what i want to do is get people off autopilot and have the experience that's they really want to have in life and not have them pass them by >> got it. the book is called "die with zero." >> i'm always on autopilot, bill >> i'm aware i'm going back to my retirement now. >> it's been fun we'll see you again soon thanks for watching "power lunch," everyone "closing bell" starts right now. >> welcome everyone to "closing bell." stocks are struggling back towards the flat line. 59 minutes left until the close. plenty more earnings coming this afternoon to keep us all busy. let's look at what is driving the action right now negotiations continuing in washington over the next round of stimulus, particularly unemployment benefits. both sides digging in. new data showing consumer confidence weakened in july amid a surge of coronavirus cases

and individual names getting lower. >> that keeps it pretty much unchanged year to date we have a massive show coming up >> discuss the latest stimulus negotiations th that's any minute now it's the key question for the markets today. and then as the heat gets turned up on big tech, we'll talk to the always candid ceo about the precious ceos facing testimony tomorrow and the stay at home trend a huge swell of tech earnings coming to day and later this week. let's start with the broader markets. mike, over to you. >> thank you we have markets on pause for the most part today. bond market is qui wet yields at the lows stock market, too, is hugging this very familiar area, basically flat on the day.

that is an area of attraction. we'll see fit lasts for now. it is the defensive factors. the ones that benefit from low yields that are up today, real estate, staples and utilities. take a look though at a couple of indicators as we wait for the fed decision tomorrow. what's going on and how quiet the bond market has been this is the move index it is treasury volatility. it is kind of the vix for treasuries record lows in the last ten years. pretty at the lows very much stuck below around .6% for the ten year the entire curve making new lows on the short earned as well. and raises the question, is this almost a mission accomplished for the fed? we're waiting for what they'll say tomorrow about potential new efforts to try and restrain rates and keep the economy on a

better path. many speculated they will take a look they have been completely passified by fed policy and this environment in general where there is a thirst for yield. this is high yield bond. this is the yields, not the spreads. so this is basically the going rate right now for high yield debt is around 5.5%. record lows on investment grade below 2% almost a mission accomplished. corporate whether they're backstopping municipalities or lending to main street low uptake of the programs in terms of the balances outstanding relative to what the fed authorized it is almost asserting support for the areas. they have done the deal. i guess it leads to a question i have which is what could be incrementally more stimulative or an easing motion from the fed

tomorrow that snechlt 23 hours i guess. >> for sure, mike. most of the work is done the other thing i guess that stands out today is that the dollar has paused its massive slide of late. but gold has not >> that's right. it's true. gold certainly a restrained move silver is pulling back a little bit. gold is off the overnight highs. but it still does have momentum. i think momentum is the key phrase right here. we have all the rationals for why gold is doing what it's doing. it also is a momentum trade right now. it is a chase very heavy in flows into the gold etf for the reasons we've been discussing. so far, it's continuing. but as i said, the future, some of the futures clicked above $2,000 an ounce overnight and sort of hovering below that right now. but without a doubt on kind of a blistering pace lately

>> we're knee deep into earnings season what you are getting out of conference calls and expectations for the future? you are willing to say this quarter was the bottom >> i think there is no doubt this quarter is the bottom in terms of year over year growth doesn't mean it will be positive growth in the current quarter. analysts definitely too radically cut the forecast the beat rate right now is above 75% in terms of earnings even the revenue beat rate is well above the long term average. it looks in terms of those metrics like things like 2009 and 2010 where you have the big post recession moves analysts get a little too conservative but the stocks are not really being rewarded for it. i think that, you know, the market already, you know, had a pretty good run going into this earnings season. it's not as if the market was necessarily really anchoring on the forecasts. and what you're getting from management is a sense that they're going to be conservative on the spending side they've spent a few months

getting more productive. so there is a cautionary tone. i think there is a ceo survey out there that suggested continuing caution among that group. so it suggests that maybe there are not people pencilling in anything like a v-recovery which is okay. the numbers are not bearing that out yet. >> mike, in terms of the earnings coming up this week, we know that some of the big tech names like apple and amazon that are reporting on thursday pulled back a little bit off the highs, easing the setup fraction. tonight amd, that doesn't apply? >> yeah, amd it is considered a huge beneficiary of multiple trends including intel's troubles the stock had this major run, 30% up this month. clearly people are expecting great things the company has really been delivering on a lot of the high hopes. we have to see how it goes >> we might well have lost sara briefly there. i'm also not sure if we've --

no, we do have senator mitch mcconnell ready to go. apologies for that brief little pause in the programming i'll hand it over to kayla >> thank you, wilf our thanks to the senate majority leader for making time for us to update us on the process of negotiations. where do things stand right now and when is realistic to expect a bipartisan package to pass both chambers? >> it's hard to predict. what we laid out yesterday is how we would deal with this phase of our overall rescue effort remember, we've already passed about $3 trillion of assistance. that is added to our national debt my view after the bill passed, we needed to push the pause button see what we already passed

worked out and then decide where to go from there well, we're here in july we have advocated a trillion dollars. one-third of what the house passed a couple months ago highly targeted to a few things that we think are absolutely critical to get the country back on its feet. number one, liability protection no one should be sued intelligence they were grossly negligent or engaged in intentional harm who is dealing with this brand new disease. that's doctors, hospitals, nurses, universities, public schools, everyone involved in trying to work our way through that ought not to be subject to an epidemic of lawsuits on top of it. beyond that, the theme of our package is kids in school, jobs and health care. >> leader mcconnell, you mentioned yesterday that the

economy remains fragile. when you decided to press the pause button, the virus is on the detroit kline. that is not the case now the congressional budget office found the $600 weekly unemployment speed limit is able to keep household spending at prepandemic levels can the economy keep that under way. why worry about the deficit when there is a public health crisis worse than there was in march? >> well, unemployment is extremely important. the way the previous bill is crafted, five out of six workers are actually making more staying at home than going back to work. and remember, all of these folks are going to get another $1200 in direct payment under the act that we announced yesterday. so all we're saying is we don't want to make it more profitable to stay home and go back to

work we want to continue that at the judicial level and back to states so they can continue it for a necessarily longer period of time. but it also involves the principle of not paying your neighbor more to stay home than you're making by going back to work >> part of the biggest divide between the republicans and democrats right now is on state and local government funding where is fertile ground between zero dollars as republicans proposed and $1 trillion as the democrats have passed? >> yeah, actually, we haven't proposed zero dollars. we propose $105 billion for education. that is $5 billion more than the house passed bill a couple months ago the two biggest item in every state budgets are education and

medicaid so the $105 billion that we're advocating for education is direct assistance to states and localities with this -- either the top or the second most expensive item in every one of their budgets. what i'm talking about in that question was specific funding for government budgets to make up for short falls i want to move on to talk about liability. democrats said that they will not bend to support liability protection you just said a few moments ago this afternoon there is zero chance that the conference passes something without this. why is this a deal breaker for you? >> because there is no chance of the country getting back to normal without it.

