welcome to a jam packed hour of "power lunch. the spot liellight remains on t big four gdp tumbling almost 33% to the sec quarter. that's old news. what's happen right now? we have three ceos to tell us what they are seeing from real estate to autos to voting. nba season tips off in the bubble tonight kenny the jet smith will join us to tell us how the league and plars a players are feeling. "power lunch" starts right now we have a sell off on wall street right now the dow is down about not so much about 1% right now. that's moderating from a 500-point drop this morning. the nasdaq is hanging onto a half percent gain. it is positive the losses aren't as bad although every sector is lower

not surprisingly tech stocks are holding up the best today. bob is looking where we stand on earnings about halfway through the season and our tech team will get us ready for what to expect tonight josh lipton on apple julia on facebook. bob, let's start with you. >> kelly, earnings are a little bitter than expected the market is holding up pretty well because of that the big winner here remains technology stocks. why shouldn't it just look at the second quarter earnings estimate. you heard of what a disaster the sec quarter is 38% for the second quarter this is almost the same for the second quarter technology will have a small decline. that's why tech keeps winning. look at lam research they make semiconductor equipment. the ceo said covid-19 has underscore the rapid growing on reliance look at the chart up 28%

good earnings report but straight up since the bottom in march. telemedicine is killing it look at these numbers here 2.8 million visits in the second quarter. 200% growth. they raised their guidance shares are up 176. that's not tarypo. it's been up every single day since the covid-19 epidemic started hitting in february. there's the chart for teledoc. q3 numbers al going up a bit back to you. >> thank you >> one big number to watch, iphone revenue questions tim cook is sure to get today. what was the best selling model during the quarter what has been the reception for that new iphone se that started shipping in april. that iphone number maybe even

more important than usual this time a rn. amazon shares are climbing more than 60% for the year >> amazon, as you know, has far out paced its big tech peers and wall street still thinks that there is room to run on top of that, shopify blow out report a few days ago indicating that e-commerce continues to see surging demand amid the pandemic the stakes are high this afternoon and any disappointment could have an impact

facebook facing growing criticism and boycotts if major ad buyers. julia has more on how this could impact its results >> we'll see what facebook says about how those boycotts which the organizers are pushing to expand are impacting the start of the third quarter earnings per share in the second quarter are expected to grow 52% to 1.39 while revenue is anticipated the grow 3% to $7.4 billion. we're also watching user engagement in light of tiktok's growth daily active users are expected to grow about 10% to 1.75 billion. back over to you >> a lot of those advertisers

went beyond the july boycott and said we're going the hold back advertising for the rest of the year do you think facebook will give clarity on how the boycotts are impacking buy gans vers ining gt getting lumped in guidance >> they will give insight around expenses i think the question is how is advertising looking in july? wa has happened in july? the boycott has been u.s. based. organizers called on advertisers internationally to boycott as well they said we should expand the boycott to make it a global boycott and not make it limited to july which was the initial plan facebook has made a number of changes in response to this boycott. we'll see if they announce anymore changing cause it's not enough just based on the fact there doesn't seem to be any

response by the organizers of that boycott they don't seem satisfied. >> julia mentioned expenses. >> remember last year for amazon was so called investment year, they expanded in terms of their logistics network. they were supposed to reap the benefits of that this year the last thing i would say amazing to go through these analyst notes and see wall street's love affair with amazon we have contrast that with

yesterday's lawmakers grilling of the companies it will be interesting to see if anything happens. >> app store probably saw some very strong growth in the june quarter as more of us are now locked out at home and looking for may ways the work, learn and play the app store, probably represents about 30% of that broader, faster growing higher margin segment clearly sticking to his guns

