uity markets have been so friendly -- >> -- right. >> we have cash-rich airlines that aren't making any money but they have enough cash to battle it out but air fare is down 30%. it will take awhile but i think eventually, yes. >> colin, we got to go thank you so much for your time. colin scarola, thank you. >> thank you for having me. >> melissa, good to be with you. "closing bell" starts now. thank you. welcome to "closing bell." i'm sara eisen with willfred frost. the a reversal of the recent trend. near session highs on the dow at 4:46 we'll take a look at what is driving the action a tough outlook for bank earnings as jpmorgan records record revenue we'll talk to the cfo. >> tensions with china simmering as huawei and lockheed martin

sanctions and claims to the south china sea take center stage today. stocks are shrugging it off. the dow up more than 400 points but the big tech is struggling faang, internet names that have been on fire are seeing weakness today. we're following it all 59 minutes left of trade. >> certainly we've been all over the place in markets but we're up as we stand with the major indexes we have a big line up of guests. in a few moments we'll speak with shrewsberry, cfo of wells fargo. and robert kaplan will join us and we'll speak with michigan governor gretchen whitmer an earlier biden endorser as biden lays out more details of his economic plan. let's focus in on the big stories we're watching at this hour wilfred has the highlights

ph wilfred, start off with the banks here. >> the key focus, sara, as we expected it to be on provisions for potential bad loans. they rose from all the banks from q 1 to q 2 and rose more than expected. wells fargo's more than doubling quarter over quarter the big question will it will be the peak for the provisions particularly given spike in covid cases since the end of the quarter. here is jpmorgan chairman and ceo jamie dimon on that topic. >> we feel the same today as we did at the end of the quarter. and we're very clear we cannot forecast the future. we don't know. we're also very clear deny sh did -- at least i think, we'll have a perkier economy going forward. we are prepared for the worst case we simply don't know i don't think anyone knows.

>> citi's ceo was not too down beat about those spike in covid cases. >> i think you can see that in the spend rates that, you know, while these cases have had a resurgence, you know, we've seen spend come back off in some of those places we haven't necessarily see it go back to the lower levels of the darkest days of early covid. >> none of the banks could guarantee that provisions have peaked trading in investment banking for citi and jp strong a huge upset to the pressure in the retail banking operations. wells fargo, on the other hand, doesn't have that offset and their dividend cut could share to 10 cents per share was bigger than expected hence the share price move all the banks trading down today other than jpmorgan which is holding on to slight gains and goldman sachs is up, as

well, ahead of their report tomorrow, sara. >> 0 so do you think the shift in tone from dimon -- last quarter i remember he sounded a little bit more constructive as it relates to the economy. is it because the stimulus effect was in full force last time and now it's wearing off? >> i think there's a slight shift in tone from early june when the share prices peaked and they all sounded a bit optimistic in terms of whether or not reopening was going well. there's definitely a little bit of a softening or worsening in tone since then. the tone wasn't outright bearish. it was just unquestionably uncertain. the scale with which provisions have gone up again in q 2 is significant. it's almost inconceivable, if any of these base case expectations that all the banks have within their investment banks and economists, almost you can see the second half of the year provisions could be higher than the first half of the year. no one can say that for certain. investors want certainty

we haven't gotten that yet that's why share prices are selling off. with jpmorgan, you see an absolutely outstanding investment banking quarter it means the share prices are slightly higher. you're getting a sign of what people might expect from goldman sachs tomorrow the fixed income portion did very well. they don't have as much in consumer banking and commercial banking, which is where the provisions are turning out. >> jpm and goldman helping the dow now. turning to the other big earnings story delta shares lower. phil joins us now with some of the details and the color from his interview. >> shares of delta are off the session low. make no mistake, it was an ugly second quarter the company losing $3.9 billion pretax a loss of $4.34 a share. wider than expected. that's not the reason the stock is lower the revenue coming in and just

under $1.5 billion, the worst since the mid '80s the real question is how bad will it be over the next 12 to 18 months? and in regards to the business now, ed was very clear travel demand is slowing down this summer it's not reversing it's just not growing as much as delta and other airlines expected the daily cash burn is down to $27 million a day. delta has plenty of liquidity now at 15.7 billion, he told us it's likely delta will have to raise more. >> i anticipate we will raise some additional funds. as you mentioned 19 months buys us time, assuming no progress from this point. we will certainly be looking to reduce that cash burn level $27 million a day in june. expect july will probably be about the same level as it was in june. but certainly as we get toward the end of the year, our goal is to get our cash burn down to 0 we can start raising cash to pay the debt down. >> the weakness in the airline

industry not just here in north america but around the world, it's being reflected in june orders from boeing negative 182 airplanes that's what happened in june year to date, negative 784 in turn -- terms of commercial airplane orders. june deliveries delivered 10 airplanes. that number is likely to increase once the max is certified and ungrounded, potentially, later this quarter. bottom line is this, airlines, particularly leasing companies and airlines, they have cancelled the max because when you look at the 182 in terms of negative orders in the june, guys, 179 were for the 737 max. >> so what did he say, phil, as far as the outlook on travel demand returning has it been impacted by the surge that we're seeing in certain pop lis hot spots across the state now? >> sure. the sun belt that's right in the heart of delta, you know, the hub -- their home is atlanta. so they see the southeast much

more than other airlines they are seeing the impact down there. it's not just the resurgence of covid-19 that might have people saying, well, why am i taking a trip to florida or texas or somewhere elsewhere cases are spiking. it's the fact you've got the quarantines that are in effect in new york, the tristate area, massachusetts, chicago has one itself so it has people in these areas saying, well, should i take a trip if i'm supposed to quarantine when i come back here overall, that has fewer people flying than expected this summer. >> phil, thank you so much for that now to the coronavirus and a growing backlog of tests in the united states. meg has the details for us hey, meg, tirrell. >> reporter: fiphil mentioned te areas. quest diagnostics saying last night for nonpriority patients, essentially those in the hospital or symptomatic health care workers, for everybody

else, it takes on average seven days to get their test results it's up from 2 to 3 days in early june it's not just quest diagnostic buy row reference labs three days or less how to fix the problem admiral brettgiroir is saying couple of things is coming online by the fall he points to point of care tests like anti-gen tests. he also points to the idea of pooling where you're testing multiple samples with the same test beyond that, he said we should be prioritizing testing, again, to patients who need it the most there is a growing frustration, guys, about some groups of people can access to testing and it includes professional athletes nba player hassan whiteside posting he was getting his 20th covid test nba players are getting tested every other day as they're in the bubble in orlando. we reached out to the nba about

this, and they said "our testing in orlando will not result in testing capacity being i did strerted from the community. they have a program that will be additive to public testing guys, just more problems five months into this pandemic. back over to you. >> meg, switching focus slightly what did we learn from maderna today? >> well, they posted the clinical trial criteria. the protocol for their phase three vaccine study on clinicaltrials.gov they have an estimated start date of july 27th for the large phase three trial. so this is barrelling ahead toward the start of the huge effica efficacy studies for vaccines in the u.s. >> on the testing front, you mentioned the nba and clearly if there's money, they can pay for faster tests and they can pay for more tests harvard university, and its plan for return to the fall, even though it's going to be online, said students can come back on campus, if they test every three days how is that going to work?

are they going to pay for it and do that? there are lines in arizona where people are waiting 13 to 15 hours in their cars to get tests and, as you said, waiting as much as a week to get it back. >> yeah. that's a look at harvard's plan, but i know some universities have access to amazing technology so harvard may be tapping into the institute which has genome sequencers being employed now to help with testing. a lot of people said academic medical centers are an untapped resource in helping us with our testing. universities might start getting creative in how they're doing this. >> meg, thank you so much for that markets, by the way, up 0.6% on the s&p but the nasdaq just given up a little bit of ground and gone back into the red albeit slightly down continues to lead the charge up 1.6% after the break, wells fargo has been underperforming all year and today's results aren't

helping the stock. we'll discuss with john shrewsberry after the break. experience the joy of a bigger world in a highly-connected lexus vehicle at the golden opportunity sales event. lease the 2020 es 350 for $359 a month for 36 months. experience amazing at your lexus dealer.

