be joined by larry kudlow don't go anywhere. "closing bell" back in a couple of minutes i felt completely helpless. my entire career and business were in jeopardy. i called reputation defender. vo: take control of your online reputation. get your free reputation report card at reputationdefender.com. find out your online reputation today and let the experts help you repair it. woman: they were able to restore my good name. vo: visit reputationdefender.com or call 1-877-866-8555.

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to new hits like little fires everywhere. and fx originals you can only watch on hulu. that's just the beginning of what you can experience with hulu on xfinity. tv made simple, easy, awesome. you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse.

but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. bill murphy announcing the state will not start indoor dining this week after initially planning to loosen restrictions. texas, florida, and arizona close bars for a second time this map shows week over week we're seeing a spike in cases in areas like phoenix, arizona, san antonio, texas, and orlando, florida. joining us now, larry kudlow, national economic council director good afternoon >> thank you appreciate it.

>> i mean those points we just made, clearly there are cases spiking in certain areas and that has led to some economic shutdowns again does that concern you the broader economic recovery may be derailed >> well, no, not at the moment although, i will say we are scouring the number as best we can. we're looking at them very, very closely to see i just want to say that, you know, those states who are pausing or throwing down are doing the right thing. we understand that absolutely doing the right thing. i said that on air this is a time where we have to go back to basics. remember the notion of personal responsibility f you're in a hot zone and you're coming up against people, you know, you have to have your face covered and you have to get tested if that's what is happening around you in a hot zone. and you have to have great personal hygiene and you have to have your social

distancing now we know how to do that we're in a different place today than we were last march and april. but these breakouts will happen. and we have to apply the right mitigation and techniques. i'm glad to see the state governors taking action. those have been our guidelines from day one >> larry, you said before in fact on this show that you don't want to see the unemployment benefits extended beyond the end of july. i wonder whether that is an immovable position in your mind. if we do see on going spikes and on going reshutdowns of the economy which we hope we won't, but if we do, would you shift your positional map potentially if people don't have jobs to go back to? >> well, look, we're looking at a lot of options and we will continue to look at a lot of options and, again, i want to emphasize that i know in some of the hot spots, florida, texas, arizona and so forth, california, there are place that's are doing much better, for example, like new york

that is very important and philadelphia and michigan have been doing very well. so we hit a bad patch. we know how to mitigate that i don't think it's going to last too long but having said all that, our main goal hopefully is to get people to get reemployed reemployment is absolutely essential. and we want to give them perhaps a boost, a benefit for re-employment. and we want them to come back to work we had so many anecdotal -- i can't begin to tell you how many businesses, large and small, have gotten in touch with us directly or indirectly saying how hard it is to rehire if we keep the $600 federal plus up. so we're going to try to help that with the re-employment. we haven't come down yet its nondecisional or predecisional. by the way, the president continues to push for the payroll tax holiday for the workforce for the same reason. they want to give them an after tax bonus to come back to work so at the moment, this story looks very good.

we'll be looking very, very carefully at this. >> larry, it's sara. the bonus for coming back to work, but wouldn't you have to pair that with an addition album p up in the unemployment benefits maybe it's not the $600 that you're doing now, you still have 20 million americans collecting unemployment benefits. that could be a pretty big income shock and a consumption shock if you takeaway that ful bonus. >> well, look, a lot of the incomes come from the government as part of the rescue package which i think was a successful rescue package led by president trump again, we've had so many reports and there have been so many stories that the $600 plus up is not that we want to punish anybody. but incentives work. so if you're incentivized because you'll make more money staying at home, that is not

what we want on the other hand, we would like to help give a push that doesn't mean the unemployment benefits from the state go away but if you get a job, if you're out looking and you get a job, we probably would provide some re-employment insurance or re-employment bonus. and don't forget the payroll tax holiday itself gives you, what, 6.25% bonus. so these are very good things. now we'll assess as we have been in recent weeks the state of the economy. and the pandemic but right now, i think the bulk of the evidence shows we're on track for very significant upward move and it's a v shape recovery, i don't know home builders report was smashing retail sales, the jobs story, weekly unemployment plans continuing claims have come done quite a bit. the mobility index, new business applications, all this is

pointing to a v shape recovery but i'll acknowledge there is uncertainty out there. i good get that. and we are always assessing and reassessing and looking at the data >> larry, i just want to ask you about a story that dropped during the first hour of the show on "the washington post." it says the exodus from trump's economic team continues despite fresh fears about new closures and coronavirus crisis what is your take own comment on that are you part of this exodus that is about to happen, larry? >> no, i'm here. i'm still standing >> what about -- force zblors it's been two years. >> they say andrew, kevin hac t hasset, all of the name that the team is running away from the white house. >> well, no one is running away from anyplace. andrew was a deputy of mine. he worked 3 1/2 years. i appointed him. he did a terrific job. he wasn't a macro economist.

