something that can triple or quadruple easily based on the valuation at the other luxury brands are getting, capri holdings, that's the one you want to buy. >> we'll let you go. >> names that are music to my wife's ears, jimmy choo. >> all right v a great afternoon. >> welcome to "closing bell," everyone stocks selling off in a volatile session. the s&p 500 down just over 1% having opened higher let's have a look at what is driving the action tech rolling over. apple made 5 apple made a 5% intraday swing the senate has failed to pass a gop stimulus plan casting doubt over any new package before the election and employment data came in slightly worse than expected highlighting a still fragile u.s. recovery. the dow down 300 plus points as we stand the s&p 500 down 1.2%, sara.

>> it's been a wide range today. former citigroup ceo sandy weill will join us to discuss the water shed moment at his former company which just became the first major u.s. bank to appoint a female ceo plus, we'll speak with jason robins from draftkings ahead of tonight's nfl kickoff. and we are counting you down to some exciting earnings after the bell today including peloton, oracle, and chewy. two out of three are big stay at home winners plus an interview with chewy's ceo as soon as the numbers hit the tape let's get straight to the market in the final hour of trade another volatile session on wall street mike santoli tracking the action for us what caused the weakness here in the last few momentors so? >> that morning rally was really limp it did not pass any of the tests. it stopped where yesterday's highs were nobody had any faith this was really going to be upside

momentum then you had a rally in the treasury market. yields got compressed a little bit. and the dollar is also been higher throughout the afternoon. so the macro things i think had some role in this overall, i think we're in the post concussion protocol as i often say after we have a sharp pullback nobody really trusting, in fact that, a good low is in yesterday. also, you know, most of the selling is coming out of the mega cap tech stocks that is not the stuff that should be most innunsed fluenceh macro components this is the low. that takes us back around early to mud august in terid august. its no the necessarily cutting into the meat of this really it is showing you that there is some struggle to get any lift off the lows right now it's touch and go. i would point out previous times we had the sharp selloffs and then go into trading ranges.

let's see some of the divided indicators on sentiment. this is from the ft story about the retail options craze this is the amount of money spent on upside call premiums in small orders so essentially it's almost all retail activity. this is done off the charts. i don't think that activity is going to go away quickly a three day 10% pullback is not real real real dissuading this crowd look at this other job of professionals. this is one group that turned tail this is the volume, an inverse etf. stocks profit when they go down. this is from fund management this thing spiked right up there. p sometimes y sometimes you get that at the beginning of a move. but what is interesting is i think you have a push-pull between a lot of retail excitement for the market still and then professionals saying we might have to just back off a

little bit we're overdue for seasonal corrective work. >> what are the smartest technical analysts or research notes that you read and you pay attention to saying about whether people should be buying this dip >> i think most of the -- i would say that consensus of people who have been right about this market or that it's a bull market the trend remauins higher longe term nothing says the low we reached in the last couple days has to be the low for this move because of seasonal factors and because did you buildup to excesses. don't be surprised if you have to kind of chop around lower a little bit here. but i don't think people are looking at the macro stresses and saying that's somehow a game changer for what has become a pretty good uptrend in the last five or six months so mostly people don't see a big reversal right here. that doesn't mean that it was just a three day veevent either >> markets are down 298 points we did briefly hit down 390

about 20 minutes ago citi ceo will will step down and be replace bid president and ceo jane frasier who will become the first ceo of a major u.s. bank a water shed moment. it takes citi's female board representation to 47%. frasier has been head of m & a, ceo of the private bank, ceo of the latin american region and the ceo of global consumer that role she only took up in october 2019 which was also when she was given the president rank or title so while many thought she was anointed as a leading candidate to succeed, some are a little surprised at the timing. corrat is only 60 haen fraand fs 53 corrat has been at citi for 37 years and ceo for eight years

unhau inherited a terrible hand of a bank failing stress tests multiple times he drastically improved risk management and business mix shedding certain noncore assets. after that, significant initial improvement when focus turned to then grinding high er the top line and returns, citi did lag j.p. morgan and bank of america. forecast, last year precovid-19 on an adjusted basis, citi's return was 11.5% j.p. morgan bank of america were high teens share price, therefore, for citi compares to those two during corbat tenure gave that result she isn't hugely well known as incoming ceo of a major bank and no doubt any announcement she makes in the next year will be very closely followed indeed.

>> my question was always with citi when you showed the weaker metric as far as market and performance, is it because they're more globally diversified? they have a ton of composure in mexico and in asia and there's been a lot of volatility on the macro economy and geopolitics and therefore are we in the cross hairs with that? or is there something there within the operations and the manage sne management >> i think you hit the nail on the head that would explain a big portion of the relative underperformance, majrle if we lo particularly if we look at that point where rates were rising here and not elsewhere around the world. therefore, without limit your ability to improve returns that said, you just to look at the multiple that it trades on, 0.6 times book today compared to the likes of bank of america around book value and j.p. morgan above book value.

there's a long standing and ability to permanently close the gap. and some analysts have been saying that a fresh pair of eyes might help that to see if the strategy can be reinvigorated. that is something we have to wait and see what jane frasier can deliver on >> absolutely. i want to take a look at the historic nature to have day's announcement with the addition of frasier, there p 39 female ceos in the fortune 500 which is still a record high. in the s&p 500, that number is 7.2% right now 36 female chief executives according to our report. for citi group and wall street, this is a culmination of a decade long effort to make strides when it comes to gender diversity. i reached out to some banks to check on progress that they've made leer a f here are a few stats 57% of j.p. diamond's leadership team is female goldman sachs won't have its

public if they don't have a female on the board. a majority of the intern this is year were female analysts at goldman sachs, 50/50. at wells fargo, in the levels two to four below the ceo they tell me 41% are women. it's a 7% increase from the year before bank of america and wells fargo both say more than half of thur global workforce in total is female and bank of america is one of only four s&p 500 companies with six or more women on the board high number there. they're awe also trying to close the gender pay gap bank of america says they're on average the compensation for women is 99% of what is received by men in other words, equal compensation so there is awe ton of progress on this issue. the i would argue banks have actually been better and more advanced on this issue than a lot of other industries out there. there say question now that they do finally have a woman oningru

the bank, who is the next to take over? bank of america has a female coo. what do you think? >> i think the first point on that question is which of the other bank ceos have been there for a long time is most likely to step down soon. goldman sachs you only have a recent ceo wells fargo, a recent ceo. of the big six, the biggest question of who could have the next female ceo is which of those three is most likely to stand down all of them also chairman and in a very strong position so when they stand down is it in their hands. i do think you're right to point out that there is an obvious person at morgan stanley is touted as next ceo and j.p. morgan, a trio in the running. often touted as potential next ceos

so i guess the positive thing on this is to say there is quite a hot of options out there they're all in there the last five years, the banks have improved from probably five decades worth of underperformance and improved from a low base as well. there's a long way to go despite some of those encouraging metrics and the encouraging water shed moment that we heard today of a female ceo leading one of the six major wall street banks as of next february. >> absolutely. and that's -- and we're celebrating progress today on "closing bell. after the break, facebook's content controversy. mark zuckerberg defending his company's algorithm in a new interview as facebook comes under fire for the types of content it serves users. we're going to talk to a "new york times" column thaust is tracking the top trends on facebook for years and found some surprising results related to the election. the lexus es.