>> we have breaking news right now. what's going on? >> that's right. rou moderna has been targeted by chinese hackers. this happened earlier in the year and it was an attempt to steal valuable data and moderna is one of the companies that has one of the leading covid vaccine candidates what moderna is saying is the company has been in contact with the fbi. the hackers were probing the systems and looking to find as a

rule ner blts. it doesn't mean they got access to any data. we'll have to wait for moderna to tell us what, if anything, these hackers were able to steal. clearly a global race for vaccine candidate and intelligence agts encies also playing their part in trying to steal the most valuable information. >> thank you we appreciate it and thank our tech reporters as well who will see after the bell you can see the nasdaq out performing today we're still worried about the economy after the record drop in gdp. how important are tonight's results to the market? >> i think they are extremely

important. i think expectations are very high for these big four. they represent almost 20% of the s&p. i think most investors are looking to see what the market might look like going forward. >> you own google and amazon and qualcomm what about facebook, apple and microsoft? >> i think they are all great companies. our focus has been holding those particular ones. those are the companies we hold. we feel really strong about amazon and microsoft. >> these are trillion dollar companies. we used to think this was head wind for continued growth. maybe we still don't know the answer yet assignments so far like jason was saying about paypal and the rest that these big tech results

are confirming the transformation to a digital economy is here and they should be permanent beneficiaries of that >> i think they all will be permanent beneficiaries and we have identified 12 different areas of the technology market that's going to be impacted positively by what's going forward. it's things we have been talking about for the last month or two. for example, we're going to see less paper we'll see more in the icloud we'll see the whole covid experience aggressively push forward those companies that should do well if they adopt a digital transformation >> yeah. would that will be any kind of di different ways you would recommend them play the market there's some who love the strength and happy to stay there. there are others that are wary about it and clients would prefer to look elsewhere what would your other suggestions be >> i would say what we look at for our clients is the full picture. we're not going to go with like

go all in on one stock or one industry but to have a very well balanced portfolio areas we do like are things that have been undervalued and under performed. basically value stocks, dividend paying stocks have underperformed growth this year. a will the of times we're coming out of a recession we'll see those start to pick up with low interest rate environment, our clients are looking for some sort of yield or return. it's great place to have a long term view and a long term return on yields. >> bonds in general offering little yield what's your overall advice to clients? >> we turned to the staples market where the dollar depreciation over the last couple of months companies like p and g, colgate. they benefit from the dollar

trim >> all right we appreciate it thank you for joining us to talk about these markets today. >> thank you coming up, the u.s. economy is seeing its biggest decline ever in the second quarter what comes next? with the growing trend of work from home, office space is in flux. stay tuned

welcome back second quarter gdp plunging 2.9% annualized it's not as bad as wall street was expected here to help us unpack this is steve. liesman. >> economists see it as a reason for concern. c it's the unprecedented hit to the economy from the pandemic. we expect it will take years for that damage to be fully reversed a poorly managed health situation and depressed incomes means the economy risk a double dip recession without you aurget fiscal aid sf services hit much harder than

goods. inventory subtracting 4% trade added a bit. that's because exports failed. federal spends was up but state and local was down better numbers in may and june gave the third quarter a good starting point there's concern. decline in state and local spending may just be beginning >> steve, thank you. there's one company that's been lucky to find a wave of momentum a commercial reality was focused on biotech companies the stock is up 60% from its lows this year and off an all time high.

>> you out performed real estate reits which are down about 12% one reason for your particular consumer or end user, there isn't a work from home alternative. you can't have a laboratory at home, for instance there's no way to do that. >> that's exactly right. from the beginning, mid-march when every one went into pretty much lockdown. our laboratories really, each of our clusters in the campuses and our properties were operating 24/7 they really were and are essential businesses and you can commute if you're an office worker you can virtually work from home or other locations as you've said, you can't replace a laboratory that you have to go to that's doing rnd and some of the most important areas including, as you know,

diagnostics and testing which are major issues. moderna we have been with them, they were started back almost a decade ago it was really wonderful. they are expanding, we also operate our own and operate their one other manufacturing facilitie facilities they received some major grants and one of the mission critical companies together with