the only economist is kevin hasset he said he would come back for unpaid three month work. we're consulting with him and many others on the outside we've got a whole council of economic advisors. stast is still intact. my nec is still intact we've had very little turnover in the nec recently. so i don't know. "the washington post" can write whatever they want to write. i haven't seen the story yet i don't know if i'll look at it. it's just gossip in my opinion just gossip. >> larry, good to hear that from you and good to hear the man at the top of the nec is not going anywhere larry kudlow, thank you for joining us. >> thank you, appreciate it. >> ten minutes left of the markets. we're trading high nicely high today. by just over 1% on the s&p 500 we're now in the "market zone," commercial free coverage of all the action heading into the close. the senior market commentator set to break down the crucial moments of the trading day

we have morgue an stanley jim lacam weapon l lacamp with us as well all of the major indices are higher and, mike, it's again a sign afterthese big gut check days that we get buying what are the key levels on the s&p 500 which we always seem to find support on. >> it's in the zone of 3,000 the 50-day average we got down to 2960 a couple mondays ago. does it seem sticky that the market is not been able to generate too much down side momentum from this point but i would say also it works the other direction. in other words, the market is not able to crack above, you know, 3150 so it seems as if, you know, plausible that it just knocks around this range.

you're rotating within this range. >> i believe you're in texas which is one of the hot spots that we're following when you see the market like this and the continued display of resilience bouncing off of a down week, does it make sense to you. >> we have a lot of unprecedent the things going on. look, we have a great quarter in stocks terrible quarterer in that it's been a great quarterer in stocks at the end of the great quarters or the end of really bad quarters, you typically get a little knee jerk so last week we saw a lot of stuff selling off and a lot of concern that the green shoots that we were seeing the light at the end of the tunnel was an on coming trade as we saw the covid-19 numbers start to pick back up. but the market did sell off to a very lornlg call point as you just said.

right at the 3,000 level if you look at the direction of this market in this recovery, it's tracking verywell wreer n we're not coming off all time highs. this market is starting to show that it's not going to sell off too much i think one of the big reasons for that is there's a tremendous amount of money on the sidelines not knowing what to do you have a lot of seniors that got completely out of the market they didn't get back in. they had a report out last week that estimated there is $5 trillion in consumer investable assets sitting on the sidelines. i think that is one of the reasons you sell off to a logical point and start to firm up i want to point out just because we have to kind of tap the

brakes on the reopening of the economy, it doesn't mean we're shutting down the economy. so we do expect that the recovery will continue it may be lumpy and may be halted and stunting and all of that but it's still going to continue >> let's hit facebook. the stock is up. a growing number of companies are pulling ads including major advertisers like starbucks, best buy and unilever pushing an effort to amp up efforts to curb hate speech and disinformation facebook stock currently as i mentioned up 1.5%. it got slammed on friday let's bring in bent bell, senior tech analyst at jeffries he has a buy rating on facebook. what type of revenue hit are we looking at here, brent, as a result all the companies pulling ads? >> we think it's minor we continue to believe that there is a tail wind to facebook's marketplace and we don't believe this will

be seen as a long lasting threat many of the advertisers said it's going to be a short term month. but they will come back. this is one of the best properties on the internet and the advertiser is off the charts again, eight million paid advertisers. billions of people are using even in the small business side, you know, they have 160 small businesses using and again a very small fraction are paying so we think there is more advertisers joining them than leaving. >> do you think this comes back to facebook because these boycotting companies look at it and they think we have to be on facebook regardless or because facebook can make some relatively simple changes to how it does business such that these companies will come flooding back for all the right moral reasons? >> we think they have to be there. this is the most affected marketplace. zbrust a targeting perspective advertisers continue to believe that this is the place to be this morning we had one advertiser say that he thinks there say short term shift at

google, with youtube but they're going to come running back to the platform we look at a chp with $10 to $12 earnings power again, you have 250 to $300 a share on the stock >> i mean really even with the cascade of names i mean one thing when it was patagonia and north face but now it's coca-cola and unilever and starbucks. is there anyone added to the list that you think, brent, maybe this is more meaningful than i expected? >> no. again, there is eight million advertisers. so if unilever leaves, it doesn't matter the resalt what they're doing with facebook shots to bring small businesses on to the platform and to find the buyers is overwhelmingly more positive than negative. so this is headline risk we saw this when the stock was 150 and below when zuckerberg --

in front of congress and everyone thought it was over and stock ran right back so they're tl are buying opportunities. we see opportunities like this where there are more headline than fundamental >> brent, thank you for joining us >> thank you >> banks getting set to announce the dividend plans potentially falling after the stress test. >> that's right. they're free to make the announcementes in about three minutes. in response to those fed stress test based on the guidance from the fed last week, firms are required to suspend their buybacks and cap the dividends in the third quarter to the same level as the second quarter so long as it's not more than the average of the four prior quarters of net income based on that metric, analysts have their eye on wells fargo and capital one as key contenders the banks can make their announcements today payouts. they don't have to make the announcements. >> leslie, thank you very much

for. that we look forward to those. could be coming at any moment. i mentioned on the capital front the biggest folk us is likely to be on goldman sachs. on the dividend front, wells fargo. given that the dividends are based on trailing quarters of earnings, you can equally expect the likes of wells fargo to wait until earnings which is a couple weeks ago as it relates to the dividend announcement of this portion as opposed to the capital announcement but we'll see. any minute now >> something we're watching the next hour, with very two minutes left though before the end of trading. mike santoli, take us through the internals. the. >> pretty strong all day, sara the new york stock exchange volume about 80% in upside issues that is the case all day so fairly solid and relatively broad rally. take a look at small versus large growth this is the russell 2000 against the nasdaq 100 now you see huge outperformance today, a bounce on the relative basis for the small caps up

