welcome to power lunch the market is shaping audiotaei reopening roll backs investors anxiously await whether congress will act on a

new stimulus package out of d.c. more progress on the big vaccine front. that is putting the competitor moderna on the become burner for today. shares of wayfair are up 950% from march low we'll tell you the other radar e commerce player investors are diving into. power lunch starts right now kelly. thank you. it's not the typical rally we have seen but the s&p is still on track for its best july since 2013 let's get over to bob for more on what's moving now bob. >> last week we had cyclicals and value stocks really doing well at the expense mostly of tech like amazon down 8% not happening, not today bottom line here is apple, visa

microsoft really helping the dow. exxon, chevron not helping we have been trying to get over ta june 8th high that's the height of opening, reopening hopes. 32 or so we're over that. we close over that you'll hear the technician squawking about this one this means we're positive for the year as well megacaps leading the way this crazy bullishness, amazon is up 70% of the year. that's not good enough for you jeffrey raises amazon to 3800. it goes on and on the bullishness around megacap keeps going up the work from home beneficiaries all doing well today they have done well since june 8th. that story is the reopening the

questionable but the work from home stuff doesn't matter. they will do well. the reopening sector, the stuff that would bo debtdo better, unr performing this week marks the end of the $600 per week unemployment benefit being received by millions of americans as congress hashes out phase four what will it mean for the my still struggling to recover? steve has the details. >> tough times lay ahead for families who lose the $600 ben fi benfit who can't find work goldman sachs warns a lower gdp if it's not extended heritage foundation writes in a piece as many small businesses are struggling to survive, the fact some are having to compete with excessive unemployment

benefits is making it harder to stay afloat and recover. that's the heritage foundation est mates are to thirds of workers receive more in unemployment benefits than they do working but 7.5 million people have still come back to work over the past couple months while the benefits been in place and it's seriously helped retail spending the jpmorgan institute writes an estimate will result expiration will result in large spending cuts with negative affects on households and macro economic activity higher spending by the unemployed during first months of the pandemic than before the pandemic hit negotiations beginning this week on the next bill and republicans seem against extending it in payroll tax cut. a bill continues the payment until january 2021 tyler. >> stooefr, who has studied

whether that $600 a week in extra employment benefits actually depresses the willingness of individuals to go back to work is it a fact that it's such a powerful disincentury tifsecentt people pay home? >> no. you pay the same amount of work to stay home the idea is people will stay home some of the evidence studied and he has not found any impact plus there's the idea of the 22 million lost work, 7.5 have come back to work a lot of people say there's a lot more work than the money there's job security people are afraid in the bad market of losing the jobs. there's the idea they want to go back to work because they like their jobs and the idea they want to get their benefit. there's a lot more work than the pay and the answer to your question is no there isn't a

study. there's an intie wiuition on tht >> my intuition would be that people know that $600 a week is a very luxurious lush benefit. it's one way or another going to be temporary and that if they go back to a job, that that job is likely to be more permanent and as you say, people like where they work. they want to keep their job. stooe steve, thanks. >> i was going to add a lot of conservative economists have long said that people don't react to temporary incentives. this clearly is temporary. why they think people are reacting to that this time around is unclear. >> interesting steve, thank you what will the next round of stimulus look like and how will it impact the markets and the economy as we head into the election, which is now about 100 days away.

i'm going to begin with you stephanie. what do you think comes out of congress over the next couple of weeks. will the $600 a week benefit be extended in some form even if it is moderated somewhat? >> it's hard for me to imagine that either side will get what they want on any of this despite it seems so easy for things to move here in washington. it tends to be hard. what the democrats have said they want is $600 and expanded unemployment insurance to the end of january 2021. that gets them in their mind a biden administration, the senate flipping and then they can do more policy when they are in the driver seat. republicans are saying zero. i think compromise would see probably lower than $600 but something and probably not