astrazeneca. each of those companies have the three most advanced vaccines that are being custom now and we'll see which ones have the most important -- able to retain the antibodies that fight covid-19 and what the duration may be >> what's been the cost to up date buildings to make sure the ventlation systems are safe and things are up to snuff in this pandemic environment >> actually, pretty labs by their inherent nature have man air changes. 100% fresh air comes through oftentimes as much as 30 times an hour. in a traditional office you might get handful of changes which is recirculated air the spacing in laboratories is pretty inhernts if you remember

your days in maybe high school or college and a biology or chemistry lab, there's quite a bit of spacing we have installed plexiglass dividers it is just almost made for this environment and with multiple shifts going on and the masking and the glove work, it really becomes a pretty safe environment. the problem we have oftentimes is service people coming into the building, who might be covid exposed and we have seen a handle of those over the time. >> we heard from google, for instance, the people can work from home through summer of 2021 there's a bit of a push/pull are you seeing that at all in tenants willingness to renew leases >> right we are seeing that about 90% of our revenue comes from life science entities whether they be biotech, pharma, non-profit institutions all

doing research development and commercial work in the life science space. about 10% of our revenues come from technology. we cater to the large tech we have companies like google. we actually did their very first campus when they spun out of stanford back in 1998. amazon, facebook, et cetera. those clearly work from home policies and if you're a coder, working in marketing, research, it's much easier to work at home in those industries. we have seen that. >> great to speak with you thank you. >> a real pleasure good to see you. after reporting earnings, two payment stocks are telling very different stories today paypal is up mastercard is down are consumer changing the way they pay our traders will debate it, next - [announcer] if you've tried college but never finished,

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stocks of visa, mastercard and paypal paypal profits up 86% in the quarter while spending volumes at visa and mastercard both declined let's discuss this space if you look at the stock performance, it's clear where investors are placing their bets paypal up 75% this year. >> yeah, there's no question we also have to remember that

when stocks even stocks of best companies can get way ahead of themselves sometimes let's face it, look what amazon has done over the past 20 years is changed the world it's had many, many declines after it got too far people got too far caught up it went back down 90% when the dot com bubble claollapsed i'm not trying to say paypal will see a huge decline. if you look at its weekly trend it's getting very overbasic. it's got above 80 now. it's gotten higher than that one other time in 2017 this is getting very frothy and the most recent move has been pa parabolic. i'm sure robinhood traders played a part in that.

we have to constitute the difference between stocks and the companies. right now it look like it's got a better opportunity >> okay. john, taking a step back what's the biggest competitive threat facing digital payments and fintech now. >> the idea of not using cash will be preferable to having a digital precedent. this is great long term investment thesis and that's the movement away from cashless society. cash is a percentage of purchases and coins are going to go down.

owning a whole basket of these stocks, we use the finx for some of our clients to play this. >> definitely a place to watch john and matt, thanks. kelly and melissa, back to you ahead, oil sinking today down more than 5% at the lows. the closing numbers after this break. a pulse check on the economy the ceos of group one automotive joined us to talk cars and boat sales during the epidemic. -- pandemic. power lunch will be right back you say the customer's make their own rules.

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welcome back, everybody. here is your cnbc news update. after being greeted by a standing ovation at the funeral for congressman john lewis, former president, barack obama praised the civil rights leader refusal to give up in faces of powerful forces supporting segregation. >> john lewis did not hesitate and he kept on getting on board buses and sitting at lunch counters got his mugshot taken again and again. marched again and again on a mission to change america. >> the democratic governor of wisconsin is now requiring residents to wear face coverings while indoors through the end of

september. that is a change for tony everies who said he worried republicans would take him to court. republicans earlier successfully sued to kill the governor's safe at home order. for the first time in nine years, a red panda, look at that little guy, has been born at a zoo in berlin. a female brought to the zoo from india as part of a breathing program. hope that put a smile on your face melissa, back to you >> so cute it looks like a rook coop whiaci like a rodent. leets take a check on the markets now. the dow is down about 236 points nasdaq is doing better they are all reporting after the bell tonight the market closing for the day