2.8% coming into today for this month, the nasdaq 100 hit outperform by 5% so this is really just a reversion bounce at this point not sure if it's going to last from here. take a look at the volatility index. it stayed in the 30s for quite some time. under 33 is a pretty good sign that there is a little bit of a spike at 36 on friday. so that's kind of not an all clear but helpful. and now we're going toward a three day weekend in the summer. that means this should actually bleed lower as the week goes on. >> just under one minute left. thank you. we're up 2.1% now off 530 points on the dow the dow is certainly outperforming in the other that is boeings large jump of around about 10% to 12%.

the nasdaq is lagger today the russell up 3% today. regional banks in particular rallying 3.5%. ahead of the decisions on stress tests which are due later in this hour. the s&p 500 up 1.8%. the dow, 580 >> yeah. really strong finish near session highs will welcome back, everyone. i'm sara eisen here with wilfred frost and mike santoli take a look at how we finished after a down week, we did bounce back today in a big way. the dow closed up 580 points just about keep in mind, we're approaching

the end of the quarter and the end of the month still looking at a pretty strong one. the nasdaq up 1.2% technology played a theme in today's rally. up 3% in the close best day since early june, june 5th. the russell gained just about 4% for the quarter, small caps are up 22.5% that is quarter since 2003 we're tracking now investors are now awaiting the potential dividend announcements from the big banks earnings from micron we'll bring you the results as soon as they're released let's hit this close joining us to talk about the market, jim lacamp still with us mike santoli, first to you on what was a strong day despite the continued focus on rising cases across this country of coronavirus. >> definitely pretty strong. i think, you know, light volume, all the rest

you can explain it away. it was a strong close because there was no obvious need for there to be a kind of a wave of selling on the close because of the quarter and rebalancing. a lot of that has been worked through perhaps by now and so that did, you know, leave clearance for a little bounce. we regained, you know, a bit more than half of friday's losses it is definitely puts the bears on notice that we haven't been able to press lower. but i don't think you can assign too much meaning to the little twitchy moves day to day in the summer, there are air pockets in it both directions. i do think on the virus news there was nothing you would say that today was incrementally worse than you were braced for on friday. i mean, i think that's the curve we're grading these thing onz right now. perhaps that explains why there was clearance to have more of a rebound in some of the cyclical sectors today. >> new jersey clearly pausing part of their reopening plans based on what they're seeing in other states do you that i is priced into the market the economy could see much wider

spread, pausing or reversal of reopening plans even if the cases don't get that much worse? >> jim >> the battle between -- i'm sorry, i didn't hear you yeah i do think we're going to have issues let's not forget that we have seasonal issue here too. historically and the time period between april and october. you typically get a lot of volatility we have some of our worst historic months right in front of us, september and october the good news about today's rally is that the areas that really move and michael mentioned them, you have the industrials, very good day banks have a good day. the airlines had a great day and small caps, they all had a really good day. these are areas that a lot of wall street expecting to revert to the mean. they underperformed for about ten years now. and so when people say where can the upside be in this market it can be in the areas that haven't done well in the last

ten years. i'm not telling people to go out and sell all your big cap tech names and buy all these things st it doesn't usually turn on a dime it can be gradual. but does it tell us that we have some upside here in the short term, there are he other issues including the election and questions about what's going to happen to the corporate tax rate, questions about what is going to happen to the capital gains rates. but the election is still a long way off. a week is a really long time in political terms. so for now, i think the market looks relatively healthy a lot of it will be seasonal but seeing the areas move and maybe another head fake. but there's been some signs that we're starting to see a sea change not only to the names but with regulatory accusations on big cap tech and with the dollar weaker and a lot of the big cap tech getting a lot of the supply chain issues will impact them with a weaker dollar

i think you can be seeing the beginning of of this rotation and that is very healthy and bullish for the market >> let's get into the supply chain w very micron earnings out right now. josh lipton with the results josh >> so, sarah, micron reporting q-3 eps of 82 cents. versus expectations of 77 cents. revenue beating as well. q-4, looking for $1.05 they say the street is closer to 81 cents for q-4 they're at 5.75 and $6.25 billion. micron, the largest u.s. maker of menlry chips and the chips going to, of course, a variety of products. so i think pcs and smart phones. investors getting insight into health and strength of the markets. he's saying here micron's exceptional execution drove strong revenue in eps growth