every curve, every innovation, every feeling. a product of mastery. lease the 2020 es 350 for $359 a month for 36 months. experience amazing at your lexus dealer. the game doesn't end after a spectacular touchdown grab experbecause there's always another team looking to punch one in. with nfl redzone from nfl network on xfinity,

you get every touchdown from every game on sunday afternoons. all season long. watch every breakout star, every heart pounding running attack and every big-time defensive stop. sunday's were made for football on xfinity. that's simple, easy, awesome. add the more sports and entertainment package for nfl redzone. click, call or visit a store today to learn more.

welcome back the debate over the stimulus bill is stalemate. the senate failed to back a stiny package. we have the latest d.c >> as you say, the senate did not move forward with that $500 billion targeted relief package despite the fact that senate majority leader mitch mcconnell used the several weeks uniting that party behind that effort. democrats who requested a pack anl for times that size all voted against it and the prospect for aid now appear dim. the treasury secretary yesterday pinned some hopes on that very republican effort that just reached a dead end today he told a pool of reporter in that same conversation that his discussions with house speaker nancy pelosi he centered on a short term package to keep the government open past september when the reporter asked about the likelihood of further stimulus spending, he said, i don't know we'll see. i hope there is it's important to a lot of people out there

president trump specifically wants to get creative within the confines of the law through executive action to prevent airline layoffs, to fund schools and also to provide another round of stimulus checks but despite as much as we heard about those potential executive actions over recent weeks, none of the efforts so far have seen a light of day back to you. >> election mode right now thank you. with less than two months to go before the election, facebook riled up people on both side of the aisle with the policy decisions, on speech, mill advertising, and how the algorithm ranks content on users feeds. in it an interview, facebook's ceo addressed thou algorithm works. lus en >> there is a meme out there that frankly is wrong. that says okay, our algorithm is just trying to find things that are going to kind of enrage people somehow and that's what we try to show people. that's not actually how our

systems work the way that it works overall is not primarily trying to high height the content that is most enraging, it's trying to show people the content that is going to be the most meaningful. it's the type of stuff you expect that is the most important in the world >> joining us now from "the new york times" is the tech columnist. he's been digging into the data on the election and on facebook's role. the latest article, "what is facebook is the real silent majority" is a must read what do you you this about his comments there it seems that even if their algorithms don't do that, all the stuff that is enraging people is getting shared millions if not billions of times. >> yeah. i think there's a useful difference between intent and outcome here i don't for a minute think that mark zuckerberg and the people at facebook would set out to program ab algorithm to make people as angry as possible and

capitalize on the form of engagement but when you make an algorithm that optimizes for things that people find meaningful, a lot of that is anger based. so, for example, one of the most popular stories on facebook in the last, in the last couple weeks, is the story of nancy pelosi getting her hair cut at a salon in san francisco that got millions of interactions on facebook and that's meaningful to people. so i don't really get what mark zuckerberg is stlag saying there is a difference between what makes people angry and find meaningful >> so you've got pretty deep as far as looking at what people are reading, what they're engaging with. and how it relates to the election give us top line take aways which i think might surprise a lot of people if they're just watching cable news and the polls. >> yeah.

i was shocked too when i started digging into the data. there is a right-wing parallel universe on facebook that has a huge footprint it's very large. it's very, very engaged. that is more than six time as many as joe biden's post breitbart, the far right news organization got more than 40 million interactions on the facebook page in the last 30 days which is more than abc news, nbc news and "the new york times" and "the washington post" combined >> kevin, do you think that this shows that in fact the mainstream media don't capture the middle ground? the republican fan base as it were just have a better engagement on social media >> it's hard to say why.

there certainly is an argument that right harnessed a lot of this anger and grievances in a wau th way that makes it very attractive on a platform like facebook yeah, there is a lot of sort of page that's are out there pushing dubious or xexaggerated claims and that stuff travels very well on facebook. >> i was going to ask, how much of the content that is being read by large numbers of people that you cite is real, is, you know, not misinformation or fake news or conspiracy theories. how much is just opinion based >> a lot of it is opinion. a lot is commentary. a lot is, you know, pro trump commentary some of it does cross the line over into misinformation in my opinion. but the pages remain up and

popular and facebook has not taken any action to sort of dissuade them from doing that. >> to your point overall about the level of engagement you've seen on the particular trump supporting pages, do you feel like the polls may well be underestimating his chances in the same way that perhaps they did in 2016? >> it's hard to say. there is not a lot of link on facebook engagement and voting habits i think people that just consume mainstream media sources who aren't very active on facebook maybe who use twitter more than they use facebook are missing this enormous groundswell of support for right-wing policies and politicians. and i think people including reporters in the news have to do more to sort of figure out what is happening on facebook and yale pay attention this is not bots this is not russia this is people, real people who are really engaging with this

content. >> kevin, thanks for joining us. >> thank you for having me. >> we have news on disney. >> disney's cfo weighing in on the backlash over mulan's end credits thanking the chinese government accused of human rights violations. the bank of america conference just now if asked she believes the controversy will impact the box office in china, mccarthy saying film was shot mostly in new zealand in an effort to depict the landscape in china, they filmed scenery in 20 chinese locations and she said that in order to film in this those places, you need to be granted permission defending those kinds of things and acknowledgements in the credits as commonplace it has generated a lot of pub list i did but didn't indicate what impact she believes that will have when the film open in china tomorrow mckarnly also noting that mulan's release via disney plus

has had positive impact on subscriber signups it will be really interesting to see what happens in the box office in china over the week. >> it certainly will thank you so much for that broader markets continue to slip the nasdaq is down more than 2%. the dow down more than 400 points s&p 500 down 1.#8% we have 48 minut38 minutes lefte session. sandy weill will join us to discuss his move to become the first major u.s. bank to appoint a female ceo later, we'll speak with the ceo of draftkings ahead of tonight's nfl kickoff and talk about the mpy'ne of football and the coans w partnership with michael jordan "closing bell" will be right back

health care back stocks slipping as we approach the close. up nearly 450 on the dow now no clear reason. you start losing momentum. i'm hooking over at you

personally >> that's it it seems like it's still most of weakness is driven by the overkroded namove overcrowded names in august. it's not as if it's the typical cycle. that argues against the idea that is the market is somehow reacting to the failure of that fiscal bill effort in the senate today. so it does seem as if more of the same the lows for the s&p 500 right around now are pretty much much the lows from a couple days ago from tuesday and so, you know, it's an attempt to see if those will matter in the longer term. p as i mentioned, takes us balk to august 11th >> i'm looking at mike what is working in the market relatively to see, you know, where people can go for protection on days like today is mcdonald's the only dow stock higher today right now in, the s&p 500, they're lower. but materials and real estate are holding up the best which is one sort of cyclical value and

the other more defense you have which got hurt lately. nike hut a reco nike hit a record high >> the leading stocks in the s&p 500 as opposed to on a sector basis, it's a lot of the really beaten up consumer type stuff. travel, some of the ole chain retailers. that argues against the idea what we're really worrying about is specific incremental news on the economic recovery. it seems a little more about equity flows and things like again the overcrowding in big cap tech >> got it. hasbro, higher krume construction materials higher. let's get a cnbc update with sue. >> hello the here's what's happening at this hour. a wildfire burning since last month in california is now that state's largest on record. forestry officials say the august complex fire burned more than 736 square miles. it is centered about 130 miles

north of san francisco wisconsin's supreme court blocking that state from mailing out absentee ballots until they rule on the subject. that move may delay the state's mailing of ballots which comes less than two months before the november election. twitter saying that it will label or remove misleading claims that try to undermine confident in elections the policy goes into effect next thursday and in new york, that nation's largest public transportation system will be issuing $50 fines to people who do not wear face coverings. of the new rule covers subways, buses, and commuter trains and fair warning, it goes into effect on monday you're up to date. that's the news update this hour back to you. >> all right sue, thank you after the break, former citigroup ceo weighs in his on c suite shake-up and as we head to break, a quick check on bonds when the world gets complicated,

a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management. everything we have, we've earned. the unmistakable lexus is. get zero percent financing on the 2020 is 300. experience amazing at your lexus dealer.

