general motors doing good here. >> steven weiss? >> made my contributions to roku already, but thank you i own u.s. global jets etf >> cracker barrel, dom i like them and i'm buying them here that does it for the "halftime report." "the exchange" with kelly evans begins right now >> thank you very much, dom. hi, everybody and here's what's ahead of us. big layoffs, warnings from food companies and some cautious fed speak today. is the economy showing any signs of losing momentum here? we'll ask as the dow turns positive for 2020. and if you think the gains in the tech stocks have been impressive, you should look at the electric car stocks. we're talking gains of 200, 300, even 400% in just three months is it sustainable and which ones are due for a pullback

we will dive into that the pc is back facebook calls out apple can you sue over a bad stock and ulta's makeover. we begin with the markets. rahel solomon to do the honors rahel? >> hello, kelly, happy friday. it is green across the board all three averages up about half a percent right now. as you mentioned the dow has given up its 2020 losses and we have one more august trading day after today, but it looks like they are lodged for the best gains in decades other big gains are the cloud winners. a big move after results last night. workday up 21%, box up 30% and

salesforce up 2.5% let's look at apple before the stocks split the market opened monday, can never talk too much apple. 24% of the dow's gain. at its current price it is the most influential component of the dow. that, of course frks wi, will cn a big way come monday, kelly >> there is so much coming on monday, the tesla split, the dow split. consumer spending rose for the third straight month in july but the pace of growth is slowing. food companies are warning about slowing spending coca-cola offering buyouts to 4,000 workers while mgm resorts are cutting 18,000 jobs. are these markets in jeopardy? with me is head of asset allocation asset management and

kate is head of asset management investment institute do you think the economy needs more performing or does it need a little assistance here >> the market is still strong. we'll see a moderate pace of recovery from the early spring and the summer the concern about the economy is whether consumer spending can hold up because the stimulus package hasn't been passed yet so far consumer spending has been quite strong, but if we don't get something in september, there is a risk that the consumer could start to pull back a little bit. that would put the recovery act at risk. >> tracy, would you say that's priced in? we thought we were going to have this big deal in washington, now maybe it's a skinnier deal, a smaller one, but nothing is done until it's in black and white. what do you think?

>> we think consumer stock is at risk here. claims came in at a million, so another million people unemployed that is definitely weighing on the consumer so the key here is, do we get that additional stimulus or not, and our belief is that we will get the stimulus it could take some additional weakness in the consumer it could even take some market weakness before congress comes together and passes that package. but that's really what we think it's going to take >> jason, where would you be in the market as we're talking about these risks, especially the consumer confidence number this week was not great, so you could say as an investor, all right, you have to think through the scenarios it weakens a little bit, we get the move from congress, boom, we can look at the other side are you rotating tell me about tactically speaking, what's your advice here >> we're not rotating. we do like equities.

we think there is still more upside we think we'll get that fiscal package. i think we'll buoy the market. it will keep the market from pulling back too much, but it's what the market has been debating about in terms of growth and value we're neutral there. we would like to get the market more exposed to mid-term equities it doesn't have quite the exposure to the financials as the value tree would have. the industrials are another sector that we like. we're kind of dipping our toes and adding a little cyclical exposure to the recovery we think that will materialize until we get a true sign of a vaccine, i think it's the market consensus you'll not get a rotation so fixed income but not being overly aggressive without a stimulus package at this time. >> that's interesting you don't think we'll get a valuation

until a vaccine. maybe you just have to wait and see on this one. i know you guys are looking at things more globally speaking, but the same question i just asked jason, what would your advice be to investors here? >> even with the news from the fed yesterday about keeping rates lower for longer and the inflation average targeting, that means that now investors really have to stop and think, you know do you want to be in cash earning nothing? do you want to be in a treasury earning 75 basis points, or do you want to take more risk and move into high yield where you're getting that additional yield? do you want to be in the large caps box where you're getting the dividend of 1.73%. we think that means there is this rotation out of the safer asset classes into those riskier asset classes, and that's where

we're telling investors we want them to go especially if we see a pullback here in the next couple months so large caps, mid caps over small, u.s. or domestic over international, and high yield over investment grade. >> i haven't heard this much enthusiasm for midcap stocks in maybe ever thank you both very much for joining me today, it's been a pleasure, jason drayho and tracie mcmillion who will buy tiktok as it becomes a moment of stress the u.s. julia boorstin learned more today. she joins me now julia? >> victoriapappas taking the realm after the resignation of