despite what he calls challenges in the macro environment back to you. >> josh lipton, thanks nice pop for micron after hours. listening through the metrics, sounds like a beat on all fronds including the outlook. what are you watching and how much of a bellwether is it snt. >> pretty constructive obviously, it's a bellwether for memory, for that part of the semiconductor business and the stock has been moving in the right direction. it is still, of course, below the precrash highs around 60 but definitely has kind of created this up trend since the low. it has not wavered i think semis are popular in general. this certainly wouldn't hurt that picture >> just want to bring you some deal news. it involves lululemon. they are buying mirror they let you put a mirror up in your room and have a subscription service along it with the price of the deal is $500 million. this is lululemon's first ever

acquisition. it looks like they're going to pay for that in cash and liquidity which they have on hand, putting in the release they have about $800 million in cash keep in mind, they were an early investor in mirror participated in the fund-raising round. and they are going in. what is interesting is this is outside of their core categories of apparel and accessories it's happening at a time where a lot of stores are still shut down and still reeling from the covid-19 crisis. louisiana limb lululemon making a big bet in the at home fitness market it is so strong. peloton and mirror have seen user growth exploding as people have stayed home lululemon's stock down .75%. we got an exclusive interview in a few minutes are the ceo of lululemon to help talk us through the strategic rational behind this deal

ahead of the investor call mike santoli, what do you think? >> very interesting extension of the brand. i think it's also interesting we just showed peloton shares backing off a little bit probably a nod in the direction of morrow bust competition for the at home fitness area and also a small enough financial bet for louisiana that it's not as if it's a tremendous commitment and they have to reorient anything about the existing business. >> i mean, i totally agree with that particular point. it's a small financial bet initially the thought is are they marking the top of the market in the at home if thenfi trend. it's taken pel tone's market cap to 15 or $16 billion but to that point, it doesn't sound like they are spending that much. $500 million is nothing compared to what peloton is now worth and no doubt there will be a lot of cross pollenation

looking forward to that interview when it comes on that news pivoting back to the broader markets, do you feel with the levels that we're seeing at the moment at rebound today despite some bad numbers over the weekend for cases in various states that market is slightly ignoring the risks of economic reopening being reversed >> this is going to continue and lead to a lot of volatility in the markets the key for us is watching haptization rates and mortality rates. those are not increasing significantly. so as long as we can manage that, we think the reopenings will be more about curbing some of the behavioral guidelines the market likely won't react very negatively from here. >> but what does that say about a view about the v shape recovery we just heard from larry cud lone the white house economics

team saying they still expect that is that possible to see with the reopenings being rolled back and just the fact that it doesn't sound like he was very eager to extend the unemployment benefit bump that we've sen tend of july all of these fraktors and could make the shape difficult >> yeah. our view forrest of the year is while we've seen a v shape recovery so far, it starts to flatten out in terms of the slope. so unless we see a faster than expected vaccine or real uptick in employment, it may be more of like a square root recovery or smoothfrom here. >> we have breaking news on the fed. >> what we have right now is the federal reserve providing us now advance copies of the testimony that fed chair jerome powell will give to the committee on financial services for the house of representatives tomorrow. in it, some of the highlights.

jerome powell will say tomorrow that as the economy begins to reopen, incoming data is beginning to reflect economic activity many businesses are opening their doors. now while this is an important new phase and we have done so sooner than expected, this bounceback in economic activity is welcome it presents new challenges, notably the need to keep the virus in check he goes on to say the path forward for the economy is extraordinarily uncertain and will depend in large part on our successes in containing the virus. a full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities and then one more that was interesting here there are many of those out there, sara that are questioning whether or not the fed's actions in unprecedented times are within its mandate, whether it is acting legally. jerome powell, fed chair, will say that tools that federal reserve is using under the 133 authority offer times in emergency such as the ones we've been living through with economic and financial conditions improve, we will put these tools back in the toolbox.

that is a sampling we'll continue to go through the comments but this is what he will say tomorrow in front of the house committee for financial services back to you. >> dom, thank you so much. mike santoli, we know that fed chair is always been a little bit more down beat perhaps realistic about where the economy is compared to perhaps where the market has got to but the saying that the economy is extraordinarily uncertain does i guess remind us of that point of view that he had for a while. >> keeps wanting to accentuate the risks. i think that i doubt anybody would have been expecting him to strike a different tone tomorrow so i don't know that we're in the mode of being weary of the fed chair turning all of a sudden a recovery which could mean less action in terms of fed support. and i do think it's very, very consistent here. but maybe there is the take away that the more times he says this in congress, perhaps, the more persuasion he might have in terms of some fiscal help down the road. >> it's the new favorite word,

uncertainty and uncertain. i mean that's the new -- i think patience is one of the old favorite words to try to communicate that the fed is very much in the game here in terms of lending support to the economy sarah, should investors be you thissed enthused by that there were questions whether they were sounding too down beat about the shape of the recovery. for me, it sound like the more down beat he, is the more stimulus will flow >> i mean, stimulus is definitely the key providing support for the markets. we see over 500 global stimulus actions over the past year and really we feel like that open end will be positive for a floor on the market. we're recommending to investors for the rest of the year is really to focus on quality if you can find quality across the spectrum, across sectors around the world, that will help be resilient against this level of volatility. that is companies with strong free cash flow and companies withdrawing esg which tends to be overly index to quality

