>> and we both doubled our income in store capital. very pleased to be alongside them >> steph >> john deere, quality reopen stock. tractor sales are on the rise. they're using technology to gain shares and increase margins. they're reporting on friday. hope i get a buying opportunity. >> thanks, everybody "the exchange" begins now. and thank you, scott hi, everybody. here is what's ahead this hour after days of anticipation, the s&p finally hits a record high, may even close there, but it's barely holding on. this after blowout numbers from home depot and walmart, but they can't even keep those stocks afloat it's all the good news baked into this market that is the question of the day. plus, truly spectacular. another spac hits the market we'll discuss the two names going public and discuss the potential risks. another player hits the

battle with tiktok the v is here, ahead dom chu is here with the key numbers. >> the key numbers is 3335 that is our introductory level kelly, as you said, a big debate about whether all the good news that could come in the coming months is baked in the marketplace right now. the dow industrials, flat for the day. not a heck of a lot of movement so far the s&p, 3395. that is our new record intraday level for the s&p 500. the nasdaq trailing the pace as it has for the last several months checking out some key trends what got us to this record level? it's technology and materials and consumer, the best three

sectors right now. two stocks, both of them at record highs in just the last couple of days, both reporting earnings home depot it was at one point right after earnings, positive in the pre-market session. that trend has been lower for most of the day now. let's put it in context. again, a record high for this stock. you can see in this particular chart for the one-year basis, yes, record high levels here a couple days ago, so that's big the other one is what's happening with walmart same kind of story pre-market trade for walmart we saw a pop right after earnings came out this morning and it's been downhill ever since. and, again, for a stock that, for the one-year basis, was just at record highs two days ago, so watch that particular trade in walmart. a big move there is everything baked in i'm sure you guys will explore it later on in the show. >> we're going to explore it right now, dom, thank you very much the selloff in the retail stocks today does suggest good news is already priced in.

plus there is another crucial factor in the gains, and it's the governmentstimulus with covid relief stuck in congress, is this as good as it gets joining me now is dan genter and mike smith is vice president of the canter smith group at ubs. it's good to have you both here. mark, i'll beginwith you what would you do with retail stocks now and are they telling you something about the broader market >> resale right now is 20%, back to school sales for the year if you look at the university of north carolina we just saw yesterday, they had a grand opening, grand closing seven days, now they're going back to online learning. so that is saying a lot about what's going to happen to the retail sector if you have 20% of your annual sales coming from back-to-school sales and we're not going back to school

so we're saying at conner smith, a group at ubs, that you really have to be defensive going forward and we're looking for other sectors that will possibly do better with an ongoing pandemic >> fair enough, mark, but some would say a company like walmart is defensive, right? all those trends are what we're benefiting from. if we're going ba to shutdowns, that was powering these except for the stimulus that would be somewhere along the line, too, right >> it's all about the numbers. 20% for sales for retail is back-to-school sales a lot of us are not going back to school. chicago said no school university of north carolina, as i said before, tried, failed i think that's a microcosm of what's going to happen nationally we are very optimistic about what's going to happen unfortunately, the science isn't as optimistic. so retail, i'm saying you have to be defensive. >> understood. dan, let me bring you in on that do you share this kind of skepticism about the progress in

fighting covid and in reopening the economy? because, look, i would say the covid numbers nationally are better in recent weeks it does kind of help explain why the market has this optimism >> kelly, i think you're right, and i agree with mark. we're going to have a number of starts and stops and it's just going to be a reality. we don't have a vaccine, even if we get a vaccine by year end, it's going to be a long time before we really see the effect of this, and frankly, we've had some damage to the u.s. consumer psyche as to whether or not they're willing to get out in a normalized fashion and shop. as mark mentioned, you're opening schools, closing schools, opening restaurants, closing restaurants. you still have to focus on the stocks that are either benefiting from this situation or those that are not going to be quite as cyclical or volatile as reopening, and i think they have solid earnings that are going to be predictable, and frankly, some of the high dividend stocks right now are just going to be a good place to ride this out, have a bit of