we want to highlight the nasdaq for you technology is bearing the brunt of the selling again in the session. stocks overall are down with the dow down more than 400 points. there's the nasdaq 100 heat map. a lot of the high flying popular tech names are getting slammed today and driving the nasdaq lower. we're talking apple, microsoft, amazon, facebook, nvidia,

netflix, paypal, all the winners and the darlings of 2020 so far are getting sold today interestingly, tesla stayed in the green for much of the day. the and that continues to be higher but overall, it's pretty tech hefy selloff there on the nasdaq and there's the nasdaq 100 >> citigroup ceo announcing he is stepping down next february and will be replaced by president and ceo of global consumer jane fraser who will be the first female ceo of one of the big six u.s. banks citigroup's stock up about 38% with corbat over the helm over eight years. sandy weill joins us now in an exclusive interview. a very good afternoon you to, sandy. thank you for joining us >> good afternoon you to st. >> what's your take on this announcement you are proud that your alma mater is the first of the big six to announce a female ceo >> i stole my line i was going to say i'm proud to

be a citi alum and i think i'm thrill that they chose a woman. but i'm more thrilled that they whose cho chose a woman that has done a phenomenal job over last 16 years at citi aeeverything she d the opportunity to manage. >> why do you think it's taken so long for the big banks to get to this point? >> i think it was an industry that not too many women went into a while ago so it takes time to bull up awe cadre of people where you have an ability to have choices, i think. most of the banks have a lot of choices and women are in important positions on the boards of companies like citi is nearly -- the board is nearly 50% women.

tlaen a and there are a lot of women in senior positions. >> what was it like back in your day? how tough was it to be a woman on wall street and get to any high level position? >> in our firm, you're going back a long time, we had had a lot of women in high positions, i think. three of the four of our very senior people on our management committee which was about 12 people were women at that time some of our leaders were african-american at that time. our board had had several african-americans on it. so we always look to having inclusion. i think more than ever now it's so important that everybody think about doing this >> sandy -- >> with jane as the ceo and mark mason who is african-american is the cfo, i think sets a very good example >> sandy, when you look at mike corbat's eight years at the helm, how you would rate him

overall? >> i think he's done a very good job. i you this he unhartinherited al mess from his predecessor. i think his predecessor sold two of the very high margin businesses that citi had he took financial services public at $15 a share. that is a life insurance company. it is now selling at $125 awe share. and he gave smith barney to morgan stanley >> and what would be your number one piece of advice to jane fraser as she takes up the helm in february? i'm sure she'll be more involved in between what is the next step that citi needs to say she spent time also at mckenzie. so i think she knows a lot about

strategy but she also knows a lot about how to run the business hands on. and she has empathy for people so i think she is a natural leader i shi it is yu has an unbelievable opportunity in the future the you know, everybody talks about how low the return on tangible he can but and equity is i think the reason is that they started from a much lower position than any other financial institution. so mike, i think, has put the company in a good spot i think the people talking about why he retired so early, you know, i think it's a very tiring job. and he's been in the business since he graduated from college. and he's been the ceo for eight. and for eight tough years. >> sandy, what do you think is wrong with the bank stocks right now? they're down 20% year to date. that's looking at the

financials if you zoom into the big banks, it is even more than that. though the broad market is having a pretty remarkable run up from the march lows, banks have not really done that well they're the second worst performers this year to energy what do you think is the worry there? i'm happy to be a citi share holer with jane at the helm. i've been happy with mike. mike is in a very good position. all the banks have suffered this year somewhat. the reserves are relatively

high if you look at other years, the accounting is different. and i think that's what is hurting the earnings of the banks. but they're incredibly well reserved, i would think. and i think you'll see good things from jane, from citi, from the whole management team >> you get your point that they, because of various accounting changes have put up awe lot of reserves and that hurt earnings, are there other lidge mut fears that explain why the bank share price as a group have underbetter formed so far this year you are concerned, for example, if we don't get another stimulus bill that banks will continue to languish behind the broader market >> you really have me at odds on that one i just don't know. i think the stocks are very cheap. i think they're cheap on the

basis of book value and earnings per share. and i think they're cheap on the baus is that they have tremendous amount of equity. they seem to be very, very well reserved and it's just hasn't been as exciting but i think if you look at how well all the banks have done and running the business in a virtual digital environment without hardly a hiccup with the trading volumes at very high levels and the volatility, very high, i think the banks really have performed better than anybody could have hoped and i think the stocks -- >> i wonder if if it's -- sorry. i didn't mean to cut you off i wonder if if it's more awe reflection of what is going on in the economy, particularly in the main street economy with small businesses having to close down with, commercial real estate facing a lot of pain and just in vesto

just just investors having to worry about the pandemic and the health of customers. what do you think? >> from what i hear, i think the banks feel that they're adequately and more than add quitly reserved for the problems that you're describing and the problems that people are seeing and feeling right now. >> sandy, great to have you join us as always thanks very much >> thank you very much >> good to have sandy here pt. here's where we stand in the markets. we're lower. dow is down 410 points s&p 500 down 1.75% fourth down day in the last five sessions we did get a rebound yesterday we're st still lower on the week. technology in the cross hairs on the selling. still ahead, much more on the market down turn including why

tom lee says there are many reasons to be positive heading into the final months of the year he is maintaining his constructive tone. he'll be with us next. first up is this exquisite bowl of french onion dip. i'm going to start the bidding at $5. thank you, sir. looking for $6. $6 over there! do i hear 7? $7 in the front! $7 going once. going twice. sold to the onion lover in the front row! next up is lot number 17, a spinach and artichoke dip, beautifully set in a hollowed-out loaf of sourdough bread.

don't get mad get e*trade and get more than just trading investing. banking. guidance. the volatility. the ambiguity. the moment calls for more. and northern trust delivers more. with specialized expertise. proven strategies rooted in data and analytics... and insights borne from over 130 years of successfully navigating economic turbulence. giving you clarity. inspiring confidence. and helping you uncover new paths forward. northern trust. wealth management. northern trust. (music) anncr: give customers access to precisely what they want, when they need it the most.

with adyen, the payments platform that delivers convenience for all. adyen. business. not boundaries.