the previous ceo she told me which buyers would make sense >> from the people we're hearing from, i think they're amazing tech companies oracle is a leading company in security microsoft as well, great security and privacy platform as well as everything they're doing with the cloud yeah, i think amazing, reputable companies and we're certainly fighting for them. >> as for walmart joining microsoft's bid, vanessa pappas -- sorry, i got that wrong earlier -- vanessa pointed to national energies and said they have rolled out econ features there is potential, including the potential the app could be shut down. kelly? >> with its future of viability

hanging over tiktok with this potential owner change, what about rivals there are plenty out there who would love to steal tiktok's thunder. instagram showed reels is this giving a bigger opening for others to come in? >> you're absolutely right i asked her about facebook's reels which it just rolled out here in the u.s. a couple weeks ago. she said her party line stressed the possibility and enthusiasm of creators for tiktok she did say specifically they have not seen a decrease either in terms of their users or creators or advertisers due to all of this noise around the potential deal and potential shutdown so there are certainly a lot of companies, not just facebook also apps such as triller trying to get that young user base that's so hard to reach. she says it hasn't really had an impact just yet. >> we'll see if that changes

after everything that happens in the weeks and months ahead julia, thanks very much. great stuff. julia boorstin speaking with the great ceo of tiktok. coming up, forget apple oram zo -- or amazon. we'll see who is due for a breakdown. apple claims facebook quieted them when it came to the app pricing. we're back after this quick break. you say that customers make their own rules.

let's talk data. 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 buy the new samsung galaxy note20 ultra 5g.

welcome back electric vehicles are turning heads these days well, the stocks are, anyway, because they're making some pretty electric moves. tesla, of course, the biggest in market cap it's up more than 440% this year workhorse got a jump this summer, and nio, the chinese maker, up 40%. david wis ten, an analyst over at morning star. matt, i'll start with you. we've seen charts like this before how do they end? >> not good. it doesn't mean these aren't

good companies sometimes the stock is well ahead of the fundamentals and gets well overbought, way overowned, way overloved, and that's what we're seeing in tesla. you look at the weekly rsi chart, it's a reading of over 85 today. that's very close to its all-time high and a 450% premium to its 200-week moving average the next closing one is only 250% premium this stock has gotten way ahead of itself. i think it could come back significantly, 20 to 30% if it fell 60%, it would still be above its february highs. i don't think it will fall that much, but sometimes stocks getaway ahead of themselves. if you asked me in june, i would say buy tesla, not nikola. now i say just the opposite because nikola has come in a little bit and its chart looks better >> you said a lot of these firms won't make it. they'll linger around for a while, there's easy money, and also saying that part of this is

the excitement over this spac model, saying it's putting gasoline over that fire, so to speak. tell me if the price reaction to all of them seems to you like a warning. >> the whole space in terms of start-up as well as tesla, it's not really a start-up anymore. i think it's a bubble. tesla roughly 70%. that doesn't make any sense to me yes, there's more appeal to retail investors, but 70% to come on, it just doesn't make sense. it's a frustrating sector to cover and that quote you referenced, i'm talking more on these start-ups that they got their vehicle and they got some funding and that's great, but it's hard to make something right and consistent and at scale. tesla's market caps are not a big company in terms of vehicle

size, probably 400,000 this year they're targeting 500,000 of the that's going to be tough it's a bubble. eventually you'll need more money so it remains to be seen, especially once rates come up. >> it's interesting you characterize it that way, because as you said, you covered this space these are your companies in a way it makes it much more difficult for you when the price action goes this way matt, what would you do if you're elon muck he's already issued more stock he set the stock prices too high he's very wealthy as a result of where the stock price is now, but if it collapses, that would be a headache of its own is this going to go the way of the cannabis stocks of other subsectors of the market we've seen where they had this tremendous hype, the price basically collapses, everybody moves on and nobody notices? or are there bigger ramifications here for all investors and for the market >> yes, i do think it could go