yield, while we see what happens in the next 12 months. >> i know ultra is one of those names -- it's unbelievable to have an 8% dividend right now. why, though, the advertising play of omnicom? it's almost, like you said, a 5% dividend yield, but it would seem like advertising would be one of the most fickle places to be right now >> omnicom is one of the special places they have a strong cash flow, they have a strong balance sheet. they can really ride this out. they're in a situation that, look, as soon as we're able to turn the lights back on, people are going to hit advertising with a vengeance they need to get people back in the stores, back in the restaurants, back in the showrooms. they're in a situation where you can ride it out, get almost 5% while you wait they're trading at an 11 pe, so it's almost a giveaway, and they will have a very rapid acceleration of earnings as we go back there.

it's a reopening stock, but i like to have a reopening stock where when the reopening is somewhat tenuous, they're going to pay me 5% while i wait. >> mark, i understand. you mentioned the defensiveness on the retail names. does that extend to the overall market and where would you position right now >> warren buffett, one of my heroes, is buying a ton of gold. you just saw him buy 20 million shares of barrick. ubs has a buy on gold. we're continuing to think this rally is going to continue in the gold space, so i would say let's follow the oracle from omaha and let's get some gold. >> this is just speculation, but what if i said to you, it's not warren it's his guys, and a fraction of 1% of the portfolio. would you still be as excited? >> it's definitely warren. >> how do you know there's no way -- >> he's not just letting people go willy-nilly and buying this amount of gold >> it's a gold miner, but yeah, go ahead

>> the gold miner, gold, it's all going to do well in this type of environment, and you're seeing that ubs, one of the world's largest banks is saying buy gold every investment bank is saying buy gold there has to be something to it if the smart money is saying get defensive, you got to listen >> we heard the rationale for it we talked about it with rick and others what's going on with the dollar, what's going on with a lot of these asset classes don, just as a final response to that, would you buy gold >> i don't think you can deny the momentum that's been there i think for any investor to have a diversified portfolio and have some hard commodities as part of their portfolio is a reasonable way to diversify i think we want to have a little more cash flow, as i mentioned earlier, as we go through this, because we're going to be where this timeline to total economic recovery is going to be longer than people think. i want to have some cash flow, i want to be in position for the upper momentum, and if you can diversify into some other commodities, that can be a

foundation and a base, and certainly have a nice run. >> thank you both on these markets today. let's get to another housing market data. another better than expected report with homebuilding soaring in july. diana olich has more for us. diana? >> they beat expectations on the total numbers but take a look inside the headlines multi-family drove the gains, up about 57% for the month. single family starts were up 8%, but still not back to the rate we saw back in december and january. single-family permits, which are an indicator of future construction, they were up a much stronger 17%. so what all this means is that we're still not getting enough new single-family supply to meet the growing pandemic-induced demand for new homes supply was down 14% annually in june builders are planning with those permits, but they're still having issues with supply chain and labor, not to mention lumber

prices are soaring add it up and you're looking at even higher prices for newly built home which were already up 5% annually in june, kelly >> diana, this is a maze to go -- amazing to me. it feels like housing is leading. look at home depot and what they've done rochester, new york, one of these new hot housing markets, supposedly is it topeka or wichita, kansas? there is something to be said about these kind of second tier, third tier cities that are all of a sudden seeing huge demand >> yeah, and it's not so all of a sudden we were actually seeing millennials migrate to smaller cities pittsburgh last year was incredibly popular, cleveland. it's smaller, affordable cities, and now that you have this new way of work from home where you can really work from anywhere, it makes these smaller, more affordable cities that much more attractive, and that's why they're in the hottest zip codes right now, because people just don't want to live in very

expensive large, urban downtowns, they want to get out somewhere where they can get more space and not pay so much that's where the builders are building as well >> i say second and third tier, i just mean sizewise i grew up in rochester it's back on top i love it. diana, thank you we appreciate it still ahead, another electric vehicle maker is jumping into the ring today, debuting in the new spectacular way. we're going to look at whether the landscape is getting too crowded and if it's worth it for investors. plus tiktok's new bidder we'll tell you which tech giant want to get into the social game now and the politics that may be at play. so much for working from home amazon is adding 900,000 feet of office space we'll tell you where and how that is affecting the future of work, coming up.