companies in strong business models and all that. that's where investors are looking to position their portfolios >> sarah, thank you for joining us jim, good to see you too thank you. >> up next on the show, we'll ask lululemon's ceo about the company's big deal in the fitness space just announced and how it will impact his bottom line. "closing bell" returning in just 90 seconds

louisiana lululemon acquiri. joining us now in an exclusive interview is lululemon's ceo calvin mcdonald. thank you for joining us fresh off that announcement. >> thanks, sara. excited to be here >> so this is a little different for you guys, getting into the at home fitness market what are you going to tell investors about why mirror right now? >> our vision that we shared with investorslast year is to be the brand that ignites the community of people living the sweat life and the mirror acquisition is an exciting opportunity to build upon that vision to be leaders in creating truly on the guest experiences and this enhances both our digital and technical capability >> i just feel like investors get you right now.

you know, your stock has done remarkably well. they get the growth trajectory you see and painted in men's, in international growth, in the apparel and even the expansion what would you tell them to not muddle that picture of growth drivers and why you're getting into fitness and the at home fitness market which can be competitive and also fatty >> yep we shared with investors last year our power of three. which we're going to be our growth drivers innovative product, creating omni guest experiences and market expansion and in those driving, doubling men's, doubling digital and our international business and the opportunity to market, to innovate in and around our community is always part of that strategy we do events today we have our experience stores. and what we have seen and know is that more and more guests are

sweating both physical and digital at home. and we were always excited and interested in the space as an opportunity to build out that connection as you know, we've been testing our membership program for over a year now it has been incredibly successful so we already know that our guests have shown a willingness to work with us in other means and other relationships, sweating locally in studios and coming together for events mirror creates a platform to continue through the initiatives, building out our membership program and offering those solutions in house >> what happened to mirror's business as economies have shut down and people have had to work out at home and do you wonder at all or worry at all whether that's peaking now as economies reopen >> yeah. what is exciting about mirror, we took a small investment in

them last year which really gave us the opportunity to start the relationship earlier this year, we put our ambassadors on the platform to see how the mirror guests will interact with a variety of sweat options. we love the versatility of the platform there are multiple waysin whic you can sweat on mirror. what we equally like about it is the business was started in 2016 by grin as the founder it only launched in 2018 and this year it's going to do an excess of $100 million. it's on a wonderful growth trajectory it will be profitable next year. it's in a very effective way it's a young brand that lacks awareness. and what we're really excited about this partnership is lululemon can bring to the brand and to thepartnership.

>> you have plenty of liquidity which you spell out. there are troubling signs on the horizon now of cases rise and in the south of this country. we could see more reopening halted or rolled back with stores closed. >> as you mentioned, we have $1.5 billion in liquidity built on $800 million in cash. we had another $300 million credit facility. we're going to purchase the cash and quarter one, we were one of few if not the only that even in challenging times we were still

profitable we shared direction on our last earnings call of how we're seeing quarter two there is momentum into the business we're confident with the momentum we have in the business and demand we have in the product, the growth that we're seeing we're going to continue to manage in the recovery and the support phase. and we're going to continue to invest in the business and this investment is in the future of our vision of lululemon and we're assumer excited of how it adds to the system and contributes to the

momentum they will prove to be very cheap as opposed to a new effort to sell lulu products through >> what we like about this business model and mirror is that in itself, it is a revenue business that's proven to be very successful with incredible momentum after just two years. and we know we can continue to grow that. it's only available in the u.s. today. we can bring it on a global scale. we can tie it into our membership we know the revenue behind that reoccurring revenue stream so we see an entirely new model of incremental business for louisia lululemon and strengthen our community, build our community and drive our loyalty which will drive our core apparel product as well. it really is going to be sort of a lengthy system but it's no the an acquisition simply to sell more apparel. we think that will be a by product. we love the model. we love how it plays into our vision >> and calvin, what do you say

to the loyal mirror customers and users at the moment who may be loyal nike wearers or alo wearers or under armour wearers or whatever the brand may be >> we built the brand on relationship with ambassadors that are locally in the community that own studios, that invite guests in and although they may be wearing lululemon, it's not a lolululemon exclusiv studio we have grown up in an environment in which people will choose the apparel in which they sweat in we built the brand and relationships by working with those influencers and excited to extend and do that in this new platform with in home sweat. and, you know, we're proud of our product and believe it stands out and performs better than anyone else and guests are able to choose and sweat in what they want as it relates to this product we believe that our product performs the best as it relates to the sweat hub. >> so just for people who aren't

aware of the product, so it's $1495 for the mirror and then you pay for a subscription for the classes, $39 a month to get all the live stream classes it sounds like the peloton model s that how investors should think about it is this a peloton competitor >> it's similar in terms of model. there is a piece of hardware that you purchase as a guest and then there is a monthly subscription where we see it as being fundamentally different is the platform it's not a hardware device that is only applicable to one sweat. it is very versatile can you get on the mile an houron amirror and do meditation yoga, hip hop to stretch so we love the versatility around the product also versatility in the additional content as we grow out the sweat not just sweat but grow

we see an opportunity to engage in a variety of ways so we're excited about that. and the versatility was a big part of why we loved the mirror potential. >> calvin, just aside from today's acquisition, i want to ask you in general about how the business is doing now that states have reopened you have been able to open a lot of your stores how much is open and what is the customer response so far >> yeah. we opened most of our stores globally now we're still closed in new york we close houston last week and we continue to see great response from our guests obviously we're operating under very different constraints than we have in the past. controlling the number of guest that's come in as a result of lineups outside of ourshops.

