private label mortgage backed securities from that perspective there is no consistency in how the period will end certainly there are risks going forward. >> jonathan, we have to leave it there. thank you very much for your insight. appreciate it. >> my pleasure >> thank you. well, the big news over the next couple of hours will be microsoft and tesla. >> and i think chipotle, too a lot to watch we'll turn it over to "closing bell" for that i'm sara eisen along with wilfred frost. stocks are higher as the rally rolls on but the nasdaq dipped back into the red. let's look at what's driving the action right now optimist around a virus vaccine candidate pfizer and home stocks are higher today after a record increase in home sales and a ninth straight weekly climb in mortgage applications. news on the stimulus front

congress now considering a temporary unemployment insurance extension. >> ahead on today's show, as more government money flows into vaccine efforts, we'll speak with the ceo of thur ermo fishe. plus micro loan campaign affirm striking a deal with shopify we'll teex wispeak with marks ln about that and a number of names are reporting after the close including microsoft, tesla and chipotle those numbers could move the market this evening. let's get straight to the big stories we're watching today mike santoli is tracking all of the action meg tirrell has the latest funding for pfizer and phil lebeau has fresh comments from the ceo of united about what a vaccine would mean for his business subdued summer choppy

action the market holding up near recent highs the major takeaway from the action so far. the s&p 500 on a one-year basis, you could look at this and say we're laboring to make further upside from where we got in early june that is true this looks like relatively defined uptrend. the question is whether it will have to go sideways and return a bit before gathering up more upside energy or if we're due for something deeper on the pullbackside you see that sideways summer zone we were in last year as well, which i keep in mind nasdaq is different. it's more of an overheated momentum situation, well above the former highs that is now cooling off. this is way above things like its 200-day average. the market as a whole is absorbing what's been so far a little bit of this cooling off period of the major nasdaq stocks 22% of the s&p in those top five nasdaq stocks, 40% or so of the

nasdaq in those stock. microsoft, we'll hear from them later. the sentiment in valuation set up for this stock is interesting. it's the indispensable blue chip stock now. people have reason to love it for its steadiness and the growth profile and the financial sturdiness this is showing more than 90% of analysts like this stock but that's been the case for a long time for the faang type names, the nasdaq 100 names it's not paid to fade the optimism of wall street in fact, it's not all that optimistic or enthusiastic when you look at the price target it's not far above where we are right now. on the valuation side, getting rich this is a long-term look at the valuation price earnings multiple on a forward basis of microsoft. it starts on march 10, 2000. that was the peak of the nasdaq bubble back then that's when it traded above 60 times forward earnings here you see it's accelerated to the upside about 35 times earnings right now. it's aggressive by almost any

measure unless you look at it compared to things like corporate bond yields under 2% today and other faang stocks as a premium to the market, 50% premium. 250% premium back then it can be expensive, it can build in expectations, it can be dependent on low rates but it is not like anything we saw in that bubbly zone 20 years ago >> the key question is whether an earnings report is something that refocuses investors minds on what that key multiple is or whether today and tomorrow will be like the rest of the last 18 months, which is we're willing to pay up for this steady cash flow >> willingness to pay up has been the main story. i do think over the last year or so the numbers for microsoft have also been stellar the issue here is unlike almost every other company, the estimates have not come down so it's not as if people have reset their sights for less enthusiastic results from microsoft as opposed to what

they've done for the overall market arguably that means the bar is higher if there's going to be a reaction to these numbers. >> all right, mike next hour, get ready shares of pfizer and biontech higher after striking a deal with the government to provide at least 100 million vaccine doses to americans meg tirrell has the details. >> this deal is topay 1.$1.95 billion for those 100 million doses if this vaccine is successful and gets through phase three trials, shows it works and gets approved by the fda. there is also the option for an additional 500 million doses to be acquired. americans say the government and pfizer will get this vaccine for free now pfizer says it is on track to start that phase three efficacy and safety trial this month. so in the next week or so if all goes well with that, they can seek regulatory review by october with the goal of manufacturing 100 million doses by the end of this year globally

and up to 1.3 billion by the end of 2021. we caught up with pfizer's chief business officer, john young, about ramping up supply. here's what he said. >> we're plainly in the process right now of making the necessary investments to scale up our supply chain, and we're looking to accelerate the manufacture and production of our vaccine as quickly as we can in order to supply what plainly is a position where demand will exceed supply. >> and making that situation even more difficult is that this vaccine like many others needs two doses. so 100 million doses means 50 million people could be treated. back to you. >> what is the upshot, meg, so far on pricing are americans going to have to pay for a vaccine? >> alex azar this morning saying vaccines will either be free to americans or put at an affordable price the price of this vaccine based

on this deal for pfizer any way is at about $20 per dose to $40 for the whole vaccination schedule we don't know if the price will be similar for other deals struck you know, if you look at the astrazeneca deal, that supported development and manufacturing of the vaccine, that was 1$1.2 billion, that includes 300 million doses, but it's a different kind of deal you can't calculate the price apples to apples >> thank you we have breaking news on stimulus negotiations. let's go to washington and kayla tausche. >> sarah, stimulus negotiations are still incredibly fluid but i have learned where discussions are centering on specifically this expansion of unemployment benefits that had been at $600 where republicans are discussing that going right now is continuing to expand the benefit but by just $400 a month that is a lower level than at present, but the republican

proposal i've learned from two sources familiar with negotiations that would go through the end of this year, through december 31st. so certainly a sign that lawmakers believe that there could be an employment crisis in this country that would go through the end of the year such that they would need to keep the benefits expanded at some level. to compare it to where democrats were, democrats and the heros act passed back in may, they kept the $600 a week boost through the end of january of next year. so there's certainly quite a bit of difference between where republicans are and where democrats are. that's where negotiations will take place republicans as i reported to two of my sources close to negotiations are looking at a $400 a month plus up to unemployment they were talking about $200 a week or $800 a month they have come downfrom that expecting that they'll need to move a bit once they get in the room with democrats. >> pretty significant either way. even if it's not $600, a sizable

amount still and five or six months the ceo of united airlines weighing in on what a vaccine would mean for the airline business phil lebeau spoke with him earlier and has the highlights >> these were sobering comments from scott kirby the ceo of united airlines. as you look at shares of united, keep in mind his outlook is why the stock is down a little over 3% the cash burn, they get credit for the fact they brought that rate down significantly. they're targeting $25 million a day for the third quarter. better than many people were previously expecting the flight schedule is at 35% compared to the same time last year it's the expected length of how long it will take to make the recovery, that's what i think people are focusing on today here's scott kirby on "squawk box. >> we really focus more on the revenue because that's the best measure of demand. and unfortunately it's down more than your 72%. it's at the moment down like

83%. we think there will be a gradual recovery we don't expect to get anywhere close to normal until there's a vaccine that's widely distributed to a large portion of the population. >> when that vaccine might happen is anybody's guess at this point whether it's later this year, next year, until then he thinks revenue does not grow beyond being down 50%. we're showing you these airlines because they're all reporting earnings this week next up it will be american airlines reporting before the bell tomorrow. we will have an exclusive interview with american airlines ceo doug parker, you do not want to miss this interview tomorrow morning on "squawk box." we'll get his take on where the airline industry is now and his outlook for how long it will take for the recovery in air travel back to you. >> phil lebeau, thank you very much broader markets with about 50 minutes left in the session, up about a third of a percent. up next, shares of thermo

fisher are up 125% this year we'll speak with the company's ceo after the break. you're watching "closing bell" on cnbc. businesses are starting to bounce back. but what if you could do better than that? like adapt. discover. deliver. in new ways. to new customers. what if you could come back stronger? faster. better. at comcast business, we want to help you not just bounce back. but bounce forward. that's why we're helping you stay ahead and adapt with a network you can count on, 24/7 support and flexible solutions that work wherever you are. call or go online today.

