welcome back, everybody. glad you could join us for "power lunch." stocks are under pressure right now. with the nasdaq leading the declines, down about a percent as more americans file for jobless claims than expected that has weighed just bit on investor sentiment this day. retail sales coming in above kp expectations but a top analyst says there's more ahead. later, a massive twitter hack still a lot of unanswered questions about what happened and could there be a bigger cyber attack campaign ahead? "power lunch" starts right now. >> welcome, again. thank you, tyler morgan stanley jumping on strong trading revenue helping to lead the financial sector higher

today. tech stocks continue to lag. let's get to bob for more on today's market action. bob. >> hello, melissa. we're near the highs for the day but have not been able to get into positive territory. sec cyclicals tend to lead banks are having a pretty good week strong trading revenues. jpmorgan, same thing there important thing here is banks tend to drop in the week of their first earnings report. that's when jpmorgan reports this week not so bank of america strong you saw there kbe, there's a bank index almost up 5% for the week banks have been terrible under performers megacap, they're down this week. some of them are down. amazon is down about 6% for the week apple is flattish. most of the others are down 2, 3, 4%. how about netflix, which is a faang name out there

it's been all over the place 500 to 570 back down to 500 the important thing here social security moved in a 5% range today. lot of volume. three times normal volume. that's typical for netflix we'll get the earnings soon here finally people keep asking my why isn't the vix dropping anymore. it's stuck at 28, 29, 30 it's not going to drop we're going into the elections they are going way higher in next few months into november. let's get to steve for a rapid update on the economic recovery steve, what do you have? >> the latest piece of data came in this morning. retail sales did not beat expectations now we're pretty well locked in on what we'll be for that second quarter. looks like lit be a dismal one the rapid update, median forecast up six economic forecast today it's second quarter it will come

in down around 32.5% that will be one of the biggest ones we had in terms of single quarter jump that's an annualized basis look at the rebound that's now forecast the third quarter 23.5%. the fourth quarter, 27%. you have to factor in first quarter being down 5%. we don't get it all back for the year the year we would end up down 4.5% according to the median forecast here is some of the commentary we got retail sales are .6 below where it was in february parts of the economy are coming back in a v shape. remeans the retail sales numbers. other parts are in an "l" or a "u" shape. gregory brought his numbers down and brought the third quarter, second quarter up but he brought the third quarter down because of the resurgence. since the last week of june and first couple of weeks of july, the pace of growth and spending has subsidesed as we get this june data in, we

have no now factor in the impact of some renewed lockdowns and a decline in the big states that represent some 30% gdp, florida, texas and arizona. that will have an impact on third quarter number as the da begin to come in melissa. >> i'll pick it up we may be in for a slower economic recovery than many on wall street had previously thought. as the market gotten too far ahead of itself? richard is the ceo and cio and all other kinds of o's why don't we start with the question, rich has the market gotten ahead of itself and what does it need to see from the earnings to stay at levels where it is now >> tyler, i think the markets will go through push me type se narp owe between massive monetary and fiscal stimulus

the question is, with respect to earnings, with respect to economic growth and everything right now is our investors balancing out their expectations to those counter vailing forces correctly. will fundamentals be letter six mon -- better six months from now, 12 months from now >> let's talk about what rich said and what you see as remove into the real heart of the summer into the election season and into a very uncertain time with respect to the coronavirus and covid situation. >> thank you actually i think that some of the uncertainty is beginning to fades a little bit i think that's why the market react so positively on the news

around vaccine and treatment developments and the idea that maybe there could be widely distributed. that helps eliminate some of the uncertainty there's massive amounts of uncertainty it's less than ha we had even just say a month ago as far as has the market gotten ahead of the economy or the fundamentals, i find it difficult to really get to excited about it when you still see economic surprise indices, the various data providers that's still to the positive side despite the good bounce that we seen in the economic data, it does not look like expectations have necessarily run far or too far ahead of reality and maybe there's some argument my team,