we expect that momentum to continue as stores have opened up, our digital business has continued the strength and we're excited to see the momentum in the business >> also, i want to ask you about facebook lululemon's twitter account did tweet out support for the stop hate for profit movement you announced you're pausing ads on facebook. can you just talk us through why and what you need to have happen to resume? >> we did announce on friday and we stand in solidarity with the naacp and the adl and we believe that, you know, we all have a responsibility in creating an inclusive society. we have an opportunity to use our brand and our voice to drive meaningful change. we're in conversations with

facebook we had a great partnership we're standing in supporting the campaign and we'll look for change on their part to sort of determine moving forward >> we just had an analyst last hour tell us that none of this matters because there is no other place like facebook where brands like yours can go and will only last a month is that true >> i believe we're all looking at roles and opportunities that we have as businesses and brands to drive meaningful change and i believe facebook is asking the same questions in meaningful change will come out of this and as brands we will evaluate at that point in time and see the actions in terms of the partnership moving forward but i believe that change will happen >> calvin mcdonald, thank you for joining us >> thank you so much >> good to you have. the ceo of lululemon the first ever acquisition for the company. >> yeah.

fascinating story. great booking. thank you to calvin. we have a market flash on simon property group dom chu has it >> the big mall operator and real estate investment trust where lululemon is a tenant. the reason we're highlighting is the shares were up 3% to 4% after hours. 120,000 shares of volume partly driven by the fact that the company is now said that around 199 of the 204 retail properties they have in 37 states, 95% of the company's net operating company are now open for business and that many of their tenants have reported higher than expected conversion rates and sales. they also said that they're going to authorize a $1.30 per share dividend payable in cash they expect to pay at least $6 in dividends for all of 2020 $6 based upon the closing price, that would imply a dividend yield of around 8.8% this big mall operator wants to

continue to pay dividends. they say they have a strong financial position but that is probably what is driving the stock right now. back to you. >> dom, thank you for that up 4% in after hours up next, mike has a look at why the volatility index is indicating an unusually high market even as stocks continue sge the best tv experience just got better

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investors overall remain cautious >> there is a couple different ways that people on wall street are using to try to illustrate this very stubborn sense of caution at least among certain players out there in the market. this very kind of busy scattered chart shows the s&p 500 recent return off the lows along with the number of bulls versus bears in the retail investor survey. so normally this the return for the s&p 500. if you have this kind of return as we had last week and this week, you would expect there to be more bulls than bears essentially this is the relationship here. you can see typically it is over here nothing up in that quadrant over there. so almost never have you seen this kind of rally and this short of period of time and had this much of an excess of bears

over bulls among the aai crowd similar point, if you look at the volatility index compared to the strength of the recent rally, right now down here is the vix. so the vix is in the low to mid 30s right now. normally you would have seen the market to be either flat or up a little bit or down a little bit based on what the vix. x is looking at right now based on the historical relationship here you see that line. again that, bubble it is way outside the norm for what you normally see. i have a couple explanations for this even though we rallied 40%, we remain more than 10% below the recent highs and the highs were only a few months ago the shock value of that move is pretty significant then, of course, you have all the headline risk and the idea this rally has not seemed fully organic to a the lot of people i balance this against the new amateur small investors that people keep looking at that are in trading options and speculating on very risky stocks it seems that it's a bifurcated

market and people are willing to bid for volatility insurance at a high level they're willing to sit out the market if they're a traditional retail investors but yet, on the speculative side, there is overheating going on that's why i think it's tough to get a clear read on sentiment. its easy to say some people are not buying this rally. guys >> yeah. there is still plenty of caution. we heard that over and over. mike, thank you. with a very nice new hair cut. up next, we'll ask rbc's head of u.s. bank equity strategy how you should be investing in that industry as we ait dividend decisions from the big banks. could come any minute. we'll be right back. for as little as $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership. schwab.

own your tomorrow.