sales at rh, very high gary friedman is surprised by howquickly people shifted lives, buying new houses, leaving cities, spending more time at home and redecorating. he'll be on "mad money" tonight. and webbush add bed bath & beyond to the trades list. the company turned the corner to positive comp store sales and ending on the cusp of a dramatic improvement in profitability shares up a little more than 5%. pretty glowing note including saying that they're getting their online act together even though many on wall street have written off this company for dead it's been a pretty bearish stock over the last few years. they were struggling into the crisis and out of the crisis and now perhaps the tud is turning according to webbush and the other analysts too >> a little bit of green chutes there. we were down 2% on the nasdaq. still down 1.6%. bob piz annie has a break down of the latest market action for

us >> there's a lot of discussion about congress xilg the skinny coronavirus bill i don't think that's it. this is a searching moment on valuations we're not sure how to value tech stocks that's been the major problem here we all started the day in positive territory most of the big names on apple, microsoft, salesforce, the usual group. and they drifted lower in the middle of the day. we're just off the lows. still down here. let me show you nvidia intraday. nobody can figure out what the valuations are you couldn't buy this thing at $515 a few hours ago now you can't sell it for $490 that doesn't make sense. the institutional money is saying we don't understand what is going on. so look at all the positives that's been moving tech stocks its confusing. we have accelerating revenues. that's good. we have stimulus from the fed. we've got reopening narrative that is generally positive the we have all the momentum players and robin hood in there.

okay but it's confusing what is the right multiple with all this stuff going on? nobody knows the answer to the question and that's why things are moving all over the mace. look at these big tech names in the last couple of days that we've seen since september from the low to the high, docusign, 40%, are you serious nvidia, 23% moves. this professional traders look at this and say what is going on too crazy for me i'll step back a little. look at the s&p 500 here what matters here? technicals don't matter. if i had to take a guess, 3330 is the tuesday low watch that if we breakthrough that, people will start saying, we can't hold the rally overall. but everyone i'm talking to says, bob, tell me what the right price is for the big names like invuda anvidia and i'll gia good price for the s&p 500 and we can't answer that question right now. that's can all this crazy in social security going on intraday >> i feel like that is the

question on the way up too people were just saying what the fed it's had a toward use traditional valuation metrics. the fed is all in and trillions of dollars of stimulus and super low interest rates multiples can climb from here. same kind of question. >> correct >> exactly correct then you tend to overextend on the down side. you go parabolic on the xwup side then when it comes down, you overshoot on the down side the head and shoulders overshoots on the down sigh. that's what we're doing right now, sara. >> yep absolutely we'll watch that level 3330 the bob pisani much more on the pullback and short sellers setting sights on nikola and peloton gearing up to report results those stories and more when we ne inside "the market zo." s&p 500 is down 1.4%. the game doesn't end after a spectacular touchdown grab

because there's always another team looking to punch one in. with nfl redzone from nfl network on xfinity, you get every touchdown from every game on sunday afternoons. all season long. watch every breakout star, every heart pounding running attack and every big-time defensive stop. sunday's were made for football on xfinity.

that's simple, easy, awesome. add the more sports and entertainment package for nfl redzone. click, call or visit a store today to learn more.

you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis.

welcome back to cnbc and we're into "the market zone. we have mike santoli and stephanie link back with us as well welcome off, stephanie stocks started the day off with strong gains now they're under pressure heading into the close all three major average onz track for a negative week. weaver down four the fourth day in the last five sessions. s&p 500 now down almost 2% stephanie, you are buying some of your favorite names on days like today are you waiting? >> i'm waiting i think this year is no different and you have the election and that sort of thing. we've been talking about this push-pull going on in the marketplace. you have this -- you have better than expected economic data in several parts of the economy versus the fiscal negotiations and that is every day. and also we have the elections coming up. so i think you have a little dry powder and then you pick your

spots. you pick your favorite names frankly, today was quiet, right? you had initial claims they missed. not by much. the four week moving average is still lower. the story to me is restoration hardware the quarter is outstanding they emphasize a theme i've been talking about for a long time and housing, housing strength. 10% of gdp there is a multiplier effect you buy a house and you put stuff in it. there are so many other companies like stanley, black & decker, d.r. horton, a bunch of last chance trades on them on your program i think that given all the dwrat that we're seeing pending home sales up 15% permits up 19%, new home sales at 2006 levels, the best levels since 2006 i think those trends continue. i'm keeping calm, patient, and i'll pick my spots on where i want to add.

>> is it a concern to see all 11 sectors in the red >> obviously, it's worse than otherwise. yes, everything is pretty negative the big index stocks did have a lot of down side pressure on them but if you look at the equally weighted s&p 500 is down about 1%, and you have the nasdaq 100 down 2% or so, so effectively, the stuff that was most crowded and basically got most extreme in overshot the most in august continues to come out. pull backs, this is a reminder much it's a process. it's not a moment. and so today we kund of again bumped along the lows from a couple days ago. i don't know that there is a way to stay okay, finally we're done we cleaned up a lot of whatever needed to be cleaned up. most of what is going on is not a tantrum about the economy even though the economy may have stalled a little bit

>> claims came in worse. continuing claims came in worse. but to stephanie's point, overall, the data appeared better than expected down 364 on the dow. shares of nikola under a lot of pressure after a short seller accused of it of being an intricate fraud. phil has the details >> shares of nikola down 10% we're not going to go into all the allegations made by the research group against nikola. they come down to the thee categories when you look at the claims they're making, they say they're multiple false statements by nikola's chairman and others about the company and rigged truck reveal that involves the semitruck that they showed several months ago and then misleading demonstrations most of the allegations surrounding the class a semitruck revealed nikola denies the investors allegation and denies the entire report saying that nikola has been vetted by the world's most credible companies and investors. we're oj a path to success and

will not waiver based on a report filled with misleading information, attempting to manipulate our stock remember, that nikola a couple days ago up 35%, 40% after announcing it had struck a deal with general mote rz they will develop the electric pickup truck and have it built by general motors at a gm plan ut has given back everything that it started enjoying on tuesday after that announcement. similar for general motors most of what it gained on tuesday and on wednesday most of that has been given back by the way, we reached out to gm, they say that it stands by all of its statement that's it made regarding the deal when it was announced on tuesday guys, back to you. >> it's well off the highs i think they got into the high 60s. of its now in the 30s. will still, coming from where it started at $9 with no revenue is

not too shabby >> it's down 11% on typical volume even the norpal volume is exciting it's a $14 billion company it didn't exactly come out and point for point say proprieties. i think even if the partnership with gm, you may say it is favorable to gm in terms of what is being trans acted so i don't know if it is cut and dry as here's what they were saying last week but what nikola was and now it's the same thing. there is an element in which gm's sponsorship of this xmp a positive, not a negative >> peloton is one of wall street's hottest stocks this year thanks to the stay at home trade. diana olick is taking a look at

their earnings after the bell. >> yeah. the street is looking for strong results from peloton's fiscal q-4 earnings and potentially the first profit quarterly since going public now they just upped the price target on the stock due to rising awareness and continued covid-19 related demand surge as consumer avoid returning to physical gimz. in addition, peloton announced a loyer cost treadmill and higher end version of the bike called bike plus. it also lowered the price on the existing bike. there were delays due to safety issues in tread delivery he and high order volume on the bike. >> have they given you a sneak look at the new bike i have to say, as a loyal customer -- >> it's all over the price >> they lowered the price of the bike that i had to pay up for which annoys me. >> if you ordered it very recently, you can get that money

back but i did look at the bike plus and basically, it gives the trainers power over your bike which is a little intimidating, i have to say. but you can opt out of that feature if you want. it also has a screen that pivots and the whole idea thand is they want to be able to have you do more floor routines, yoga, medication and be able to see it f you're in a cramped little space, sometimes if the screen doesn't move, you can't see when it you're on the floor so that made a lot of sense. >> absolutely. stephanie, what is baked in here as far as valuation with the tremendous runup i'm looking at the market cap here of peloton. i mean, it's gotten to be a huge stock. what is it $30 billion company. >> yeah. it's up 200% year to date. down 3% today. not a bug deal at all. i was reading a report and they summed it perfectly. peloton is still the safest gym in town. that's exactly right they are stay at home winner and they have absolutely crushed