we cannot have an epidemic of lawsuits on the heels of a pandemic that is not over yet that we're trying to get through until we get to a vaccine so that we can finally put this horrendous experience in the rearview mirror. >> the public opinion doesn't necessarily support that a research poll we asked voters if it they supported protecting corporations against these lawsuits only 26% of respondents supported it actually only half of republicans supported it lindsey graham said this about the current package. i think if mitch can get half the conference that, will be quite an accomplishment. why don't more republicans support the package as it stands right now? >> republicans almost to a person support the liability reform and that's not about companies. it includes companies. it's about hospitals and doctors and nurses and teachers and

universities and colleges and k-12 this is not just liability protection for businesses. they're included along with everyone else dealing with this brand new disease unless you're grossly negligent or engage in intentional misbehavior, you'll be covered it passes the senate. >> liability protection is a stand alone portion of the package that you unveiled yesterday. it's a suite of different bills attacking different pieces of the economy and different pieces of the relief effort do you expect some of these pieces to pass and others not to >> that will be subject to negotiation tw the democrats but we're not negotiating over liability protection i'll be responsible for putting the final agreement on the floor and as i said, it will have liability protection in it we're not negotiating with the democrats over that. we're willing to discuss with

them, we think, a trillion dollars which a few months seems like a lot of money is enough to address where we are today they want to spend three times that much. that's why we're having discussions with them. we can't make a law. >> mr. leader, i want to switch gears and talk about a couple other issues one is nominees. we have senators that have concerns about judy shelton being on the federal reserve board. >> what do you think the down ballot effect of the president's leadership on coronavirus will be come november >> i think each of us in office is judged how we hand ld it and

we have done a great job of delivering for our folks at home i, for example, have visited over roughly 20 hospitals and the last few months. talking about the assistance we already provided through the cares act. it made a huge difference. huge difference. for hospitals. it's also made a huge difference for small businesses 48,000 small businesses in kentucky have taken advantage of the popular ppp loans. to the tune of $5.2 billion directly pumped into the commonwealth of kentucky so i think all of the incumbents who have been here and working on this legislation will be judged by how well a job they did for their particular states during this horrendous crisis. >> very diplomatically talked about what congress has done and that voters should judge congress on those actions. but specifically, the poll numbers for senate republicans who are up for re-election this year tracked those of president

trump in recent weeks. what you are telling the members about how closely they need to hugh to the white house whether they should be distancing themselves from the president? >> look, what we do know is that this is a very large class of republicans because six years ago we took the majoriti we have 23 members up. our democratic opponents only have 12. so we have a lot of competitive races all over the country in different kinds of states. i'm confident when the smoke clears we'll still have a republican majority in the united states senate >> we'll leave our conversation there. with he know you have other important negotiations to get. to we really appreciate your time this afternoon. senate majority leader mitch mcconnell. >> thankyou.

>> the phrase, we don't want to make unemployment benefit more profitable to go back to work. perhaps the headline saying, "it will have liability protection in it. the we're not negotiating with the democrats on that went on to say there may be other areas we're willing to negotiate on but that will be a significant sticking point if the intention is to stick no matter what to liability protection being included >> yeah. sort of making that clear that is the red line in this negotiation. of course, the opposing view on that, i'm just sort of getting into this a little bit and why it's such a hot button issue is the democrats say that it's not safe for workers to go back if their employers are completely protected from lawsuits and then they don't have responsibility to keep their workers safe and the workers don't have sort of any reason or any ability to

fight to get safe working conditions so it takes the responsibility off of the employers mcconnell came back and said it's not just for the private sector it's for schools and hospitals and it would be hard to have a normal economy so this is obviously shaping up to be a big issue. a lot of other places where there is a lot of distance state and local government, republicans are painting it as $105 billion that goes to state government but will go to schools. the democrats say that they're e way bigger holes and you have to pay the police officers and firefighters and everyone on the state payroll. so what happens to them and what happens to the holes i think that's going to be a huge area of contention. >> yeah. and also a gap as you suggest as well on unemployment benefit the size of that and the extension either way, the key thing i think for the market is whether or not we're likely to get an agreement any time soon. and the headlines from that interview over the last 15, 20 minutes perhaps contributing to the fact the s&p 500 is now down

0.3% it was flat at the top of the hour lost a little steam. more analysis of that interview to come later in the show. also coming up, a once in a generation rotation to growth stocks that's what one top analyst says tesla peaked because of. later on the show, dirk van de put. you're watching "closing bell" on cnbc. experience the adventure of a bigger world in a highly capable lexus suv. at the golden opportunity sales event. get zero percent financing on all 2020 lexus models. experience amazing at your lexus dealer.

welcome back eastman kodak is now small company with a big history and it's getting even bigger today shares surging after it won a $765 million u.s. government loan under the defense production act under that loan, the photography company will be shifting to producing pharmaceutical ingredients to help speed up domestic production of drugs and ease u.s. reliance on foreign sources like china and india. white house trade adviser saying that the deal was about "america losing its pharmaceutical supply chains to the sweatshops, pollution havens and tax havens

around the world that cheat america out of its pharmaceutical independence. the stock losing some of the earlier gains. still higher by more than 200% not really -- i mean it's a tiny stock, a tiny kind of company now buchlt interesti now but interesting to get the second wind when bringing back u.s. manufacturing and they're involved in production of this critical vaccine and treatment like we saw the president at fuji film yesterday. >> i know. and kodak. that is not a stock we mentioned for, i don't think in any of my five year tenure at cnbc maybe in the past before that. >> mike santoli days >> mike remembers all of the companies. pfizer shares moving higher after strong earnings about the coronavirus vaccine. meg tirrell spoke with the ceo this afternoon and joins us with the key take aways from the interview. >> pfizer and the german partner becoming the second vaccine to get into the latest stage of clinical trials before applying

for regulatory approval. they started this trial in the united states late yesterday this is going to be a phase three study that is going to also include sites around the world. and they say if all goes well, they'll be on track to file for a regulatory approval as soon as october and maybe even late september. that is an incredibly optimistic scenario where they enroll 30,000 people and follow them to see who gets infected and who doesn't. now a key question if they get through regulate sorry approval, how much of this vaccine is going to be available? $1.3 billion by the end of 2021. now that is global supply. and this vaccine requires two doses. we asked the ceo about all of this in our interview earlier today. here's what he told us >> what i can control is if i

can have product available by the time now right now our manufacturing sides all over the world are working intensively and going to produce product at risk. so if the vaccine proves to be safe and effective in the october readout of the phase three trial, we will have product in october, november, and december >> really describing this as a ram up there is more supply in november and december clearly not enough will be available to supply everybody that needs this vaccine right away sara and wilf? sfwh >> it will be an issue tesla's quote mind bgloging evaluation, our word on the street with a number of name next