hey you, yeah you. i opened a sofi money account and it was the first time that i realized i could be earning interest back on my money. i just discovered sofi, and i'm an investor with a diversified portfolio. who am i?! i refinanced my student loans with sofi because of their low interest rates. thanks sofi for helping us get our money right. ♪ our retirement plan with voya gives us confidence. yeah, they help us with achievable steps along the way... ...so we can spend a bit now, knowing we're prepared for the future. surprise! we renovated the guest room, so you can live with us. oooh, well... i'm good at my condo. oh. i love her condo. nana throws the best parties. well planned,

well invested, well protected. voya. be confident to and through retirement. you say the customers maklet's talk data.s. only xfinity mobile lets you switch up your wireless data whenever. i accept! 5g, everybody's talking about it. how do i get it? everyone gets 5g with our new data options at no extra cost. -that's good. next item: corner offices for everyone. just have to make more corners in this building. chad. your wireless. your rules. only with xfinity mobile. now that's simple, easy, awesome. switch and save up to $400 a year on your wireless bill. plus, get $400 off when you pre-order

the new samsung galaxy note20 ultra 5g. another day, another company going a hot new way. a frenzy for electric cars

lately, and we begin with leslie picker, and leslie, why so many companies are choosing to go electric right now >> as a blank check, you'll get in on the ground floor of a pre-iop tech company then they'll take their millions, sometimes billions of dollars in tow, and they'll pitch to the founders, sell to us and we'll expedite your route in the public markets. we've seen this kind of pitch from the likes of bill ackman, barry sternlik, and someone who has taken companies this particular route, that's kevin hartz. he said spac is the ideal vehicle at the right place at the right time >> we've seen companies stay private for far too long the average time companies stay private is now 1 years it was john deere in the '90s

that said tech companies should be out in the market, and we're seeing the market move back the other way. what they say is light is the best ant acceiseptic. we need to get these companies back out in the public markets >> they say spac is more expensive in the public markets. there is really nothing like a free lunch when it comes to debuting your company in the public markets >> the company choosing this way to go public, you have to give up a fair bit of control, right? >> you give up a fair bit of control and it's expensive you're paying investment bankers up and down the entire chain you're paying them to underwrite the spac, to begin with, the blank check company that goes public you're paying investment bankers to underwrite that, so paying regular ipo fees, essentially. you're paying the investment banker to consummate a deal once that's decided in the next two years, typically, or so. then you're also paying the

manager of the spac what's known as a promote, which is essentially 20%, typically, not in every dcase, but usually it's about 20% of the total offering site you're looking at about 25% of the total offering sides of the spac, which are fees that are potentially more expensive than any ipo. >> that is expensive no matter how you look at it let's turn now to phil lebeau and why canoe is the fourth largest vehicle to go this way >> it's because ipos are hot right now. canoe, known as canoe since 2018, was approached by hennessy capital. they said, let's put this spac together it will be under the symbol