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health officials have warned that one of the greatest challenges of rapidly rolling out a vaccine will be obtaining the supplies necessary to produce enough doses however hhs secretary alex azar saying on "squawk box" today that the government has bolstered the supply chain so companies can at least produce enough initial doses to vaccinate the u.s. >> we're not concerned about supply chain and it's domestic manufacturing across the portfolio that we're investing in we're even gone as far as syringes, needles. so this is where having the partnership with the defense department in this is critical they bring incredible logistics and procurement capabilities to the table for this historic effort >> speaking of those logistics, thermo fisher produces covid-19

test kits but also medical instruments and lab equipment. that stock higher today on the back of earnings it's been a remarkable run so far this year. joining us now is marc casper, ces of thermo fisher welcome. is what hhs secretary azar said correct? i know you're involved here in the supply chain of these vaccines what can you tell us about what you're working on there? >> thanks for having me today. we're playing a significant role in supporting the governmental response around the world. in the u.s. we'll play the role in the manufacture of therapeutics and vaccines. we are working with barta to use our sterile full finish capacity to produce the final form of which ever vaccine is

successful that's one activity we do anticipate playing a major role i in >> is it right there will be enough supply when ready, whoever gets to the finish line first, all americans who want to get vaccinated vaccinated? >> i think that the actual strategy for who gets vaccinated in what order is something that the government will work on and we'll play our role, which is usually the fill and finish of the product to ramp up, i'm sure as will others i assume there will be a methodical ramp up over time so it gets rolled out to the right parts of the population over time i'm sure there will be a high level of demand when a vaccine or multiple vaccines are successful and there will be a period of time for the industry to respond to meet that need >> how close are you in touch with the different vaccines in

progress has there been anything in the last month that has changed the calendar of when it will be widely available to an entire nation clearly the market moves aggressively on the small bit of news are we still talking about not widely available until early next year? >> we are working on 200 projects with biotech and pharmaceutical companies specifically related to covid-19 and what will be determined is which ones will be effective, then the scale up. so when we look at timeframe, you know, we planned for everything from this fall into 2021 not knowing when the clinical results of a product is going to be successful. so we prepare for a wide range of scenarios and it will be great if it's sooner rather than later obviously. >> on your results today, the growth numbers were better than expected fueled by that life

sciences solution segment. what was the organic growth there? 55%. was that testing demand? what are you seeing there? >> it was driven by our role in testing. and, you know, we are, you know, the largest of the manufacturers of the covid-19 testing around the world. we were able to aggressively ramp up production so that we ended the quarter with the capacity to produce more than 10 million kits a week for covid-19 tests. and really ship tens of millions of tests during the quarter to help society respond to the pandemic and ultimately understand whether a person has covid-19 or not. we were rapid in getting the regulatory approvals in march and scaled up to meet demand we continue to scale up because the demand looks strong and we would expect the third quarter, which we're in now, to be

similar to the previous quarter and anticipate growing roughly 15% organically this quarter >> is the benefit from testing reduced by long wait times to get the results back is there a hope that those response times to get the results could fall significantly rather than typically people waiting five, six, seven days? >> yeah. what we're doing it working with our laboratory customers to help them scale up capacity to meet the surge in demand. when you look back over the last several months, there have been periods of time where actually the response times were within 48 hours, which is terrific. right now it's more extended we're working very diligently with customers to help them increase capacity so they can get back to a more rapid response time. i'm optimistic that can happen >> what about the ultimate rapid test i think you make one

abbott makes one where you get immediate-ish results. why are those so hard to get i can't find one i know a lot of people struggle with that. >> in the role we play we have scaled the laboratory-based tests because you can run on a single time 384 samples at a time so you get incredible volumes. with the rapid tests which are local and convenient you're doing one at a time. it's been hard for the industry to scale that up it's not a place we play in significant fashion. we played the role in helping laboratories scale up testing for them to determine whether somebody actually has the virus at this moment in time >> finally, mark, i wanted to ask what you're doing on food packaging. you're doing some interesting work there, testing to try to keep that supply chain healthy why are you working on this now?

we can't even get testing right for the population and what we're told is that food hasn't been a huge risk when it comes to consuming something that may have been touched by covid-19. >> yeah. so we're helping our customers with different applications around back to life, which everything from helping universities do testing for students of asymptomatic patients to the travel industry, but also some manufacturing that want to be able to make sure that their products and services are safe environmental testing if you will we're hoping customers with technologies for different applications so that we can get the economy growing at a more aggressive ate we're applying technologies to many different ways to play a role there >> marc casper, thanks for joining us keep us posted on the vaccine front. we appreciate it. we have under 40 minutes left of trade. dow is higher, up 130 points

pfizer is leading the dow on that vaccine deal. microsoft is higher ahead of earnings today s&p is up 0.4% the nasdaq just turned positive. the tech trade cooled down a bit today. if you look at what's leading the market, utilities, real estate and materials shares of amd up 8% building on gains of the year after announcing a new line of pc chips. after the break, bill ackman explaining his hell is coming prediction back in march here wh hear what he has to say about those comments and what he's doing now. jim, could you uh kick the tires? oh yes. can you change the color inside the car? oh sure. how about blue? that's more cyan but. jump in the back seat, jim. act like my kids. how much longer? -exactly how they sound. it's got massaging seats too, right? oh yeahhhhh. -oh yeahhhhh. visit the mercedes-benz summer event or shop online at participating dealers. get 0% apr financing up to 36 months on select new and certified pre-owned models.

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bill ackman joined "squawk box" earlier today and addressed some of the backlash he received around comments he made on cnbc on march 18th when he warned that hell is coming. >> i would say i blame cnbc. it took 15 seconds of my interview and they ran around scaring people because it's good television i hate to be in your face for

this, but that's what happened i gave a very bullish message. >> i said i was buying stocks. i tweeted the same things, you guys kept playing the hell's coming piece i said we're at a fork in the road one path is death and destruction, and we're heading down that path if we don't shut down the country if we shut down the country, we can be like hong kong, which is going back to a more normal existen existence. that was my recommendation to the government that was my recommendation why did the market bottom? because california shut down the day after my interview new york state shut down two days after my interview and people said okay, now there's actually going to be an end to this the market bottomed because states started taking actions that would lead to the end of the virus. >> so not sure that kid add quis up to the tone of the interview. i want to point out and remind everyone a week after the march 18th interview he pointed out

that he gained 2$2.6 billion fro a short position he had on the markets. and that half of that short position had still been in play during the march 18th interview. he started the year with just over $8 billion, 2.6 billion is a game changing amount in terms of your annual performance, not just hedging around the edges. secondly, i went back and watched that full interview from march 18th, it's 28 minutes, it's online. i watched it twice today i don't think it's fair to frame it as he did today as i gave a bullish message. he talked about waking up in the middle of the night having nightmares, about going to the bank to get his hands on as much cash as he could a small amount of it where he said he was buying stocks and also outlined the fact he wanted to be meaningfully bullish on stocks the overall takeaway, the overall tone and the vast majority of that interview was