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tesla is calling the current valuation mind boggling. the analyst behind the call is on "halftime report" earlier to

discuss how he is worried about the stock in the second half of the year >> tesla basically has to produce 75% more cars in the second half of the year relative to the first half of the year. it's a very uncertain economic environment. is that a slam dunk since expectations are higher? absolutely not you know, could the market, you know, if it sees a recovery next year move away from growth stocks towards value oriented stocks sure and so those are some of the things that we worry about they could be a cause for tesla. >> the sort of idea of a second downgrade to sell got a lot of coverage earlier this morning. i didn't think he was actually that bearish during the interview. the price target was so far below the current level. didn't really go into what -- whether or not he thought there was immediate short term

catalysts to see a correction. i thought it was a technicality cover your bases as opposed to we think it's going down >> i think in the downgrade he gives all kinds of credit to the very long term, long shot possibilities for what tesla can become whether it is autonomous driving or the supplier to the world for batteries. but saying that stock is already built that in. and not very much has changed about the production expectations and profile of tesla in the last several months even though the stock went from $1,000 a month ago to above $1600 and now pulled back. the big point is the stock has just been the extreme version of this maenaa f this mania and this has a chance of unwinding here. >> it quantifies the extreme runup in the share price and what that's done to the valuation. it paints a picture. the enterprise value of tesla is now matching that of toyota and

voekz wagon. together they make 20 million cars tesla at 500,000 cars. so he just can't get past the valuation argument which, look, people have been arguing for tesla for years. and that's never really mattered >> it's a stock that traded under $400 as recently as four months ago i mean, it's kind amazing when you talk about the ground that's been covered in a short period of time. >> which also really came out in the interview earlier today. scott is pushing him you see the impossible job any analyst had on any ratings and price targets on tesla over the last 12 months it it's dinkind of lose-lose no matter what. if you base it on fundamentals and all the other stocks, there is no way you could have got the share price that they run up to. >> majorleague baseball. we have more now what, eric >> that's right. the miami marlins after many

players on their team tested positive for the coronavirus, the team will be pausing the season through sunday. the rest of the week they will not be playing any games there will be a couple of other games i think the yankees-phillies game next couple of those not playing as well the big news, the marlins season being paused forrest the rest e week 17 players that do have coronavirus. up with thing to note, mlb has done 32,000 tests since last friday testing and .3%, just 99 have come back positive. no other teams outside the marlins have any new on field personnel that tested so so bright signs there. but definitely a big negative spot with one team just sitting out the rest of the week remember, it's only a 60-game shortened season back to you. >> all right thanks so much for that. markets down 0.36% as we stand update on coronavirus hot spots. the seven day averages of cases in certain hot spots are falling. down 7% in florida, california, and 24% in texas

dr. fauci today warning of outbreaks brewing in ohio, indiana, kentucky, and tennessee. other countries struggling to pass a second wave, germany had 557 new cases a day. china reported 64 new cases. the biggest single day increase in more than three months. and iran's daily death toll is also at a new high still to come on "closing bell," mcdonald's revenue in the second quarter tumbled 30% we'll see how starbucks will compare to that after the close today when they report plus, his stock doubled since the march lows, aaron levie on the work from home trade and the changes the economy is making. here's a check in on bonds ever since we've gone mobile on the now platform,

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welcome back under 30 minutes left of trading. time to get a cnbc update with sue herrera. >> hello, everybody. here's what's happening at this hour with the new last name following her divorce from amazon chief jeff bezos, mckenzie scott is make going on her promise to donate a significant portion of her estimated $60 billion with $107 billion pledged to 116 different organizations. a new study has found the massive wildfires that swept across large parts of australia last fall killed nearly three billion wild animals

that is tripled the original estimates. the figure includes nearly $2.5 billion reptiles. in one australian village untouched by the fires, there is a rebound of sorts emus have been banned from this pub after two figured out how to walk up the stairs so far, a simple chain is keeping them out they parentally can't figure out that they just duck under the chain. but we'll keep you posted on that one >> i like it thank you very much. >> you got it. >> up next, a busy close today with earnings from if visa and starbucks, a many. d and ebay we'll have analysis and exclusive interview as well. and on the other side of this break, box ceo aaron levie will join us. we'll be right back. [squeaky shopping cart]

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fox unveiling a new lechl of security in the cloud products with the new intelligence integration. box's shield product can scan files and classify them based on content and secure sensitive e a box ceo joins us now good to see you, aaron. >> good to see you thanks for having me. >> so tell us what is new about the latest shield product? i feel kind of like whether it's you and the past with us or a lot of your rivals recently and in the past always kind of talking up why the cybersecurity aspects are the best but it is really now just a cost of doing business as opposed to a differentiator >> it is the cost of doing business in the digital age to make sure you have incredibly powerful security. for us, we do think of this as a differentiator just because of how much we put an emphasis on data security, plins, and bringing really kind of

intelligence to how we secure content. so this new feature is a first of its kind. it is combining data classification controls directly into our platform. so, for instance, if you're a life sti sciences company or bank, you're working with lot of sensitive property and a lot of tense sieve digital data we want to help you understand what is inside that information so you can classify it appropriately so it is only shared with the right people or accessed in the right applications or from the right locations. so the only way to do that at scale is doing that in an automated way as opposed to users going in and applying that level of security. so that's what our new feature does within box shield and we're rolling it out over the next month or so to all of our box shield customers >> what level of demand have you seen for all of your products in the last couple of months? and to what extent do you feel like this is just brought forward this work from home trend, other digital adoption

trend and other demand >> if you look at the market sizes that cloud companies are going after, usually these markets are much larger than i think a lot of analysts are -- where the market tends to realize. so the entire kind of world population of people that go into workplaces, whether that's, you know, working ina retail site or inside of an office or at a doctor's office, all of these workplaces and the ways we work need technology so there are billions of people globally that are going to be accessing enterprise technology to do their job. and so this is actually pulling in that demand but the market sizes are often much larger than i think are sometimes initially realized the market we're going after in the late 90s or early 2000s, there were maybe only tens of millions of people globally that really needed to be able to secure their data, secure their

content and be able to collaborate in an efficient way. today there are hundreds of millions if not billions of people to do that. that's why you're seeing unbelievable growth in zoom and slack and microsoft teams and webex and our job is we want to be the best way to help enterprises manage the corporate data in if a secure way. so we're seeing really fantastic growth that we call out in q-1 our last quarter in the enterprise segment there are some natural headwinds in this environment just due to the economy in our s & b segment. but we have been able to see some progress made within that segment that we're really excited about. so overall, i think demand for cloud remains strong and you are going to see an acceleration of digital transformation just due to the fact that people have to now start to digitize more of the business processes >> tomorrow is a momentous day, aaron. we're going to get ceo s of

google, amazon, apple testifying and answering questions about antitrust. this is going to be must-see tv in the business world. who is under the most pressure who do you want to hear from the most >> yeah. no, it's going to be -- i'm going to be just certainly excited to tune in i don't know why they do it as a pay per view option. it will be really interesting. >> it will be on cnbc. >> what's that >> it will be on cnbc. well then maybe there is a way to charge extra for that i think it will be super interesting to watch the different dynamics i think the one risk this he environment has is for possible kind of politicalization of some of the topics. and so we'll have to see if that kind of enters the picture i do think what is really important is as you look at the digital economy which we've within in for a couple of

decades, but the size, scale, the power of these platforms are obviously larger than ever before what we probably ever could have imagined. i think there is an important discussion to be had around what do does it mean to have consumer choice to make sure you have fair, a fair landscape for a new company to be able to compete in kne these markets. this is important conversations for the u.s. as well as i think the global kbhe to be yael i discussing around what does regulation of tech look like if you look at markets like health care, life sciences, banking, telecommunications, we've seen regulation emerge in the industries as they become more important to our lives over time and i think it's -- it certainly makes sense we would see the same thing in the technology industry whether it's for big companies or small companies that make sure we got -- >> aaron >> yes >> i don't mean to interrupt, we're running low on time.