$600 million and that will go to pay for a vehicle. that vehicle is known as canoo think of it as a cross between a minivan and maybe a larger transport type vehicle, but everybody who has looked at it has said, well, it's an interesting concept if it works. the ceo on "squawk box" this morning said this will be offered on ev subscriptions in urban areas. >> they are actually not willing to make a long-term commitment, making a down payment for the vehicle. they would pretty much appreciate what we are doing because we have a subscription model that allows them without any down payment to get the c car month by month, and it includes pretty much everything. >> by the way, the canoo, that vehicle, is expected to roll out in the second quarter of 2022. >> it is strange looking

i assume it complies with all the regulation required to be on the road >> by the time it rolls out. right now they're in development, but they say they crash tested it and it will be ready. >> phil, this subscription model, they're trying to make it as easy as possible for someone to basically say, i want this car tomorrow, i want all the paperwork and everything associated with it kind of done so i can start driving it. what's the minimum period of time that you have to subscribe to it. >> i don't think they established that yet, kelly. those are all the questions that need to come up. by the way, that subscription model, it sounds very appealing. it really has not been successful when it's been brought to the market with traditional vehicles it's been a case of a small number of people have said, i like the subscription idea it just has not taken off the way many expected it to. >> is it called canoo because of the way it looks >> that's a good question. i did not ask uhle this morning why it is called canoo, but the next time i talk to him, i will

ask it >> lofty wheels but it looks somewhat like a canoe. phil, can i ask you about the other big topic people have been hotly debating the past 24 hours? this whole thing whether gm would spin off its electric vehicle operations into a stand-alone company? we've got analysts valuabting their shares on this possibility. >> you see the spac ipo, and the valuating plays are that it's highly integrated through the company and they are funding it right now through all the

profits they get from their pickup business, from their truck business in north america. so the question becomes, do you somehow carve that out do you spin it off, and if you do, evan jones from morgan stanley is saying, look, traditional vehicles are only worth about $20 million, but an ev business could be worth three times as that. the battery business,if you were to sell those batteries to another automaker, a third party, so to speak, you're worth another 13 billion, so on paper it looks like a smart move but for the borrower, the question becomes do you really want to go through everything involved there in order to carve it out simply because there is such a frenzy right now with electric vehicle stocks? >> right, or is that too trendy of a move. phil, thank you very much. phil lebeau with all the very latest headlines for us. reversing course after 130 covid 130,000 covid infections in just

a week plus this stock has some of the heavyweights but it has nothing to do with tech. this is the overcrowded kings segment. we'll review it, straight ahead. stay with us >> announcer: but wait, there's more "the exchange" is also a podcast. listen to your favorite parts of the show you might have missed sign up now on apple podcasts, spotify, stitcher and google podcasts servicenow. the smarter way to workflow. come on in, we're open. ♪ all we do is hand you the bag. simple. done. we adapt and we change. you know, you just figure it out. we've just been finding a way to keep on pushing.

♪

welcome back to "the exchange." let's get a check on markets not huge movements behind me but significant ones nonetheless the s&p is up seven points now to 3388. we have to hold above 3386 for that to be a new all-closing high two points above that level right now. the nasdaq is at half a percent today, 58 points, but look at the dow once again lagging, underperforming. the dow is down 38 points. home depot had blowout earnings.

they were holding fast but since sold off let's check the sectors where you can see discretionary, the tech is holding out, materials, industrials. today has a little of the stay-at-home retail feel to it kohl's denied giving information because the pandemic has had an effect on its business at goldman, despite other chinese stocks getting caught up in chinese tensions, goldman said they should have expansion. finally shares of spotify are lower after apple announced two new live radio offerings on apple music.

that enough to send spotify down about half a percent today, but it's also on the growing list of companies claiming apple has more advantages of what it uses over its rivals. here's sue herrera with our update hi, sue. >> spacex launches sixth flight with satellites. according to its founder, elon musk, 800 satellites are needed for its worldwide internet service, and they are now well over 600 it might be the first u.s. case of covid transmission from mother to unborn baby. the texas case is one of the few documented around the world. doctors say the baby was otherwise healthy until she soon began showing signs of fever and respiratory distress but the good news is both mother and baby are now doing well. and after an intense bidding war, the l.a. house that appeared on the popular 1980s-era sitcom, "the golden