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welcome back after reporting the q 2 earnings before the bell, the bank reported a miss on the top and bottom lines so for more on the earnings we'll bring in the cfo of wells fargo john shrewsberry who joins us by phone. thank you so much for joining us >> caller: thank you glad to be here. >> we wanted to start on the topic of provisions. yours, in particular, relative to q1, up far more than your peers. why did you think that is? did you underprovide in q 1 or is your business mix worse than some of the other banks? >> caller: yeah. i don't think it's -- in fact it's probably better given how far less exposed to credit card and given the change in environment. the we work we put into the q 2

provision and allowance bill to be gone portfolio by portfolio and done bottoms up work throughout the course of the quarter and everybody has a better line of sight on at least the fact there will be a v-shaped recovery and parts of the economy that opened up over the last few months, we've had some close down, et. cetera. that's all new and incremental news and different banks will process it differently they'll apply it to the different types of loans but that gets us to the level where we are, which at about $20 billion or 2% of our loans overall, actually, compares appropriately on a mixed suggested basis with the others. >> what level of confidence do you have, john, that q 2 will be the peak for provisions? >> caller: it depends. we have high confidence if the economic forecast unfolds the way we expect it to. we have our own base case that

lines up reasonably well with the median of most public forecasters. we put about a 20% weight on the downside case, which is substantially more pessimistic than that, just to be cautious in this process. and so sitting here today and, you know, at the end of the quarter, we believe we have captured the lost content. we're aware of the accounting firm loan loss provision for banks changed this year. we're trying to capture the loss content in the portfolio at the end of the quarter, knowing what we know, we feel like we've got that. >> john, it's sara i'm trying to read your results relative to the others as well as your share price, which is done markedly worse than the other banks this year. and i'm wondering how much of it is a wells fargo problem it's no secret you were struggling for years ahead of the pandemic with the fake account scandal and the weight it was having on your business how much is a problem in the u.s. economy and some of the

places that you're particularly exposed to, like consumer and housing. >> caller: yeah. we all have different business mix. there's definitely some level of idiosyncratic wells fargo story. we have some work to do to repair our relationships with our regulators that we have talked about it's hard underway but the franchise is very much intact. you know, our status is the largest mortgage lender, coverage, small business lender, middle market lender all of that is intact. i think bank balance sheets and loan quality is as strong as it has ever been going into a downturn in a cycle. certainly much better, not just for us but across the board among larger banks for each of us it's a little bit different. one of the major areas of differentiation today, you can see in the results, is we don't have as large of a corporate and investment bank.

we don't have as global as investment bank and there was a opportunity in the first quarter. we had a record quarter for us, but it is -- we don't have as much weight on that in our business mix and that was an outperformer and then we're providing, wolf said, some folks put up more in the first quarter and less in the second we put up more in the first. i believe most people believe will tail off from this point, unless things get worse than expected from here. >> go ahead. finish your thought, john. >> >> caller: i think it's worth pointing out we have a new management team, new ceo who has brought in a wide array of new leaders. i think they're doing their work certainly investors and other stakeholders watching to find out what it looks like once they've had a chance to put their imprint on the company as a whole. and we're in the middle of that. so some of that came up on the call earlier this morning. i think by later this year, you

know, coming into the end of the first year with cheryl as the ceo and looking as the opportunity for people to understand charl's intentions are and run the best over the next several years. >> there's also, of course, the fed asset cap. it came up on the call, as it did last quarter i mean, just how much of a hindrance, john, has it been for you and charlie as you try to run the business >> caller: more recently it's been more of a constrain you know, when risk-free rates moved above zero a year and a half ago and cash flowed out of banking system, our balance sheet naturally rolled down. people put cash in cash equivalents and out of deposit accounts and it created some head room. the reverse has occurred in the last three or four months as people have stockpiled liquidity from the bank. it makes our balance sheet bigger, even if we're just holding cash at the fed. so we've had to do a few things that definitely cost us interest

income at the margin to be able to navigate through that we'll continue to, as long as the gap is in place. so, you know, it's hard to put a number on what it costs. if our balance sheet were 10% bigger, call it $2.2 trillion versus just under $2 trillion, there are, you know, there are a few billion dollars worth of revenue most of which probably falls to the bottom line that's the order of magnitude. having said that, doing the work necessary to satisfy the feds so that asset cap can go away, that's the most important work we're doing and the volumes in our quarter to get it right and to their satisfaction. >> curious about your thoughts on the bank front. we saw so many corporations draw down aggressively in march and april. are they paying those bank what can you tell us about the pace of the draw down? >> caller: yeah. we had about $80 billion worth of draw downs in the -- in

march. some of which bled into the beginning of april, but, you know, most of that, i think, figure that the bond market would remain closed and i think those companies many of whom have calendar quarter and wanted cash on the books at the end of the quarter. it's substantially all paid down, at this point. a lot of it because the high-grade market was a record level of issue in the quarter. people went to the bond market and got the cash they needed, paid down their bank lines so that commitments are still available but it's, for us, and for others about entirely gone away it's a testament to the success that the fed had in calming markets because it was relatively short period of time where that level of uncertainty existed and high grade markets, in particular, were functioning very well now and have been since mid april. >> i want to play a quick sound bite from the call from the ceo

cha charlie sharp. >> the balance sheet cap exists because leadership sales oversea and -- infrastructure in the company and our financial underperformance is because leadership didn't make the difficult decisions necessary. we also recognize that we have been extremely and inefficient for too long and will begin to take decisive actions. since i joined the company nine months ago, i've added six new members to the operating committee coming from outside of wells fargo with strong and relevant industry experience. >> john, you're one of the few remaining senior managers on the old team when you -- is it quite demoralizing, i guess, this isn't charlie's first earnings call anymore are you helpful it's the last one of the past blame game and the kitchen sinking? >> caller: yeah. of course i would exception with kitchen sinks but i know where you're coming from i think it's a fair criticism

for him to say, listen, i've seen what good looks like elsewhere and some of the folks who have joined us in the last nine months and en before who joined us from outside and there's a different way to run the bank a different way to be structured a different way to operate we'll move in that direction and you can't help but to contrast it with the way we were structured and operating previously, which is some of the experiences of folks in the bank previously in a variety of ways did a great job for a long time. and credit, you would say, is well run at wells fargo. capital liquidity strong but operational risk and compliance and just operating in general were not areas of strength and thank goodness for us not only do we have charlie but the broader team of leaders to b able to make the additional changes and pull the bank into the next phase, which is going to be better. >> john shrewsberry thank you for joining us