let's get to dom at the commodity desk >> right now, u.s. benchmark west texas intermediate, 40 there are right around the big figure it's down almost 3%. world benchmark down 1.5%. even though many experts said it was expected, the negative economic data as well as worsening in key certain areas, thaifr put a real damper on energy prices. not helping parties was sochl that conversation surrounding president trump's tweet about the possibility of delaying the november leks. wti prices did find some support at a key technical price lefl but on deck tomorrow we have the latest weakly active oil and gas rig counts from oil fueled companies. that could be one of the next catalyst on the data front back over to you >> thank you let's check in on one part of the economy that's on the rebound. it's the car market. one of the largest auto

retailers in america is group one automotive today they announced strong results. shares are higher now up 3%. they are up 250% since the march bottom welcome back >> it's super interesting. one of the reasons that your earnings were so strong is your cost cutting was so deep and then the market rebounded. the that a sustainable sort of state of affairs or will you ultimately have to spend more if the recovery remains intact? >> controlling the cost is sustainable. clearly it will be some costs that come back we strip more than 30% of the cost out of our business the other benefit was our margins increased. we couldn't replace them we're going to come out of this downturn a much stronger company

and i think we'll be about 20% more efficient in terms of what we can produce per head, so to speak. >> 20% more efficient permanently. you stripped 30% of cost out that quickly are we talking about layoffs and head count reduction what does that mean? how did you pull that off? >> it meant furloughs. at one point, our business was down 50% in the u.s., in early march. we furloughed about 50% of our people in the uk we were totally shutdown for two months in terms of sales and six weeks for service. we furloughed 90% of our people because we were closed now we're back to about 70% of our original head count. we're bringing the people back every week but we have rebuilt the business from scratch and it's going to be much more efficient. >> how can you be 20% more efficient permanently? does that mean 20% less labor

intensi intensive? >> yes i would say that's a simple way of saying it we have gotten lazy and sloppy we are selling a lot more cars through excel ride over the internet that is much less labor intensive for us yeah, we have made a will the of processed changes and we can do more with less we need to because volumes are still not back we have to be much smarter >> i'm wondering what percentage of sales is that it sounds like a big number. i'm woerndsing in the total scheme of things is this a meaningful amount. >> 10% or so maybe even a bit less. it's growing it's triple what it was last year it's growing very fast >> is there a direct response to

the likes of carvana which has taken the auto dealership model by storm >> we have been doing this for a long time. it's nothing new for us. i would say it's a shift in what customers want, particularly with the virus many people are happier to shop at home delivering anywhere between 10 to 20% of our sales through excelride through their home it's more of a come pet tifr requirement these days we have to do business the way the customer wants to do business >> on that note, if you start doing more of your business over the internet, does that mean you'll be competing with big national online platforms like carvana more in future if so, what's your advantage what's your differentiator for the local buyer? >> we have been competing with those people for a long time they are more of a finance play, i would say than anything else

we're a full service organization we also have access to cars from the oems and certified pre-owned vehicles yeah, we have a lot of competitive advantages by being franchised dealers >> yeah. >> quick just kind of sort of lay of the land question what's selling right now are there any brands doing sort of surprisingly well >> suvs and trucks continue to sell trucks sold the best through the last three months because of rural markets. the truck markets didn't seem to have the impact of the metro markets in terms of the virus and people really hunkering down ford has been our best brand for the last quarter because we had the biggest supply of ford trucks we ran short of chevrolet

trucks trucks and suvs and those are the vehicles that are in short supply for us right now. demand at the moment is ahead of supply in both new and used cars >> wow thank you for joining us to talk about the state of business. we really appreciate it. >> my pleasure up next, the pandemic and shutdown actually feeling demand for boats in the u.s. but wiping out inventory and stockpiles

boat sales are booming during the covid-19 pandemic shares of bruns wick are up

200% since stay at home restrictions were lifted. to daid, the ceo joins us now. great to have you with us. >> thank you for having me >> how should we think about pace of sales in the sec quarter and how transferable that pace is given the stay at home restrictions being lifted. you had summer approaching and then you had this desire of people to find some outdoor activities >> yeah, the second quarter was very dynamic it started off with depressed demand in early april that carried over we saw a rapid pick up and acceleration through may and a really strong june june is the strongest month in most years but it was particular strong this year we seen it continue into july. overall very strong. on the wholesale side we can't