through january but through lame duck so probably november or december >> let's talk a bit about the idea of a payroll tax holiday or a reduction of some sort this has been something that the administration has floated apparently the administration is behind it. wants it to happen is that a possibility or a probability? >> i think if the president of the united states says that something is a red line for him, we should take it seriously. i read a ton of commentary dismissing it because a number of republicans are not for it in congress and democrats all hate it if this is important to president trump for whatever reason, he absolutely has an important seat at this negotiating table. i could see him pushing for this and if so, i think it would be included >> all right let's turn to you sherry paul and get your thoughts here we heard steve's report there where a couple of the major big

investment banks on the street have said, basically, if you take away that $600 a week in extra benefit, you'll see spending go down you'll see more people go into arrears on their mortgage and rent and the economic effect will be severe or potentially severe do you agree with that >> yeah, it feels like common sense. i think it would be helpful if we went back to march to understand how both the monetary and fiscal stimulus partnership between the fed and congress and government were supposed to work the intention behind that was to buy time for vaccine and to nationalize at the time in march a strategy for containment whether that was a national approach to masks. it was broad based testing now we're in an individualized community based approach which is leading to volatility in terms of invees eincreased in in rate this is now even more so an

uneven recovery. i think we should expect that. going forward, i would expect that really congress will have no choice. why? the fed has done their job their job is to grease the wheels of is system to make it functioning. the job of congress is to put money in the pockets of people as a bridge financing to help stave off any further financial crisis in my view this sits now with congress why not both why not both the payroll tax cut and extension to benefits? let's just call it a day >> sounds like that's where it might end up if you have some horse trading going on investor should be looking for investment opportunities where are those opportunities.

>> if you're looking for one sector that's been left behind, i would look to health care as a primary sector it's trading flat year to date it has one of the lowest p/es. the dividend yield is almost twice the ten-year treasury. a lot of the head winds are behind the sector. >> final thought stephanie miller how close is this election >> twist my arm. i think biden is a little over 50%. he's leading if the really becomes about economic growth and the future of our economy, trump can get it in the bag >> yeah. we can all remember that in recent elections, you can have more than -- you can plurty of the votes and still not be elected president thanks very much let's get to a mayjor update

on the coronavirus vaccine fronts >> these were highly anticipated results coming from oxford university published today the first look at human clinical trials of their vaccine. more than 100 participants were enrolled in this study they did some side effects including fatigue and headaches and some pain at the injection site a lot of people are asking how does this compare to what we have seen already from moderna and pfizer >> what i would say is all the things that's been presented so far suggest whether it's the

moderna data or the pfizer data we with generate neutralizing antibody levels in the region you see with convalesci ining patients >> they reported results from a german clinical trial today which support what we already saw. they say they are on track to begin a stage three trial. they say they may be in place to seek regulatory approval on an emergency use basis by october of 2020. guys, back to you. >> so meg, let me follow up with a quick question what's the next mile post on this journey from which ever study or company or companies involved what have the next data points that we should be anticipating

>> it's down a bit after these results but mainly because there was such a run up last week into the study. pfizer seeing a bit of a boost moderna stock is down quite a bit. just because these other companies have these results and moderna run up so much last week as well. >> all right thank you very much. still ahead, we'll have more on the markets consumer discretionary and technology leading the way on this monday. industrials, utilities are the laggards energy as well chevron buying noble energy for five billion that's the biggest energy deal since the pandemic began and a top analyst says more deals may be bubbling up nesl tell us someam he's watching after this quick break.

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welcome back chevron announcing a $5 billion deal with noble energy it's the largest energy deal since the oil crash. it was ultimately bought by oxidental petroleum. let's ask raymond james.