the way of the cannabis stocks whether we can bounce back the way it has on many different occasions is something the cannabis stocks haven't been able to do, that's another question it doesn't mean it can't fall and fall substantially you're talking about the retail, how that's gotten all involved we also have to remember the algos. they're run more by institutions, but they're momentum-driven trades they get zero credit when the stock rallies, but there's a big impact on that the problem is when it reverses, they'll be selling into a down stock and doing so aggressively. they'll get a lot of blame at that point it's going to inflict some pain on individual investors. that's going to spill over into other stocks, especially since so many others are high-flying as well, maybe not as much i'm concerned that the tesla and apples of the world, apple is a great, great company, but its stock is overbought. it could cause the rest of the market to pull back, even with the fed on the sidelines waiting

to step in if things get really bad, but that doesn't keep us from seeing a 10% correction in the stock market and a significant correction in tesla. >> david, matt mentioned earlier that a pullback from nikola could make that attractive at least among the names we're talking about. are there any valuations to you that are compelling, and what happens to these companies if their stock price reverses and drops by 50, 60, 70% >> yeah, and i should say i only cover tesla, i don't cover any of the startups, i don't cover nikola or nio or anyone like that on my coverage lists, gm as an eva story, they're getting no credit for that nor of their crude business you're asking what's going to happen i think eventually some will have a hard time getting one product to market or multiple products to market, and at that point they'll probably get stressed, something in the

economy will happen. remember, there's still a recession in twith the pandemic. not everybody can afford a tesla right now. you can't just keep selling one vehicle that costs 150k or something. just a long term to scale. >> david making the case for people to think about gm the same way they're thinking about some of these other high flyers. thank you both today, matt maley and david whisten talking about the stocks dell and hp, we'll look at those numbers. both stocks up about 6%. plus, a vaccine breakthrough with some names you may not have heard of the payroll tax dilemma coming up. 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. tools, cattle, grain, traded goods. even shells represented value. then currency came along. they made it out of copper, gold, silver, wampum. soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. that's why it's time for digital currency and your investment in the grayscale funds. go digital. go grayscale.

welcome back to "the exchange." let's get a check on the markets. we're up 117 right now, about .4 of a percent gain and we're pretty close to positive territory on the year, which is amazing if you think about it, with the pandemic and everything else that's happened the s&p up about 8% on the year, the nasdaq up 30% and we're seeing slight gains across all of them today. let's turn to the sectors. yesterday financials were a rare leadership spot holder today not so much. but energy is leading the way, so once again, some of the less favored sectors are in the leadership energy up 1%, materials up there as well. underperformers -- i'm sorry, health care, real estate but only by a little bit shares of draftkings are lower on a downgrade to equal weight by morgan stanley. valuation concerns at play there. also they're talking about a reversal of the stay-at-home trade, a lack of security checks

and draftkings headwinds and take a look at peloton, which continues to surge to new highs. we're up another 8.8%. we're up 60% since the ipo last september. just an incredible growth story there. let's get to sue herera for our update sue? >> hi, everybody, here's what's happening at this hour the u.s. will be bringing back roughly 3,500 troops from iraq over the next two or three months that's according to the "wall street journal." that's about a one-third reduction. president trump is expected to tout the move as progress in ending what he has called america's endless war. children with covid-19 may be exhaling the virus for several weeks even if they never develop any symptoms that's according to a new study that was published earlier

today. herbalife has agreed to pay $122 million amid rumors that it made payments to china and then falsified the books to hide them russia has released purely classified video of the largest nuclear explosion ever the definition of what is known as the sara bamba almost 60 years ago. pretty incredible video. i'll send it back to you as more companies make head way to a vaccine, one spa world, ticker spw they're down 50% this year but almost tripled to the 52-week low. also on their list is wnyb

they're down 237%. finally sea world having a bad year so far but seeing a nice rebound, doubling more so. it's more than tripling from its lows the company announcing early this week the opening of a new park that will open soon for the rest of steve's picks, you can go to stevepro/low we are joined with a closer look at the evolution of mr. powell steve? >> when fed chair j. powell came to the job in february 2018, he expressed respect for economists in economics but skepticism. his biggest beef, how key economic theories didn't work so

well in practice, ideas like the neutral interest rate or ourstar kept changing. unlike is unlike celestial stars, he said, these stars move unpredictably and cannot be observed targeting announced yesterday by the fed came after 15 fed listening events and it reflects 17 members of the federal market committee. but it's also the result of the evolution of powell. the fed implemented inflation targeting in 2012 under then chairman ben bernanke, leading policy expert. but powell began to see an inherent flaw. the fed will always see inflation and never hit the target the fed was always chasing its tail powell and the fed are hoping to try to convince the public that inflation can rise to the target and above it in order to average