we're a little hesitant on the large cap growth area right now. maybe people have extrapolated out too far and too fast what their growth could be like and there's other areas that, let's say in the smaller cap or on the value end of the spectrum looks like there's a lot more room t run. >> it may not be topic number one, rich, in this covid world, but earlier today attorney general barr had some aggress ifr commenaggressive comments in the name of big names that do business in the way of china one way or the other. it was clear this was the administration raising the heat on american companies that it sees as, in his words, kowtowing to the chinese communityist party. how uncomfortable and how material could it become for

those companies if the administration ratchets up pressure and pushing them to do less business there? >> this is the political third world you're touching. you're sticking your finger right on it there. i think that if the administration wanted to and wanted to bar business with china, that would be bad things especially for things like the tech sector. the tech sector is not only a supply chain, global supply chain but they have a global demand chain too like no other industry out there we have to remember it's a double edge swords when ever you talk about china and tech. i don't think that's going to happen i think it will be a lot of blustering but i think exactly what you're talking about is how detrimental that would be to u.s. industry. we're talking about tech think about the small cap and mid cap that are depending on

china for inputs or to sell their goods and what thatwould do to the economy. i think this is mostly bluster i think it's, it's a presidential election year i think we'll hear a lot more about things like this i think we would seriously hurt the economy, the u.s. economy. for get to global economy will be hurt if you put up walls in terms of exports and doing business >> let me get bryan's quick thought. we have about 20 seconds >> i think it's one of the reasons why when we look at the economics behind the drivers of growth for the different parts of the market why we tend to be a bit more optimistic about the outlook for the smaller cap more domestically or parts of the market it's more moving down that capitalization into the mid cap and small cap. the fact of the matter is we live in a global supply chain.

nobody would be unscathed if there's some sort of shock to the system >> thank you very much great to see you as always appreciate it. to the bond market now rick is tracking the action at the cme. hey, rick. >> if you look at a chart starting on the 23rd of june, you'll notice that today is going to be the 17th session, the 17th ten-year note session where we look to settle between 61 and 69 basis points pretty flat. keep in mind that 54 basis point s the lowest close ever. we're hoverering close to that level. let's look at the june 1st start of boons you can see they have been trailing off they trailed off below the most recent range when the ecb was flighty on how they will deal with their 1.5 trillion dollar plan and how hay will spend it look at intraday of euro

just a big drop. what happens when the euro drops. look at the two-day dollar index. it popped. tyler, back to you coming up, tech and real estate the worst performing sector today. why utilities are up 1%. retail sales were better than expected for the month of june a top analyst says there's trouble brewing below the surface. more "power lunch" right after this this selenite grey is so pretty isn't it?

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welcome back americans went shopping big time last month shaking off the cabin fever to spend on cars, electronics and lots of folks dined out. this was before covid started to come back. our june shopping spree doesn't tell the story and expects 25,000 retail stores to close for good this year great to have you with us. >> thanks for having me. >> i'm wondering, did you forecast before the pandemic the 25,000 stores would close and the pandemic is precipitating that pain or do you think there are more store closures because of the pandemic? >> there's definitely more because of the pandemic. >> why do you think numbers are

a blip >> we're taking june's numbers with a grain of salt and that's because june's numbers like may's, these are the easiest months in terms of a rebound and consumer spending. there are a number of things that suggest to us the rebound and retail is going to be more gradually tenuous and take on a more w shape trajectory. >> there's changing or there will need to be changes in how consumers spend because of pandemic if schools go online, there may not be the need to go and buy new backpacks or sneakers or clothing of that sort and more of a need to be electronics like laptops and headphones i'm wondering how does that factor into what you like and

what you don't like in retail? >> e-commerce has done phenomenally we have seen it hasn't been enough to move the needle in terms of aggregate sales best buy, dick's sporting goods and william sonoma it's a digital first retailer. generates over 50% of their sales online >> macy's has been troubled for some time and the pandemic is twisting the knife, so to speak. you say it's at the highest risk of default what happens then? >> we think macy's is the one that's most likely among the department stores to follow jc penny's footprints we look at that from a leverage per spective

around 51% of macy's portfolio is in a class malls. that compares to nordstrom that's 95% and kohl's that's free standing. we think free standing is where consumers want to go now as they try to avoid crowds. >> in terms of troubled retailers, retailers having trouble paying rent, for instance, some malls are looking to sort of change their strategy and buy into those retailers are there names that could get a quote, unquote bail out from a reit we're lo . >> we're looking at 51% of malls to close around 2021

some malls are transforming their parking lots into movie theaters i think that's the way to go >> all right we'll lever it there i'm sure we'll have this conversation again in the future all right. still ahead, coronavirus cases rising across the u.s. as florida reports, yet again, a record number of deaths. we have the latest numbers there. as the wave of infections continues, one analyst says disney's park and film business will be in for more pain that wall street predicts he will join us.