girls" has sold for a cool 4 million bucks. that is well over the $3 million asking price that's according to the "wall street journal", and the buyer isn't even a fan of the show, just a fan of the house. and kelly, that is because it's a classic mid-century modern it's never been changed and it's in the brentwood section of l.a. >> mid-century modern is all over hgtv these days >> absolutely. it is the hottest type of real estate and architecture in los angeles. they had 20 bids >> that tells you more about the housing market right now it's not "the golden girls," it's just the house. sue, thank you very much i'm over here now for today's crowded kings segment and today is about toll brothers it's 23% above its 50-day moving average right now. as we discussed yesterday, these are some ways to watch whether a stock momentum has become extended yesterday we talked about best buy, one of the retail names well above its 50-day moving

average. today it's the homebuilder toll brothers you can see the choppy blue line is near $45 a share, up from 15 at the lows back in march. the purple line, that's a 50-day moving average this gap now, 23% is pretty large, and one of those kind of cautionary signs that traders keep an eye on also the relative strength index, that's something when you hit above the 50 mark you start talking about pretty extended. this one, i think we're at about 74, the mid-70s range for toll brothers a couple reasons there why people are keeping an eye on it. here's why tolls perform to date it is up 224% from that 52-week low. it was down to $13.28 back in march. we're back up now to about $42 a share and continuing to march higher nearly 2% today as a result of that strong housing data we talked about earlier coming up, despite cases

rising and a reversal of reopening policies in some states, one strategist says we're still v-rebounding he'll tell us why. plus, fedex is doing something it hasn't done in years. the gains are rounding up their friends to battle apple and politics is making its way to the trading field. "rapid fire" is on its way we'll see you in two jim, could you uh kick the tires? oh yes. can you change the color inside the car? oh sure. how about blue? that's more cyan but. jump in the back seat, jim. act like my kids. how much longer? -exactly how they sound. it's got massaging seats too, right? oh yeahhhhh. -oh yeahhhhh. visit the mercedes-benz summer event or shop online at participating dealers. get 0% apr financing up to 36 months on select new and certified pre-owned models. i am totally blind. and non-24 can throw my days and nights out of sync, keeping me from the things i love to do.

talk to your doctor, and call 844-214-2424.

welcome back let's catch you up on a few stories that should be on your radar today. it is "rapid fire. here to break down the headlines are jon fortt, seema mody and eric chemi thank you to everybody

fedex is following the rival ups by tacking on heavy surcharges ahead of the holiday season. we're talking up to $2 a package, $5 for some high volume ship p shippers they ever surged off their lows, and this speaks to them, seema, off their high demand. >> yeah, and it's been cost-effective delivery options. it's put a strain on big shipping giants. we've seen ups make a similar move and fedex, i think it's interesting timing as well we're about 130 days away from christmas, and now here in august, fedex decides to unveil these increase in prices amazon hasn't had to increase its prices and doesn't that speak to the warehouses and retail centers as a footprint? i think it does. >> do they have a better business model are they absorbing the cost some

other way? jon, the last time they imposed surcharges was in 2018, 28 cents for ground, 99 cents for air >> how much does this affect me, the consumer i don't care if other companies pay it, i assume it's going to get passed on to me, but am i going to see it as a line item on that bill or is it baked into the cost i'm concerned about what the visual will be how i see that cost on the bottom line. >> do people start cancelling a purchase they might make, maybe, maybe not, but even for a buyer to absorb 28 cents, it is definitely another one we're talking about 2, 3, 4, 5 dollars. >> the one who will really feel