bearish. clearly he's nailed his performance this year. good for him on that point i wish i invested with him frankly, but to say today that he had been bullish on march 18th is inaccurate and clearly he did have something to gain on march 18th from the market falling further because he had that significant 2.6 billion or half of the 2.6 billion short position still >> i would say i don't think that you have to go to what the intent of his comments were or even the nuances where, yes he did say as an aside he was buying stocks. to me, the takeaway was always the tone of open-ended risk, panic, and to me it reflected one month into this crisis or one month since the market peak that people with an awful lot to lose, billionaires, hedge fund managers were already in liquidation mode at that point that gave you the makings for the way you get a panic bottom

in the market. so, yes, i agree you would not have come away from that 28 minutes saying he seems like he was buying this break in the markets. so whatever we want to assign blame or credit to, it's not as relevant to the fact that he reflected a mood out there that was worth paying attention to at that time. >> we were all scared. that was a scary time. i agree with you we should also mention after that interview stocks went limit down remember those days we were reaching the maximum amount that stocks could fall? a lot of people did attribute it to some of those comments. >> they definitely influenced the market if you watch the interview back, we had the live tracking of the market, during his comments we went to lows, which were already down 5%, 6% and went down further. i do challenge anyone to watch that 28 minutes and conclude as mr. ackman claimed this morning that overall "i gave a very bullish message.

i think that's pretty hard to conclude >> able to raise a lot of money which we'll keep an eye on. time to get a cnbc news update with sue herera >> hello, everyone here's what's happening at this hour nearly 1 in 3 americans say kids should not be in classrooms this fall that's according to a new poll from the associated press. the poll found similar opinions about reopenings of colleges and universities in philadelphia, a s.w.a.t. officer accused of pepper spraying protesters in early june has been charged with ten miss da meerns demeanors includ counts of assault. he is accused of spraying multiple peaceful protesters and throwing one demonstrator to the ground that's the news update i will send it back to you >> thank you we've got a news alert on wynn resorts and jobs. contessa brewer has the details.

>> layoffs and furloughs coming for some wynn resorts workers in las vegas. i've learned that the percentage of the overall work force is in the single digits, and that the majority of those will be placed on furlough. the company in a statement to me says though we retained all of our people while we were closed, we now know how challenged business volumes in las vegas are, and are staffing to the significantly reduced demand this comes on top of an announcement from caesars cfo that after the merger which just happened on monday there would be layoffs for caesars and el dorado as well we know circus circus announced it's laying off people in las vegas. they see that the demand is not coming back in this swift recovery the way they had hoped and they are staffing appropriately. in other places around the country where the regional casinos have been slow to bring people back, they're doing so in a way that's managing costs and, in fact, expanding profit

margin this could be the tip of the iceberg for las vegas. if they don't see a return to air travel, if they see the bars remaining closed, this is something we'relikely to see happen in las vegas and perhaps elsewhere. >> no question it's a story of so many industries are these casinos able to be up and running fully or are they still under capacity ka straightstraight c constraints? is it just happening now because they can't have as many people in the casino? >> think about it, the gaming revenue accounts for a quarter of the revenue that comes through the las vegas casinos. right now gaming revenue, that's what it's all about because the spas are closed, the entertainment is closed, they can't have people showing up to the big shows. sports betting has been suppressed the bars are all closed. they can't have a bar scene or a

club scene or a pool club. so, no, they're not operating fully. they're trying to maximize their revenue by focusing marketing on those high value players coming in right now las vegas is a drive-in destination, not a fly-in destination >> contessa, thank you very much for that >> sure. s&p 500 up about a third of a percent. nasdaq just negative coming up, three companies that have vastly outperformed the market this year due to report earnings in a few minutes. we'll see if tesla, microsoft and chipotle can sustain their extraordinary momentum when their results hit the tapes. significant market capitalization at play here's a check on bonds. just lower on the ten-year today, around 0.6%

under 30 minutes left of trade. here's where we stand in the markets. dow is up 110. pfizer in the lead s&p 500 up 0.3%. financials among the biggest losers ten-year yield dropping below 0.6% the tech trade is cooling off. the nasdaq is flat to negative russell 2000 down 0.1% after the break, affirm has an inside look at how much consumers are spending and what they're buying we'll talk to max levchin about where the money is flowing and how the pandemic changed e-commerce and look at one big winner

today, software company jamf holdings making their public debut. up 40% not a bad way to start it's a way to bet on apple they get a lot of their revenue helping businesses deploy apple products and they've seen strong revenue growth we'll be back on "closing bell." [squeaky shopping cart] [sniffing] is the salmon wild-caught? she only eats wild caught. [cash register beeps] uh, i need a price check on honey. don't get mad. get e*trade and get more than just trading. investing. banking. guidance.

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affirm expanding its reach in the buy now pay later market through a new deal with shopify. they say they will allow eligible u.s. merchants on the platform to allow affirm as a flexible payment option to customers. shopify is the latest to merge

with affirm. joining us is affirm founder and ceo max levchin, also one of the original founders of paypal. thanks for joining us. >> happy to join us. >> will shopify have to exclusively offer this service or is it just an option for them and their customers? >> it's a tightly integrated partnership where our product will be embedded directly into the platform and merchants will be able to flip a switch and go live and offer buy now and pay later product power by us. >> do you expect a disproportionately high take up of your services on shopify sellers or the norm as anything else like a walmart or other partners >> we've seen unbelievable traction on shopify already, and that was only through an app

integration where merchants have to do a little bit of work it's not as intuitive as it can be with this partnership we expect massive uptake we have seen incredible results from merchants that use our products doubling of the average order value, increase in 30%, 40% conversions at checkout. so we know this product is helping things fly off the shelves, which is a metaphor and it really pleases both the merchants and the consumers. by making integration so easy we expect it to be extremely close. >> max, for those that don't know exactly what you do, we profiled you on the disruptors list a number of times explain your product and what differentiates it from other credit card companies and what this shopify deal looks like for consumers going online shopping now. >> affirm has been at it for almost a decade. and our mission has always been the same, we wanted to bring transparency and honesty into

consumer finance frankly it's easy do that because the majority of credit card companies do not offer transparency, their business model is about hidden charges, unexpected fees, late-fee revenue and things like that we wanted to throw that away and reinvent it from scratch when you use affirm, you find the point of sale for many retailers now, nearly a million, thanks to this amazing partnership you can choose affirm between us and other payment types where unlike the other payment types, you know exactly what the price will e. you know what the schedule will be it's a payment plan, you pay over as short as six weeks or as long as 3 1/2 years. that's the merchant's choice they tailor and personalize the term of the transaction to the amount and the consumer.