2% over time the other big change announced yesterday also reflects powell's observation of how economic theory can fall short in action. the fed kept waiting for low unemployment to spark inflation, but the rate kept falling, inflation kept not appearing, and yet powell could see tremendous social gains from low unemployment in this year's virtual jackson hole speech, he said the strong labor market that prevailed before the pandemic was generating employment opportunities for many americans who in the past have not found jobs readily available, especially low-income americans. now the fed is going to let the economy run with low unemployment and worry about inflation when and if it really shows up all of that is part of the change of powell from outsider to trail blazer. now, kelly, we'll see whether it remains in practice and whether it's right >> you're so right, from an outsider to a trail blazer i don't think any of us would have thought at the time that this is the guy that will be

trailblazing to a new -- they seemed oddly to be matched well to one another so let's talk about some of the risks, though. so far, as we go through the pandemic, so good, but there are plenty of risks to his new strategies >> i think that's right, kelly i think i can get them all on one hand, which is sort of good news that it's only one hand and bad news that it probably includes all five fingers. you have asset bubble problems there is an assumption underneath it, kelly, that they can address inflation when it comes. so those are the the issues. i figure it's okay for a while also questions about how to calibrate this idea. he said it wasn't a mathematical formula so we have to kind of feel our way in figuring out what the fed is going to do. there's definitely risks involved, but right now it seems like the better bet to let unemployment run lower and worry about inflation later. >> all right, steve, thank you steve leasman over the

fed-powell course. "rapid fire" is ahead after this [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know there's a 30-minute limit, right? tell that to the rain. [ beeping ] for those who were born to ride, there's progressive. 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 let's catch you up on a few stories that should be on your radar today. it is time for "rapid fire." here to break down the headlines, dominic chu, we welcome back rahel solomon and introduce mr. ford there is a pc boom and that's good news for companies like pc,

inc. we were joined by the ceo of hp. >> now we see the need to have one pc per person. this is going to drive demand and stay fast for a while. >> dell saying they also see robust demand for notebooks, both stocks at 20% it's not just the mac, people are buying computers like never before >> apple saw a huge bump, too. they reported it was like a holiday quarter for the pcs and ipads. when you think about it, this follows through into education in normal times you've got a pc lab, a computer lab, you've got maybe an ipad cart and these things are shared between kids and between classrooms now you can't have that. you have to send these things home kids have to learn to distance it's one to one, and either the schools are going to buy them or

the households have to, kelly. >> dom, we're seeing a shortage of laptops, a lot of schools struggling to get their hands on them the resale market is just huge they're going like hotcakes. >> an acceleration of a trend that was already into play when you and i were going to school, nobody really had a laptop for every person out there. these days you cannot really go to school at the college level without one. now it's coming down to high school, middle school and even elementary school. the issue is whether or not these trends last past the covid-19 pandemic. i see the same thing with the golf industry. there is a huge move there a lot of that demand is there but will it last that's a key question for a lot of computers out there i haven't used a laptop probably for like six to nine months prior to the covid-19 pandemic, and i finally fired up my dell alienware after six months >> because it's all on your phone? >> it's all on my phone or ipad, yes, but finally i started using

the computer because i was doing so much more on there, the webcams, all the applications, the microsoft sweeps, all the things i was using was on the laptop then i had to kind of keep church and state separate, so i have a laptop i'm using now. >> the males out there seem to love their ipads, but i don't know, i like the laptop. what more can i say. >> i'm more of a laptop person, too, especially for online shopping speaking of online shopping, companies like best buy have seen really strong demand, but to dom's point, you do wonder how long this sticks around, because when everyone has a laptop and ipad, your dog has a laptop, your grandma has a lap do laptop at some point you've gotten your fill >> are you changing the future, are you accelerating the future, are you bringing it forward and you're going to face this hangover in this case, you have to wonder