how big of a deal is this deal today? >> well, it's much smaller in scale than chevron's last attempt at doing a deal which was petroleum a year ago that was 50 billion enterprise value. this is only 13 billion. one quarter as large everybody's stock is down since then the fact this is the first large buy out in oil and gas since the pandemic began the pretty notable. >> there's two interest things in what you said on the one hand it sounds like maybe the landscape has stabilized enough that buyers feel comfortable about the prices that they are paying. on the other hand, if they had paid 38 or $50 billion a year ago, you know, look at how much the world has changed then what do you think is the motivating factor for chevron today? >> chevron's stock is down about 25% year to date now

that's pretty bad on an asbestos lu -- absolute basis relative to other oil and gas companies, that's an out performer. equity represents a pretty good currency for chevron to use. it was down 61% as of this past friday not everybody has this currency even if somebody has it does not mean they are inclined to use it >> you're not a big fan of this deal why do you think they should put their money to work that way what do you mean by unsustainable level of os t

tearty >> it slashed capital spending to lowest levels in decades. chevron is no except chevron's capex is a quarter of what it was 2012, 2013 some of that is just lower cost. it's also less activity on the company's existing asset base. if the choice is invest more in the assets that the company already owns or add more to that asset base, i think the economic option, better economic option would be to reinvest organically. they can do both by if it is a choice then i think it ought to be organic capex >> sure. you're saying you're still comfortable with an out performer. this isn't a deal breaker. why do you think i steds nstead

focusing to grow assets, why do you think they keep looking for these external plays >> almost everybody in the industry does some level of mma. chevron has been more aggressive about corporate buy outs it's worth pointing out 90% of the deals out there are asset level deals. an individual field or an individual bought acreage. noble is the exception that's the rule. it was also the exception that broke the rule it's really not a make or break decision either way. >> as i look back on the chevron deal from last year, i think they were lucky to fail. right now they would be writing

down that deal is this deal far more likely to go through, number one number two, as you look across the horizon at these lower prices, do you see other consolidation deals coming in the pipeline, so to speak? >> yeah. chevron in retro spect dodged a very big bullet by not paying what they were originally wanting to pay for this is very different scale and do i think there will be a bidding war? no doints. partly because this is much smaller company. there is -- there's lots of things on this scale for somebody else to buy if indeed somebody else wants to replicate these kinds of assets elsewhere.

it's companies swapping assets or monetizing assets asset deals are cheaper. they are easier to integrate they have less operating risks, less regulatory risks and they give you only what you want and none of what you don't want. maybe chevron wants all of noble. in most cases, the buyer wants to fill a particular gap in their asset base and that means buying one individual country, one individual basin rather than a whole smorgasborg of assets. >> all right thau thank you very much. we appreciate your time. still ahead, a number of

e-commerce stocks are surging amid the coronavirus pandemic. traders will tell us which names have more room to run. plus, real estate on the brink as home buyers flood the suburbs and rental eviction forgiveness is about to expire bess freedman will join us - [announcer] if you've tried college but never finished,

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welcome back shares of wayfair are seeing a huge surge from the lows amid this pandemic as don sumers stuck at home rely on e-commerce for their home improvement needs. can it build on the success. kate has more for us

>>wayfair has been a big winner and a big comeback story take a look at the stock since its 502-week low that's to people staying at home flash back to a year ago, wayfair was hit by the trade war and tariffs. it raised prices and sales slowed all of this resulting in deeply negative margins and what is called a downward spiral flash forward to today, the company still isn't profitable but wayfair moved up the time line to break even that goal was set for 2021 executives now say the company will turn a profit this current quarter. the big question, once the pandemic is over, can they keep up the growth. let's look at the bull case first. work from home could persist into next year people might look to make more substantial home upgrades given that potential analysts are betting on customer loyalty and expansion into areas like home improvement.

guys >> all right thank you very much. kate with the story there. wayfair is not the only e-commerce stock taking off. since the march lows wayfair joins etsy, stitch fix and mover. you come at this from a different per speckive daniel, you get to go first. you see these stocks as a great sand box for traders you don't think that the height or the power of the moves in these stocks is disqualifying. explain why not. >> because the hype is exactly what makes them great especially for short term momentum traders

like myself. all of these tickers have a lot of attention on them because of the pandemic consumer behaviors changing in all of that. my favorite part of them is they have high short interest and right up near the highs where the short sellers are going to have to cover. imagine how the short serls all and all these tickers feel the higher these things go, the more likely the short sellers are to cover for that reason, i love these for buying delta 70 calls, 30 days out especially when they close up at the highs on the day of high volume >> you would play these stocks through the options, not necessarily buy owning the equity, the common >> that's correct. i do own a few of them in equities as well for me, personally, i'm a very active options trader and for moves like this, when you have tickers that have large percentage gains, those are the best tickers to trade in the options market