satisfy all of that q2 demand within the quarter we'll be continuing to satisfy it through q3 and q4 into next year the result is our pipelines have gone to low levels the lowest we have seen for about 20 years we will be meeting demand but also rebuilding the pipeline through this year and well into next year. >> how quickly can you rebuild a pipeli pipeline i would imagine it take a while to build a boat? >> yeah. we sell a lot of different kinds of boats everything from an 18 foot aluminum fish boat to a large 40-foot boston whaler. it depends from the biggest boats, that's where it's the lowest. we'll be rebuilding those through this year, through '21 of even into future years. if you think about it, pipelines

are down about 30% 13, probably 13 weeks which is a quarter of a year of production. we have to rebuild that quarter year on top of building to meet current demand >> david, i'm curious what kind of boat you would recommend for someone who has no idea what they are doing out there in. >> we put a lot of technologies into boats including joy stick control and auto pilot even our biggest boats are much more easy to handle and more intuitive for beginner boaters we have are very lucky we have a huge portfolio of boat ing offerings. we make every one possible i would recommend they speak to a dealer in terms of selecting a boat >> one more question because these price points are pretty high on average. much of these purchases are

financed >> typically about 50% of purchases are financed that's unchange d from recent history. we talk about our premium boats that i understand can be more expensive. the average price is about $40,000. we sell boats from 10 or $15,000 upwards. we also have freedom boat club lots of ways to get on the boating ladder through our value products and also through shared access like freedom. you work your way up the ladder like you do with any purchase. >> david, even though you see the strong demand persisting through this month, you still haven't given your guidance. i'm wondering what are the outstanding question marks that comes to the economy that prevents you from making that forecast >> we're seeing the tremendous tail winds in the boating sector clearly offsetting head winds in

the broader economy. the question is the balance. we expect the overall market head winds and marine to continue to dominate there is some unknowables in there. we prefer to be cautious given the die ma'amynamic of the situ. >> great to speak with you thank you. >> pleasure. thank you very much. markets are having a volatile session today we are off the lows. energy is still the biggest lagga laggard. it's led lower today financials also down big as rates continue to sink wells fargo, citigroup and cincinnati financial are all leading the declines much more "perunow lch" ahead.

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let's get over to the bond market hey, rick. >> hi. yes, two year, three year, five year, seven year and ten year can all potentially have new low all time yield closes. maturities are hugging it for weeks and weeks. but the ten year, look at the intraday and remember, anything under 54 basis points is fresh low yield close. now it isn't only in the u.s it's all the countries look at the bund yields. they dropped 2 1/2 month low. everybody, of course, watching foreign exchange the stronger euro, the weaker dollar st w why is it so much weaker let's go to the white board.

look at this beautiful trend line we violated that trend line on july 17th. that will be two weeks tomorrow. and in that period of time, if you would have sold it on have a lags violation of that trend line, you'd be up 3% back to you. >> thank you we like seeing the white board ncht covid-19 cases spread in the mlb. all eyes are on whether the nba's bubble will hold kenny "the jet" smith joins us next don't forget, you can always watch or listen live on the go on the cnbc app. we're back in two.

welcome back after 141 days without pro hoops, the nba tips off tonight to become the second major u.s. sport to restart since the

pandemic this comes as baseball is struggling to contain the virus. 18 miami marlins tested positive and two philadelphia philly staff members did as well. so will the nba's bubble in orlando be able to keep the virus out? let's bring in it two-time nba champ kenny "the jet "smoi" smi. he started a virtual basketball camp during the pandemic you were on my favorite other show on television great to have you here thank you for joining us >> thanks for having me. >> so can the bubble hold? >> well, it seems like it's the sayest pla safest place on earth right now. there was testing this week. zero positives came out. i think the ability with the nba has been able to do is different from every other sport that no one's traveling. they're in one location. they're all living in a proximity of two miles and no one is leaving that two mile radius of the campus.