are people going to need to stock up on this stuff for five years after this point >> it's a very good point. i have one ipad, one work phone, one personal phone, one laptop but i think i'm good for a couple of yeears. i don't know how often i'll be in best buy or purchasing a personal computer in the future. it's a good question, kelly. >> i think we're overcovering these companies. remember, john, back in the day when we talked about intel or these personal computer places it feels like i haven't talked about an upgrade for these for a while. perhaps we'll be talking about an upgrade because everybody needs to replace those computers. >> my kids are playing "fortnight" on their personal devices. they didn't really care much before, but when they get older, they'll definitely want them replaced, and the question is going to be, will parents pony

up >> you could have like, "john after hours. moving right along, there is a tech showdown in silicon valley after apple conducted an update after announcing they would take 30%. facebook wanted to include a line above the fine print that says apple takes 30% of that purchase, and this is after apple refused to waive the 30% fee on this new feature. how much are these companies really fighting each other >> they're really fighting nice try, facebook clearly apple views the app store as very much like a retail store where they get to screen what comes in, they set the rules. good luck protesting inside of somebody's store against their own product. you can protest outside the store, but inside the store? i don't think so nobody is going to let you do

that apple certainly isn't. >> can i just say something here i agree with john here, because i feel like that's the situation that's setting up. but here's the thing, if the whole retail world was only, hypothetically, say walmart and target, only those two stores, would you have a right to go in there and protest some of the policies because it is, say, monopolistic or some behavior like that. this made me think a little bit. i'm not sure how i feel about that >> go ahead, rahel >> apple against small business? i get it, apple is trying to be fair, but i just don't know, the optics don't seem that great, especially in this time. >> facebook is small business now? i'm trying to squeeze out a tear for facebook because they don't have a megaphone loud enough to say something they want to say come on, facebook has the biggest megaphone in the world

right now. if they want to say something outside apple's space, they can do it. certainly it wouldn't make apple look so great, but it makes me want to pull out the violin. >> investors don't care. it just shows no sign of seeing this as a real setback i think it will play out for some time. let's talk some gap. we haven't talked gap in a while, but they pivoted their supply chain to make face masks during the pandemic and it really paid off. they announced $35,000 of face masks. the city of new york, the state of california, kaiser permanente, dom. the stock is still down 2% on the year, but is this a new line of business for them it just seems like a one-off >> it could be a one-off, but i applaud them and all the other businesses out there, small, medium and large, that made the necessary pivots they had to make during the covid-19 pandemic some would say it's profit e

profiteering, what you're trying to do is make up for some of the lost revenue let's not forget a company like gap had to close their stores physically speaking, they had to bulk up specifically e-commerce. one of the ways they made up for it is in making masks. these days, this is a fashion apa apparel company at its very core, a retailer i have ten different masks from different designers. it's become like a fashion accessory for me these days. >> rahel, it goes back to your original point where there are some companies changing the future or accelerating the future they say, we take this as an example of how our corporate culture can be going forward what does that mina plid ean apo other scenarios that don't have a pandemic, or should they just hope their mask selling will grow for a while >> i don't know, kelly

i hope we're not wearing them for a long time. another company we heard from recently that's also benefiting from the facebook trend, etsy. they said they made $346 million from masks in their second quarter. clearly people are trying to accessorize with their mask. i really haven't gotten there. i begrudgingly grab mine and throw them on. >> i use the disposable ones myself uber is suing the company saying they pushed up the date of when their stock shares would become public. they are at the task price of 45 instead of six months later when they would have been 40% lower, and uber says this is without merit. they would have had to know a

couple days before the ipo that shares were going to fall or didn't look great in order to be accountable? >> i'm sure there is a case to be made that they had a sense of demand from the employee perspective, this is adding insult to injury. you have the stock price dropping, and yes, the company does withhold a certain amount for taxes from that rsu amount, but then you're hit with the extra tax bill in payroll taxes later. so this really hurts uber is in a position now, if it values its employees where it's got to kind of make them feel better about this, the whole point of giving them rsus was as a privilege and that backfires when the ipo is mispriced. >> we see flint plenty of ipos don't go that great. it's just strange to see a lawsuit about it >> we wouldn't be having this conversation if uber shares were higher if uber shares were higher, you