the results so far since they went public i think there shouldn't be too much of a surprise they disclosed a mullon connected fitness subscribers. that implies deliveries are ahead of expectation is in the stock? probably but the numbers will be good it's going to be about the guidance can they produce these bikes you can't get them, right? and they have enormous backlog it's a great story it's a hard one for me to own. it is a $100 billion and total addressable market there is more growth ahead >> we have two minutes to go before the close what you are watching? >> the volume split is actually certainly negative given the way the indices have buckled but not as dramatically as you might expect this is the theme for a while. on the way up, people complain that breadth is not as good as the index. upon the way down, breadth is outperformed

you see here it's, you know, 3-1 to the down side but this is not necessarily the kind of washout day you think it s it got worse in the afternoon. then take a look at the domestic consumer, equal weighted consumer discretionary continues to outperform. the industrials, which them vef themselves okay. the vix is in the 30 range this market is on edge there is a heavy hedging demand right now. i think that's going to persist. this kind of vix implies a 1.5% move daily >> 40 seconds left of the trading session. the nasdaq is down shy of 2% dow down shy of 400 points s&p 500 down 1.6%. all 11 sectors are low it's been a poor intraday session. energy the worst sector. oil slips another 2.5%

add to what is now currently 7% of losses for just this week tech is doing badly. consumer discretionary doing badly. but all 11 sectors are lower at the close, just off the session lows but only shiitelightly. the 2% for the nasdaq, dow down 1.4%, the s&p 500 down 1.8%. >> which leaves us down 2.5% for the s&p 500 so far another lower close. fourth time in the last five sessions welcome back, everyone if you're just going us, i'm sara eisen with mike santoli take a look at how we finished up the day on wall street. started off with a sharp gain. we took a spill into the afternoon and into the close the dow lower by 400 points. most dow stocks did get hit today and finish lower mcdonald is a notable exception. nike closed flat and near a record high. as far as the s&p 500, down

1.75%. all sectors getting hit. energy, financials, those were some of the hardest hit in today's session. technology also had a rough day. that's why the nasdaq got hit harder down 2% overall. it's down more for the week. more than 3% so far going into a friday the russell 2000 index down 1.25%. faring better than the other averages it is still down the most as far as the major averages so far this year. investors are turning their attention to a trio of big earnings oracle, peloton, chew you. they're set to release results any moment we'll break down the numbers as soon as they are out for you and then we'll speak with chew you's ceo abo chewy's ceo. people are spending a lot of money on their pets even though the unmoiment rate is very elevated plus, we'll joined by draftking's ceo to discuss the outlook for betting as the nfl kicks off and how michael

jordan's move to join the company will help grow that brand. first up though, we have to talk about this market. joining us, stephanie link is still here tom lee, head of research at fund struck global advisors joins the conversation welcome, tom first you to, mike seven trying to figure out the volatility in early september has meant. the start of a longer drawdown or just a correction what did today indicate? >> today indicated the process isn't finished you came into september which, of course, is now living down to its reputation as being a little bit stormy with the s&p 500 at a record high, up 10% year to date. you have the dow back in positive territory tesla to 500 and the most overbought readings in history all that is your setup what you see mostly since then is people trying to essentially peel off some of the stuff they

owned too much of. and there was this overcrowded trading growth you're seeing most of it on the daily basis. so reallocation way from what worked really well i don't know what that necessarily means because of the heavyweights and the index and whether, in fact this is going to be a trip wire as we maybe threaten some lower levels just because of the way the mechanics of trading tends to work but right now, to me it's worth the process seems like it's not as if the credit markets or necessarily kind of acting up. it's not as if it's been really a turn in the macro picture. all those things i think suggest that it's mostly an equity story at this point. >> tom lee, you are still as constructive on equities as you were a few months ago? >> yeah. i think the risk/reward for stocks is positive there are a lot of catalysts between now and year end as michael is saying, yeah, the markets had a great august you know, stocks aren't

invincible i think it's really health why i to see this sort of correction in rotation. >> where would you be in the market as the market corrects and rotates? >> i think there is a lot of questioning of the mega caps because they have become -- they've been so important to this market and so central to the leadership but from a risk/reward perspective, especially if the economy is reopening and we get something like a cure or a vaccine, the stocks that really benefit are what we call the accept i center. with sentiment so negative towards the economy, i think as consumers gain some confidence, not saying that's going to happen but if they do, and they start to sort of go back to work and start to merge and really engage with the economy, the epicenter stocks are going to move the most >> we want to hit oracle

earnings they're out and look strong. josh >> oracle reporting q-1 earnings per share of 93 cents. street was at 86 cents revenue beating $9.37 billion. street at $9.19 billion. the two biggest segments, cloud services and license support comes in at $6.95 billion. that will include cloud revenue and maintenance fees cloud license and on premise license, $886 million. in a statement here the oracle ceo saying that our infrastructure businesses are also growing rapidly she says as revenue from zoom more than doubled from q-4 last year to q-1 in this year, she says i have a high level of confidence that our revenue will accelerate as we move past covid-19 we expect them to offer guidance on the call. also we know oracle is interested in tiktok's u.s. operations so to oracle executives address that on the call which starts at 5:00 p.m. eastern and we'll be on it.

back to you. >> josh, thank you for that. mike, how does this one set up in terms of year to date performance relative to the very strongly performing rival software companies >> it's been well left behind. it's been mostly side ways for the better part of five years or so or the last couple years. so it's up 8% year to date it's been one of those kind of old tech relative value steady but not fast growth type stories. obviously, there is a stealth kind of stay at home remote access type play within the company. so certainly couple million dollars in upside in the revenue is a good earnings beat as well. >> big beat for peloton. the first quarterly profit since peloton went public. q-4 total revenue grew 172% to

$607 million the street is looking for $583 million just $223 million in the year ago quarter fuel year up 100% to $8.1 billion q-4 rein full year 2020 ending fitness subscriptions grew 113% to over 1.09 million and paid digital subscriptions grew to over 316,800 total members 3.1 million. margins expanded gross profit was 288.8 million representing 188% year over year growth and a 47.6% gross margin and improvement of 275 basis points versus the prior year period guidance also pretty incredible. for q-1, 720 to $730 million total revenue. 218% growth at the midpoint. and that's versus estimates of $506 million q-1 connected fitness

subscriptions. growth of 135% full year guidance now 3.5 to 3.65 total revenue 96% growth versus estimates of $2.72 billion. a note from the ceo though while we had expected demand to moderate, the unexpected resurgence of covid-19 cases in many states has perpetuated the imbalance of supply and demand in many geographies continuing order to delivery windows for our customers. bh while we significantly increased our production capacity and continue to grow our manufacturing cape amounts, we do not expect to return to normalized order to delivery windows in the u.s. prior to the end of q-22021 he also said margins would not be as strong in the next quarter going forward because of the price cuts back to you. >> i mean it was down 6% and now up 6%. the delivery of all the details helped to turn things around, especially when you got on to the improvement on the guidance.