so i think that's a unique environment that the sport of basketball can provide i don't know if every sport can provide that environment now three courts in one area, three fields in one area so the uniqueness of basketball itself allows this to happen >> but i mean look what happened with lou williams. i don't know if there have been any big penalties for him if that's a way of trying to deter people from doing the same thing. but whether it's the players or some of the workers who are going to inevitably be coming and going from the bubble, it's not a true bubble. i hope it works. but, you know, it's going to be really hard to keep these guys from, you know, to stay in the same environment day after day for months on end. >> yeah, i he mean, it's difficult. but that's why you're a professional because you have a focus and a championship mentality that is much greater than the normal person this is what makes you a champion this is what makes you great this is what makes you one of the 350 best players in the

world. are there going to be people that slip up of course, possibly. but even his absence was excused. he was excused to be gone. he just while he was gone decided to do something that was probably, you know, detrimental to the whole league. so for me, i understand that there is no perfect environment. this is a very contagious virus. we've seen that. you have totake it super serious. so also optimism but caution zbll te . >> tell me i haven't kept up with every piece of news. have any players -- have there been players to opt out? i know there is a ton of money at stake here. if they don't play, nobody will get paid how many people said they don't feel comfortable going what are you hearing privately >> i think 80% of the nba players want to continuethe season they wouldn't financially be --

you know, 85% of the players are veterans long term contracts. that wasn't the issue. the issue is safety and probably the biggest issue is social justice and how the awakening of the world not just the country but the world about what was going on those were the biggest concerns. once the league got over those and said, hey, question kind of function in this environment, then it was like how do we do it and what -- how can we create a safer environment? i think adam silver did a great job figuring that out. i think the players now, you know, in three to four weeks and they have zero people come back with a positive test, the day of the opening season of the opening season makes them all feel like they're doing the right thing. >> sure. we look at baseball and obvio obviously there is a outbreak. what is the plan if there is a player or several players on a team that get covid-19 >> from what i hear, shut it

down adam silver said that player safety and, you know, we players and media and myself, we're not immune we cannot supersede what the communities are doing in terms of socially, economically, or anything else. so whatever is going on with inside that environment, we have to be mindful what's going on inside the world and i think that's the most important part that i want to emphasize. we're not immune to the world. we're part of it our voices might be larger at times. but it doesn't supersede anyone because our voices can be heard quicker. >> so many other questions i want to ask. i want to ask who is your ferret favorite up there with you doing "inside the nba" who is more fun? charles or shaq? >> shaq is more fun. without question shaq is more fun

chuck is like a big brother. but shaq is a much more fun, you know, you talk about the jet academy earlier. i started that because of the social pandemic. and there was social distancing pan dem ib pandemic i'm like why should you suffer he said we stunted we want to become a good basketball player. i signed up kemba walker, trae young, oladipo, all the nba all stars. and we became their personal trainer live >> awesome >> that's why i'm still dressed. i just did a session with the kids we upload the videos jetacademycamp.com shaq came on and said, hey, i'm going to do a shaq code. he calls me at 2:00 in the morning. $35 off if you put the big shaq i'm like, are you sure you twoopt do that $35 off. big shack. use the big shaq code.

he's the most fun because of that >> classic >> kenny -- >> jetacademycamp.com. >> lakers win it we got to go >> lakers are the favorites. i don't know if they win it. they're the favorite >> that's all we'll say. thanks for letting me sneak that in >> we have a lot of earnings to watch after the bell "closing bell" will cover it all. kelly, melissa, thank you. welcome to "closing bell." i'm sara eisen along with wilfred frost. stocks up at the open. but they're now in the gre green .5%. a record slowdown in gdp raising the stakes for the deadlodead negotiations earnings the other big driver. companies beating lowered expectations ups and qualcomm are surging another day of growth over value. big tech rising ahead of earnings this afternoon. this is going to be an