and it is completely devoid of gimmicks and tricks. it's designed to be clear and simple and it's seen amazing traction among young people. >> clearly there's been a massive uptick in digital adoption over the past three, four months, and you said before you don't think that will reverse. i wonder whether or not you think it has brought forward a huge amount of growth for various tech-enabled platforms or tech companies and it will plateau at some point when lockdown ends for a matter of months or years. >> absolutely. i'll contradict myself from the last as soon as. as i said affirm initially saw an enormous amount of traction with young people. with this pandemic, it resulted in kind of an inadvertent bringing into 21st century of all sorts of demographics. my mom is 72, she's not exactly your typical online shopaholic and she's surrounded by boxes that come in the mail and that's

how she gets everything she needs to get now that's great she was probably not a typical affirm customer and now she's aware of its existence this is true for millions of people i think the shift from offline to online spend is powerful. i think it's here to stay. i think we leapfrogged two or three years worth of e-commerce growth and it won't diminish i think it will eventually slow down a bit just to give you a sense for the magnitude of the shift, we saw a quadrupling of demand in the first months of covid as people were trying to set up home offices, just make their home more livable because they realized they would be stuck there long-term. i don't think the trend will reverse. i think even retailers that are traditionally anchored to the real estate assets, leases, sort of showrooms, they are starting to think that they have to reinvent the experience. the showroom will become a warehouse, maybe it is by now, and buy online, return to store,

exchange in store, all these new models are being tried and they have propelled to the primary model as opposed to something they eventually have to get to >> so how do you think about the winners? amazon stock has been incredible during this pandemic and really up until now. what about everybody else? based on the consumer buying habits you're seeing, who do you think will win >> yep i think the biggest winners are the platforms. if you look at retailers at large, those just starting out and saying i have just the thing, people will buy this because they're stuck at home, or very large retailers that are saying forget this platform idea, i will not home brew my own e-commerce platform and stitch it back to my old school warehouse system, i'll switch to something like shopify i think large platforms,

prosprayed provid providers that enable merchants to serve where they are, which is online, will be huge. i may be preaching to my own choir, but i do believe that the age of credit cards is rapidly coming to -- i wouldn't call it an end, but a viable alternative in the buy now pay later tools built around transparency, clarity and simplicity, it's no longer a niche it's something that is massive and a real movement, we're seeing traction and this new partnership is confirmation that people want transparency in their payments they don't want to pay late fees they don't want to find zero percent is not really zero percent. >> max, thank you very much for joining us much appreciate it >> thank you we briefly touched session highs moments ago. fresh one as i speak, up 160 points on the dow. a half percent or so for the s&p. up next, spotify inking a deal that's music to investors deal the key things to watch when microsoft and tesla report

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we have just about 12 minutes left in the trading day. we're in the closing bellmawr ket zon bell market zone mike santoli will break down the crucial moments of the trading day and today we have josh brown here as well with all three major averages, all four now positive on the session, nasdaq has been wavering, dow up 178 we'll kick it off with the broader market and the under-performance here of the nasdaq. interesting, mike, because microsoft is actually higher ahead of the record today. and every day this is the first place we go to get the feel of what's happening today what's driving it. >> what kind of day it is. i would say modest under-performance. texas instruments is backing off. some other software stocks are lower. really it's just drift this little push higher helped microsoft go back to yesterday's intraday highs

it's mostly about the context. dollar still on the weaker side today extending recent losses. the treasury yields are compressed you can look at these atmospheric conditions and say maybe there is too much speculation in parts of high-tech, maybe the treasury yields are telling you something negative about a further slowdown thisslowdown in the economy, but so far the market is mostly just feeding on the liquidity story where you are beating super low earnings expectations >> and the ishares value and growth today are neck and neck, first time in about ten trading days there has been a lot of divergence different days, different directions for those two groups over the last couple weeks. which would be your presence here for the rest of the year? >> so i'm not sure that it makes sense for investors to k450d che one versus the other what ends up happening is a lot of this boils done to liwn to ar

discussion and it is tough to look at the first half of the year and say this these are the sectors that will outperform second half of the year this is not a new story, nobody is discovering this concept. and you get to a point where they are overowned so i think that you want to have some exposure to value but again, these boil down to sector conversations materials are having a fantastic day. reits, utilities are the best performing sector in the s&p that is just the story of the day. we didnon't know if that carrie forward for days or weeks, but when you get these sudden pullbacks in the leadership stocks, some of the other groups step up. there are some good tensions t exceptions, but know who they are now. casino, airlines, travel.tensio. exceptions, but know who they are now. casino, airlines, travel

everyone gets it this is one of the days that you get awarded for owning them. >> and banks not quite as bad. and shares of spotify up 5% today, striking a new long term licensing deal with universal music group. the deal could result some spotify making money from its marketing data and analytics information. up 4%, clearly a good performer. it tends to react pretty well when it makes those announcements even if this is one of those stocks that doesn't necessarily have a cheap valuation multiple >> no, good performer certainly. understanding it a little bit, this thing has gone pretty vertical i think that it can do no wrong. management really does have the benefit of every doubt on wall street, whether it be the podcast strategy or locking unother ki up other kinds of kept. people are giving spotify credit for figuring out the netflix

path essentially, sort of locking people in. we'll see if it is true. there is a massive addressable market all the checklists, the boxes get filled right up and down but it does look like kind of a momentum job as well on top of that storyline >> josh, do you like it? they have been getting a lot of flashy names >> yeah, it is obviously more than music i think that it has become the netflix of audio i don't think that is debatable anymore. apple had this game to lose and they kind of dropped the ball. so the experience of hearing two people talk on a podcast i would actually argue, and i've heard daniel make this argument in interviews, it is the closest to reality of any medium there is you movie, it is far from reality i think people love the format of audio talking, interviews,

discussions, even monologues it is the closest that you get to actually being in the room with real people so when i talk about the realism of experience, everything about the way they run this app permeates that idea through all that they do and by the way, three weeks ago the stock was technically overbought had an rsi of 82 anything above 70, it is a little overheated short term but they worked that condition off. the stock has an rsi now of 65 so it spent a couple weeks c consolidaticon s sal consolidating. >> pretty bum lish and speaking of, microsoft is headlining a huge day for earnings after the bell today, the best performing dow stock of the year so far. josh lipton with a review. no pressure there, josh.

>> q4 eps of buck 34 of revenue, the stock up more than 30% so far this year. easily besting the broad market. there is a range of products and services that should benefit as more people are working and playing at home. a big number to watch here, revenue for the commercial cloud segment, that would include cloud properties like azure and 365 commercial stifel looking for gross margin in the mid to upper 60% range. back to you. >> josh lipton, thanks so much tesla also set to report after the close. >> will they report a profit, that is the question everybody is asking right now. the estimate, the consensus is for a profit of 3 cents a share. but let's be honest, a penny or two cents will be enough to get people excited remember, when you are looking at the q2 results, three things

to focus on. do they post a profit which clears the path presumably for addition to the s&p, what will they say about a second manufacturing plant here in the united states. and then as always, it is elon musk, when he talks with the analysts, that is where the real news comes out q2 deliveries, they exceeded expectations what will they say either during the earnings report or during the conference call about the full year guidance of delivering at least a half million vehicles >> we look forward to those. josh, clearly we've seen earnings can move some of these big tech outperformers from snap and netflix, but it hasn't derailed the rest of the market. would either of these stocks derail the rest of the market if they disappointed tonight? >> tesla does have a history of making big moves on earnings, it is a battle ground stock used to have a lot of shorts in it now it has a lot of momentum

money let's just are say and a lot of people are really are price insensitive.are say. and a lot of people are really are price insensitive. they really don't even care about things like will they or won't they make earnings but we'll see if the institutions do. i think what is interesting with tesla, the questions that people will be focused on is wait a minute, aren't they selling the same amount of cars as they did last year at this time and with double the amount of facilities making them how could that produce a beat. i think that you will also see people looking at whether or not they use the sale of environmental credits to make their numbers rather than just the sale of automobiles. but to a point made by my friend larry mcdonald who pointed out tesla has 30 billion reasons to want to come in with a profitable quarter right now because of the s&p inclusion it could be as much as a 0.8% weighting given its free trading flow so i think that they want to happen i think if there is a way to do

it, they will make it happen and it is an extraordinary situation. i think all eyes will be on this company. >> which would create i guess new stock demand for an index. >> i've never seen this much hype about the possibility of -- >> you don't think people will buy it >> the stock is up from $1,000 to 1600 in a month i just think that is an interesting cover story on top of trying to justify the way that this thing has gone vertical. don't you think that t of the mix >> i think that it is probably baked in >> and we have a lot of time to talk tesla in the next hour when we get those earnings. we'll see if they get the gap profit but now, mike, is your time to do the market internals.