things started to jump again the reaction is up 5% now. thank you very much. don't miss first on cnbc tomorrow, peloton's ceo "squawk box" at 7:45 a.m quite an impressive turn around and the immediate reaction to the shares there stephy, again, it's an expensive stock. but the momentum is there. and the theme behind it is very clear. >> absolutely. they just scratched the surface. there is not a lot of competition. as i said before, they have had supply chain issues. they can't get enough bikes out the door i think the delivery numbers were really good i think the guidance on delivery numbers sber than expected i thought product gross margins would be down much mosh andthe weren't. subscription revenues were better than expected they delivered and they're a stay at home

beneficiary as we talked about it's just -- i can only own a few of the names in my portfolio. this one isn't it. >> mike, is the peloton story, i guess the question from here is just how much is already in the stock? as the company eluded to itself. >> the way to phrase those questions also is what percentage of the plausible overall market that help he upon is likely to access has it front loaded given these massive, you know, massive demand picture in the last several quarters? i don't think the market is going to necessarily worry terribly much about that until it has to. it certainly very rich it's certainly giving peloton credit for retaining the customers. and down the road, obviously you'll hear it's mostly about subscription and services. just like you always do. where they are a hardware first company. they have merit to it.

i don't know what is in this stock. there is no doubt they're front loading a lot of it. that is more advantage than future disadvantage if you think they retain the customers and becomes a platform with, you know, reoccurring revenue. >> let's pivot back to the broader markets. tom lee, why do the banks continue to lag? does it worry that there is perhaps a sort of weaker economy out there than perhaps we all noticed? i think banks lags because rates are low. we're worried about deflation. it's tough to be overweight and expect earnings momentum from banks. but there are beneficiaries when economic momentum recovers so i think banks are suffering if the same thing that is affecting all the reopening of the stocks which is that the market cares about price momentum and earnings and ability, they're going to be

buying the same mega cap stocks in growth. and that is 76% of the market. uz have a quarter of the s&p 500 in reverse and those are epicenter stocks where the risk dlsh reward is. people just don't have a lot of confidence that this rotation should take place. >> i get your point on the ep i center stocks, tom that is the medical advancements are coming fast and furiously. we get better treatments and testing and vaccines nt but what about the economic backdrop? you know, another more than $800 million people still filing for unemployment claims. 800,000, excuse me the fact that congress doesn't look set to pass a stimulus any time soon. and that other stimulus is wearing off. i mean how does that affect some of the more sick tickcyclical ns

>> that's a good point i mean, you know, the economy is snil a depression. you think consumers are still really nervous about the disease. and so that's affecting the willingness to re-engage but we're starting to see some positive things. i think jp morgan requiring a lot of the senior staff back in the office, you know, new york city opening for dining in september 30th these are some signs of normalcy the i think that's going to help consumer confidence. but with regard to markets, you know, i think relative value has always been really important bonds bee haufd haved as michaes mentioning earlier if you look at corporate bonds, you're looking at investment grade bonds. the same company, investment grade epicenter stock is trading at 15 times. i think that convergence in the past was always stocks follow

with bonds and that means stocks could really rerate higher that's the reason we think there say huge margin of safety in the epicenter stocks >> one final question questions, what do you think of gold from here >> i think we have some credible argue that you want to have inflation protection there is $100 trillion of net worth. so i think americans should have some exposure to gold as an inflation edge bitcoin as well. >> tom and stephanie, thank you for joining us today great to see you both as always. still ahead, draftking shares soared more than 140% since going public in late april the stock is higher again today. the nfl season kicks off up next, we ask the company's ceo whether the return of football will lead to increase in betting and if he is worried atonnu huniment can hurt his business down the road 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.

schwab. ♪ 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. chewy earnings are out the online pet retailer reporting a better than expected loss down 8 cents they lost 8 cents a share. the expectation was for a 16 cent loss. they lost about half what was expected revenues coming in line. $1.7 billion expectation was $1.69 billion. it does represent about 45% sales growth from last year. we know this has been a huge stay at home winner. margins also expanded, 25.5%

that was a big margin expansion over last year and according to the new ceo, they set new records for both net sales growth and new customer additions they're producing the second adjusted profitability metric despite the gap loss the stock kind of all over the place also ut was lower first we're going to talk about what is going on beneath the headline numbers with the ceo in in just a few minutes of chewy overall, huge beneficiary. digit sales growth they have already run up 100% so far this year. we know people are at home we know they're continuing to spend on the pets and we know in many cases they're getting more pets because we've seen this big adoption theme we'll find out whether that is still happening.

a new site by the gaming administration says that 43 million americans will bet on a game this season that is five million fewer draft kings ceo joins us now good afternoon firstly, do you think you did lose customers to the stock market over the last say six month period and do you think they'll all come back or will they lead the stock market for good to return to sports or keep doing both what's your take on that >> you know, i think what i've seen within our products is that people tend to when they adopt a new one keep doing both.

i don't know what the buyers of stocks of various platforms are. i can tell you from our perspective, activity is way up. new customer ads are way up much everything seems to be spiking so if there is any cannibalization from the stock market, we're not seeing it. do you expect the start of the nfl season to take things to a higher gear? is that the sport most crucial to the platform? >> the numbers this year are fantastic. we're setting records across the board for virtually everything on the sports betting side you get plus is 01 points. if the chiefs don't lose by 102 points, you'll one that bet. we had already, you know, i this i close to $9 million put on

that i don't think that going to happen >> the players have been testing here preseason, jason. do you feel confident that the nfl really has a plan to deal with covid-19? they chose not to do the bubble. like the nba and it feels like there is a little mystery as to whether they're going to be able to execute a season and not have to cancel games and for them, cancelling games is a much bigger deal than cancelling a baseball game >> well, you know, i know there is a lot of really smart people that work at the nfl and they had the benefit of, you know, all this started happening pretty shortly after their season ended so they've had their whole offseason to figure this out obviously, i don't know. i'm not there. but just based on how many smart people working there and the time they've had, i have a good degree of confidence they figure it out and i think even if they do, i'd be surprised if they cancel

anything >> do you expect every state to legalize sports gambling >> i think a lot of them will. certainly there is the tax revenue need that will emerge as the economic impacts of covid-19 really start to hit stage budgets. i think maybe certain states that were on the fence before might decide to move forward but, you know, hard to say that every state will do it i don't think that, you know, every state as a lottery right now. i think most do. i think mostly most states have sports betting >> jason, i want to ask about your recent news that michael jordan is going to be a special adviser to your board. what exactly does that mean? how do you expect him to drive buzz your stock shot straight up just on the headline. >> you know, i think the thing that michael maybe even more impressive although certainly impressive what he did on the court as an nba player, but more

impressive is what he's been able to do on the buzz side. the i think he created fairly unique brand and entire trend of how athletes are used to market. and we're excited that brand jeanon, that business save you is something he'll bring to the board room and looking forward to learning from him i think a lot of what we're trying to create from a brand perspective, a lot is similar to what michael is able to do hopefully we can soak up that knowledge from him and really build something special together >> what about any potential conflict of interest the fact that he is an nba owner. have you thought through how you're going to guarantee there is no impropriety there, the fact that he's going to be very intimate knowledge of players and management of a team and also of your site which f m gambles on those teams and

players. michael has nothing to do with the snubs. we have a variety of different per inspect youives. i think it's helpful trying to create really complicated space that touches on a lot of ecosystem. really helpful to get the perspectives and, of course, if there is topics that need to be discussed that are not appropriate, those people step out of the room. we're used to that we don't talk about those things in the board room. and the board room, we're talking much more about strategy and, you know, plans for the business >> got it. >> jason robins, thank you for joining us appreciate it. >> thanks for having me. st. >> ceo of draftkings the do not miss the debut of the nfl season it's on nbc.