i guess i'm just wondering what you think the upshot is going to be google announced the workers are going to work from home until the middle of next summer. is there anything to stop the companies that work from home plays that got so huge and the ceos so wealthy from continuing to do so do you think this is really a moment where there is going to be some regulation to shrink them >> well, i don't necessarily know it's about shrinking the companies as much as making sure that will a fair playing field for other entrants into the markets. i think we'll probably have to maybe pay less attention to the market caps of these companies because that's more driven b investor sentiment and demand for the services and much more around what are the landscapes in which new companies can get started on how can they compete with some of the big technology companies making sure that there is a high degree of interoperable and choice when you put the data in one of the platforms, are you able to actually pull it out and make sure can you access different

service? these are really important topics these companies are going to only obviously become more important for our daily lives. i don't think it's about breaking them up or making smaller. it's about making sure that consumers have choice when they put the dwrat somewhere they can bhof it around and that we have an open playing field for new startups to merge. i think that's what the legislation eventually emerges to go and focus on >> aaron, gra et to see you. >> thank you. >> this is the last commercial we're going to take before we head into the close and into "the market zone 'rdo . othe s&p 500. at leaf blowers.

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make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today. welcome back 11 minutes left in the trading day. we're now in the closing bell market zone. commercial free coverage of all the action going into the close. cnbc mike santoli theer bre tho santoli to break down the market major averages lower today for the third time in four sessions. earlier this hour, we spoke to senate majority leader mitch mcconnell about why he believes

liability protection is going to be a critical component in the next coronavirus stimulus package for republicans. >> there's no chance of the country getting back to normal without it this is not just liability protection for businesses, although, they are included along with everyone else dealing with this brand new disease. unless you're grossly negligent or engage in intentional misbehavior, you'll be covered and it will be in a bill that passes the senate. >> just looking at the market here, mike santoli, stocks are headed south again we're now at session lows, down 194 on the dow you think there is some concern about the stimulus getting passed, get something sort of agreement with mcconnell drawing a red line around this liability protection which democrats are vehemently against >> yeah. combined with other republican senators not being enthusiastic about the leaders proposal from reports during the afternoon, that may be said that, you know, we're not heading very quickly

toward an agreement. that being said, i think you can also spin it a different way and say the democrats now know exactly what they're negotiating against if they're so dead set on the liability protection to get more enhanced unemployment benefits i point out too that most of the weakness in the last hour has been from those very large tech stocks that would not seem to be most tied to the hopes for fiscal support so it does seem like maybe just another one of the os lags.j. os >> we have the fed tomorrow as well is the market ignoring the risk on the monetary side that stimulus does not continue for the rest of the year at the same pace it has for the last few months >> i think it has. i think the market fully expects to get some kind of stimulus and some package to pass on whether or not there is liability protection or not.

>> shares of mcdonald's sinking to day after missing the street's earnings estimates and posting a 30% sales decline compared to a year ago despite disappointing on the bottom line, there were bright spots in the results the fast food chain did see an improvement in u.s. comparable sales each month throughout the quarter. while the company did not issue formal guidance on the ceo, he said he believes that q-2 will be the trough in mcdonald's performance. we have a snapshot of ow difficult it is for the big restaurant chains even if things improved, they have not improved resoundingly still a long way to go >> mcdonald's is obviously a play on people moving around and stopping when they're hungry and clearly not going to be able to get out in front of the broader reopening efforts in various parts of the country i do think the way the market is treating it, yes, backing off today. the stock is holding the vast majority of the gains off the march lows mcdonald's is in the category of when it comes back, not if it

comes back this period seemingly disadvantaged them over the long term so 2.5% and also helping >> just note that they pointed o ut that the china results appeared mixed the early rebound looked like became a little more choppy and stalled. eugene, is that any indication of what consumer spending is going to look like in this country? mcdonald's did say same store u.s. sales did improve and trending positive. >> i'm not sure exactly what it was. china came back online a little earlier. they don't have as many drive throughs that may play some role. i'm concerned with that. i think they're doing as well as you might expect here in the

u.s. >> let's talk about starbucks. it is one of a handful of big names set to report after the bell kate rogers with a preview >> a loss of 59 cents a share on revenues of 0 presiden$0.6 billr q-3. we'll be looking out for commentary on sales performance improving. the company said in june zmekted fiscal f-4 earnings to improve and cash flow to be positive by the end of june as most of the locations had reopened in the u.s. with limited capacity mcdonald's ceo did talk this morning about science of a recession. will we'll be cure dwrous siousf starbucks echos that sentment. >> amd set to report results in a few minutes. have a preview the josh >> investors piled into amd. check out that stock it's up about 50% now this year. it's up about 30% just this

month. on track for the best month since january 2019 investors bet that amd can capitalize on indeltel's latest stumbles one big number to watch in this report, revenue for amd's server chips. the company's highest margin product that they sell and also looking for $400 million in the quarter. back to you. >> thank you we talked about how the setup is hard coming into earnings. eugene, whether it is amd or the chip makers or the bigger tech companies due to report in the next couple of days, if one of them disappoints meaningfully, could that drag do you remembwne nasdaq >> i think it will be stock specific you know when intel came out about the announcement about the seven chip, it dropped in comparison to amd and the rest of the industry. rest of the companies held up. i think that it will be sort of a warning sign

valuations are extended. >> yeah. where do the semis fit in, mike santoli, with the growth trade that we've been seeing that's been a little moody lately definitely still in that uptrend. and that is also the case after intel took the big hit so i think can you look at semiconductor group as has been the case as some kind of a bellwether for both growth expectations and also clearly the leader -- the kind of longer term trends in technology. so far, they've insulated the market against too much weakness >> focus on the big tech names that are reporting on thursday the setup for them, is it still

tough overall even though they pulled back of late? >> it's sufficient tough in a s people remain heavily positioned in the stocks. yes, they backed off coming into this week. it didn't completely take the entire group off the boil. i'm not sure today if this is about getting out of the way of the earnings reports or of the hearings in congress with some of the ceos on thursday. the market is trying to dial bass risk. those are the ones that get hit. it's hard to know if it is anything more than that's where the money is when the market is backing off and that takes the brunt of it. >> mike, we are making new session lows dow down more than 200 points right now. .75%. just over two minutes left of trading. the only stocks that are higher are sectors are higher on the defensive plays. what do you see in the internals? >> absolutely. the internals held up better than the overall indices as you might expect you see here advancing volumes