>> i'm not going to attempt the granthem accent, but it is pretty much 50/50 and the final hour has put advancing volume to declining volume, solidly positive though not overwhelming take a look at the dollar index and you will see obviously an inverse relationship, the dollar not down much today, but definitely has backed off and has liquified the global equity story. and finally the volatility index kind of sticky right here. it is down just a touch, still under 25 but more or less kind of riding the lower bound of the range. >> and 40 seconds left er i want to point out all metals are doing well. sti industrial metals strong as well weak dollar today, softish oil but equities having a great

final hour of trade, nearly 200 points on the dow. nasdaq which had been red is green by a quarter of 1% utilities, real estate, materials the best performing sectors. the worst, energy and banks after a big jump yesterday at the close, we're up very close to the session highs, up 0.6% on both the s&p and the dow. microsoft up 1.5% ahead of its all-important numbers. >> which is the high of the settle for microsoft welcome back, everyone if you are just joining us, i'm sara eisen along with withe dow near the highs of the session. we were up about 190 just in those final few minutes of trade there. s&p 500 climbing into the close,

we've seen some nice closes the last few days up about 0.6%. some of the defensive groups that led us there like utilities, but also materials, not technology and not the banks. banks were at the about the of the list today the nasdaq did manage to close positive though. we spent a lot of the session in negative territory microsoft was a help nasdaq up 19% so far for the year and the dow down 5.4% so far for 2020 russell 2000 index of small caps eeking out a gain as well after being negative following that little march higher into the close. investors thousand ready fnow re wage of earnings just a few moments away from reporting results and we'll

break down all of the numbers and get you instant analysis with investors and analysts. but first to talk about the market today, josh brown is still with us, and sarah malek is joining the conversation. first to you, mike, a little buying on the close. what drove the run up? there is a lot of talk around stimulus talks, the republicans now offering $400 per month. i actually initially heard that as $400 per week relative to the $600 bump that we're getting now. $400 per month is a lot less in terms of what they are extending in unemployment benefits >> it is not clear to me why that would be viewed and translated into market action as a positive unless it was taken as an interpretation that, okay, now real negotiations have a starting point and we'll get something done but i don't know if that is the case or not. didn't want to read too much into the intra day action because it was choppy.

the s&p went back to yesterday's high which is the post crash high, so it seems as if things where pretty decent order. and it is the same set of questions, which is the big tech stocks become too dominant and too heated, can the market absorb them pulling back or taking a rest for a while. so far it has been okay. what are treasury yields saying by not getting out of their own way. so far the market able to absorb whatever that message is so pretty much similar in a sturdy tape. >> sarah, what are you telling your clients to do right now >> we're definitely -- we think investors are definitely taking the glass half full view of the markets. we think stimulus is buy o ru rumor, sell on the news. and there is a long path from vaccines to vaccinations so we're getting concerned we have election risk and we're

seeing a pull back in economic reopenings and all of that tells us that there is limited up side to the market >> and microsoft numbers just crossing the tape, revenue $38 billion, forecast $36.5 billion. already elevated of course eps 1346, the forecast 138 so for this quarter, there is a beat on both of those lines. individual business segments each have revenue roughly in line with where it was expected to get that beat the shares are trading lower a little bit, 2.5% of course massive positive run-up into this, just need to dig in a little bit more for the guidance to get that but the quarter itself was a slight beat. >> obvious the setup here was

tough, mike. what stands out to you still strong revenue growth. >> nothing in the numbers that so far let me believe that there is a reason that the stock would selloffguidance. i think field position has dictated the way they traded as opposed to the substance of the report so i think we have to wait and see what they are projecting head about things like the cloud business to see whether there will be any actionable out of in report >> josh, how are you thinking about 3450microsoft and the valuation? microsoft the leader of the dow for 2020 >> yeah, i would say that microsoft is becoming emblematic of the issue that all investors will face going forward because we've seen a tremendous amount of the future prosperity of this company pulled forward into its current share price. microsoft went this to these earnings tonight literally 35tr

11 times sales and so unless they have got like a cancer cure and a balgdness cu baldness cure in the works, what else can they do to see an increase in multiple from these valuations and microsoft is not the only name in that boat. so i think investors as a whole own a lot of these stocks because they are in he have single think of, and we've seeing them get the benefit of the doubt through 2023 which i think produces two outcomes, numbering one, investors are starting to look overseas again big tech giants like microsoft not as globally dominant, but at much lower valuations. and then number two, i think the other thing that you are starting to see is a broadening out and people looking for those secondary names that aren't as well-known and not that they are buying them much cheaper, but maybe not as much of the future prosperity

is being pulled forward. so i do think that gives you fertile gruound for all these nw growth companies coming to market there is s ais an abject for grh >> and i think that they did rethink the multiple, people are looking at little numbers being slightly higher, so where would the multiple go? >> i think that that process is glacial. you won't see it in real time. there won't be a specific day where you say, oh, everyone decided microsoft is too expensive. i think that plays out and it is painful. you think about walmart from 1999 through like 2015, no returns for investors. walmart didn't do anything wrong. it just happened to have been like 60 times earnings so they grew earnings for the next 15 years. but the stock price had been so overvalued that all that

happened is the earnings caught up to a previously too high multiple that is the risk of all of these new let's call them nifty 50 stocks of 2020 it is not that you will be wrong and microsoft will be a bad company. we all agree, it is great. everything about it is great that is not the risk the risk is, yeah, everybody gets that and we're already paying a multiple as though that will definitely come true. look, there is a lot of stocks you could throw on to that list. >> let's look at whirlpool, it is a giant beat on the bottom line whirlpool coming out with $2.15 adjusted earnings. expectation was for $1 so that is more than double there on the beat on earnings. revenue also coming in higher than expected, obviously share price reacting there to the bottom line beat up almost 6%.