texans and chiefs 7:00 p.m i can't wait for that. coming up is there any stopping peloton? shares are higher. again, we're going to ask an anltist how much thisred hot stock can ray.ll and what the valuations are pricing in ♪ 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. ♪ ♪ ♪ ♪

a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management. and tailored recommendations. ♪ ♪ you can go your own way ♪ go your own way your wireless. your rules. only xfinity mobile lets you choose shared data, unlimited or a mix of each.

and switch anytime so you only pay for the data you need. switch and save $400 a year on your wireless bill. plus, get $400 off when you buy the new samsung galaxy note20 ultra 5g.

let's go to mike santoli and take a look at key economic indicators >> one of the best long term economic indicators, it almost looks broken these are initial claims the that was actually a really steady and interesting down trend we had going into the shot now we're still just under -- we're $800,000 it is still phenomenally high. it's four times what we had when considered normal. a massive amount to go so however, take a hook at this other measure of household financial conditions it doesn't look as bad in the aggregate relative to the overall economy. total household debt is a percenta percentage of gdp. we're nowhere near there now we're roughly at high neutral

levels relative to where we had been in the past corporate debt surpassed it. they're the more able to shoulder a lot more leverage that probably is okay in a forelady going basis the fact that consumers didn't come into this being highly leveraged and having good debt service capacity it's a silver lining it's not a super bullish story it is a partial jooffset >> mike, thank you >> shares of chewy are volatile after a smaller than expected quarterly loss we'll ask the company's ceo about what is behind the surge in marn ow etr he sees in i signs of slower consumer spending

i'm a verizon engineer. and i'm part of the team building... ...a powerful 5g experience for america. it's 5g ultra wideband, and it's already available in parts of select cities. like los angeles. and in new york city. and it's rolling out in cities around the country. with massive capacity. it's like an eight-lane highway compared to a two-lane dirt road. 25x faster than today's 4g networks. in fact, it's the fastest 5g in the world.

from the network more people rely on. this is 5g built right. only on verizon. a lot goes through your mind. how long will this last? am i prepared for this? are we prepared for this? with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations, with access to tax-smart investment strategies designed to help you keep more of what you've earned so you'll know you're doing what you can for your family and your future. that's the clarity you get with fidelity wealth management. shares of chewy were initially higher after the earnings report, the second quarter. it was a beat. the company reporting a smaller loss and seeing net sales grow

47% from last year joining us now on a cnbc cluf from more exclusive on the quarter is the ceo. give us color as to the business yoo you are seeing behind that 47% sales growth and how sustainable you think it is. >> guys, it's good to be here. thank you. yeah so we're super excited about the 47% year over year growth. $1.7 billion in the quarter. and what you're essentially seeing is, you know, consumer engagement is strong we continue to observe elevated demand patterns. not as high as peak pandemic but certainly elevated from the p pre-krid levepre pre-covid-19 levels. the so we're happy to be here. of. >> it does raise the question as to what happens with that elevated level of demand as we get out of covid-19. as we hopefully continue to see more reopening and more discretionary spending on things outside the home how you are planning for that.

we've been bull ush about the shift. but if you look at the new data that is released even in the pet segment now, online is supposed to take around 27% market share up 500 basis points from pre-covid levels the shift that we're seeing migrate to online, you know, we expect that to continue. they're preparing theirselves for servicing millions of customers are going to find themselves in it an advantageous position that's what we're doing. >> but is the competition for what you do including online growing, you are threatened by walmart's membership

subscription service >> as i eluded to in the past, our years of preparation, our culture of unovation and singular minded is not acquiring customers. we're acquiring relationships. customer who come to us and spend with our platform over long periods of time what we have shown by data is the longer customers stay with us, the longer they spend and the longer they stay, ultimately this end up shifting to the chewy platform so we're going to continue to execute the playbook with we have driving tremendous experience and surprise and delighting customers and keeping them engaged for long periods of time >> it is always thought to be recessionproof we're seeing a very high level of unemployment. we're seeing the extra unemployment benefits fade with no new stimulus deal in sight. so how sensitive are your customers and the amount they spend to what is happening in the economy? >> it's a great question first of all, you know, we saw

an options tremendously up in q-1. and that level of engagement that new pet parents are bringing to the platform hasn't wayned number two, when you look at pet spending per household, the metric is expected to be up 4% and continue to stay up over the next few years i think there are two things driving that the number of pet owning households is increasing during this pandemic. but, two, pet parents hamore ti to engage with their pets. regardless of whether you're in a pandemic or not, sprets to eat. so from that point of view, it's a category that continues to see high engagement and we'll continue to service our customers accordingly. >> is your brand transferrable -- this may sound stupid abo bu but is your brand transferrable to sell human products >> great assortment, great pricing and convenience and delivery to the doorstep and so from that point of view,

you know, we're fully focused on pet. we have a lot of opportunity in front of us. 16 million customers on our platform so a hot of go get for us. >> or you could just snack on dog food the my question is the -- >> i obviously don't want to do that but my point is if you're already getting a delivery that is every two weeks or whatever it is in a way that perhaps is more signed up as a subscription to get the same product, couldn't you just throw-in some other human products that people need every couple of weeks as well >> yeah, i think this comes down to focus comes down to the focus of our core focus and serving millions of pet owning households the we're easterly gli that journey. is the brand expendable? i think you would argue that it is based on the proposition that's we bring to the table. but when you look at the single reminded focus that we have, it's about serving pets and pet

parents. >> all right are adoptions still rising we saw a big spike but people presumably are spending less time at home so what are you seeing on that front? >> yeah. the adoption data has been merky. there is no perfect data available. what we estimated was adoptions were up 60% in q-1 according to internal metrics for pet parents or pet parents bringing pets to the households, we do believe that adoption continues to surge >> finally, i want to ask you about this report. bloomberg is reporting that petco may file to go public. you think of them in the retail locations. are you taking market share from them if so, how much? and who else are you taking market share with this growth?

>> in our opinion, we don't track the channels where customers migrate to us from we're enjoying the secular shift to online and we believe that our proposition appeals to customers broadly. regardless of the channel that you're shopping to, we think we're bringing customers from. >> got it. thank you for joining us fresh off of the stocks. the stock is up 1% after hours chewy's ceo. still ahead on the show -- >> it's up because the prospect of humans starting to eat more pet food untapped market is unbelievable. >> right you can start that trend i'll stick to human food still ahead, record breaking wildfires. they're burning by millions of acres in california right now. also in washington

up next, we'll go live to the west coast for the latest on the destruction. with the icon that does the same. the rx, crafted by lexus. lease the 2020 rx 350 for $409 a month for 36 months. experience amazing at your lexus dealer. that helps you master your backhand... ... then you should be able to get a bank account that helps you master your budget. virtual wallet® is so much more than a checking account. clearly see the big picture of your finances. and easily manage and grow your savings. did you see that? virtual wallet® for digital banking from pnc. it's time to get more from your bank. a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management.