they still exceeding declining volume the average stock is outperforming the market cap en that and this has been the pattern. the smashgt proppmarket is prop larger stock is outperforming. and this is a day when the average stock is outperforming the defensive sectors, low volatility stocks way outperforming high beta on the day. but certainly a high beta underperforming. and the volatility index is threaten to make a new low for the post crash period. that is not the case right now above 25 still showing some reserve of anxiety there in the volatility market >> mike, just quickly as well. gold is not back up to the highs of last night. it is close to that level. still has gone back into positive territory >> no doubt that these are persistent trends and they have wide sponsorship i think the thing to look out for is they're getting extremely

popular in short term. they're often orphaned is now evident. so you have to ind koof be on alert in the short term. they're benefitting from a lot of things going on in the current environment. >> there is one minute left. oil is down 1.5% today the dollar is weak of late they're plateauing a little bit. it's up ten basis points without sliding like it has been of late there is the dow at session lows as can you see, down 210 points. 0.8% session lows across all of the indices, .6% of decline for the s&p 500. 1.25% lower for the nasdaq composite. the russell 2000 down 1% itself. at the bottom of the pile,

materials down 2%. energy down 2% technology down 1% mike is pointing out the big tech names rolled over into the close. apple, netflix, alphabet, tesla down 1%. the bell goes, we are down at session lows on all three indices. >> certainly taking a step back today. closing at the lows. welcome back f you're just joining us to "closing bell," i'm sara eisen along with wilfred frost and mike santoli take a look at how we finished up the day on wall street. the dow down 205 points that's about a loss of .75% pfizer is the biggest winner and 3m the biggest loser earnings action there. the s&p 500 closing down about .6%. first, actually third negative day in the last four puts the s&p 500 still up 3.8% for the month.

and pretty much flat it was sectors like staples and utilities and real estate that do well when bond yields are falling. the nasdaq got hit the hardest down 1.3%. investors are waiting. a lot of earnings this hour. we'll get results from visa, starbucks, amd, and ebay we'll have instant analysis of all the numbers coming up here on the show. plus, we'll speak exclusively with the ceo about his company's results and whether people are still stocking up on snacks during the coronavirus crisis. as soon as those results are out. first to join us to talk about the market, eugene profit is here

wells fargo asset management head of active equity. i turn you to, mike, on what happened today they determine which way the ib dechls dec indices go i don't know it is very news driven there is more anxiety around the likelihood and the timing of a potential next round of fiscal support. you can look at that and say the markets manage to stay well supported. we have a stutter step in growth maybe that's a good thing. on the other hand, no net head way despite the fact that we've been sitting here with a highly stimulated economy and super low yields and the dollar going south and gold taking off. so right now i think it's inconclusive except to say the markets had a hard time

seasonally getting a whole lot more upside momentum in late july into august so see if that's going to take hold this year as well >> and in the short term, are there more risks than opportunities? if you look at how gold and treasuries separated from equity and credit, the market is definitely trying to say something about the longer term. but when our managers are looking at investments, there certainly are some out there that still look very attractive to us across many different industries >> like what >> i think when you look at industrials, that's certainly an area where you see a lot of opportunity. you see manufacturing and home building picking up. and that v shape recovery is still continuing in those areas. i think the market is telling us that the economy on the other

side of this may not recover p it's certainly not recovering the same equally across the board. and it may look slightly different on the other side. you may not see the same strength in names like airlines, hotels, travel but you may still continue to see very strong strength in manufacturing and in some of the industrials along with what we've seen in technology, et cetera >> what do we need to hear from the fed chair tomorrow to keep the market supported >> well, we would like to hear that stimulus is going to continue they already pretty much said that you're looking at interest rates staying low out to 2022. they have been basically stating it will take us a lot longer than a short term to get out of

this pandemic. corporate ceos are starting to respond to that. the market hasn't responded. that's why you're seeing weakness in the names as we got to the elevated levels >> yeah. i wonder, mike santoli, last time we heard from the fed chair, the market didn't like hearing he was sort of pessimistic. he used the word uncertainty a million time he wasn't ready to commit. he didn't really see the recovery in any sort of meaningful way i wonder if this time if he has that kind of attitude and expresses the sentiments that the market is happy it with. that means the stimulus is flowing and might come even more >> yeah. i don't know, to be honest, that market aside from the one day immediate reaction that coincided with this comments was really disappointed with that tone even back then. i'm pretty sure it's a good bet that he is going to again emphasize the down side risk to the economy. the fed and all the officials have been very consistent about that and essentially saying we don't know how this plays. our models are not helping us

out really to handicap this environment. we're going to err on theside of doing more and not less now whether that means more versus what they've already announced and having the pipeline and by the way, the economy is not really taking up the fed on a lot of the lending programs and the balance sheet is trimmed back a little bit who knows? the market is going to take that as incrementally reassuring. >> if there is any hint of the possibility of negative rates that, would be incremental in terms of stimulus. it would be incremental to the stock market in terms of how they interpret that? >> i don't think the fed is prepared at all to change the stance in trying to foreclose on that likelihood. i don't think the bond market, even though can you see that on the probability spectrum the futures market does have some percentage of possibility of

negative rates it's really a prediction it's just a matter of, look, we don't know what is going to happen in the next one to two years. rates are already so close to zero they're going to stay at zero at a max fum for so long. how can you not build in the, you know, in ermz of it the futures pricing? i don't think it's an affirm pif prediction by anybody right now. >> let's get to earnings the global snack maker, 63 cents adjusted the estimate is for 56 cents so nice beat there revenues also coming in a little bit better organic revenue. always the key for the consumer companies up .7% really the story is helped by pricing which did offset some volume declines. as far as other highlights here, slightly lower margins they're dealing with the strong dollar still probably celebrating the weak

dollar lately which will help earnings not giving full year guidance. does see a currency hit continuing this is a company that does most of the business abroad they sell oreos and nabisco crackers and have a ton of business in the emerging markets. the story, interestingly from an economic perspective, is that the developed markets, u.s. and europe primarily drove the gains this quarter had positive volume growth we're going to talk to the ceo about this in a few minutes and ask him what he is seeing specifically in the developing and developed world as we slowly come out of this crisis and reopen the economy >> we look forward to that one, sar yachlt i'm going to get to the visa numbers which just crossed as well. revenue, $4.8 billion. eps slightly better than expected 107 the forecast was for 103 individual lines all pretty much

in line with expectations as the headline it's down 17% year over year that's where the expectations had had got to payments overall is down 10% year over year so give me a snapshot of, of course, where we are in this time they're coming in line on the top line and fractionally ahead on the bottom line we also have starbucks numbers out. kate rogers? >> starbucks reporting a better than expected quarter. loss of 46 cents adjusted. on revenues, $4.22 billion for q-3. that is also a beat. same-store sales here, global comps down 40% u.s. down 41%. that includes comp store transaction decline of 52% offset by a 25% increase in average tickets. the so people spending more