it is the small business, especially if you're trying to compete with amazon who has their own logistics workplace now. this is about the big getting bigger and the strong getting stronger, and amazon with its logistics through prime only getting stronger >> in the case with ups, some of the charges only apply to basically big retailers. but in the case of fedex, jon, you're absolutely right, this appears to hit people whose volumes are suddenly up. who would have bigger fluctuations smaller companies, not the big ones, right? >> that's exactly right. shopify helps small businesses to manage that difficulty, but in this prime period where they absolutely have to make big sales, have to make themselves visible when you have the big retailers like walmart doing extremely well, it's another cost >> up next as we see what happens with that one, this is one of the best stories in the last few weeks and there's so

much at stake for apple here their battle with epic games continues. epic games is seeking a preliminary injunction against the tech giant for the removal of "fortnight" from the app store. they are trying to cut did out entirely from its account, so they would no longer be able to make apps from the app store they are also trying to form a coalition, seema, of apple critics. if they are successful here, it's really more about is apple going to end up being charged with antitrust, anticompetitive practices, and this is perfect fodder for congress, i would think. >> yeah, and to your point, their critics have been only getting louder over the past couple weeks because it hasn't just been epic games there's been spotify and facebook that have made the same argument i wonder if your ceo tim cook is on record for a $2 trillion average. do you think, hmm, maybe i should revisit my policies around the app store, because the last thing they need right now is a high-profile dispute

with a company that has such a large and young user base. >> i don't know, jon, if you know the proportion offhand or if the company estimates it, but when we talk about apple's price surge lately, how its multiple expansion is being driven by its services business and the app store revenues are a big part of that business. if they are forced to change it for epic, they probably have to change it for everybody. >> it's a considerable issue with the developers who are so important to apple services business kelly, no one will accuse apple of bringing a knife to a gun fight when it comes to these sorts of platform wars what they're doing is saying to epic, you want to make this about "fortnight"? we want to make it about your entire business. it affects a larger part of the business than just "fortnight," and being on the app store isn't such a big deal. they've got pc, they've got console.

they would be able to get around the mobile issue, but that's why they really want this court order. >> again, i just think that if they're willing to go fight in this case, maybe they think they have somewhat less to lose, although they would still obviously lose a lot here. but, i mean, they are playing right ninto congress' hands >> they are, but in the short and medium term. we saw it happen with qualcomm apple had their supplier stop paying licensing fees and that hit qualcomm hard. eventually they settled. qualcomm is up now, but they went through the shadow of the valley of death to get here. apple might have that coming next up, the university of north carolina chapel hill is moving online after reporting 135 new covid-19 cases and four clusters after just a week of in-person classes. eric, what's interesting about this is not only all the colleges and other types of schools trying to figure out what they're going to do with

covid if they face similar outbreaks, but plenty of questions have been asked about why, i think, football and other sports are reportedly still continuing >> they're part of the acc conference they're going ahead with fall football, so if you can't get through a few days of normal students without getting covid cases to a few digits, what are you going to do when you have sports on the field playing with kids from other schools? it's kind of a mess, but you knew it was going to happen. i don't think anyone thought we would send all these students back to college and we'll get through the cases. you expect it would happen, now it's just how are they going to deal with it >> is there some policy that the football team has about, okay, this happened on campus but it hasn't happened to us yet. some have already canceled the season, others are waiting >> that's such a naive question. it's chaos out there nobody has a clue. every school has their own rules, every conference has their own rules.

they're all making it up as they go along there is no cohesive plan. that's why parents and athletes are furious, because there is no actual person in charge of this whole system everyone is doing whatever they feel like. >> seema, what would you watch in terms of fallout here >> i think bringing it back to business, obviously this education crisis hits so many u.s. households, but i would bring to attention acc, that's american campus communities. it's the largest student housing, real estate investment trust and stock actually moving on today's news around unc and it's down double digits with a market at a relative high. it's a reminder that there are so many subsections and stocks down in double digits. what eric pointed out with chaos in this sector, this is one stock certainly losing >> it's down almost 4% for american campuses today. speaking of sports, a coalition of black athletes and artists are coming together to fight black voter suppression, and one of their goals is to