welcome back johnson and johnson pushing ahead with its coronavirus vaccine as cases continues to

break out in records >> modesto, california now seeing the fastest case doubling times in eight days. florida reporting a record in new daily deaths from covid-19 156. almost 14,000 new cases being reported in florida. that's the second highest. one small bright spot, it does look like there might be case flattening in arizona happening. we'll have to wait and see if that continues other companies tracking this data are companies working on vaccines trying to figure out where to run their clinical trials.

>> it will be more than a 1,000 person study it will include ages 18 to 55 but also 65 and older. we'll try to target that most vulnerable population. j and j on track to start the phase three if all goes well in september. >> it was 45 individuals he said 1,000. one the difference >> it's a hugely difference number in patients one might wonder if it's because

it's starting so much later. the moderna trial started back on march 16th. it's a difference circumstance maybe it's a different approach to running these studies >> all right thank you. all right. tonight at 7:00 p.m. eastern time, cnbc in partnership with acorns will host a special live town hall bringing together those affected by current social, health and economic crisis and answering their questions. today, we once again see how americans are being impacted by the covid-19 pandemic. weekly jobless claims coming in above estimates above 1.3 million. dan, welcome nice to have you with us

>> thank you >> let's talk about the three sub components there must be jobs that are new as a result of covid >> we're seeing jobs that are new and booming. i kind of put this in three basic buckets. people go to fancy department stores or will go into grocery stores and get your goods for you and bring it to your home because you can't leave. online tutors are another example of that. life coaches, we're seeing a big increase in demand for life coaches. not just jobs going away but

entire industries that are going away or doubl deeply troubled be of that pandemic you're seeing the market at work here saying there's a crisis how do i get out of this crisis? >> when i think about life coaches and counselors and things like that, i wonder how qualified some of those individuals are to do the jobs that they purport to be able to do >> you got to do your research on who the people are. see what they are writing, what they are sharing talk to other people that they have worked with in the past you have to do the due diligence. just because people are taking the jobs, doesn't mean you want to hire them there's a demand there are people who are struggling right now to understand where to take their lives. that's one example as a life coach.

huge increase in demand for people that can take a business, take a company and office, a school and turn it into one where you can work or learn while being socially distant from your peers. >> i would think they might be hiring designers to offices in way that's socially distanced and safe i would imagine there's types of work in the health care field, most especially, like telemedicine or therapists who are working now increasingly via

software program zoom, whatever, and doing their business that way. it may reflect on the need for office space down the road >> you are dead on the demand for telemedicine skills are way up. people are listing telamedicine and zoom as skills they have they are saying this is a skill i've developed in the last few months i'm going to talk about it publicly i'm going to each others how to do it. i'm going to list it on my linkedin program that's where the jobs are. they got to say they have this totally necessary skill for the way we are living our lives. >> do people have to retain to

be an occupancy planner or are there natural fits between losing jobs in the skills that are needed in fields that are creating jobs? >> yeah, i think there's no straightforward answer in some places the jobs are gone it was a cliff that you fell off of if you worked on a cruise ship, those jobs do not exist. if you're in the travel industry, those jobs are barely coming back. there's no easy off ramp into those kind of things if you are an architect, that essentially distanced architecture i was talking to my administrator at my children's school and they were talking about how they are retraining teachers they are smart and seeing the equitying dots and seeing where

business is going. you don't have to spend years and years studying this. we have been in situation where you had to become an sperts super quickly on how to do business in an environment where people are not leaving their homes or can't get into their offices or both doing their jobs and teaching their kids at the same time. >> thank you very much >> be sure to watch our special live town hall tonight at 7:00 p.m. eastern time. invest in you, ready, set, grow your future tonight. ahead, a massive hack of targeting twitters largest accounts, including presidential candidate joe biden. elon musk and kanye west we have the details ahead. why education will be a key issue in the election and a disney downgrades. why the stock's magic is fadesing all thheis wn "power lunch" returns. in a highly capable lexus suv.