welcome back to "closing bell." we're getting some of the releases from the individual banks relating to their stress capital buf capital buffers. goldman sachs does fall below its required stress capital buffer that was already priced in, of course, on friday. that was backed out by the analysts

they're saying that the required level is based on the fed's calculations, 13.7% and the actual levels are around 13% the so that's on a huge gap left for them to close in the coming months they have until october 1st to close at very simple ways they could close it they could sell some risk weighted assets or, of course, they could generate cash that way. so the gap there of .7% again the required level and actual level not absolutely enormous. now leslie is digging through the numbers and summarize some of the key numbers for us. leslie >> i think the biggest news to come out so far is that from wells fargo. they released a statement saying that they're common stock dividend will be rebussed from the current level of 51 cents per share. they did not announce what that level is only to say that they expect that the level of the third quarter dividend will be announced when the company

releases second quarter financial results on july 14th, 2020 another stock that we told you to watch out for is capital one. they announced their stress capital buffer at 5.6% they did not make a mention in the press release that we see about a dividend so we'll keep an eye out for any future press releases. we're still digging through lots of releases coming out starting at 4:30. so we're digging through all of them and let you know what else we learn >> on the capital side, add that as expected, citi and morgue an stanley are above the required scb levels for morgue an stanley. actually 15.7% for citi, actual level, 11.2% required 10 wells fargo fine on the capital side goldman sachs a little below the required level though there was not expected to be any issues with their dividend. wells fargo, of course, as

leslie is saying, not able to recommit to their dividend of the big banks. it was certainly the one that was going to have the most difficulty to meet its dividend based on the formula but it's not surprising that they won't confirm the new level of the dividend yet based on the fact they may as well until the next quarter of earnings come out and have the updated calculation. let's get to girard cassie he is able to join us now. head of u.s. bank. head of capital markets. girard, thank you for joining us i guess let's start with goldman sachs and what you take from those numbers that came out of them, 13% actual level versus required 13.7% >> well, you put your finger on it it's not a margin that is -- that they can not reach by october 1st. eastern they bring down the risk assets as you pointed out or you see better earnings.

the and, of course, when you look at the way the stress test is run this year, obviously the federal reserve did not take into account the second quarter numbers when the second quarter numbers for goldman sachs and the capital market players are very strong. trading revenues are extremely strong over a year ago level so i'm with you. i agree with you they'll make up the difference either through shrinking the balance sheet or growing the earnings it's not a concern at this point in time. >> what about on wells fargo, girard i guess, again, everyone was sort of expecting a dividend cut. how much of a blow is that to the buy case for their equity? >> it certainly makes it more difficult because obviously with the new formula that you pointed out, for the third quarter only this is the part that was a little confusing last week as you know, the new stress test goes into effect october 1st the old stress test expires in the secretary quarter. so the third quarter was some of

what a stub quarter. they had special rules just for the third quarter which you identify with the net income so wells, because of the second quarter results, we don't know what they are yet, of course the quarter ends tomorrow. but we expect with all the banks to see very high provisions which means the earnings in the second quarter for wells and peers are going to be lower than a year ago so when you take that four quarter average, the dividend was probably going to be higher than that four quarter average which required them to lower it. we don't know yet how much they're going to lower that dividend by. that will be a decision they'll make over the summer no doubt. but clearly the dividend needed to be cut because they didn't have the income to support it. >> girard, just stepping back a bit. high level, the fact that they are going to have to do this again in the fall and the fact that the rules changed a bit, do you think this will ultimately weigh on the bank valuations no matter how sound the financials and this -- and the actual fundamentals are right now going forward?

>> sara, you make a good point there. they do have to resubmit and they're going to resubmit under two different scenarios, the u shape and the w shaped economic scenarios and maybe even the v shape scenario depending on if it's identical to the scenario they just tested to in february. they may not have to reapply but certainly for the uand w which are much, much more stressful. that is going to unfortunately weigh on the stocks, i think, until the numbers are announced. we have to remember, you know, the fed was very opaque. they haven't committed to using those scenarios to recalibrate the stress capital bufrfers if this economy is in recovery in the third or fourth quarter when the stress scenarios are submitted, they may not need to use them if the economy is in recovery but if it's not and still in a recession, then, of course, they'll be able to implement the changes if they think it is appropriate. >> what is your biggest -- what is your top pick of the big six banks, girard? >> i would go with bank of

america. what we've seen is that under the leadership of brian moynihan, he has really derisked this balance sheet since the crisis in '08-'09. i think you see that in the stress capital buffer. he has one of the lower stress capital buffers among the big six banks. i think quite evident by that that the portfolio has been derisked the dividend payout ratio is also lower than the peers. so even if we do have this more difficult stress test that is aballisticable at the end of the year, i still think bank of america you get through it without cutting the dividend on top of that, they have one of the best digital products along with j.p. morgan i think you'll see the digital channel grow more so because of what we've gone through over the last three months. so bank of america from a valuation basis, very attractive that's the stock i own >> down 1% after hours girard, thank you for joining us >> you're very welcome thank you.

facebook fallout coming up, we'll ask a pair of marketing experts whether advertisers can really afford not to buy ads on the social media giant's platform that's next. it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪

time for a cnbc update >> hello, everybody. here's what's happening at this hour the house select subcommittee on the coronavirus crisis is now mandating that all members wear masks during hearings. masks became a partisan flash point on friday when every republican chose not to wear a mask democratic chairman james clay bu

will not be allowed to speak in coming hearings. >> new research shows temperatures at the south pole have risen three times faster than the global warming rate over the past three decades. and sales of fireworks are surging as many cities cancel or scale back fourth of july celebrations because of the pandemic one fireworks retailer says sales have been surging since mid may and have more than doubled since last year. the american pyrotechnic association also says more people are using fireworks as a portab affordable entertainment at home sar yash sara, back to you. >> all right thank you. up next, a laundry list of companies say they'll stop advertising on facebook. longel wl rhtd to do that "csi bl"ilbeig back

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a growing number of companies say they will stop advertising with facebook because mark zuckerberg is not taking enough responsibility for the content on platform. facebook brought in $17 billion in the first revenue bulk of it coming from millions of small businesses that rely on the platform shares up 2% today after decline sharply on friday. joining us now president and ceo of marketing tech start up company. and also a company that works with television advertising. very good afternoon to you both. you got a relatively nuanced position, i believe, which is, you would like to see facebook make a lot of changes but you're not telling or advising your customers to pull their spend from the platform.