wells fargo worst financialer for today and the year down 55% now we have news on the white house's plan to bar international students from living in the u.s. while taking online classes kayla with the details >> reporter: sara, the trump administration and major u.s. universities lead by harvard and m.i.t. reached a settlement today that would see the white house rescind the policy announced days ago that would ban foreign students from living here in the u.s. if the university were they were enrolled went fully online the settlement would see the white house reverse the policy it's unclear what the full extent of what the white house would do and what the universities agreed to the settlement was announced moments ago by judge allison burrows in massachusetts who had been set to hear arguments today as this case escaladed, as many of these universities are arguing that this jeopardized' student's safety and long planned curriculum plans for

this fall. so certainly it would seem to be a win for those universities and for foreign students who are studying here in the u.s., who are wondering where exactly they would be enrolling in these in-person classes. more as we know it back to you. >> all right kayla, thank you we've got about 35 minutes left of trade take a look at the markets seeing some strength here. the dow is up near 451 points. most sectors are higher now. nasdaq goes positive though technology is not the star of the day. you have other groups leading. a little bit of a rotation here. energy, materials, industrials, and health care are the winners. still ahead, don't miss an exclusive interview with robert kaplan taking on the coronavirus situation in texas and across the country and what it could mean for the economy and the feds' next move. that's coming up

and 32 minutes left of trade. dow at session highs up 460. a number of las vegas bars are suing over the governor's mandate to close down operations in some counties contessa brewer with the details. >> reporter: sara, more than 3 dozen bars in and around las vegas are suing to stop the governor's order to close down bars again from taking effect. in fact, it is already in effect they argued it's not fair to single out bars when other similar, noncertainessential bus are continued to operate they mention cad see knows, gaming floors, and pools are open and the bars are pushing back on compliance reported at less than 1 50% before july 2nd, they argue 80% after that look, the cases here don't mind. clarke county just hit a record more than 1,000 new daily cases reported yesterday analysts and inest verse are

watching closely to see if there's new restrictions on casinos to follow. wolf >> contessa, thank you very much a new cnbc analysis found when it comes to the ipo process, there's a big disparity in fees paid to minority, veteran, and women others. they're aiming to close the gab. leslie picker has the story for us hi, leslie >> reporter: hey that's right amid greater quarters for equality among women and minorities they have been adding more of the diverse broker ages to the banking line up. so far in 2020 they were a part of 41% of u.s.-listed ipos according to refintive we crunched the numbers and there's a big gap for what they're being paid on average over the last five years, the firms are making just 12 cents on the dollar when compared with the fees generated for other smaller firms with similar roles.

our analysis found minority women and veteran-owned firms brick on average 0 pnts 69 more than of the fee pool others generated 22% of the total fee pool on average. but you mentioned bill akman is the first large ipo to elevate the role and therefore pay out for the minority underwriters. guys >> we'll look for that thank you. we're starting to see anupc the states with highest coronavirus case loads texas, which has one of the highest positivity rates in the country has seen a 31% increase in the seven-day average of currently hospitalized patients. california's hospitalization rate is up 13% while georgia does have fewer cases than california and texas, it is seeing a big surge in hospitalizations that is the seven day average of current hospitalizations up more than 40% meantime, maine, new hampshire,

vermont, those are the most improved states have seen more than 20% declines in the seven-day average of current hospitalizations keep an eye on that in our coronavirus tracker. >> i'm glad you had that read. hospitalizations you said it perfectly about seven times. >> yeah. well, we're all becoming a little more familiar, sadly, with saying it let's get a broader news update with sue herrera. >> hello joe biden has unveiled a $2 trillion plan aimed at combatting climate change and stimulating the economy. he calls for 0 carbon emissions from power generation by the year 2035. > bail has been denied for maxwell. prosecutors argued she's an extreme flight risk. maxwell plead not guilty to sexual abuse charges related to jeffrey epstein. a judge has thrown out a $25 million set mr. president

betwe -- bihar i have weinstein and his accusers they called the millions set aside for legal fees incured by weinstein and stredirectors of s companies obnoxious. in san diego a navy ship continues to burn for a third day. hundreds are trying to save the ship and stop the 1 million gallons of fuel on board from leaking into the harbor. the navy said it is making significant progress i'll see you again in an hour. back to you. >> sue, thank you very much. we look forward to it. still ahead on "closing bell" we'll speak with robert kaplan about reopening roll banks across the country and what it means for the economic recovery here is is a check on bonds. we've seen buying of the bonds pushing yields down to about 0.61% on the 10 year woman: my reputation was trashed online.

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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 24 minutes left of trading here is where we stand higher across the board. looking a lot better than where we were yesterday where yesterday's rally gave away to a pretty ugly sell-off into the close. the dow is trading near session highs -- at session highs. up 464 points. and s&p up financials and consumers discretionary the worst weighed down in part by the bank earnings it's been a wild start to the week for the market. we'll discuss where stocks will go next with david o'hara.

and we're minutes away from robert kaplan. his read on the economic recovery and reclosing measures fa factors into his outlook that's coming up on "closing bell." at leaf blowers. you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading

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welcome back to "closing bell." stock rallying today the dow powering ahead as we march into the close with with 20 minutes left. s&p up almost a full percent tesla on a tear. now up more than 260%, so far for the year will the momentum start to cool down and value names start to take off it's a hot debate now.

joining us is value investors and manager of the decade david herro. the dichotomy between value and momentum took a wild sharp u-turn yesterday one of the biggest we've seen in reversals in the nasdaq. technology is on the back foot what is driving this >> caller: well, who knows what is driving things day-to-day you know, it's hard for us to predi predict. it's more something traders do we as investors try to evaluate the value of the business. pricing the positive and negative attributes and make sure that all those attributes reflected in business evaluation then buy the businesses when they're on a significant discount you're exactly right, companies that have been trading at big discounts of their intrinsic value have fared poorly not only yearto date but over the last seven, eight, nine, ten years. we never know when it changes

but we know over time it has changed. eventually the forces of supply and demand and eventually the concept of buy low and sell bigger begin to assert themselves you know, it's a high price is simply become unsustainable. almost for what they are the higher prices, the more money that goes into it, more money that is needed to sustain that price and eventually it just runs out of fuel. in the meantime, the opposite is true for low price stocks. if everyone is selling those evaluations get crushed, those market caps get crushed, and how is anyone involved so for the teeter to thor to turn, it doesn't take much to move prices up so i don't know when it'll happen but all i know is when you see this dichotomy, and when it gets bigger, bigger, and bigger, when it happens it can be explosive >> where do you want to be when it happens >> to be honest, you want to be

in kind of the harris type of stock. european industrials which we are heavily involved in. like company like daimler or even some of the financials. these are companies that have lagged over the last two or three years. that have, in most cases -- i mean, if you take a company like daimler or bmw great brands, strong balance sheets, net cash on the balance sheet. i don't have to go over the math that the enterprise value of daimler, which is the world's biggest truck company and owner of the world's most recognizable car brand, mercedes, and if you add enterprise value of bmw, which makes, what 2.3 million cars combined that's about $60 billion compared to tesla which makes half a million cars, has an surprise value of $300 billion. tesla, of course, a great

company. innovative you know, i like to refer to elon musk as brother elon because he's a free spirit fights for freedom but, you know, the company looks stretched. who knows when it's going to turn but when it does, i do believe it's companies like a daimler, like some of the sup le -- suppliers like continental, these are the businesses that will eventually get revalued. >> indeed. who knows when it might turn, david. that's why we've heard you make that argument quite a few times over the last couple of years already. switching focus a little bit banks today reporting take aways from the u.s. banks for the european banks >> a little bit. don't forget business models are a little different capital positions are a little different. but i think there is a take away one that, yes, on the negative we have to continue to make credit adjustments the european banks, of course, have faced these margins for a long time.