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welcome back, everybody. here is your cnbc news update. the supreme court is leaving a lower court order in place which prevents convicted felons from

voting in florida if they haven't paid all their court fines. civil rights group argue many of those blocked from the polls can't afford the fines and beyond that the state is unable to tell them what they owe cvs pharmacy and walgreens joining the growing list of companies making customers wear face coverings a space walk is under way. restaurants are replacing batteries on the international space station while far below in ft. lauderdale, florida, a hop walk was cut short when police wrangled a loose kangaroo and posed for some pictures with it. we don't know where it came from but we're pretty sure it didn't hop after the space station. back to you. let's check the markets now. the dow limps bit today. it's down.

the losses are modest. less than 1% but losses they are. the oil market is closing for the day. we have details at the commodity desk >> down about 1% wti settling around $40.77 a barrel this is after opec and allies agreed to ease supply curves the group will reduce cuts to 7.7 million barrels per day through december they have been at 9.7 million barrels per day. the move is a signal that oil demand is returning and economic recovery is under way but after this move, so is more oil supply i'll spend it back to you. thank you. twitter the target of a massive hack attack has dozens of high profile accounts among them barack obama, bill gates, jeff bezos and the corporate accounts of uber and

apple. they said they would double any payment to a bitcoin address twitter still looking into it and describes it as a social engineered attack at twitter employees who had access to internal systems fbi is leading an inquiry into the hack and just a few minutes ago, senate republicans requesting an you aurgent brief from the company steve, great to have you with us >> hey, melissa. >> socially engineered attack. that's fancy way of saying the hackers got to individual twitter employees in order to gain access. >> exactly it could mean they e-mailed them and tricked them into sharing their log in credentials so the hackers could access the tool that enabled them to send the bitcoin tweets from various accounts there's reports coming out informs an inside job. the employees were in on the hack and had been paid to help these hackers access these accounts that is what's really scary to me here is it's not so much as

technical security issue but a human security issue and it raises a lot of questions about how twitter vets the employees that they allow access to this kind of information and these accounts you might remember, last fall the department of justice came out and said two former twitter employees were in kahoots with saudi arabia nationals this will be the second time twitter had someone on the inside helping hackers get personal information out and accessing the accounts >> $120,000 transferred into bit coin we don't really know to what end the hack attack happened >> absolutely. it could be kind of testing the waters and seeing can we do this and it's almost like a joke.

it was very obviously a scam what's really concerning is, they figured out they can do it this way what if they decide to tweet out from these accounts some valuable economic news or something about the pandemic these are all market moving and news moving accounts that people pay attention to and can really affect the way people understand what's going on in the world the president himself uses twitter to dictate policy, fire people in his administration luckily for twitter, president trump's account doesn't appear to have been affected by this. if it had, that would have been a huge problem >> on "fast money" we were watching this whole thing unfold and seeing blue check account and blue check account being compromised. i said on air, why can't they do anything about it. it looks like the problem is getting worse. is there a kill switch or circuit breaker and they ended up blocking verified accounts from tweeting, accessing other account functions. that seemed like a blunt

instrument i guess they never had to cross that bridge before >> yeah, they took a machete to it instead of taking tweezers and picking them out they stopped everybody with a blue check, like you and me. it's really concerning it took the better part of two hours for them to finally get a grasp on this you have to wonder, the stock exchange has the sort of breaker that twiggrigger when the stock market drops 7% and we take a pause to figure out what happened twitter doesn't appear to have any remedy similar to that especially when so many people are keyed into twitter to what's going on it's the backbone of information on the internet. >> if it happened during market hours. >> who knows >> they could be going through twitter for certain trigger words. fascinating story. go at it