could sell some of the appreciated stock to fund some of the liability on the tax side of things. it's the fact you have some stock that is lower. part of me struggles with this because in the market things go up and things go down. not every single ipo goes higher, and if it's part of your compensation, guess what, it's part of your compensation. >> this isn't kellogg or goodyear, this is uber employees were told the story and the stock was supposed to be worth so much more, it was changing it is world for transportation and for practically everything so for the company to make a change at the last minute that put the employees at a disadvantage when it has to do with the stock, that hurts >> wait, wait. so you're telling me if they made that disclosure, those 200 people would have turned down the stock, right, not taken the rsu, not taken the award don't give me the shares, i don't want the tax liability is that what your point is >> i'm saying the change they

made right before the ipo to change when the pricing takes place and effectively what ended up hiking the tax liability for the employees hurts extra because of the way not only the company pitched itself to the world but pitched itself to employees. >> i guess my point is i don't think anybody would have turned down the stock even if those disclosures were made, i guess, is my point. >> we're just sitting back like, you guys go at it. it is interesting, though, because john, to your point, the company kind of knew about the demand -- yeah i think about airbnb rushing to go out the door this year. anyway before we go, nobody puts beauty in a corner analysts' expectations of online sales more than 2% that hel -- 200%. the owner says she thinks it will be repressed the rest of

the year this was the stock of the decade, then kind of hit the skids for a while. are they doing something right for covid to kind of set it up for the next chapter >> they were being kind of stra t strategic. they had some grand opening projections. they kind of scaled back, but they still maintained for the ulta customer to come in and experience the shades and the brands is still sort of the highlight of the experience. they're shifting more to e-commerce so the takeaway from the call yesterday for me was that ulta moving forward is still ulta, but they're changing a little bit they're sort of changing their face a little bit. we might start to see more digital investments at e-commerce they're also saying their real estate team is in the process of perhaps renegotiating some leases ulta is in a unique position because they tend to have off-mall locations and they're huge stores. so anything you want beauty

related, you can get at an ulta. as sales are declining, people are spending more on skin care, fragrances and that sort of thing. diy, do-it-yourself. >> and dom, they're all saving on gas >> i don't know about you, dom i only wear makeup at work, not at home. >> i probably wear more makeup than my wife does, and that's a sad commentary right there >> john ford, rahel solomon and dom chu in a very active "rapid fire" today. jared joins us next at the pain he sees if congress can't come together on action. frank holland taking your questions on high-flying stocks. we're back in two.

jean, did you know geico is now offering an extra 15% credit on car and motorcycle policies? that's great! that's 15% on top of what geico could already save you. so what are you waiting for? john stamos to knit you a scarf? all finished, jean. enjoy! thank you. i give. the stitch work is impeccable. it's just a double fleck pattern with a reverse garter stitch. no big deal. is your hair this soft? softer. geico. save an extra 15% when you switch by october 7th.

it has been nearly full four weeks since the last stimulus package expired and the next one is really nowhere in sight the republicans are considering a narrow $500 covid stimulus bill, nowhere near what the democrats are proposing. nancy pelosi and mark meadows did discuss stimulus afterwards pelosi issued a statement saying they are at an impasse. > janet yellen and bernstein underscore this stalemate. they said with no stimulus, the country could downgrade to no growth at all. how did you score a gig with yellen, jared? >> that was a real treat to get to write with her.

she is so clear and thoughtful >> was it her that came to you, or did you go to her with a little oomph added tell me about it >> sure. we talk about the economy now and then, and as we were having a discussion about what the feds are doing and what the fiscal authorities, the congress, particularly senate republicans are not doing, we thought we should write something about that really, what we wanted to get at was this idea that it's not just monetary or fiscal policy alone that are so necessary at a time like this, you really need the one-two punch. one of the things we said in the piece is that it's as if by holding credit rates so low and making sure that credit markets are flowing freely, the fed kind of sets the table. but to get the diners to come into the restaurant, there you need fiscal policy to complete the deal >> it's interesting, because the fed has done so much to provide liquidity this year, they've launched a number of different programs while congress did ppp, i wonder