there's a lot of premium that you can sell when ever they revert back to the mean especially around the 50 period simple like with chewy they provide great opportunities with long calls because of the big movements that they experience >> all right mark, let me turn to you i don't know whether you quarrel with danielle but you're not as sold on these stocks, particularly stitch fix. tell me why. >> the group has had an amazing run off the lows it doesn't make these ripe to sell into right away when you look at it, it's gotten right up the prior highs that were hit earlier this year and also going back since last yun after a run of about $11 up to 30, this is a pretty serious level for the stock.

>> mark, thank you very much for your time. thanks so much for more trading nation head to our website or follow us on twitter. where else but at trading nation kelly. ahead on" power lunch," is it housing boom or boost we'll speak about the reality market amid this pandemic. an update on the college admission scandal that rocked the nation last year the tesla shares up more than 200% this year, one analyst says the stock jolt could be running out of juice tesla up 7%.

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here is your cnbc update a new development in till kfg o judge's son in new jersey. investigators are looking for connection between that shooting and a man found dead from an apparent self-inflicted gunshot wound. the man was lawyer who had a case before judge ester. in florida, teachers unions are suing governor rob desantis over his plan to fully reopen next month one union president called the reopening reckless and uninstitutional. this apyres pears to be the fir suit of its kind in california, the start of high school sports is being delayed until december or maybejanuary because of the pandemic the announcement was made two weeks before the high school football practice season was set to begin

that's our cnbc news update for this hour. back over to you >> we still don't know what will happen in new jersey where my son is eager to start playing football but they don't know yet. thank you. it's another green day dow industrial is up 25. s&p is up 21 the nasdaq up 2% higher as technology, big cap technology roars back after taking a bit of a breather last week the russell 2000 down about a quarter percent. speaking of down, mortgage rates are down, record lows. below 3% for first time ever on average for the 30-year fixed conventional as the clock ticks for many coronavirus relief programs including the expiration of eviction moratoriums is the real estate market about to get a reality check as that money disappears or gets reduced?

good to have you with us >> thaupg fnk you for having me >> fantastic thank you for inviting us into your home or home office what are you seeing in new york, in connecticut, in new jersey, out east in the hamptons, miami? what are you finding people are wanting, sellers and buyers? >> it is a complicated and evolving real estate market. i think part of that is due to the fact that different regions have different desires meaning the hamptons, palm beach and the connecticut market has done well there's a lot of demand there. we were a hot spot and got hit hard now that we come back down, thanks to the governor i think we're starting to see deals happen slow and steady. it's not one thing it's very nuanced at this point.

>> are new yorkers who are buying properties, are they rebasing to other places like florida where there's no state income tax, like connecticut, like the hamptons or are these not just second homes but another living opportunity for people what are they doing? are they leaving new york for these places or adding these places to their portfolio of homes in. >> i think it's a mixture. >> what maertters greatly is wh happens with school in the fall. we still don't know. some people are trying to figure that out and some will stay many the hamptons or palm beach until they know more some people will come back to new york city and try to work with the system and have their kids go to school online there's not one answer and not one size fits all because this is all evolving every day and we have to wait and see what will happen

>> we're talking about the problems of the 1% the people who are trying to decide whether to stay on the upper east side or go to the hamptons or palm beach or whatever thigh can't make mork orn rent or payments and lard lords will find they are under stress because they don't have the revenue coming in. what do you think will happen in. >> that's a real challenge that will have a huge impact they may have to lay people off and that puts more strain on an already very, very high unemployment rate.

you can see the public and prooifrt sector work together and try to be flexible maybe a discount on rent maybe another month where they don't have to pay rent we have to apply a bit of humanity in this environment we are all in this storm but not everybody is in the same boat. we have to be a little bit more gentle with every one. >> yeah. i think that's a great sentiment to have there and time will tell how this evolves let's get back to the question of what's happening in the suburbs. you hear sort of people accustomed to inner city living or vertical living, want to get out and move into areas where they have some space, they have some property.