this is nothing new for them the balances, the european banks, in particular, whether it be trading revenues or asset management fees or selling insurance out of branchs and other financial services, european banks have been able to sustain earnings and maintain earnings power despite the narrow spreads meanwhile, the european banking sector, in general trades probably less than half of what the u.s. sector trades and the u.s. sector is cheap compared to the rest of the market i think the european financial sector, broadly speaking, whether it be insurance or asset managers like a schroder, a credit squeeze, private bank, and investment banks these companies are trading at around half, two-thirds, 50 or 60% of book value and they should be able to earn double digit returns. so it's, to us, a strong value proposition. you're going to say, yes, david,

you've been saying this for a few years. now last year, by the way, they actually did quite well as a group. european financials. i would expect from these levels you'll see similar price appreciation over the medium term based on the quality of earnings and the price of the business. >> thank you so much, david. good to see you. this is the last commercial we take before we head to the close. up next, untptnierrued coverage of the final moments of trade as we take you inside the market zone [squeaky shopping cart]

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don't get mad. get e*trade and get more than just trading. investing. banking. guidance. 13 minutes left in the trading day. we are now going into the "closing bell" commercial-free action going into the close. here to break down the crucial moments of the trading day is bba capitals barbara durran is back and david ellison is here we're seeing a nice lift into the close session highs the dow up more than 500 points. we have every s&p 500 sector now positive after another volatile session. as you can see, just climbing here as we approach the close. barbara, what is driving the

persistence strength amid the worries about the economic recovery now taking a step back as a result of the hot spots around the country for coronavirus? >> it's a lot of uncertainty and worry but i think the underlying thing is the fed the fed has said they'll keep interest rates lows and keep it at zero for the next two and a half years they have flooded the system with liquidity we don't know what the next package will be. it looks like there will be one. i think it provides tremendous support for the market and evaluation support it's a big part of why i think we've seen growth stocks continue to run. it's not they're the beneficiaries in this semishut down, but they also can support higher evaluations. >> so you're not -- you don't think the rotation takes place now, barbara >> we've seen this -- i think we saw the rotation start about a month ago. i think we've seen it over and over and the question is, is it sustainable? again, i see it as i did a month

ago. this is rotation these stocks like amazon has been up 300 or 400 points racing toward the price target in the last few weeks it's a normal breather you have to consolidate gains so you go for cheaper stocks it's cyclicals and industrials. i don't think the fundamental outlook has changed. i think recovery will continue it's not going to be a straight v up i think given the unemployment, which stayed high and low double digits, i think it's going to be slow and halting but improving so i think it's too soon for industrials and cyclicals but we'll have a short term rotation into those because those are cheaper. >> let's talk bankings earnings kicking off this morning. jpmorgan and citi were helped be amassive surge in trading revenues wells fargo doesn't have the trading exposure, the notable underperform reported a 66% loss per share. wells fargo so provisions for bad loans rise more than

jpmorgan and citi. we asked john shrewsberry about this. >> we have gone portfolio by portfolio and done bottoms up work throughout the course of the quarter. i think everybody has a better linet least the fact it won't be a v-shaped recovery and that parts of the economy opened up over the last few months we've had some close back down, et. cetera. that's all new and incremental news and different banks will process that differently they'll apply it to the different types of loans that gets us to the level where we are, which at about $20 billion or, you know, 2% of our loans overall actually comparison mixed suggested basis with the others. >> your take david ellison, your overall take so far >> we've only had three out

of -- i don't know, a couple thousand but i think the take is i think they have their arms around what is happening in credit certainly they've been looking at that hard for six months. i don't think that's the issue with the companies and the evaluations but the issue is the level of rates and the lack of loan growth. i think that's the long-term problem that we have in the industry that's why the evaluations are where they re. i mean, they're at very, very low evaluations relative to certainly tech stocks and historically relative. so i think it's a level of rates and it's lack of loan growth credit they'll work through. they have plenty of earnings they'll get through that they did it before '08 wasn't that long ago the challenges where rates go. if we end up like japan, it means margins are going down and the stocks will probably follow that. >> did we get a tone, dave do you have a good sense of what the tone was from the bankers as

far as forecasting what is next for the economy and for their industry >> not as much as i had hoped. clearly they have more access to customer than we do or i do. i think the issue is that, you know, i call this market the bakers dozen market, you have 12 companies that are running the whole economy and the fed is carrying everybody else, and the fed is carrying these banks and so it's the federal government and their programs so, you know, it depends on what the fed does and i think we all know the fed is going to stay in the question is what does the federal government do? if they start to quantitatively tighten by taking away some of these programs, it will have an impact on the unemployment level and the delinquencies that they haven't seen yet so the industry is preparing for a recession that hasn't happened yet, if you look at the nonperformers for the

chargeoffs they have a six or nine month head start that's why they're reserving so heavily because they're concerned, i think, if the government pulls back in terms of their stimulus plans, it will create a lot of losses for them. that's the risk we have in the next two or three months. >> yeah. reminds me of jamie dimon quote today you'll see the effect of the recession, just not right away we'll move on to tesla robin hood users have been a buying frenzy for shares of tesla. kate rooney with the details and the numbers. >> hey, sara tesla has been a popular stock on robin hood but not this popular. take a look at this week in the past 24 hours, nearly 50,000 robinhood accounts added tesla to the holdings. in a four-hour period yesterday, 40,000 people bought tesla according to third-party site robin track. that was a whopping 10,000 people per hour. tesla surged as much as 16% at

the high yesterday coinciding with the buying spree. tesla is the tenth most popular stock on robin hood even beating out retail favorite amazon guys, back to you. >> kate rooney, crazy frenzy thank you. meanwhile, piper sandler raising the tesla price target to a street high of 23.22 per share. the firm calling tesla the most consequential company and the mobility ecosystem this is unlikely to change in the next decade. so, barbara, you'll jump on board with the retail traders and the analysts community >> not likely. you know, i read his face and his target is more like a 2,025 target each and every way you look at the numbers and the units projected in the best margins and cash flow, that's when you get the price target so i admire him. there's almost no downside for him to go out there because given the momentum traders, it's

youngsters i had a couple of clients said why don't we own tesla i said we're not going to. i think the stock could go higher based on the mom it up. i think it's a 2025 target yes, they are consequential but it takes into account no competition coming in. we know everybody is sharpening their knives and it's a longer run play but there will be competition. by 2025, it will be interesting to see what their market share is and how good the competition is. >> proving nicely to the close the dow is 600 points. 2.3% s&p is up 1.4. nasdaq close to a percent higher it's the underperformer compared to the major averages today. but the tech-heavy index up more than 8% in just one month 9.4%, in fact, now with the interday improvement. bank of america came out with the fund manager survey and 74% said they believe going long

tech is the -- they believe shorter tech is the best contrary began trade the headlong rush into tech usually gains for overall gain i mean, clearly, dave ellison, you've got to be a brave man to short tech overall today shows that given that even despite opening lower, the nasdaq is higher by 1% do you think we can have a sustained relative outperformance for value as we're seeing today and yesterday? >> caller: i think that will happen once we understand there's a vaccine that will work i think that's the problem is that the technology trade is a covid trade.