let's diver a bit deeper into the future of cyber security of twitter and social media. our next guest says it looks like the twitter hack is part of a bigger campaign. joining us is david kennedy. it's highway ceo of trusted sec. welcome. why the you say this could be the bleeding leading edge of something bill bgger and bolder? >> what was interesting is the severity of it when you see accounts being taken over, we saw the in this case it was massive the. account takeovers of thousands of accounts, the most powerful accounts in the world. it showed a direct flaw within twitter. they had basic saaccess to backd systems that allowed them to hijack the accounts out there. when we start to look at what hackers do and the methods they operate by, we try to categorize them into who they might be

based on the pattern they exhibit. if it's ransom wear, they may have tried to target twitter this one was particularly interesting because it literally just went in and went noisy all up in front. sgr does the fact these perpetrators did not get away with a lot of money and didn't do what you described there which is sell the access they had developed for multiple millions of dollars, does it tell you they were amateurs or what >> that could be one of the

pieces they were script kitties or people or novembice or average they were doing something called scripting or building programming logic behind this. we don't know how long they have been in twitter. it kbould a much larger systemic breech they could have had access for weeks, montss, stoelden messages >> do you think they had inside help >> twitter response was very

interesting. they said it was a collaborative social engineering track we don't have any confirmation it was an insider. it is move systems and other spreads like a wildfire. those types of breaches where you have a malicious insider are the devastating types of breaches you see >> among the accounts they did not hack was the most famous one of all president trump's.

why? >> you saw joe biden and barack obama. if you're going after the most power people, the president of the united states, the twitter treems, all of those would have been key one my only guess is they have additional security controls in place for the president based on the power he has in the united states government. quarantine those into separate systems so people can't interact or interface with those. twitter has been vocal with senscensoring president trump in certain tweets he had and modifying it and showing manipulated kbleed and have a lot of people that are against the president himself. modifying that and making sure employees can't change it without approval processes is a good step. that should have been applied to the entire organization, all of the accounts having one employee to see all direct messages shows some insecurities there >> thank you very much very fascinating conversation. we appreciate it >> any time. coming up, rockets,

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welcome back time for today's power movers. we begin with a pun as virgin galactic shares are rocking higher the new chief is michael colglazier he's the head of disney theme park we end with the mattress company

sleep number the company posting a big loss sales fell but not as much as wall street feared the company not offering guidance because of the uncertainty surrounding the pandemic melissa. i would think they would sell more mattresses people are home more president trump's hard line on schools resonate with parents in key swing states. we'll get the numbers. many of disney's businesses have been crippled or shut down during this pandemic the stock is up 50% from its march lows a bearish analyst will join us coming up on power lunch hope it doesn't cost too much. i hope my insurance pays for it. can you tell me how much this will be? - [cashier] 67.

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president trump threatening to defund schools that don't open this fall that's made education a crucial

issue in the upcoming election ylan looks at how that is playing out in crucial swing states >> reporter: tyler, there's really two questions in there. first, how important is it to reopen the schools and then should our polling, across 16 battle ground states. the response to the first question is overwhelming 74% of voters said that schools and daycares should be a priority to reopen safely. republicans, democrats, ib dependents all agree only about half as many said retail or public transportation should top the list. 5% said the bars on the question of defunding the schools, our poll shows that swing states do not support that almost all of democrats are against it 17% of republicans are, too. and pay attention to the independents 63% said it's a bad idea that may be why on capitol hill

you're hearing the republicans talk about potentially tieing additional aid to reopening the schools. guys, that's the difference between using a carrot versus a stick. back over to you. >> thank you very much we appreciate it all right. we should note we're at the lows of the session now the dow is down by more than 200 points disney starting to reopen as u.s. theme parks after months of being shut down. and then there's the movie and tv business is shooting new content has been shut down, as well should investors be weary of disney we'll talk to the analysts who downgraded the stock today don't forget, you can watch or bcsten live on the go on the cn app "power lunch" will be right back to return to the workplace, safely, companies will need the right tools. that's why salesforce created work.com it's an all-new suite of apps, expertise, and services.