looks like north america related sales had less of a negative impact than some of the other regions in the world whirlpool sells all over the globe. they have seen they are saying a significant recovery in demand across all regions in june resulting in year over year global margin expansion. and also want it mention here they are raising their full year revenue guidance expected now 2020 net sales decline of 10% to 15%. they were previously at a decline of 13% to 18%. and also revising higher their organic sales. i did have a chance to talk to their ceo about earnings, he did talk to me about pulling off dramatic cost cuts which is what drove the bottom line beat he said that he is feeling cautiously optimistic. i asked him where the optimism was coming from and he said june, july and into august all look good in terms of demand he said people are nesting and rediscovering their kitchens and

their lawn i didn't roomelani rs and the supply change he said is fragile. an issue that we've talked a lot about. remember in the beginning of covid-19, the supply chain was a big concern when it was in china. china, they are not seeing a problem. it is places like mexico where whirlpool's ceo tells me that he has seen component short anxiouss anxioushortages in mexico and the united states factors are up and running, but he was telling me that they have to space out people more on the line, and any just can't operate at the same capacity levels. people are calling out sick more things that are going on in this country that are making it harder so interestingly whirlpool right now is not having a demand problem, they have plenty of

dema demand, but they are having a supply issue and he said that it will be just with them and with a lot of these manufacturers throughout the length of this virus as long as it is with us which i just thought was interesting. it raises their costs a bit. he said that he is able to handle that. and clearly that is being reflected in the hair prishare n right now. highest estimate from analysts is $1.60 and so over $2 is a big sur rice >> and what is fascinating about that, february 28 of this year, this quarter they were supposed to earn 4 bucks. they slashed it done bel ed dowh and n dollar and now they are coming in at 2. even is being given a pass on this quarter >> and nobody has any idea so i would say that talking about the demand coming back so strongly into the coming months, and that

is not everyone counting the recovery in housing sales right now, so they should continue to see that and also probably fueling the runup here in the stock after hours. >> and i'll add a tiny bit more on microsoft as well saying that linkedin was negatively impacted by the job weak market, though their revenue still up 10% the likes of surface gaming and included all benefited, basically saying anything that was a work from home scenario did well search they said was negatively impacted by reductions in advertising spend. very interesting to listen to that call from microsoft, the stock todown 3%. chipotle has been on an absolute tear, just out with their results. >> that's right, chipotle out with beats on the top and bottom line for q2, eps coming in at 40 cents adjusted, rev new at $1.36

billion compared to $1.34 billion. same store sales declined by 9.8% in q2, that is actually not as steep a decline as was expected same store sales, april down around 24.4%, may down 7&, june june , and digital sales here, a huge number grew 26% accounting for 60% of sales for the quarter. that is the highest digital sales number this company has ever seen. even within restaurant dining opening back up, the company says digital sales momentum remains strong in july with a mix of nearly 50%. the company also says about 30 restaurants remain temporarily closed due to covid, many in malls and hshopping center locations. operating margin was 12.2% driven by higher delivery expenses associated with increased delivery along with other investments including free or discounted delivery in the

quarter tied to covid. the company also says it has $934.6 million in cash, no guidance obviously due to covid. the stock down just about 2% right now. and tomorrow the ceo will join us to talk about all of this and more back over to you josh brown, what is your take on this one >> similar to my remarks on microsoft. the stock up 101% from the low on march 23. it has a year to date gain of 40%. how many stocks in the s&p can you find that are up 40% how many stocks in consume ar discretion 2345er cary can you 40%. probably almost none so any great news from the company i think has been discounted into this share price and then some for quite some time so i see it down a little bit in the after hours. i do think that chipotle is one of the operators in the space

that has its act together. they understand they need to do more drive-throughs, they understand the move to app based ordering is the future, actually the present, and they will get it right so it is an expensive stock, that hasn't stopped it from going up before. >> you forgot cal ciforncaliflo. and still ahead, much more il microsoft earnings and we're stl waiting for results on taes la. experience the joy of a bigger world in a highly-connected lexus vehicle at the golden opportunity sales event.

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more earnings out this hour, las vegas sands, contessa. >> you know it is rough when you are getting less than $100 million in revenue and your experiences are a bill i don't know billion dollars a big miss here, earnings at $1.05 per share loss and revenues at $98 million when the estimate was $564 million. however, there was a weighed range here the estimates anywhere from $97 million in revenue to $961 million. so one analyst got it almost right. let me talk a little bit about earnings here because that is the all-important number in gaming here we're seeing analysts had expected a lot in earnings,

property earnings, before interest and taxes and deprerks a appreciation and all that. they thought $195 million in losses instead it came in with a loss of $547 million. that a big, big miss but on the call, we expect an update, inside into how sink more is recover singapore is recovering and expect tagations las vegas. >> so certainly a massive miss relative to the median prediction there somewhat surprising it is not down more. csx earnings are also out. >> down 1.5% after a miss on revenues operation ratio increased to 63% from historic low of 57% just a year ago

double digit declines pretty much across the board for the rail container business down 11%, appears to be the impact of covid-19 but not a lot of color in the release we're expecting more on the call again, shares of cxs down a percent and a half and shares of microsoft moving lower despite reporting q4 earnings beat joining us, our annual lists ale joining us down not a huge amount i guess, but patrick, it was a beat on both lines are you a little surprised to see it selling off in. >> i am surprised, but as earlier indicated, the run up into this was incredible and i think potentially for a whisper number people just expected more. i think microsoft is a bellwether for the enterprise, a bellwether for cloud, and the

fact that it blue throuit blew numbers almost indicates that this company is covid-proof. >> that is just what i wanted to ask, which is how much of a tail wind is the company getting right now from the work from home, shift to the cloud, enterprise spending that we're seeing across companies. and howe lasting do we think that is of a benefit >> i do think that is the question this was microsoft's first sort of full pandemic quarter every azure deal on the table or being considered in the world got closed and so that accelerated. so the question is do other companies have xwunlg eithbudge azure products on the pc side, we've seen a big uptick in shipments, we think that we'll see a big uptick in

sales. there is competition with chrome books, but is that going to last pcs have a long replacement cycle. corporate pc sales on the desktop have slowed. on so t so did microsoft pick up everything on the table as work from home was accelerated, or is there yet more and is the economy and every industry that relies on the digital transformation really ready to make the next set of investments. >> and the other question of course, is the valuation multiple just too stretched and does the call bring people's focus back to that this was their fourth quarter of their accounting year. full year revenue, $143 billion, that is 11.3 times sales. is it stretched? >> so i don't think that it is a stretch, but i think that we'll get the best sense when we get on the call. microsoft didn't give any future

expectations in the release which is not surprising, but could potentially be spooking people i think that investors are looking at the gains that they made, they are going to take the money and run. but if microsoft gives good expectations, i think that it will likely continue to the point on the buying patterns, i was a little surprised that azure deals kept going through, but i also think we're in the last couple months of governments, companies and schools still getting ready, fully ready, for the pandemic. it didn't just all happen overnight. it is still actually happening and when i look at microsoft numbers, they definitely benefited from that. but i don't think that that will likely continue for the next six months there will be some about rounding that goes on and we get

back to a little built moilt bi normalcy >> and the other question on demand, to what extent i guess is small and mid-sized businesses which are hurting and feeling the pain of the pandemic in a bigger way cutting back their own spending for microsoft products mike, just to round out the conversation, it does come back to valuation of course the comments on the call where does microsoft stack up to some of the other beloved technology mega cap darlings that we've been talking about every day in terms of how high the bar is for a name like amazon, also a big cloud business >> nothing like amazon actually. if you wanted to kind of rank them all, it is in the middle. it is certainly a little get more pricey at this point than alphabet a little more also than facebook but certainly cheaper than amazon at this point apple is kind of neck and neck, but a very different type of business, not just a platform play so i don't think that microsoft while expensive and while all this entire category of stocks

has become pretty rich because of the scarcity of reliable growth out there, i don't think that microsoft itself when you consider that there is a video game company inside of it and a cloud company inside of it is necessarily an outlier in terms of how it is valued. >> thank you both for joining us more analysis of that to come. also, up next, we still have tesla earnings to hit. shares up over 250% year to date can elon musk deliver? we'll find out and chipotle another stock that has soared this year just came out with its numbers, also trading a little lower we'll diusscs.