right. the worst the virus gets, the more important technology is that's what everybody is using at home. they're buying stuff on amazon, using their apple phones and computer and checking out netflix and all that other stuff. so once there's a vaccine, i think the market can flip. i think the market is telling you, or maybe trying to tell you that the vaccine is a long way off and if you're going buy stocks, there's only a few that you can buy and the rest will sit and wait until there's a vaccine and we get back to what is going on. i came into boston today for the first time in a long time. there's nobody here! there's nothing open i had to walk a mile to get a cup of coffee. i passed probably 20 shops on the way. there's nothing happening here that's why technology is working and the banks and real estate and all the other stuff is not that's going to continue until there's a vaccine. >> we've got about a minute and a half left of the session we are rallying, as we

mentioned, nicely into the close. briefly 605 points higher on the dow. the dow about 573 at the moment up a healthy 2 minu.2%. impre impressive we were down from the open s&p 500 up 1.4%. the nasdaq composite which was negative significantly there at the start of the day is up 1%, itself in terms of sectors on the s&p all in their higher consumer discretion communications and energy and materials and industrials are at the top thevance index is down weighed down by citi and wells fargo down 4.5%. despite the broad market rally, the banks not shrugging off the declines, other than jpmorgan had solid results and goldman sachs up 2.5% and large part of why the two stocks, the dow is

outperforming. the goldman sachs reports tomorrow european and asian indexes were negative at the close. [ closing bell ] >> well, that was the opposite of yesterday a strong close at session highs. welcome back, if you're joining us to "closing bell. i'm sara eisen here. we finished up the day on wall street positive across the board. take a look at the climb just in the last half hour of trade or so, making the dow's best day since june 29th a surge of more than 2%. 557 points higher there on the close. as far as what lead the dow higher, the best performers united health care and home depot and apple. those three contributed the most s&p 500 up 1.34%

got every sector higher there into the close energy was leading all day this was not one of those tech-driven rallies. you had groups like industrials and materials, also, in the top spots. the nasdaq closing up 1% there on the day aztec did eventually join the rally it was broad based in the end. and the russell 2,000 index and small caps it shined today 1.34% outpacing the overall market coming up we'll ask robert kaplan why he thinks the economic recovery is losing steam now and why he said the best way to help the economy to recover is for all americans to wear a mask. joining us to talk about the market today, though, barbara duran from bba capital partners and david ellison from hennessy funds and liz ann sonders. that was quite a close impressive rally with every group ending the day positive. it didn't look that way earlier in the session what is driving the strength

here >> caller: well, i think this is the nature of the beast these days, and clearly a function of the mechanics of the markets or the rise of the machine. you have a unique day yesterday with the nasdaq having a 4 percentage point reversal from, you know, up 2%, more than 2% to close down, more than 1% you have to go back to march 2000 the last time it happened. we saw a reversal of that today. i think it's hard, especially for individual investors, to try make hay of this on a short term basis. i think the best strategy investors can have to the extent they can handle it for a turn over implication is not try to anticipate in a short term what the market will do but instead react. by react, i don't mean case the momentum in the direction it's going but try to stay in gear. maybe add when you get some moves down that's kind of the best thing you can do in the unique

environment. >> but, liz ann, in terms of the growth into value, clearly the nasdaq did rally interday, it was the relative interperformer. have we, in the last couple of days or weeks, seen some of the warning signs that the evaluation difference between growth and value was stretched to a sort of multiyear high? >> caller: i do think there is often a little bit more attention on evaluations when you get into earnings season obviously earnings season the outlook for earnings makes doing evaluation analysis much more difficult task than is typically the case it's quite murky i also think when you move to some slight optimism that maybe you're going get a pick up in economic growth relative to expectations that tends to cause a move toward value. these have been moved. they have not sustainable.

i still think quality growth characteristics are ultimately from that perspective going to define leadership but i think that there are investors who are trying to be a little bit more value minded when looking for those quality characteristics. >> barbara, the view on earnings season, now we're in it, going in was it's going to be the bottom it's only going to get better from here. it doesn't really matter if the numbers will look ugly is that still the case are there questions now given the surge we've seen across the u.s. and the warnings about the rollback and the recovery about whether this is, indeed, the worst it's going to get. >> yeah, sara, that's a good question this was supposed to be, you know, the kitchen sink quarter i think it probably still is yes, it's going it slow down like california 15% of gdp having to roll back but they're not closing outdoor dining they're still, you know, pick up. of course, there's states that

are still staying open for business, but consumers are the questions. it's the question for demand i think it probably is the low but i think it's not going to be the quick bounce back people connect but a slow ascent to next year. i think the recovery will take several years. we're doing some permanent damage here, even with, thank goodness, for the stimulus keeping people afloat. it's doing a lot but not enough. >> dave ellison, i get your point earlier you prefer some of the payments companies, perhaps to the more cyclically linked traditional banks. that said, when it comes to a name like wells fargo down 5% today, 55% year to date, do you get the feeling that there is no more bad news to come out? it's priced in we've had now multiple quarters of kitchen sinking from the new management team >> caller: well, certainly the evaluation is compelling it's around 70% but citi has

been below -- for a long time and hasn't seemed to want to rally up to book value, at least there. so i don't think evaluation matters. i think people need to get a better feel for what the long-term profitability looks like i talked about the fact that margins may be contracting at a more permanent basis, you know, credit will eventually take care of itself. it always does and i think the issue is, again, loan growth and the margins. i think that's why the industry is where it is i think, you know, they're just in a -- you know, they're in a bad place. but nobody cares about the dividend nobody really cares about buybacks it's rates are going to go lower because the fed needs to continue to stimulate. the stocks will go lower because the margins will go lower on a permanent basis. you have mortgage rates and all-time lows. that's maybe good for me and you but not good for the banks

and with the deposit rates near zero, there's no reason to, you know, put money in the bank from a retail perspective so i think the business, you know, as i said in my notes that i gave you guys, the business needs to cut costs and consolidate. they're not going to -- they just don't have the role in this, it would appear, to compete with visa, mastercard, paypal, square, you name it. they just don't want to do that. they want to make money by, you know, lending money and borrowing money. that business is going away. it's gone away in europe and gone away in japan if we're not going to remake themselves, then they need to cut expenses and consolidate that's the only way you'll hold on to the values and have a chance of making money in is space. >> we've had a lot of fed speak today and steve liesman has the latest highlights for us. >>well, thanks fed officials reeing risks to

the u.s. economy remain to the downside they're signaling low rates ahead. there are differences on the outlook. fed saying a, quote, "thick fog of uncertainty surrounds the u.s. and the economy." she worries a second wave of the virus could reignite financial market volatility. saying in a speech that the u.s. would likely -- the fed would like the policy but stabilization to accommodation those new policies could include stronger forward guidance, quantitative easing that is bond purchasing, and even controlling the short to medium end of the yield curve. but st. louis fed president breaking now saying his base case is for the economy to improve pretty quickly through the next six months, including perhaps a dramatic decline in the unemployment rate. this is despite downside risk. he believes the country will get the virus under control. asked about equity values, he

said, quote, "the stock has been optimistic and it's been right." >> very interesting that take. i guess not necessarily the same view held by all fed participants we will get more fed speak in a few minutes when we speak with dallas fed president robert kaplan in an exclusive interview who expressed a down beat economy on the outlook, i think, of late. also suggested rolling back the level of fed stimulus. liz ann, what do you take away from this kind of commentary if the fed was to remove even a fraction of its stimulus or the government didn't extend some of their programs, would the market take that badly? >> caller: i think there is an expectations built in that the fed will be there. they have, to some degree, unlimited ammunition, at least the key financial markets relatively -- or the financial system, i should say, relatively healthy. i think the uncertainty is now is on the fiscal side and what can be done there.