money. china comps down 19% in the quarter. transactions down 27%. offsbit a 10% increase in the average ticket here. starbucks also giving some guidance saying that global comps will fall between 12% and 17% for q-4 and full year. the same applies to u.s. then in china, comps will be flat to down 5% in q-4 and down 15 to 20% for the full year. also giving an eps range of 18 to 33 cents per share here for q-4. back to you. >> all right looks like the market likes it for now. kate rogers, thank you a pop there. up 2.25% on earnings don't miss an interview with starbucks ceo kevin johnson foam morning. "squawk on the street. they'll talk about the numbers mike, the setup here, the expectations were low. it was underperforming the overall market this year we knew there is weakness. people are not commuting so they're not eating breakfast out. they're not get thirg daily

couple of coffee reflected already in the price what we heard from the company snp. >> yeah. the i think to some degree and also the fact that the company had, you know, enough visibility to nair rrrow the guidance in a better direction that's what the market is seizing on as well in terms of comps and also the bottom line results. very similar, i think, to the way the street is viewing a mcdonald's it will come back with the same kind of market share dominance and franchise value. it's just a complete slave to how quickly people are going to get out and about again and we simply don't know that it's an expensive stock. it's always been an expensive stock. holding the value because this market is willing to give the great brands the benefit of the doubt through this period. >> eugene, where do you stand on the likes of visa? i mean, clearly it's been a winner over the last three or four years it is highly linked to the economy. even though they beat expectations, down 10% in terms

of transaction volume year over year >> we like visa. of it's a little bit expensive because of the earnings coming down are you speeding up and that helps vees yavenlt bchlt i thin like the value we like the company but not in a hurry to add more to it. >> so we just -- ann i know you can't speak about specific stocks we got results from three consumer companies, visa, starbucks. any threads you're picking up as it relates to the consumer and the recovery and where investors are relative to what these companies are saying in terms of their expectations for how this

is all going to look and shake out? >> yeah. i think it's interesting tonight you do get three companies that all touch the consumer and certainly our impact about consumer behavior we know what our grocery bills look like over the last several months more and more of our monthly budget has gone toward groceries. probably more snacks depending on what your family situation looks like but behavior has changed and you talked about that with the starbucks. you'll start to see more waviness with the consumer services names because those will be inflinsed by the halting and the slowdown of certain economies i'm sorry, certain reopenings, cities, states, et cetera. along with the virus where consumer staple stocks

have been much morsteady along the way. all three of the companies have strong brands and we're seeing that as well and i agree with what eugene said there is good secular change happening in the digital payment space as well. and i think our managers in general think that that secular space still has a lot of room for growth in the u.s. >> let's talk about visa the still under a little pressure here on the results kate rooney has a little more color for us kate >> hey sara. dive into total payments that a key number to watch here. that is down 10% in the third quarter. yoer over year, cross boarder volume, that is a higher margin business for visa. that was down 37% year over year total process transactions were down 13% e-commerce is seeing a slight jump and analysts will be looking to see if that can

offset the overall slowdown. the ceo of visa saying that covid-19 continues to "meaningfully affect the business." visa withdrew the full year guidance in may. so no comp there we'll be looking for more commentary and stimulus checks in the last quarter jees did say that is helping boofst consumer spending we'll look for color at 5:00 p.m. eastern back to you. >> got it. kate rooney, thank you we'll leave the conversation for there now. eugene and ann, thank you for joining us up next on the show, we'll ask the ceo of mondalez about the strength of the consumer around the world during the rngsrovirus crisis eain fm amd and ebay still coming at you. experience the joy of a bigger world in a highly-connected lexus vehicle

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snack making giant mondalez reporting the q-2 earnings beating on top and bottom lines. stock moving slightly lower in after hours trading. joining us in an cnbc exclusive for more on the numbers, the ceo, dirk van de put nice have you. >> yeah, thank you for having me >> tell us a little bit about what happened in the quarter looks like the strength is mostly in the developed world as you dealt with the pandemic. what did you see from the consumer >> well, obviously we watched the consumer largely as it relates to the snacking habits and overall we do see an

increase in snacking consumers are spending more time at home. they're still quite anxious. there is a lot of home schooling going on and part of parenting these days we see an increase in snacking largely at home. the third thing we see from the consumer is that they are drifting back towards brands that they know and trust so we've had quarter with significant market share gains since in the chocolate plays the most of the known brands are ours and another thing we obviously see is this shifting where the consumer shops they are buying more in e-commerce and less on the go and impulse channels. one of the reasons why our top line was good but not quite

great is world travel retail it is a duty free shops and so on clearly consumer wasn't traveling. and then maybe the last thing to say about the consumer is that they start to watch a little bit value. and that the going forward they will see the recession there is a lot of unemployment they will pay attention to pricing and we need to make sure that we offer the right product at the right price but that's a little bit what we see going on with the consumer at the moment. >> got it. i notice that margins were a little bit lower what can you tell us about where the pressure is? is it on the call side for materials? >> it's more in our operations as we work q-3, we had had a significant covid-19 related cost in our supply chain we have to implement a number of people with pppe, we gave them insentive pay.

sometimes if one person gets infected, we have to take several out because of contact tracing. we have to take in a temporary labor. so they're all one off related to covid-19. so as covid-19 fades away, they'll get out of the pnl higher than expected costs >> i lalso notice that results were weaker in the developing markets. which countries are you seeing the weakness in and what can you tell us as the quarter progressed and what you're seeing in recent weeks it started off with india. being severely aekt iffed. you've seen that they did a severe lockdown and a lot of the stores were closed and people couldn't get out of their homes. that had a big effect in april may, we were back flat and then

in june we saw growth in june -- in india so i think india is coming out of it. another country that is affected, for instance, was russia they didn't go into negative territory in april but they were lower than expected but also coming quite nicely back southeast asia, same effect. i would say in the emerging markets in asia and in europe, we saw the dip in april and we see them nicely coming out of it latin america. they're still in the middle of it brazil, second highest number of cases in the world and so the consumer is also in lockdown and they still are. it's a region of the world where

most of the sales are in the traditional trade. so that is still an area of the world where it started later it was more in may and june. >> north america is up 17% not just quarter on quarter. that 17% year over year growth so it's not just a case of having experience the peak of the virus earlier than some of the other regions that are facing declines. why so strong in north america >> in north america, our business is 80% biscuits

consumer spending more time at home consuming more products there. i heard you talk about starbucks. they have the opposite effect, of course. but we're benefiting from that with our biscuit business. and in the biscuit market, we have brands like oreos, chips ahoy, ritz, some of the strongest biscuit brands and cracker brands we see that increasing consumption being accompanied by heavy market share gains for us. what we're seeing is a lot new consumers entering into our brands and doing repeat buying so that bodes well for the future for us. yes, you're right. a very strong performance in north america and in the u.s >> so what you are doing with advertising spend, dirk? i know you participated in that the pause on social media. the consumer package goods i'm covering pulled back spending on ads.