if the fed's success has made it less likely that congress will follow up with anything else >> that is a risk, and one of the things that's very important right now is to listen to another fed chair, chair j. powell who is going to congress every time he gets a chance and saying we really need fiscal support to help really boost the impact of what we're doing one of things that we remembered is this is precisely the thing that ben bernanke was saying at the beginning of the last expansion which was weaker than it should have been because the fiscal push just wasn't enough to be very clear, of course, congress has done a significant amount thus far but as you just pointed out shs about a month ago, they dropped the ball the way i think of it, it's as if we're trying to build a fiscal bridge to the other side of the crisis and congress stopped the construction way suh early. i really am talking about the senate republicans who have been

not been wanting to close the deal >> they would say it's the democrats. >> the democrats passed a bill, right right? >> a very large one. the economy has recovered more quickly. i think there's legitimate questions about the best way to structure this going forward >> if you're saying there's room for compromise you're right and i agree >> there's no way the two sides are ever going to agree until that final, final deadline that was going to be my final question, this idea of mission creep at the fed because politics is hard and people disagree, they go, we'll just let the fed take care of it that's been true for a lot of things with pandemic it's true of the fed's mission going forward. they are supposed to solve racial inequality and address climate change and take all of these things into account. under a biden administration one of the campaign goals is make sure the fed takes those things into account as a policy

is that giving more of the people's power to the fed. >> not really. i don't think that's an accurate way to describe. for the most part, a lot of us are talk about the fed and racial equality, for example that is to be data driven in terms of inflation not driven by estimates of an actual rate at great expense to communities of color this is no new mandate >> i think the fed has been trying for a long time to tell people we don't want to tighten prematurely and by highlighting the impact on those communities, maybe that will get across

thanks very much for joining me. it's been a pleasure >> thank you >> jared burnstein coming up, president trump's payroll tax cut is scheduled to go into effect next week many workers aren't going to see any change in their paychecks. we'll explain why, next. remember you can always watch t clisten to us live on the go onhenbc app. ♪ ♪ ♪ ♪ ♪ ♪

what happens when switch to xfinity mobile? well, the good news gets shared. and it gets rated #1 for customer satisfaction. but don't just take our word for it. take theirs. it's your wireless. your rules.

only with xfinity mobile. call, click or visit a store today. welcome back president trump's payroll tax cut is scheduled to go into effect next week many workers aren't paychecks in corporate america is throwing cold water on the plan

>> reporter: businesses are warning this is a no win proposal that's because president trump isn't actually cutting the 6.2% employee payroll tax he's allowing it to be deferred. the question for businesses is do they need to let each and every one of their employees to decide whether to keep paying this tax or push it off until next year. that would create an administrative nightmare if businesses make a plan kblan decision to defer this tax for all employee, some workers could face nasty surprise when they realize they owe the government money. a person making $35,000 a year could wind up owing more than $750 a coalition of industry businesses is now cautions that many of our members will likely decline to implement deferral choosing to with hold and remit to the government the payroll tacks required by pllaw.

the other challenge is the payroll taxes are used to fund social security. if they were not to be paid back, that would blow a $100 billion hole in the social security trust fund and move up the inksolvency date by a coupl of months. >> businesses get a tax cut but we're going to keep sending the money to the government. >> reporter: right the person who owes the tax is not in charge of collecting the money and paying the tax that discrepancy is why this is such an administrative tax for businesses >> obviously, they want to make sure people don't have to turn around and pay out of pocket i guess it's a lose lose thanks very much we'll see if anything changes ahead of that. that does it for the exchange. still ahead, abbott labs getting the green light from the fda for

a $5, 15-minute rapid test i'll see you on power lunch right after this ♪ i keep working my way back to you, babe ♪ ♪ with a burning love inside ♪ yeah i'm working my way back to you, babe ♪ ♪ and the happiness that died ♪ i let it get away servicenow. the smarter way to workflow.

some companies still have hr stuck between employeesentering data.a. changing data. more and more sensitive, personal data. and it doesn't just drag hr down. it drags the entire business down -- with inefficiency, errors and waste. it's ridiculous. so ridiculous. with paycom, employees enter and manage their own data in a single, easy to use software. visit paycom.com, and schedule your demo today.

welcome to power lunch i'm bryan sullivan it is happen friday for investors. stocks are higher to end the week, month and now all the major index is higher on the year the best august since 1984 wow. a big part of that is walmart jumping 5% of the past two days. it's joining microsoft to make a bid for tiktok in what could be most unlikely deal ever. potential game