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shares of chipotle falling despite a beat on both lines joining us now, senior equity analyst at web bush securities just great outperformance of late >> the buy side expectation was down about 8% in the quarter and the margin at 12.2 was a little lower than what we would like to see.

having said that though, the quarter to date comp of 6.4 even adjusted for the july 4th weekend makes it about 5 that is at the high end of whisper numbers for the quarter to date period i think when it is all said and done, that will trump the weakness in terms of the stock because of the quarter and so given the fact that we're seeing so much strength in july, as the quarter progresses, i wouldn't be surprised if chipotle turns positive. >> talk about the digital numbers. this has really been a huge strength for chipotle and helped the stock at least recover better than a lot of the other restaurant stocks. how do you think about how much further those numbers can grow and how valuable they are to the restaurant >> absolutely. it is a high margin transaction. and there is no reason why we can't see 60% plus approaching 80% of transactions become digital. i mean especially as we move

towards chipotle, think way that you can go through, is if you place a digital order. so clearly that isdividends. and if you think about the margin implications, we could see a 120 basis point type of benefit over the next two or three years on what is already very attractive margins and economics. >> just to recap, those numbers up 216% from last year nick, thank you very much. we have tesla earnings out, phil la lebeau has those. >> beat by a wide margin earnings a profit of $2.18 the highest estimate on the street was for a profit of $1.45 a share. consensus was just three cents a share and they blow that away revenue coming in better than

expected at just over $6 billion. expectation was for $5.36 billion. a couple of important notes here the gigafactory site that we were expecting them to potentially say something about, they are teasing us. they have said that they have picked one of two sites that they were taking a look at, but they are not telling us which one. you can bet that this topic will come up on the earnings call with elon musk at 5:30 eastern a couple other notes, operating cash flow positive $418 million. they also had their cash on hand rising by $535 million up to $8.6 billion in cash and in terms of auto production, model y production is increasing and china-made model 3 production is also increasing. again, tesla beating by a wide margin on the bottom line with a profit of $2.18. the conference call with elon musk, that is at 5:30.

>> always a colorful conference call phil, thank you. the stock is up 4% after hours so does this mean that they are eligible to join the s&p >> yeah, they have met the standard criteria. nothing guaranteed, it is completely up to the s&p committee. they will figure that out down the road yes, it was a big beat on the headline numbers i think that the muted response is probably because automotive revenue down year over year, deliveries down. a huge yump are in the sale of regulatory credits really accounted for a lot of the revenue and earnings beat. so nothing much changed in the core business, but they saidable he wi they would be eligible for s&p inclusion. >> we do have breaking news to tell you about now on the nfl. scott wapner is here with exclusive reporting by phone sdo scott, what can you tell us? >> this is the latest in the

negotiations taking place between the national football league and its players union over the 2020 season and an issue threatening the season at this point certainly if they can't get it resolved. according to a source with knowledge of the negotiations, the nfl and its players union remain at significant odds over money as they try to work through what is described to me as the last and arguably the most important remaining issue for the game's return, namely i'm told that the union is demanding that its players be paid for the entire 2020 season regardless of how many games are played in other words, if you start the season and then it can't be finished, if it has to be abbreviated because of another outbreak with covid or what have you, the players still want their full salaries. they negotiated again today. that ended without a deal. the source describes the league to me as being taken aback by this stance from the union given that even the baseball players union ultimately agreed to

prorated salaries. and again described to me as the only remaining issue between the two sides after they agreed on all of the other significant health and safety issues including no preseason games, daily testing for covid-19 and opt out where players could decide not to play based on their virus concerns and then what is being called an expanded acclimation period with no pad practices for 18 day which is players wanted as well. and the source again saying that it is literally the only issue now standing in the way of the season taking place, players are starting to report to their training camps, all players are scheduled to report on july 28th, which means that there is little time to come to an agreement on this last but potentially most significant issue of all and it was described to me as a binary issue right now they cannot come to a deal over players' salaries. >> so i guess the question is

what happens now they have, what, less than two months until the season is set to begin does it mean we could have a fall without football season or do you expect these negotiations to continue as we saw in baseball and eventually for them to work something out? >> certainly football fans can hope that they come to an agreement, but right now i'm told that they are far apart and you don't even look two months down the road, look a week down the road where you are supposed to have teams starting to report. remember, they can't show up at the last minute and then start playing games in the fall especially for football players that have been out of practice for as long as they have been. the negotiations will continue daily, they may even talk again today for all i know it was described to me as sort of ongoing but if you agree to all of the health and saefri health and safety issues, and a number of star players spoke out on the fact that there was no deal, and maybe that pushed the two sides to come together with

this the last and hard to say that money is not the most significant issue at all, especially when you are talking about the kind of season that we may have they don't get this done, we may not be watching football in the fall >> scott, presumably revenues for the teams and the league as a whole will be down significantly and the players don't feel they should take any part of that, not least when across the country other industries people are not just taking pay cuts but losing their jobs for much, much lower starting salaries? >> it is funny that you bring that up. because that is sort of the way that this was described to me from my source who has knowledge of the way that these negotiations are taking place and why i said that the league seems to be taken aback by the stance from the union in that all the other industries that beef been reporting on and following every day as long as this pandemic has been going to have been forced to make

sacrifices and at least to this point, the players union appears unwilling to do so now, that could change in a minute they could be having other talks as we've having these conversations right now. but at least to this point, the players are demanding that they get paid in full >> scott wapner, keep us posted if you learn anything. big scoop there, that the players and owners are at odds we'll continue to follow that. meantime, tesla reporting q2 earnings just moments ago, shares are moving higher in the after hours. up now 7.6%. dan idev and ted lee is joining us dan, first impressions on what looks to be a better number confirming delivery, beat on bottom and top line. importantly on the bottom line >> this is a jaw dropper i think it shows that the

trajectory now, you know, this really puts massive fuel in the tank of the bulls. and this is a home run quarter combined with deliveries, this is a tesla-unlike story. it is all about china and i think that now a $2,000 bull case could get hit given what we're seeing on the bottom line. >> ed, what stands out for you and what will you be looking for on the earnings call >> i'm looking for the half a million target for the year. all indications are that they will hit it. it is a much more mature company, much more disciplined they are hitting or exceeding their targets. they are profitable, they will probably be in the s&p 500 so there will be more investors in it. a big part of the promise is sort of tesla being more than just a car company everything it has shown now is

that it is just a regular car company. i mean where is the self-driving, where is -- we need more charging stations, period we'll see something more about the battery factory of course. but in general i have yet to e see -- there was a narrative about it being the far future and it is the near future now. so the closer they get to be a regular car company, in a weird way the less interesting they are. >> positive free cash flow where is the big profit surprise coming from? >> i think that it is coming from two areas one, china i think profitability on those cars are 10% to 15% higher than in the u.s. and europe and they have cut some significant costs. i think that is really the big difference, that is the fundamental driver here. it is not just about the deliveries, it is what you are seeing from a profitability perspective, how quickly can they get the $20, $25 of earnings power, that is the question but this was for a bull, this was sort of a best case in terms of what we saw on the profit