can you tell us how you're thinking about spend right now in this environment? >> we might be different on that in the sense that we decided in the second quarter since the crisis was sort of hitting everywhere around the world, we didn't have clarity on what was going to happen to the consumer, what was going to happen to our supply chain we decided to pull back our advertising in the second quarter. as we see consumption strong and we see our sales coming back and we see channels opening, the market share gains, we feel bullish. in fact, we are reshifting all what we did not do in q-2 to invest in the second half of the year we feel pretty good about it the other thing we're doing is within that advertising spending, we are shifting more into working what we call working medium

that is things you see on tv and online so for the year, there is probably a slight decline. but overall, we increasing our investment in the second half. >> we appreciate you joining us ahead of the conference call dirk van de put, good to see you. >> thank you >> amd earnings are out. let's get to josh lipton with the numbers. josh >> sara, amd reporting q-2 eps of 18 cents. that is versus expectations of 16 cents revenue clocks in at $1.93 billion. the street is at $1.86 billion so beats there on the bottom and the top. guidance, q-3. they say look for revenue around $2.55 billion. analysts are looking for closer to $3.3 billion.

for 2020, they expect revenue to grow 32% they call out strength in pc gaming and data center products. look at the segments in the quarter. computing and graphic segments, $1.37 billion. that is in line with expectations that will include chips for pcs and graphics chips for gaming as well custom division though that, is better than expected at 5$565 million. you see the game stock ripping higher heading into this print, it was already up about 30% just this month. guys, back to you. >> josh lipton, thank you so much for that extraordinary moves for a stock as you said that's been on a terror already. don't miss an exclusive interview with the ceo tomorrow at 9:15 a.m. on "squawk on the street." we'll discuss that one in more detail in a moment first, the ebay numbers are out as well. >> hey, this stock bouncing around in the after hours. first the results. revenue coming in at

$2.87 billion. versus $2.8 billion. earnings per share, $1.08 versus $1.06 expected slight beat. remember this is a stock that has run up nearly 45% over the past three months. and is benefiting from the work from home, shop from home trend. gross merchandise value, this is an important metric for ebay it has been a lagger over the last few years solt that came in above expectations $27.1 billion. versus $25.9 billion expected. guidance giving third quarter guidance and fiscal year guidance above estimates shares were up as much as about 1% right after the results came up but as can you see now thashgs down some 5% as i mentioned, the stock has really run up. it was sort of late to this trend raising its guidance in the middle of the quarter. so perhaps this isn't enough to satisfy investors. remember that ebay is an e-commerce name this year.

it is doing quite well and seeing demand amid the pandemic, it is far trailing the gains we have seen in other names like wayfair, etsy and amazon back to you. >> thank you for that one. ebay moving lower. we'll discuss much more of today's after hours earnings movers amd shares rallying as we mentioned. 8% following a 30% jump in just the past month starbucks, slightly ghhier visa and ebay lower. more announcements on them

welcome back news from amc we have it for you. hi, julia. >> hi, a historic deal rewriting the rules of the movie industry. theater giant amc entertainment group and cmbc sister company have agreed to dramatically shorten the exclusive theatrical window under the new multiyear deal they'll have access to all the films for at least three weekends, 17 days. the down from the prior standard of about 88 days now after that shortened window, universal can then distribute the films via premium video on demand it's been offering the movies for $20 for 48-hour window amc will get a percentage cut of revenue from that premium video

on demand revenue through the duration of the traditional theatrical window. universal will choose on a case by case basis whether to offer movies on demand after three weekends the two companies saying this new flexibility ensures the future of the movie industry and this is definitely a dramatic move. it was prompted by universal offering the films on demand during covid-19 while theaters are closed wilf, back to you. >> is universal saying that only ever going to use amc theaters at all in the first place? >> no. so the issue before is that amc was so concerned about universal offering its films on demand perhaps even the same day that a film was in theaters the that they said they wouldn't show their films at all. now amc will show those films and will get a percentage of the revenue once they start offering the films on demand. universal will continue to

distribute the films through theater chains as well we can expect other theater chains to follow-through with similar deals because amc is the largest of the theater chains. really setting a standard for the rest of the industry >> and shows the signs of the time i guess, a number of times they've been on the last couple years saying you never agree to something like this. but sort of being forced by the environment to go along it with. julia, thank you very much for that amc moving higher in after hours trade off the back of that news, of course, down sharply still year to date also moving higher after hours with a similar name but a different company, a many. d amd. the stock is up 9% after surged already coming into this chr chris rolland joins us it was a tough setup and smashed it. >> good afternoon. amd had had a fabulous report here really hitting on all cylinders. not only that, but the nearest

competitor intel has pushed their seven nanometer process. so not only does the short term look extremely favorable for amd, but the longer term picture looks pretty bright as well. >> why do you say that one of the questions is, you know, there were great expectations and they crushed it what happens, you know, when the work from home starts to fade? is the second half going to look as good with people having already upgraded their home equipment and their technology which is helping the semis some of the analysts think that is going to fade >> well, if amd has anything to say about it, those trends don't appear to be slowing they raised the full year outlook for the growth and raised that to 32% growth for the full year here so they're very confident that

not only pc can likely sustain here, but actually game consoles, we'll have the launch of the ps 5. it was the new microsoft xbox platform here also ramping and we're seeing 100% growth year over year in their server platform as well opposite move from intel thank you for joining us with quick reaction. >> sure thing. up next, we'll get more reaction to starbucks' earnings. also just out, find out whether the company's pivot toward drive thugand roh to go orders is starting to pay off. "closing bell" will be right back

welcome back shares of starbucks popping after reporting a top and bottom line beat. comparable store sales also declining, they were down 40%.

down 41% in the u.s. joining us is the managing director of equity research at webb bush securities clearly expectations were low, nick how is starbucks navigating this crisis and what are the trends doing in the coming quarters for expectations on earnings >> well, q-4 guidance is largely in line. they narrowed, you know, america's guidance it was 10% to 20% down previously down 17% now. i international unsurprising china is down 5% to flat versus, you know, previous expectation of flat in q-4 largely in line. i just think, you know, investors, you're seeing a little bit of a sigh of relief that it wasn't a little bit worse in q-4 you know, otherwise, the improvement in terms of the trend line is very much in line with where it sure be. >> are there any risks that there will be long term shifts in people's behavior

we talk about the work from home trend that people experience how much cheaper it is to make their coffee at home and that is something that sticks even when we fully reopen. >> well, there absolutely is a risk i think starbucks understands that i mean, they are, you know, making the appropriate investments in the near term shutting down a number of urban locations. remodelling, you know, full service stores into takeout only stores so they understand some of those changes and they also understand if they need to take the appropriate steps to position the brand accordingly. i'm going forward, they're almost exclusively going to be building drive throughs. it won't be 100% i have suspicion that a very, very large majority of any new openings will be drive throughs. so they have an eye on those trends they understand those trends better than anybody. they're doing the appropriate things for sort of the medium term to longer term positioning of the brand nick, thank you for joining us starbucks moving higher 3% the major averages fell for the

third time in four days today. we'll ask kkr's henry mcveigh if he sees red flags for the market and where his firm is putting money to work. save hundreds on your wireless bill

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>> from my observation, those demonstrators are fellow american citizens engaged in a peaceful expression of their first amendment rights yet, they were subjected to an unprovoked acceleration of force. and in london, a virtual auction where a rembrandt self portrait went for $18.7 million the unusual sale covered five centuries of art you're up to date. that is the news update this hour sara, back to you. >> all right sue, thank you still ahead, weighing the market recovery? we'll talk to kkr's henry mcvey about what he is forecasting for the economy and what means for you and your portfolio "closing bell" back after a quick break. as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers... and deliver our products.