>> that's correct. we actually ask them to take their spend off earlier in june, about ten days this month, off completely reason we're not all spend for july is the campaign that under lies all this, are if -- the asks are not achievable by facebook or any company running type of company. so doesn't make sense to put our vote, our capital behind this kind of campaign but we're around facebook changing their campaign around racism, violence and hate >> dave, if i come to you, clearly a lot of companies are pulling back do you think they'll return to the platform in relatively short space of time? >> i actually don't think they will return

in a relatively short period of time i think this is the beginning. over the last number of years we've seen missteps they've made and asked for forgiveness and forbearance and a little bit extra time and the advertising community isn't generous with that but this is bigger, this is a question of principle. is it consistent with true free speech to have a platform that promotes hate speech for most advertisers it is a question of principle. you can point to covid, which gives them extra license and for sure this is really significant, and structural and i think it's just getting started. >> what do you make of facebook's response so far to all of this. what other steps, you expect concrete absolute, what do you expect them to do? >> yeah, so i think advertisers

want too many things, one, handling and labelling content better and stopping the distribution of hateful content. they've not done a good job to show advertisers or users that they're willing to do that though they've changed policies they haven't relooked at the decisions over the past couple months to change that. secondly, for control, for advertisers we care about the medium in which our ads are displayed. we don't have control making sure our ads are not displayed alongside hateful or racist content. and we're trying to avoid that so i think these are the two pillars for uggs, from our clients, we care about these two things, if they can nail these things we'd be willing to spend more on the platform. >> does this current suspended advertising spend go elsewhere

in the meantime. is it an opportunity ore other areas of online platform or traditional areas of broadcast and print. >> for sure. in the short-term you could see television, which is soft right now, with attractive prices with a chance to brilliance bring - a chance to bring some of that money back it's interesting as reported few hours ago, amazon and twitch just removed trump from their platform for hateful conduct i think some emerging social media platforms, such as twitch, snap, pinterest, tiktok, have a chance to step into this void, twitter obviously, they'll be able to did it and take what will be perceived as i point of higher ground on a key principle issue. >> we'll continue this

discussion for now though, thank you both for joining us. >> of course, t. >> thank you. >> up unemployment >> of course, thank you. >> thank you. >> up next, look at the -- popping trade. we'll dive into strong outlooks and stock reactions. plus the key thing every investor needs to watch as we get into a new trading day when "closing bell" comes right back you're first. first to respond. first to put others' lives before your own. and in an emergency, you need a network that puts you first. that connects you to technology to each other and to other agencies. built with and for first responders. firstnet.

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- i did this for my children. i am very proud of myself. - [narrator] finish your degree at snhu.edu. let's go back to lizzy with more on the banks for us >> we've seen a trickle of press releases from the banks reiterating most of them their dividends as they planned to do.

citigroup. morgan standard paying 35 cents a share. goldman sachs $1.25 per share. bank of america, 18 cents a share. here's where it gets tricky, wells fargo said its third quarter dividend will be reduced from 51 cents a share but didn't say what level it will reduce to the company said that will be announced with it's july 14th earnings capitol one announced stress capitol buffer requirement as calculated by the federal reserve at 5.6% but made no mention in its press conference with regard to the dividend. we'll keep out commentary on that front most program returns from the

banks 75% come from bye backs those were suspended for the second quarter and only 25% of pay outs come from dividends but is worth noting the two banks we've been watching, wells fargo and capitol one seem to be looking like that. >> thank you for that, still waiting for jpmorgan. >> yeah i haven't seen jpmorgan's press conference yet. >> we're not expecting any curve balls in that. thanks for that. mike, in terms of after hours action, wells fargo slipping al perhaps surprisingly because the extent the dividend might be cut upcertainty is a factor but the other banks a strong day. >> wells fargo was also up during the regular session today giving that back a little bit. i don't think any of news so far is coming as much of a surprise

after those stress test results last week. >> we'll see how the banks trade tomorrow and we're going to look for earnings after the bell from fedex, we'll be watching for the he misdemeanor lines there -- headlines there. >> we're out of time "fast money" starts now. thank you. "fast money" starts right now. i'm melissa lee with our guests. coming up on fast, a social shut down, pressure mounting as more high-pro file advertisers pull out. plus shares of micron company's call is new under way. and tesla celebrates 10 years as a public company. will the next decade become just