i think it would probably incite the volatility and the negative reaction if there was no extension. whether it's an advanced unemployment or the potential for additional stimulus checks when you think about the hands in which that additional income replacement went, those are the consumers that have the highest marginal propensity to spend, which is part of the reason you saw such dramatic improvement off the depths of the lows in retail sales i think the persistence of that increase off the bottom is going to be limited unless there is some sort of extension even with an extension, there will come an end to that i agree there are so many real significant structure hits to the economy and second quarter economic effects, absent any additional shut down at the state or level, but i think that's being under estimated by many market participants. >> you know just going through some of the headlines, david ellison, especially the tougher

speak around the banks we've seen that reflected in some of her votes lately not to mention the dubbish policy around the economy. i wonder if there -- she's one of the few remaining fed appointees from the obama administration she's buzzed about as a potential, you know, policy maker, potentially treasury secretary in a biden administration it's just chatter and rumors now, but i wonder if you think that is an point >> caller: well, i think that -- let's remember after 2008, you know, 2009, 2010, 2011 the larger banks were effectively nationalized and stress test, et. cetera we've been dealing with those every spring we just had one. now, of course, we got reminded again that they basically control these companies. they're talking about cutting dividends, eliminating buybacks, and, you know, they're allowing -- enforcing a covid

overlay on the liquidity requirements and capital requirements so this is a, you know, in a sense it's the fed has gotten so big relative to the banks they've taken over a lot of lending function of the banks would be doing if anything, the banks are pulling back and becoming more restrictive. you heard it with, you know, wells fargo. that means very few people can get jumbo loans. and the point being the banks are pulling back and the fed is trying to push forward so the bank is providing a lot of products to the marketplace that the banks used do so they're losing their ability to sort of have a, you know, skin in the game here. so i think the issue they're going to continue to be controlled heavily by the fed. if the government comes this and starts to do things, with a new administration or new thought

process, you know, that will change again so sort of the idea of what the companies are worth and why anybody should own them. >> we've leave it there. thank you all for joining us. >> yeah. >> after a strong finish for wall street. up next, we'll ask dallas fed president robert kaplan about the soaring coronavirus numbers in the state of texas. why he said the economy could bounce back, if all erans amic wear a mask. we're back in 90 seconds ♪ ♪ ♪ ♪ ♪ ♪ wow. jim could you ipop the hood for us?? there she is. -turbocharged, right?

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welcome back the latest data from isi finding that states with stricter mask policies have seen a significant decline in weak over week growth in covid-19 cases. this as dallas fed president robert kaplan noted that wearing masks is now the most important factor for the economy right now. president cap lakaplan joins us. it's good to have you here if we got a federal mask mandate in this country, what would it do to your economic forecast >> so my comments are based on a range of conversations i've had over the last number of months with epidemiologists and infectious disease experts they pretty much agree if we all wore masks, we would substantially mute the transmission of this virus it's clear that the recovery would be better if we could mute the transmission of the virus.

in fact, i'm worried that since mid june the rebound that we expected in the end of the second quarter and the third quarter is stalling somewhat so if we all followed these health care protocols, we would grow faster and have a lower unemployment rate. while monetary policy and fiscal policy have a keyrole to play, at this point, they're not as important as all of us wearing masks and following these health care protocols. >> i wanted to particularly ask you about texas, your district, obviously. what is it now almost 10% of our nation's gdp, obviously, dealing with the heavy rise in case numbers, hospitalizations, and death rates ticking higher. >> yeah. >> what is the economic impact so far how is that going to look in th coming weeks and months? >> so we've seen -- and the thing i watch most carefully, not only in texas but across the country is hospitalizations.

we knew with reopening the cases would rise what you worry about is they rise so much you overwhelm your health care system and we've had a dramatic rise in hospitalizations we're seeing that rise be mute in the last couple of days we'll have to see if that continues. what is the impact the impact is we're seeing, again, based on the high frequency data we follow and my -- lots of conversations i'm having with businesses, we're seeing a pronounced slowing probably again started sometime in the middle of june. it's not that we're not growing here, but the rebound that we've been expecting is muted and slower than it would be otherwise. >> president kaplan, clearly you alluded to what we've learned about the importance of masks during this reopening phase. we've also -- i think, learned about large indoor gatherings. what extent are you worried about when we get to the fall and the weather gets worse in a lot of states, particularly in

the north, that we'll see an impact of that on economic performance then >> so, what we're seeing and what, again, we're told by health care experts is the probably of getting the virus, as you said, if you're outdoors is reduced they're of the view that you should, on the one hand, you should avoid indoor gatherings, if you can obviously socially distance. wen again if you wear a mask and everyone else wears a mask, they would say and advised us and me that it would dramatically reduce the probability of transmission i think going into the fall, i think you're going to see a lot of caution about density inside, social distancing inside, and mask wearing inside. we think that's appropriate. until we get a vaccine, which may be some extended period of time, we've got the ability to manage this virus but we have to follow these protocols

i think that's what you'll see i would hope and think officials will be urging that as we head into the fall. >> president kaplan, i wanted to quickly play a sound bite from jamie dimon about the prisurprig shape of the recession we're in at the moment. >> so the normal recession unemployment goes up home prices go down. none of that is true here. incomes go down, savings go down savings are up incomes are up home prices are up so you will see the effect of this recession you won't see it right away because of the stimulus and the effect -- making more money than were making when they were working. it's a peculiar time you mentioned the stimulus there and we're getting close to the date that the unemployment boosting benefit runs out. how important is it that is extended or how big an impact will it have if it's not.

>> with the unemployment rate this high, some form of the extension of unemployment benefits is going to be critical i see and i agree that these benefits will have to be restructured to create more incentives to work, but i would believe that we need to see some extension of these health care benefits when you've got this high of unemployment rate and i would be optimistic it would be the case i think you need to see some additional aid to state and local governments and municipalities who need to balance their budgets and have got a big fiscal hole. but part of the reason incomes haven't fallen is was said the unemployment benefits have continued. that's been an underpinning as we work through this virus. >> president kaplan, the nasdaq is up 17% so far this year the s&p 500 is down only 1%. does this price action make sense to you

i mean, you're at goldman sachs for a long time. does it make sense given the size and scope of the economic losses we're looking at and the uncertainty ahead on the virus >> so there was a trend before this crisis of increase in technology and technology enabled disruption everything i'm seeing suggests that trend is accelerating adoption of modes that use technology rather than historic call ways of buying goods and services you go through periods historically where you see some disconnect between the market and the economy. the market looks ahead a year or

two or three years, and the economy is right now -- but ultimately it's my judgment that disconnect will get reconciled one way or the other i think that will happen here >>well, what is more likely? the economy rises or the market falls? >> it depends a lot on how well we manage the virus. i still believe if we follow these protocols, we would see a rebound from the deep hole we dug in the second quarter, which still have a contraction of about 4.5 or 5% for this year and unemployment rate in excess of 9%. ill still believe in '21, we will see above-trend growth and we'll continue to grind down the unemployment rate. so the question is when do you get to more normalized economy it's going to depend on the path of the virus, how well we manage it, what is the timing of the vaccine? but we'll eventually -- i'm optimistic we'll work our way