>> welcome back. time for a cnbc news update. sue has got it for us. >> i do. thank you. here's what's happening at this hour microsoft warning of new hacking attacks targeting the u.s. election microsoft says a russian military unit attacked more than 200 organizations associated with both the biden and trump campaigns. microsoft also detected attacks from chinese groups against the biden campaign and iranian

attacks on trump campaign members. fda commissioner saying eeg not override his agency's staff on vaccine approvals. you can go to cnbc.com to see who will lead that approval process. and here's a plush way to give back if you will an 86-year-old rhode island woman spent her entire stimulus check buying stuffed animals to fill up her front yard she wanted her mush toy zoo to entertain the neighborhood kids. adults liked it too. she's going to give the animals away to anyone who stops by and asks for one put a smile on your face that's the news update this hour back to you. >> all right sue, thank you record breaking wildfires scorching millions of acres in california we're here with the latest >> the dark and smokey skies above here, a dire warning of

how intense and far reaching the wildfires across the state are and also just learned that august complex fire is now the largest in california history h it's one of more two dozen wildfires that have burned it is a record 20 times more than the acres burned this time last year. eight people have died in the fires and the flames have destroyed 3700 structures. here's the shot from fires from space. you can see the smoke cover across the country in the bay area yesterday, the fires resulted in dark orange colored skies. images of the scene filling up social media however, guys, one positive note, the wind are calmer today. it is also a little cooler and more humid all of those things should help firefighters back to you. >> why are there so many more fires this year?

>> it's a good question. a lot of times it's the winter that we had. if you get a lot of rain, there is more fuel to add to the fire. there are a host dry conditions and went through awe spate of lightning strikes, which you know, you sometimes see. >> thank you so much for that. up next, shares of peloton higher after reporting results moments ago. we'll get instant analysis of those numbers when "closing bell" returns. ♪ ♪

♪ as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers... and deliver our products. but no matter how things change, one thing never will... you can rely on the people and the network of at&t... to help keep your business connected.

♪ 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. stulill ahea athd,noer raidn the consumer what we're watching for from kroger when "closing bell" comes right back

what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley. a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice

and tailored recommendations. that's the clarity you get with fidelity wealth management. and tailored recommendations. ♪ if i could, baby i'd ♪ how can i, when you won't take it from me ♪ ♪ you can go your own way ♪ ♪ go your own way

your wireless. your rules. only with xfinity mobile. joining us, james hartiman, james, clearly the momentum is with them. the question which has been for a couple of quarters is how much can it continue? it seems at least for another

quarter base ond that guidance >> yeah. yeah, it was an excellent fourth quarter for these guys to be a surprise to nobody that's been paying attention but the bugger story is, a, just how much of the top line fell through to the bottom line >> do you wore qui at all, james, that addressable market is still the same that always was and that covid-19 is just meant they've had full saturation of that much quicker than expected as opposed to the addressable market growing >> i don't that isn't a major concern and i think in part that is because it has become a house hole name over the last nine months really going back to even prior to the pandemic when they had a some what of a disastrous commercial but, you know, that opened a lot of people's eyes to this product

and this form of exercise. the pandemic then i think brought a lot of those people into buying one of these i think the research that the company has pointed to would suggest that those were people that were not in the market at all as opposed to demand being pulled forward and then what i would argue that were not in the market at all as opposed to demand being pulled forward. what i would argue is the biggest news of the week is two new products they announced a couple of days ago they announced an upgraded bike. they brought the current bike price down $350. maybe more importantly, they came out with a cheaper treadmill. the $4200 price point they had on their existing treadmill was way too much that never really, you know, worked now at 2500 it's much more of a mainstream price point the treadmill market is two to three times the size of the exercise bike market if anything, i think they've

dramatically expanded their addressable market here in 2020. >> and the stock shot up on that news as well the company also commented on the production issues and the delay, that people have to wait to get their bikes how big of an issue is this, the fact that it's hard for them to meet the supply with all this demand >> yeah. it's a balancing act in a lot of ways to some degree, making it more difficult for people to get the product in some people's eyes makes it a more attractive product. having said that, although i don't know that there are a whole lot of true competitors in the market, i think it's safe to say they have lost some customers that balked at those delivery times that were getting upwards of two months at times

i think they're putting a lot of resources behind shortening those lead times the goal is to bring that number down substantially during the critical holiday season. >> is the valuation stretched? >> i don't think so. this has always been a business that i think is targeting a large, sustainable subscription business that's also been the bogie and to the previous conversation, i think that addressable market has grown substantially. six months ago the company said they thought it had doubled from their ipo level in terms of the addressable market now as we look to the future, there's a lot more products with which they're going to get people into their ecosystem. so what we do know is that, technology companies that have attractive and sustainable subscription models garner very high valuations.

looked at through that lens as opposed to traditional fitness equipment company lens, this doesn't seem out of line at all. >> notmike, clearly shares are zooming higher, up 7% on those better results what's the bear case on this stock? does it have to do with the valuation? >> yes it's certainly the valuation and also the fact that until it gets to that point where there is this massive installed pace and you have a very reliable and growing subscriber base, you still have to some degree hardware economics to think about. you could think about a lot of different companies, apple included, where it was only after the services business got to a certain threshold in terms of percentage to overall revenue that the market was happy to revalue it they revalued peloton already. i think the wind is at the company's back

i think the market isn't going to quibble about how much of the addressable market they've gobbled up that would be the bear case, that they really have not reinvented the company yet and maybe have gotten credit for having done so. >> how should investors read some of these numbers beneath the headlines, for instance, connected fitness subscribers up 113%, workouts were up 333%. that's what i mean with the engagement, digital subscribers up 210%. what does that tell you? >> some of those numbers shouldn't be a huge surprise we knew coming into the quarter that these guys were going to sell as many bikes as they could make, right, going back into this supply issue. the 113% growth in connected fitness subscribers, that's not a huge surprise. the digital number, i think, was really encouraging keep in mind that is just a paid

digital number if you remember, they basically gave away the digital subscription for free for 90 days it was really only mid june before some of those people had to start paying. i think the biggest take-away from today is just how profitable their business has been over the last couple of quarters and how profitable it's expected to be during fiscal '21. typically when you have a company at this stage of growth, you're not getting a nice margin the implied margin on their fiscal '21 guide is close to 7%. you put those two things together and it's a really attractive stock up next, your wall street look ahead 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.

a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management.

gary friedman just sat down with our jim cramer and talked about how the luxury brand is performing despite the struggling economy >> people are holed up at home you know, they're focused on their homes. you've got a huge market in travel, leisure and entertainment that's a massive market that's basically shut down so we're benefitting from some of that shift. at the same time, i'd say our teams did a great job of improvi improvising, adapting and overcoming. >> don't miss jim's interview coming up on "mad money" at 6:00 p.m. tonight. tomorrow we will get results from kroger before the bell, the

biggest supermarket by pure grocery sales in the country we've got an exclusive interview with kroger ceo rodney mcmullen on this show at 3:00 p.m. eastern time within the kroger report, i'm going to be watching for food inflation. this stock is up 20% so far this year is the grocery stock up still a trend that's happening or is that lessening now that people are going out more to restaurants? of course, the war for online groceries against walmart and target and amazon and everyone else. >> ask him if he's threatened by humans eating pet food moving forward. >> yeah. we could ask him what the total

addressable market is for that >> i'm cracking myself up and nobody else. key market take-aways? >> we hit pretty near the lows from a couple days ago i think it's still very choppy, kind of skittish action that we saw today, pretty typical of an ongoing pullback corrective move i'm melissa lee and this is "fast money. tonight on "fast" the changing of the guard at citi the big bank tapping jane fre e frazier. we have earnings from oracle and peloton. we'll break down the after hours action later, hitting the jackpot sports betting stocks on fire as the nfl gets ready for kickoff