are we seeing bidding wars in some of those desirable suburbs and are we seeing sellers in the quote inner cities or the inner circle are we seeing them be more flexible on prices >> you're definite slying bidding wars in places like palm beach and connecticut and part of that is attributable to the fact there's not enough supply that's been very good in those regions, they have been healthy and people want to be there. they want to live there. that's been excellent. whether there's going to be some sort of price correction, for example, in new york city, that is yet to be determined. we do know that buyers are looking to negotiate that's 100%, sure. sellers have to let go of their prepandemic pricing and be a little bit more realistic here in new york city there's high demand then the sellers can ask for more

in new york city it's a bit more challenging, i would say >> thank you very much we appreciate your time. good to have you back. thank you. >> thank you so much take care. up next, it's the power movers and the power players we'll lay out the stocks making the biggest move today and while the pandemic has put most major mergers on pause, the'stl de makings in the work we'll have more. sk, "why?" i see a new kitchen with a grill and ask, "why not?" i really need to start adding "less to cart" and "more to savings." sitting on this couch so long made me want to make some changes...starting with this couch. yeah, i need a house with a different view. and this is the bank that will help you do it all. because at u.s. bank, our people are dedicated to turning your new inspiration into your next pursuit.

find a stock basedtech. on your intereststion or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity. welcome back it's time for today's power movers we start with sorrento soaring to an all time high. it's over 8 bucks a share.

the company announced it receives fda clearance for a covid-19 treatment that could begin as soon as august. to airlines are sinking lore southwest, 28% of pilots have severed early retirement or shares offers. delta is telling its pilots that furloughs could be avoided if they agree to a reduction in guarantee pay. finally, warner brothers is delaying the release of the film tenet again. warner brothers parent company, at&t is lower today by about a percent. tyler. speaking of the entertainment industry, the sun valley conference is where media moguls make the deal that everybody talks about the p it's been a staple while the pandemic forced the event to cancel, deal talk does

continue we have details on the latest buzz hi hi, julia. >> the media megadeals are taking a breather. the source close to the situation tells me that ebay is in advanced talks to sell its classified ads business. the total number of media deals have declined to 93. disney, comcast, at&t and viacom are still busy digesting their acquisitions when deals do pick up again at the end of this year or maybe early next year, michael tells

the us that he thinks it makes sense that smaller players like amc networks or lion's gate would seek a buyer he says there's not much interest there right now another factor to watch is whether apple or netflix might want to buy a studio to bulk up their libraries. kelly. >> you talked about how there's a bit of deal talk going on but is there any real alternative for the halls and the paths where these people are typically interacting. >> there are these smaller deals that are still getting done. it's because a all these players, they really do already know each other which enabled them to continue having their conversations whether it's on the phone or over zoom or teams or one of these others or other

formats. with so much uncertainty that's put a damper on the megadeals. some of the bigger deals have been done unless say something was spun out of one of the larger companies, there wouldn't be as much movement there for a megadeal >> that's true that's true. thanks so much it's been over a year since the college admission scandal rocked america's education system if it wasn't challenging enough to fix that, now the universities have a pandemic to deal with. we'll talk about the pressure they are under, next

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welcome back, everybody. college students are supposed to start their fall semesters as soon as next month but plans are still in flux. many universities because of the pandemic but it is not the only problem facing universities. the entire system is still under scrutiny after last year's massive college admissions scandal. we have an update on that story. scott? >> tyler, the ceo of the independent educational consultants association tells me that his 2400 members nationwide are still counseling students who would normally be half way out the door to college right now. that's how influx we still r he also tells me the widespread