convert as many arenas and sports facilities as possible into voting precincts. some names in the group include allyson felix, lebron james, kevin hart, patrick mamahomes, maria taylor and more. it would seem as we're talking about these problems with mail-in voting, what's going to happen if we could use stadiums, would that solve a big problem here? >> yeah, it very well could. in general, i think everyone should be happy about more people being able to register to vote, more people being able to exercise their right to vote legally without fraud, but all of these things get politicized. some people are going to say, here you go politicizing sports. wait a minute, olympics, mohammad ali, sports has been political for a long time. politics, to some degree, is part of the point of sports. >> i wonder, eric, if it's affecting ratings this year or is it hard to tell because it's such a unique season >> it's hard to tell because depending on what numbers you're

comparing to, for example, look at the nba, they didn't have games in july and august last year, so what do you compare it to they didn't have games at 10:30 a.m. pacific time, so depending on what games you include this year, you could say it's up, you could say it's down or flat. if you look at stadiums as a voting area, we already have precincts in churches and libraries where people already congregate, so you could do it in stadiums, it might work >> stadiums are so much bigger for spacing. thank you so much, seema mody, eric chemi and jon fortt the postmaster just released a memo trying to talk about recent accusations that they're trying to kneecap the mail ahead of the november election

the postmaster said essex up and down -- he is expanding the election mail task force he said the post office can handle whatever volume of mail comes its way. he is confident that all mail can be delivered in a timely manner and that there will be no changes to retail hours or the locations of post office boxes in light of this recent criticism, it comes as the postmaster general is set to testify on capitol hill where he will face very critical questions. back to you. >> no doubt. thank you from the post office itself oracle is entering the fight to be the company that takes over tiktok's u.s. operations. whether it has a shot is next. remember, you can always watch or listen to us on the cnbc app we're back in two.

welcome back a source telling cnbc that oracle has entered the race to buy tiktok's u.s. operations it joins microsoft in that pursuit after president trump gave the chinese company 90 days to divest its operations on security concerns. oracle itself has strong ties to the white house. larry ellison has been a fundraiser, while safra catz has been on the president's transition team. let's bring in alex and a cnbc contributor. what, if anything, makes you think they might emerge victorious here?

>> i think the interesting part of this is it really clarifies what it takes, potentially, to buy tiktok this is obviously not a normal deal with the government forcing a sale for the u.s. operations plus a few other companies of tiktok i say there are three different qualifications, maybe, you need. one, you need to be able to secure data in the united states oracle can do that with a cloud business of its own. two, you need to be able to pay for tiktok in cash, because a stock deal where bytedance would own a minority stake in a u.s. tech company probably wouldn't fly here oracle a very big company, well over a hundred billion dollar market cap company they could afford to do that third, you need a relationship with the u.s. government, and as you alluded to, larry ellison has one. he has close ties to the government could it happen? sure are there a lot of synergies

probably not >> and that's where i'll pick up with you, eric would we expect it to be a benign presence or would they have larger plans for it >> it's definitely a head scratcher. he makes the point that making it happen seems to enigrate every aspect of it trump wants it sold and these are friends of trump, so maybe there's something there. they're arguably they could make use of that social public data that's gleaned from that. use that data to help inform their cloud business, right? we can't -- it's really important to understand how data

works for a lot of these tech companies. it's not just sort of something that sits in a database somewhere, it actually changes how something works. tha that's the devil's advocate there. at the same time the business logic escapes me part of it is a little bit back to the '90s when microsoft was king, and larry ellison saw them as a chief competitor and he's like, wait a second, i could be the guy to own this. i don't see too much business rationale. there is some argument for the data but look, tiktok is a money-losing business, so even as a partner client to oracle, it's something they'll have to fund for a few years before they see any real benefit from it >> alex, that goes back to what you were saying, they need some deep pockets as you were describing it, i thought, this needs to move along. this is a big complex thing to negotiate, and there's not a lot of time. are there going to be other