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combat the covid-19 health and economic crisis and put us on the road to recovery what shape will that recovery be kkr doesn't see a u or v but rather they see a square route shaped recovery. kkr, the ceo of kkr balance sheet. mike santoli part of the conversation as well thank you for joining us, henry mcvey. let's start there. so route shaped recovery you think that things will play tow from here? >> we had had a massive amount of stimulus. both monetary and fiscal i think we'll get some more from the u.s. government. i that i is going to continue to fuel growth. we're actually forecasting disposable income to be up about 4% this year which is a massive number the offset of that is the rate of change will start to slow i think you reported on a

bufrnl this we've been active as a firm on behalf of our lps since february we try to say tai vaveng the dislocation. but i think it's important to keep in mind that a lot of the economy is recovering but some of this will -- the rate of growth will slow and as that does, that will probably disappoint some expecttations. so we're sticonstructive on ovel assets as we detailed in our piece and outlook to our clinltclinlt clients. but what we think is more measured is rate of change mod rates. >> as you look at how the markets have metabolized this outlook. emphasis on the big secular growth stocks. that's been consistent also high yield. you know, credit has actually improved a lot and is not building in in, you know, massive upside in defaults or anything like that do you think the markets have roughly gotten it right here or do you see mispricings >> i think we have highlighted

this we think the markets largely got it right on high yield we do an default monitor it's about 7.5% which is right around what we sthi going thinkt happen in that market. in equities, you have some demand destruction and about maybe 5% to 10%. that's on a permanent basis. that's what the market is discounting in remember, unlike i think most of the folks here that you're talking about most of our capital is eight plus years. so we're trying to get it right for '2 3sh3 area and '24 and be. our leadership has really driven us to do is not try to just, you know, think about what's here and now but really where are we going? and so we've been very aggressive in asia that's one of our flag ship regions. we have a lot of offices and a lot of local presence. we were able to discern trends in rasha that maybe others weren't able to see and apply that to europe and the u.s. and

then we also taken some of our interlekt you' int intellectual around from the u.s. and nesting and people staying home and personal safety around transportation and it's been a global effort i think the market has it right. one thing we are watching which you and your team have commented on is it is unusual to have gold going up dlart the dollar going down and rates going down that is not the holy trinity we're focused on that. i think what it means to us is we're more from the fed but, look, ultimately rates will stay low for some time. but there is just -- the stimulus comes in a cost and the market is starting to price that in one of the reasons we built a really big infrastructure business globally and real estate is to create investments that have collateral, that are cash flowing and do well if you

have some appreciation in inflation. that is not our base view in the near term. but i think portfolios, now is the time to think about that and so that will be a bigger part of the business that kkr participates in a go-forward basis. we've had success around that i think you've that you'vet to highlight that, and that part of what we're seeing in the capital markets is abnormal and worth noting it speaks to more stimulus probably coming in the u.s. given where rates are so low and financing costs are low but ultimately there is a cost bet >> it's been sort of sluggish as far as m&a in general but high valuations, plenty of uncertainty. what's it like for private he can equity and scenes from consumers like staying at home how bullish are you on some of these permanent trends and where are you investing around it? >> we've been very active as a

firm both with our partners in terms of putting in our funds but also syndicating excess equity to those that want it and i'd say really globally that's taken place across all private equity key things for us have been digitalization i think e-commerce people talked about but really data usage. that's important one other thing we really went back and looked at, unfortunately, after the tragic events of 9/11 when you get a shock people do more domestic travel, they focus on their homes. this concept of nesting where they fix things up that's obviously going to be a big part of the story going forward. and then just longer term themes where we want to work to invest alongside private sector and public sector and that's things such as infrastructure i also think there's a substantial upgrade of consumption in asia. it gets reported a lot about china, and that's obviously an exciting market.

southeast asia is booming. that's a really important market for us we're also seeing in terms of key trends did i divestures. you as a team have reported on that we agree with that and a lot of the companies have needed to either reduce their debt or maybe sell a subsidiary to create some liquidity. and that's not going to go away. ultimately the economy feels good right now and it will continue to rebound, but this is a shock to the system. and i think that we're trying to do three things right. one is get the theme right second is create operational improvement at the portfolio company. and, third, is create capital structures that are durable. the lesson from 2008 and 2009 coming out was to do that. that's where we're focused as a firm and have a united effort around that. >> got it. henry, always good to hear from

you. thanks for giving us an update henry mcvey from kkr it's been a wild day with visa, starbucks and more pouring in. your movers right after this quick break. experience the adventure of a bigger world in a highly capable lexus suv.

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up next big tech heading to capitol hill tomorrow. the key things every invest oor needs to be watching (gentle music) - [presenter] stand up if you are..: (audience applauding) (dramatic music)

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schwab. own your tomorrow. we've got some breaking news here on facebook ahead of mark zuckerberg's testimony tomorrow. >> reporter: that's right. we have received mark zuckerberg's written testimony i want to highlight some key messages that zuckerberg will be stressing tomorrow to that subcommittee he says, one, the story -- the facebook story would not have been possible without u.s. laws that encourage competition and innovation he says, quote, i believe strong and consistent competition policy is vital because it ensures the playing field is level for all, saying that

facebook competes hard point number two, instagram, two acquisitions of facebook, became what they are with facebook's infrastructure that facebook is responsible for making instagram and whatsapp because they are a part of the family of apps and built that rather than acquiring that a third point he makes, he's asking lawmakers to address regulatory updates he says companies should not be making so many judgments about important issues like harmful content, privacy and election integrity on their own that's why i've called for more roles and updated rules for the internet so these are all points he has made before. he's reiterating this defense of facebook's scale and scope so really interesting to hear how he's going to be depending the company. i'm going to continue to dig through this written testimony but wanted to get you the key headlines. >> looks like he also says we have more than 35,000 people working on safety and security, three times what we had from

three years ago. julia, thank you that is going to be one blockbuster testimony, guys, tomorrow and it's not the only event. we have a fed meeting and a press conference from jay powell >> a lot on the agenda tomorrow and for the rest of the week seeing amd jump after earnings, four big techs reports to come on thursday. it will continue to be a crazy week that does it for "closing bell." "fast money now. i'm melissa lee. tonight's trader lineup, tonight on "fast" stocks slide into the close. the nasdaq finishing session lows as big tech ceos gear up for a grilling what is at stake plus, capitol concerns, why one top wall street strategist is calling the trillion dollar stimulus plan the biggest risk to this rally. later, we are taking your questions. tweet us @cnbcfastmoney. we start off with earnings aler alerts full team coverage trackin