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welcome back shares of disney are lower today on the back of a downgrade from cowhan arguing covid impact could last

longer than wall street expects. and doug, it's great to speak with you you don't expect to return to precovid levels until 2025 >> yeah. for the parks business i kind of look at this there's two steps leer one, getting the parks fully reopened to back to capacity and if you look at prior recessions, disney's historically cut price or protect volume. it takes about three to four years for them to recover the price cuts and get margins back to prerecession levels even after we can get the parks reopened, there's a normal recession driven margin downturn that will take a few years to get back. >> are you seeing evidence they're going to have cut price now and reduce capacity? i mean, the head of the parks that said something to the effect of he was pleased with how the bookings have gone so far. >> i think you have pent up demand, as i said, capacity is relatively constrained

i think it's also a lot of local visitation so they're not necessarily trying to book up the hotels now. it's more when you got, you know, a fully open park and potentially, you know, an economy that is still in tough times. what is interesting how disney and a lot of other sort of stocks that depend on crowds, basically, to go and frequent them is whenever there's positive views about a vaccine or treatment, disney stock rallies. you're saying essentially that even with the vaccine, it's not a flip the switch scenario in which demand returns overnight there's still the lingering impact of the job losses, let's say, in the economy. >> right. >> yeah. i mean, it's interesting i also cover the video game space. that's a big play on we won't get a vaccine. and a lot of days the media stocks will be up and the video

stocks will be down and the next day the video games -- right they trade opposite to each other. certainly we've seen, you know, as hopes of the vaccine have increased there's been some rally in let's say crowd stocks. like id said, there's an economic impact here you can't understate it's likely to be persistent for awhile the film business we took numbers down that should come back pretty quickly once theaters are reopened. >> okay. so it's the theme park business that will suffer and pull disney down in terms of disney plus, the bulls say netflix has a certain evaluation should disney have a little bit of that evaluation to offset the weakness in the theme parks even though parks are a bigger percent of revenues. >> yeah. when we upgraded disney a little over year ago, disney plus will get off to a fantastic start and it has you know, if you look at disney compared to its media peers,

disney is trading at ebitda multiple it's two to three types companies like viacom or cvs or discovery. it's getting something of a netflix type premium in the evaluations. >> so earlier today attorney general barr went after several big name companies and named them by name, including disney for being too close and too tight with the chinese specifically the chinese communist party members. disney has a lot and are aggressive defenders are you worried about disney's business in china? >> not particularly. you know, they partnered with the government there they have a theme park in sha shanghai they do a lot of box office in

china. they are defensive in the intellectual property, as you pointed out. the fact the tensions between the u.s. and china are increasing in a potential problem, at some point down the road, as of right now, i don't think it's a serious issue. >> how long can espn go without live sports, doug? [ laughter ] well, you know, espn is part of the basic cable bundle as long as people continue to subscribe to cable for the other shows on cable, including cnbc, then espn will have subscribers. we have seen cord-cutting increase since the pandemic started. i think the lack of live sports on television probably is a factor on that you know, it will be interesting to see if sports comes back if we see subscriptions come back, as well. i think the live sports issue is certainly a bit of an issue of the near term. the longer term issue is the health of the cable bundle overall. that's one area we've been

cautious. >> and i would match the advertising when you're expecting the impact of the pandemic is people, consumers cutting back corporations are certainly cutting back, as well. we didn't do any further cuts today because it's harder to see how it trends. certainly if there's a prolonged recession, you would expect to see a decline in advertising, as well. >> great to speak with you, doug thank you for your time. >> thank you as we watch the market action today down more than 1% losses had been blunted for much of the day nasdaq again down 1% and the russell 2,000 down a percent as the third quarter begins to unfold. >> i think what will be interesting to see whether this

persistence in underperformance of big cap tech continues into the close and into tomorrow. it has been the theme this week. >> it has. >> yep thank you for watching "power lunch." see you tomorrow. >> see you tomorrow. "closing bell" starts now. >> thank you welcome to "closing bell." i'm sara eisen with wilfred frost. major averages down more than half a percent looking at session lows now for the dow down 264 let's look at what is driving the action bank earnings in focus today as investment banks and trading firms like morgan stanley do better consumer banking firms struggle. technology and travel stocks both losing ground as coronavirus cases continue to surge in parts of the u.s. a mixed picture on the data front. chinese growth returns but retail sales come in weak. here in the u.s., the labor ma