possible bidders emerging here >> at this point it seems unlikely just given the time constraint, and also, as i referred to, how many companies can really do this deal? you need to check all those three boxes. the only two companies that come to mind that also check those boxes, or at least the first two, meaning with do the deal in cash and can store the data, are amazon and google. but we know what jeff bezos' relationship is with the trump administration it would seem almost impossible that amazon would emerge as the buyer here and in google's case, google owns youtube, so the potential antitrust implications of owning both tiktok and youtube may be a non-starter there. i think part of the reason why oracle is even involved here is that there are so few companies that could buy this asset. to ed's point, while tiktok loses money today, it's a huge growth asset and it's an area where oracle has struggled for years. where is the growth? you could be buying this as a forced sales price that is sort of a deflated price because of

the circumstances and end up with a jewel of an asset even if it doesn't have any synergies to the rest of your business. it just could be a good purchase on the face of it, and i'm sure oracle is interested for that reason >> ed, i'll give you the last word here, and as we're talking about what that sale price $30 billion is being floated i imagine someone, some of have to come up with a number this is one of the strangest deals we have talked about >> what's whatever will satisfy the staple this year >> it's not just the data, oracle needs to figure out in this deal, whoever it is, will they get the algorithm that underlies the tiktok engine.

it's sort of the next video that pops up like youtube could come in and steal the top tiktok stars or instagram would do that, it wouldn't matter it might be worth zero no matter what the price is. >> fascinating thank you both ed lee and alex cherman. for more on the battle check out alex article you can find on cnbc.com sense titiv sensitive econoe saying the v shape recovery is heoistl jns us, next.

welcome back many economists are warning this recovery is in jeopardy without another stimulus package on the way from congress. it may not be fully necessary and he says that not only will the economy be fine, but a v shaped rebound is still possible it's good to have you. it's still out of consensus. >> may, june and july whether we're talking about employment, production, sales. you saw the housing numbers

today. this has been much more of a v shape pattern that happened sooner than widely anticipated in the teaser, you mentioned some of these really high frequency data indicator that are showing some signs of life as we move into august >> does it have to be stronger what role does congress and fiscal stimulus need to play here some of the estimates about the hit to the economy look pretty scary. >> no doubt about it there's some policy risks here it's probably premature to go cold turkey on fiscal policy that would be disruptive and not helpful. we still have a depressed economy here where we're recovering faster than expected. there's quite a way the go if

you look at the labor market and the stimulus rescue efforts have been important that's gone a long way to support it the fiscal support will be extended >> how much of this rally can be sustained and with kind of what vigor and how long a period of time once we move from the catch up phase to more of the expansion phase. >> yeah. i think pretty much the gains can be sustained

valuation metrics whether it's priced to liquidity ratios or use an adjusted risk premium model. there's far less upside now than we were back in the dark days of late march that said, i don't think the market is unjustified in being where it is. the market had decoupled from the fundamentals the market looks forward it's not always right but investors are forward looking and we just discussed, we had three months of data that have come in far better than expected >> it's good to have you we appreciate it that does it for us today. next hour, it's tilman tuesday we have the latest online gaming numbers from his golden nugget casino stock slices.

for as little as $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership. schwab. own your tomorrow.

an army family who is always at the ready. so when they got a little surprise... two!? ...they didn't panic. they got a bigger car for their soon-to-be-bigger family. after shopping around for insurance, they called usaa - who helped find the right coverage for them and even some much-needed savings. that was the easy part. usaa insurance is made the way liz and mike need it- easy.

welcome to power lunch we start with record highs on wall street. the s&p 500 finally breaching its february highs let's take a look there. 33.90. it was the closing high. we're above that now just a little bit below the all time intraday. the rebound comes in the face of the coronavirus pandemic, uncertain recovery but for now the markets are going up california's ruling over its drivers. are these two companies abou