through this it would be a lot less costly if we did a good job managing the virus now. ultimately i think you'll see some convergence between markets and the economy just may take a couple of three years. that's the nature of the disconnect between the historicalically between the markets and the economy. that's not that unusual. >> just want to go back to the banks, which as you know started reporting this morning while clearly they are not the epicenter of the crisis this time, nor have they received a direct bailout this time around. we did see this morning huge capital markets performance. particularly in -- citi was up jpmorgan up 120% year over year. do they direct to -- for the enormous profits in the trading divisions? >> well, so you talked about capital markets. that's really -- there was a historic -- there's been a histic amount of new debt issuance what the fed did back in smarnl

we stabilized the treasury and mortgage-backed securities markets but we've also, through the so called 13 three programs we did with treasury, we tried to stabilize corporate bond and other markets and companies took advantage of that. i think that's a positive thing. they extended maturities they issued debt they raised liquidity. we saw a record amount of issuance and i think you're seeing that in your comments so i'm hopeful as we go through this crisis one of the things we've got going for us this time versus the last crisis the banks went into the much better shape from a capital point of view because of bank regulation we've also eased some capital requirements that accessed to the discount window so the banks could play their role through this crisis.

they'll let some of the programs ease but they were necessary what you're seeing in bank results, part of it, is is a historical amount of capital markets issuance, i think that helped companies get through the crisis and ideally help them preserve and help us preserve jobs. >> as far as what else can do, president kaplan, the fed balance sheet is already at -- what, $7 trillion. >> it is. >> and chair powell leaves more room on the table to do more, if necessary. >> yep. >> so what could you do? >> we still -- on the one hand, we still have a substantial capacity in these 13 three programs, which were intended to stabilize financial markets. i hope we don't need to use it we've got that capacity. i'm hopeful if we do an

outstanding job and better job of managing this virus, and wide spread wearing masks, following health care protocols, we will not need to do as much and question show restraint and we'll needless fiscal policy i think that would be better for the country if that was the case so we've got capacity at the fed and we've got a number of things we can do. we stand ready to do them. i think it would be better for the country if we didn't have to if we had better performance on the virus and we got more growth at a faster rebound. that's why i'm talking about the health care protocols because i prefer for the fed to have to do less not more. >> also, i wanted to figure out how you're thinking about inflation now. we did see a tick up in consumer prices for the month of june largely gasoline americans are paying more for food that's been pretty consistently climbing do you see bubbling inflation in this economy are we still worried about

deflation with the loss of demand how are you thinking about it? >> so, there are going to be spots, food is an example, meat is another there are supply shortages and you're going it see higher prices the overwhelming trend and force is we've got lots of overcapacity in the economy. that is disinflationary. deflationary so while you'll see these individual hot spots -- when we have this much overcapacity, i don't think you're going to see much other than muted inflation for some period of time. the issue will be a couple of years from now and it'll take a couple of years to get rid of the overcapacity that's where i'll be attuned and watching whether we see more inflation pressures. while we've got this high of unemployment rate and this much overcapacity, the overwhelming trend, i believe, is going to be disinflationary. >> thank you so much for joining us, president kaplan. >> thank you good to talk to you.

dr. anthony fauci speaking now about the coronavirus cases spiking across the nio 's issuing a dire warning. we'll have the headlines coming up 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. 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.

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to stream the entertainment you love. xfinity. the future of awesome. welcome back national institute of allergy

and infectious diseases dr. anthony fauci giving an update now on the coronavirus pandemic. meg has the highlights. >> he started with dr. fauci being asked about the current numbers and what the trends imply in terms of what we're going to see in terms of hospitalizations and deaths. here is how he answered that question. >> there's no doubt that there are more infections. we know that because the percentage of cases of the cases that are tested that are positive is increasing, therefore, unequivocally, you're seeing truly more new cases. in addition, we're seeing now more hospitalizations, which lag behind infections. we're starting and will see, though not as much as we've seen, very likely more deaths. >> and he did say, though, that even though we are going to see more deaths follow these increased hospitalizations, he does not think that the rate is

going to get as high as it did at the peak here in the northeast, for example he did point out that the people mostly getting infected now are a decade to a decade and a half younger than those getting infected before. so he did say he's hopeful that the death rate won't be as high. he was asked, of course, about the question of opening schools. he said it's very important to try as best as possible to keep children in schools. citing the downstream impacts to families and kids themselves he said it will be geographically different based on infection rates around the country. as i was coming on-air with you guys, he was issuing warning and sort of a plea to young people that even though they are at less risk of severe disease, if they do get sick, they can pr propagate the pandemic we're all in this together and have to protect one another. >> thank you very much for that, meg. presumed democratic presidential nominee joe biden

unveiling his second part of his jobs and economic recovery plan. we'll ask gretchen whiter in about the impact it could have on her state we'll check in shares of sirius xm moving up higher. it's moving up about 2.5%. woman: my reputation was trashed online.

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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. democratic candidate and former vice president joe biden taking on president trump on the economy again today. detailing his plans to tackle climate change, modernizing our infrastructure, and create millions of jobs, including in the auto industry. listen. >> we're going make it easier for american consumers to switch to electric vehicles, as well. not only by building 500,000 charging stations, but by offering rebates and incentives. this will be 1 million good-paying jobs in the automobile industry. >> joining us now is a supporter of vice president biden,

michigan governor gretchen whitmer. thank you for joining us today. >> good to be here. >> following the plan on autos it sounds like it could help the likes of tesla, which is actually not one of the detroit automakers what are the priorities here when it comes to creating jobs for the automakers when president trump himself has been focussed on the manufacturing recovery >>well, it's one thing to be focussed and send tweets and make trade policy that is been reckless it's another to have this plan to move this country forward and i think this plan out of joe biden is really visionary. it's about investing in the technologies of the future it certainly does deploy a lot of work that the big three are already doing here in detroit and expand upon that and build that out even further.

the electric vehicles of the future these are the industries we have to got to make investments in we have to grow and we'll make our environment cleaner and be a much longer term type of investment for the people in this country i was excitesed to hear the plan today. obviously, you like other states, are seeing rise in case numbers. not quiet the peak what are you seeing in the industry like automakers are they able to continue manufacturing with the flair ups? yes, i work closely with the heads of the big three as well as the head of the uaw we need to make sure we get it right. we have a lot of people that work in the auto industry and we shut everything down because we had such a dramatic increase of covid back in the end of march and beginning of april we work together and put into place protocols. we've had a great deal of

success getting people back on the line and keeping them safe certainly it's not without some experiences of some covid but we've remedied it along the way and the benefit of the big three is they've got a global presence they've learned lessons from other parts of the world and deployed them here to benefit our auto manufacturers. >> governor, i wanted to go back to that announcement by vice president biden today. whether or not it's the right thing long-term for the nation do you fear how it might be spun in the short term? you can see it already be framed as the democrats want to increase your taxes to spend the money on green energy as opposed to at a time of severe economic weakness stimulate the broader economy. do you fear it might not be a massive vote winner? >> no, actually, i think the opposite you know, we have seen -- we've paid the dearest price for an administration that doesn't have an plan. for an administration that failed to execute when it became clear what needed to be done