calls to regulate the profession, after the arrest last year of crooked coach singer have fallen flat. he says state lawmakers realize there are organizations like ieca setting standards and vetting coaches. in all, 55 people have been charged. 39 of them including 28 parents pleaded guilty the first trial is not likely to start until next year. so has anything changed? tonight cnbc's "american greed" is back with a new series on the biggest cons including the college admissions scandal >> reporter: many of the operation varsity blues parents publicly say they have taken responsibility for their actions. but maybe not full responsibility >> some parents are saying these universities are the ones who created an environment where money plays a decision in whether your kid gets to go to a school or not. so they created the system that we were just par taking in

basically. >> get the latest on all the players including lori lawful l loughlin and her daughters. >> can you give us a preview of the lori loughlin part. >> we know she and her husband surprised everyone by agreeing to plead guilty in may they are scheduled to be sentenced next month their daughters have left usc. and they're kind of trying to re-estabilsh their careers, so to speak >> yeah. and in that sense, oddly, they joined so many other college students right now we look forward it to. thank you so much. scott cohen. you'll see more on "american greed" this evening. coming up, tesla investors, look at the stock it's over $1600 a share. it's up 8% now today the investors may be raking in the green. one analyst is seeing red flags. he is throwing down the sell card

decen n't forget, can you always watch us on the go on the cnbc app. we'll be right back.

welcome back tesla is gearing up for earnings this week. it continues its jaw dropping run. the stock is up 290% this year our next guest says now is a good time to take profits. tesla is up 8 1/2% to over $1600 a share. our senior equity analyst is looking for a $400 drop in the next 12 months his target is only $1100 great to you have. welcome. >> thanks for having me. >> you know, this shouldn't be a bold call. but it is. you know, going against the tesla momentum has been a losing game i think it's on the front page of "the wall street journal" today. talking to investors say i know it's run up too much i can't bear to part with it what are the red flags you see for the stock? >> sure. so we view this as a story stock that had a very impressive run of positive news flow for several months now but we're seeing some cracks in

the story. we think the shares have gone ahead of the underlying fundamentals here. for one, they recently lowered the price of their model y vehicle which they just debuted in march they're already lowering the price of that. secondly, there's been a big drop in registrations for new teslas recorded in california which is by far the largest market there is also speculative buying which is never a good sign in our view the short interest has come down to only 7.5% of shares outstanding. a year ago, short interest was over 23% they're entering major cap ex cycle. the spending in each of the next three years is about $3 billion.

up from $1.3 billion last year so that's, in our view, going to really act as a drag for free cash flow. >> you have a number of reasons here i mean, correct me if you already mentioned this, including you think the autonomous driving technology is not ready this year for the autonomous driving vehicles. still can't turn properly. along with some other issues you know, it's all well and good but especially if you've been kind of dragged higher by the stock price momentum, how much does this fundamental analysis matter or is the stock going to simply stop working when it stops working? certainly a short covering is less of a factor than it has been over the last 12 months we think, you know, now is a good time to take profits. of course, when they report on wednesday, all eyes will be on

the gap earnings for the quarter. if they post a profit, then they become eligible for inclusion into the s&p 500 so there is a lot of buying ahead of that thinking index funds have to buy the stock if it is added to the s&p 500 but it's no guarantee that they will post a gap profit if they don't, watch out below >> any other things that you would point to on wednesday in particular that could become a catalyst for this long overdue selling pressure in your view? >> really, this quarter more than any quarter, all eyes will be on the gap earnings number. seven looking at the gap earnings number. also news regarding construction progress in germany. and then the new factor in the u.s. >> and finally, well, actually, you no he what i should save the finally for

wednesday. we're almost out of time we appreciate you detailing the red flags for us and joining us to day thank you so much. >> thank you >> tyler, i can't wait to see what happens wednesday >> elon musk said the prices are pricey at these levels >> thanks for watching "power lunch," everyone "closing bell" starts right now. >> thank you kelly and tyler welcome to "closing bell." i'm sara eisen along with wilfred frost. a new week and new market narrative. technology is back to outperforming. positive news on the vaccine front today. multiple companies confirm early success in the studies but that isn't boosting the reopening trade. the airlines, retail, hotels, all lower today. it's the stay at home technology leading us higher. amazon, peloton, and zoom. and while the nasdaq is the story right now, it's up more than 2%.