side >> mike santoli, what is the bull case for the stock? >> the next 12 months, to be honest, i don't think that you have a bull case if you are only looking at the next 12 months. because the stock has quadrupled this year while the deliveries for this year are static they haven't said that they are going to massively deliver more cars this year than we thought that they were going to seven months ago it is much more about the larger future and the market share ultimately that evs and teslas cars specifically can get. and then of course the longer term story has to be autonomous driving and the software push that basically could transform the economics. it really is at a price ever of0 a chair aboshare about the dist future so they are delivering on it, and as i mentioned, people are focusing on the fact that they sold these regulatory credits

and they ever have reduced expe, so are they reducing just the investment in the business so not to drag on the company and its performance here, but it has to be viewed in the context of a stock that has gotten completely unhinged to the up side in the short term >> and the release mentions the higher regulatory credit revenue as one of the factories driving it dan, how do we think about that in terms of the contribution and what that is >> yeah, that is definitely a tale winds and that is something that they are seeing from a credit perspective. and as mike and ed talked about, i do think that the key here is 450,000 now, i think is what in the cards potentially for deliveries it comes down to the profitability trajectory is this one time or what does it looks like going forward if it is a trajectory, this is

what i view as a paraphernalia are paradigm changer in the tesla story. >> we'll have to leave it there. thank you both >> up next, more on tesz la when mike takes a look at what it typically means when a stock enters the s&p subpoe stock is up 6.25% after hours.

welcome back time to get a cnbc news update with sue herera. >> here is what is happening at this hour. president trump says he is ordering a surge of federal agents to help combat crime in,

quote, besieged communities including those in chicago and now albuquerque. mayors of both cities have excess expressed concerns about the deployments. and in minnesota, face coverings are now mandatory. it goes into effect on saturday. dr. fauci says that he does not see covid-19 being eradicated he said a combination of good public health measures and a strong vaccine will get the virus under control. and in france, some terrifying moments as an apartment building fire, a 3-year-old escaped by being dropped into the arms of fellow residents by his 10-year-old brother and moments later the 10-year-old jumped as well people on the ground who caught the boys, one of them reportedly broke his wrist but amazingly the boys are fine. so it has a good ending. but terrifying video you're up-to-date. >> from relatively high up, and

a 10-year-old is not light to catch. >> no, not at all. i mean, it was basically about almost 40 feet so they were up there. >> great positive close escape there. sue, thank you up next, mike santoli will have a look at whether all the hype about test what potentially joining the s&p will help the stock continue to rally.

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be, it has not necessarily meant enduring outperformance. so here is berkshire hathaway, and this is dated to the point when it entered the s&p 500 in 2010 and what you will see, basically got an underperform for a while, not long after that over the course of more than ten years has actually lagged the s&p 500. and it had rallied in advance of actually formally being in the s&p 500, but the way tesla stock has moved, as i said almost quadrupling year it date, it is up to 1600 plus in just about a month's time, would seem to more than account for the fact that you will have to have some index funds nibble at it once it goes in take a look here at a far more extreme example of yahoo!. back in 1999, this was an even crazier stock than tesla has been it went into the s&p 500 when it was announced, november of '99

and it was good rigabout right n then went in shortly afterwards and certainly had the blow off top of the entire nasdaq in early 1999 so clearly meant nothing for yahoo! but back then, it was also considered a signature moment because it was the only real pure play profitable internet stock aside from aol at the time so i don't want to say this is the future of tesla, this is from a decade by the way, but it tells you it should not be the core of your bull case on a stock that it will gee into to e s&p 500. >> and given its size of course, as you said, it would be a reasonable percentage which is kind of rare though for a company that first enters the s&p. it will have a bigger delta if there is a factor at play here of people still needing to buy it >> the effect would be mostly about what happens to the other 499 stocks because there would have to be

room made for index funds to buy tesla. what facebook did upon entering was it did a secondary stock offering to more or less accommodate that buying by index funds to smooth out the entry. who knows that tesla would too that, b do that, but it is a >> there wasn't a lot of index funds, also. not as many as they have right now. >> but i have to tell you, at the time it was a very much hyped event in '99 >> mike santoli. coming up, federal coronavirus unemployment benefits set to expire at the end of this week up next, find out what the white osuse is trying to do to extend the $600 per week benefits before the clock strikes zero. we've got new reporting next ta-da!

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a new stimulus plan from the gop, we have the details kayla, the timeframe is pretty key here, the actual words that you're reporting >> reporter: yes, and they happen to be moving by the minute just last hour at about 3:30 the office of senate majority leader mitch mcconnell briefed republican staffers and other

senators on what is in the proposal according to a source on the call, they said that unemployment insurance and what to do about it was still not figured out. but as of the top of last hour when i reported on where the gop stood at that time, the current thinking within the party was that what they would proposal in this new package would be an expansion of unemployment benefits at about $100 a week or hufl $400 a month. thatcompares to about $2,400 i the current program or $600 a week, which democrats have supported. and in a bill passed by the house in may, they have essentially supported extending through january. that is cutting in half for republicans their position of even just earlier this morning where the thinking was that they would get behind an $800 a month or $200 a week expansion going through the end of the year. so this is clearly a moving target and clearly republicans want to create more space for themselves to negotiate this

package in lieu of a deal by the end of this week, which is highly unlikely. there are discussions about extending the existing program for a short amount of time, but senators on the hill today said that they're still haggling over exactly what the duration of that would be and when they would be able to finalize that so definitely a moving target. >> keep us posted. thank you, kayla $600 to $100 a week is a big drop in the extra benefits don't miss jim cramer's interview with house speaker nancy pelosi tonight at 6:00 p.m. this is going to be key on "mad money. twitter earnings on wall street toromrow morning. find out what they're expecting on end sales and user growth when "closing bell" returns in get zero percent financing on all 2020 lexus models.

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a check on all of today's after hours earnings movers. you can see microsoft down 2.7%, chipotle down a little bit both have been great performers year to date tesla up 5%. itself a great performer year to date, perhaps the best tomorrow the focus will turn to twitter. julia has a preview of what to expect. >> wilf, the question is how much twitter is able to grow its user base to balance headwinds the social media ad boycott by some brounds, there's potential fallout from the recent hack revenue is expected to decline 17% to $707 million on the bottom line that's expected to be break-even. we'll be listening for any commentary on the cost of cleaning up the platform after

just yesterday twitter removed some 7,000 groups linked to a conspiracy group qanon back to you. >> thank you so much for that. don't miss twitter's cfo ned segal at 8:45 eastern time final thoughts, mike, just the back of the envelope calculations microsoft losing about $43 billion in market cap, tesla gaining about $15 billion. >> yeah, so obviously a negative also, microsoft having at least right now before the call a little bit of a sell the news response, people picking apart some of the elements that weren't so great but that's probably the more important stock in terms of bellwether type action it comes after netflix backed off and texas instruments backed off. you're seeing profits being taken off the table with companies, even the ones that have weathered this period pretty well. >> tesla, it's such a battleground it's interesting to see this move higher and the big profit and how much of that was, you

know, regulatory credits being pulled forward that's of course what the bears are yelling about right now, to get into the index, the s&p, which has been one of the bull factors as we mentioned. tesla earnings call, always important. >> that's a good question. >> we are out of time on "closing bell. thank you so much for watching "fast money" starts right now. tonight's trader lineup, tonight on fast earnings extravaganza. we'll dig into the numbers from tesla, microsoft plus, the dow closing above 27 k for the first time since june 9th. the bank of america says market rally may be on pause. the company you may never have heard of soaring 50% in its market debut how big is investor appetite we'll get answers. we'll start off with tesla the electric carmaker jumping in the after-ho