right now we, i think, have got an opportunity to make a change that will dramatically improve our health, our welfare, our long-term economic prosperity in this country that's the plan that joe biden is put on the table. this is about getting things done the people of my state, like i think the people in many states across this great country of ours, want to know their leaders understand what they're going through and have a plan to fix problems we're confronting that's precisely what this is is a component of i add this on top of joe's plan with regard to covid-19 and building up testing and getting the virus under control, which it very much is not across many parts of the country now and i know this is what will make us more economically solid but also make us a healthier, wealthier nation. >> no individual states, governor are taking slightly different actions based on the level of virus cases they're seeing but if the vice president had

been present, and the democrats in power, would you like to see a nationwide federal instruction on wearing masks >> absolutely. you know, i got in the cross hairs of president trump when i observed very early on that the lack of a national strategy was a problem. you know, the nation's governors have stepped up. that is a bipartisan effort we have seen because there's been a -- vacuum of leadership. we have a patchwork of policies across the country we haven't deployed the dpa to produce swabs and n-95 masks which are still in the issue here we are months into this it remains an issue. i think a lack of a national strategy hurt us it probably cost a lot of lives and it's really important that leadership comes from the top with accurate, consistent medical information so that people can understand what we're confronting and rise to this challenge. >> governor, thank you so much for joining us. >> oh, sorry, sara. >> i was going say, you have the

mask mandate in your state why are we seeing pockets where 40 or 50 kids are getting sick from going to a lake party or a bar, which i've seen in the new news a number of times since the july 4th weekend so people are still going to do their own thing when it comes to masks and social distancing in this country. >> that's true, but if we have consistent messaging and we take the politics out of the simple act of wearing a mask, this is about public health. we're dealing with a novel virus for which there's no cure. there's no vaccine it doesn't care what party you're in. what state you're in what part of the country you're in what happens is when people travel, the virus travels. that's how we expose one another. by wearing a mask and had the trump administration from day one been echoing the same thing you're hearing out of state leadership, we might be in a different position so just, you know, universal mask wearing will help us get the virus under better control as the person who interviewed before me acknowledged, that would be a great thing for our

economy all the way around. >> governor, this time thank you very much. >> thank you stocks stage a big rally today. coming up we'll discuss a major al cld to the market rlyou be looming in the end of the month.

time for a cnbc news update with sue herrera president trump is scheduled to hold a news conference on china and hong kong. it is set to start at 5:00 p.m. eastern time you can stay with cnbc to watch his comments live. republicans are preparing to move the three big nights of their national convention

outdoors according to the "new york times. the move would include the president's acceptance speech. it is unclear how many people will be allowed to attend, if the venue changes. mexico proposing another extension of the ban on nonessential travel by land, if approved it would extend that ban until august 21st. and a -- a day of celebration in paris that's the france's ministry minister who ran after her car after realizing she lost her mask another official came to her rescue with a spare. always bring multiple masks. that's the news update this hour back to you. >> particularly when you know there are going to be hundreds of cameras and you're an elected official. >> yep and that's the policy. up next china's economy recovering its cities are reopening and stonets have surged over the la mth tensions with the rest of the world are bubbling over. we'll discuss it next.

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president trump holding a news conference in a few moments on china the uk banning huawei from the 5g network, which the u.s. has been pushing for the world will say they'll not allow beijing to treat the south china sea as the maritime empire now both sides are threatening further sanctions. joining us for more is the managing director and former asian policy analyst at the department of defense during the obama administration thank you so much for joining us i mean, what is your take on these elevating tensions whether or not there's a chance that we're about to bubble over meaningfully in the weeks ahead >>well, thank you for having me. the u.s./china relationship has

moved into what can be viewed as long-term holistic competition, which is going to impact almost every aspect of the u.s./china relationship economic, political, security. so i don't think we're going to see this dial back at all. i do think that what we're having now is a situation where each side is testing the others' will to continue to push for in this escalation action/reaction cycle. unfortunately i don't think that we're done at all here i think, in fact, we're probably just getting started. >> does it matter who is in the oval office? what are you telling your customers or your clients that pay you now for this kind of advice and insight would be different, say, between the u.s. and china in a biden administration since you were a part of the obama

administration. >> good question, i think for many of us watching it on the outside now is the strategic direction, a long-term strategic direction is firmly set, i think, for the foreseeable future that is strategic competition. i think what may be different, and likely to be in a biden administration is the approach to how we compete with china. so i expect the biden administration to do much more with our allies than we've seen with president trump i expect for there to be a relationship that has mechanisms throughout the agency. this is not a relationship managed at the leader to leader xi to trump level, but in fact some of the experts in the bureaucracy actually begin to help manage this relationship through its rough pactches. that's what i think will be different.

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over 30 million americans have been collecting an extra $600 a week from unemployment, a lifeline as many businesses remain closed, but those benefits are set to expire at the end of the month congress is still locked in a debate on whether to extend that stimulus how should the market take it? why does the the market seem

alarmed? >> the consensus is that the stimulus will get renewed. to me, the shape and the size of that stimulus renewal will matter a lot in terms of determining the market direction going forward. so i think people expect some kind of bill coming out of congress i think the magnitude of that bill could be significantly less, especially if you look at the rhetoric coming out of congressional leaders. i think that's going to have a big impact in terms of whether we can continue to rally going forward given the stimulus is a big driver of the rally we've seen over the past few months. >> these dates are pretty close and yet the market is very near all-time highs do you think we're due quite a big couple of days of volatility over the next several weeks? >> i do think as we get closer to the cliff, there is going to be elevated levels of volatility, especially i think we'll be pretty susceptible to headline risk as we get close to the end of the month

i think investor consensus and what has been priced into the options market is that it will get renewed. if you look at for example in the options market, volatility is at its lowest point on the curve compared to options expiring later in the year that to me is kind of the consensus or the complacency that is where you may see some potential for risk going forward. >> a lot of people have been flagging the volatility picking up around election day what are you seeing there? >> election risk actually is one we're seeing a lot of focus on that is one i think you'll see a pretty clear pricing of that risk in the options market and we have seen i wouldn't say specific election traits because we're still pretty far out from november and we still don't really have a lot of policy clarity. but i think what we're seeing through investor behavior is a

lot of people looking at hedges expiring november/december citing the election as a big potential catalyst for pullback. that is one area we have seen a lot of investors pay attention to we have seen a lot of investors look at hedges in the near term, we haven't seen a lot of action >> we've got two weeks thank you for joining us as we look to a pretty strong close and a continuation of the resilience of this market in the face of some big economic risk like the expiration of the bonus on unemployment benefits in two weeks and the virus risk a lot has to go right now when it comes to more fiscal stimulus, that the federal reserve stays in the game and that the deaths do not go back up to that peak. it's good to hear this hour that

dr. fauci does not think we'll go back up to that peak in this country where we were seeing deaths of 2500 per day we're nowhere near that at this point. >> goldman sachs rallied today given its business mix we'll see how they do tomorrow that does it for "closing bell." "fast money" starts right now. i'm melissa lee. guy adami, carter worth, dan nathan send us your questions and we will try and answer them on air live plus, we're fast tracking the data to get a look at where the recovery may really be heading what this chart could be telling us about what is in store. we're awaiting comments from the president expected to speak at the rose garden shortly. we'll bring you his statements