it i think that's a high bar for them to be able to prove i think it's a fair to look into it but the problem is the first authorization that shouldn't have happened. >> congressman, khanna, great to see you. thank you. we appreciate it >> thank you >> you bet. >> tyler, you're off to get pizza and an apple >> that's right. >> "closing bell" starts right now. >> see you tomorrow. thank you, kelly and tyler welcome everyone to "closing bell." i'm sara eisen stoctio stocks sharply lower. it is off the worst levels of the day. look at what is driving the action is steep selloff in technology that's dragged the nasdaq back into correction territory. 10% off the highs. facebook, apple, amazon. leading the declines coronavirus cases trending higher around the world. the seven day average of new cases rising here in the u.s. while europe and india face alarming surges as well. and the snowflake hangover

coming after yesterday's euphoria that is part of the momentum growth trade materials and industrials are the only sectors in the green. we have a few more ipos and awaiting more news on tiktok and oracle >> it will be busy coming up on today's show, mohammed el-erian will join us on the on going stimulus stalemate and we'll speak with jim fitterling and shares of cybersecurity firm palo alto networks up 80% from the march lows as companies boost protections for employees working from from home the ceo will join us to discuss that trend and much more let's focus first of all on the big stories you're watching. mike santoli is tracking to day's volatile market action we have the latest on stimulus in washington and sara has new reporting on the oracle-tiktok sag yachlt mi saga mike, markets down 1.4%. >> the i've been heavy tape all

day. we continue this process of sort of undoing that august overshoot to the upside. i've been focused on levels that we saw back on august 11th that's about 3333 we closed on the s&p 500. there you have it. we're just about right there we also hit that level there abouts give or take a few points three or four times in the last week now so far you can look at that and say maybe this market is trying to find some kind of base for another side ways phase. maybe like we saw. there although the more times you soften up a certain level, maybe the less likely it is to hold we'll see how that plays out look at the nasdaq 100 this is the epicenter of what is going on both in terms of the velocity that move to the upside and then the decline right here. this decline is steeper than we saw in the broader market. it's broken below, for example it's 50-day average. do you care about where the 200-day average is, i think it's way down around 9500 or something like that. so it's nowhere near touching that but we're actually also close to that august 11th level right there. that was the day of the tesla

stock split announcement things started to go crazy apple, another real key indicator to watch today this has been something that people intraday were up off lows again, $109.38 what we're doing is pulling in reverse what we really sped up higher on from that august 11th moment to that real high velocity steep rally into the peak which was september 2nd for the s&p 500. >> mike, does the fact that we bounced off those levels a couple of times mean that if we do break below them the down side is greater? there is no support for a bigger kind of leg lower? >> it's difficult to say the technicians say 3280 looks okay, too. it's not that you have to go so much lower perhaps you have to flush out orders in waiting. i think you can take comfort in

the fact that it remains mostly an unwind of that mega cap growth trade you see the equally weighted index is still outperforming the cap weighted index you have cyclical areas holding up how much can the overall market withstand further kind of pressure on those big index names in tech? >> we turn to the latest on government stimulus. airline executives meeting with the white house chief of staff to discuss a flound of aid we have the latest details >> sara, they say the administration would be open to a stand alone package for the airlines but he said that would have to start moving next week in order for the president to be able to sign it before the current program runs out on september 30th they also put the ball squarely in house speaker nancy pelosi's court. she has been open to targeted help for the hardest hit industries like the airlines

but she continues to resist pressure from within her own caucus to vote on a smaller relief package or on individual proposals. >> you may have by anecdotally someone that may say i don't care how small it, is i want it just to go i have not heard that. >> the air monica lewinsky alino support the program through april. under the same terms that exist today. the airline executives did say after the meeting at the white house that they reached out to pelosi i spoke to her office and they say no meeting is scheduled for today. back to you. >> so beyond the airlines, what are the points of disagreement that these talks can't even really get started and going anywhere right now we heard from both sides of the aisle that they come on and they talk about largely the same thing, extra unemployment benefits, potentially stimulus checks, more ppp for small business even state and local government aid now it seems like they could

find some common ground. what is the issue? >> there is a trillion points much disagreements and that is the size of the gap between the two price tags for both the democrats and then for the republicans. i think one other piece of nuance here is that we have spent so much time talking about the overall size of the package. we spent less time looking at exactly how big each slice of the pie is going to be one thing that pelosi is talking about is if you start recognizing that the need for help has grown since last time democrats passed the package, then you're going have to sort of shuffle how much money each item gets f you're going to include the money for airlines if you include the money for restaurants, then other areas might have to receive less money and that's a whole other level of negotiation both within her own caucus and with the republicans so there is still a lot of room for them maneuver here i think that what you're seeing democrats try to do is expand the number of alternatives that pelosi has to work with.

so it's no longer just $2.2 trillion versus is.5 trillion. they try to craft something that can pass from both sides of the aisle. >> what about the calendar is there a cutoff in the next week or two that this can be passed before the election >> well, we heard it here on cnbc saying he doesn't think anything is going to get done until after the election but the most immediate deadline that congress is facing to fund the government we're expecting to see a continuing resolution to prevent the government from running out of money reach the floor next week. so that september 30th deadline remains something that provides a level of urgency to lawmakers and could prod them to reach some sort of agreement >> thanks so much for that as always now the increasingly complicated tiktok story taking another turn today as we approach the deadline for a deal. sara, you've been digging into

this and had fresh reporting on it >> we all -- it's all hands on deck with this story at this point, wilfred, we're awaiting word about whether the current deal goes through. after he called it into question whether it will be approved late last night listen >> we're going to find out about that we're looking into that from the standpoint of bitedance. i don't like that. if that's the case, i'm not happy it with. assuming that bitedance is china which i think it is. >> referring to a question there about bitedance remaining a chinese company. now since then, here are new developments st according to sources very close to the deal, the treasury sent major revisions to the term sheet last night to address the security and data issues and bitedance parent, the parent of tiktok has agreed to those revision in full that's the key both oracle and bitedance

informed them directly last night that they were comfortable with the new terms that's all according to sources familiar with the matter what now, oracle will take a 20% stake in in the company and that walmart is expected to partner i can also confirm as well, walmart will be an investor and will get a board seat as part of this new deal. julia also reporting that tiktok is aiming for an ipo within a year on a u.s. exchange. pt so add that to the swirl of headlines. all that is to say that things are moving forward and the key, i think, is that security issues which are very much at the heart of this entire deal are being addressed and revised by treasury. whether it's enough to satisfy the president without an all out sale of the u.s. business, that's the question. >> i guess that is the gap as you point to from your reporting

and the positive sounds coming from treasury versus the sound bite from the president today if that's how he is thinking is still a gap to close rhetoric is one thing and action is another another point that jumps out to me is it sounds like treasury's involvement in terms of the sheet helps oracle that means they get a slightly better deal if they have the u.s. side of the bargain has more control over what is transferring from one side to the other here right. the whole concern is it's a national security issue. bitedance is a chinese company and they control the algorithm and house all that data. now according to this deal as we reported countless times, oracle will be a u.s. partner and according to the reporting 20% owner of bitedance which means that oracle will have access to the source kood or tcode and hoe

data from u.s. consumers and the cloud. is that enough to satisfy the president that this solves the national security issue? we'll see. we don't have the specifics on the revisions, treasury very focused on making sure all of those questions around security and around privacy were addressed and revised and the fact that bitedance signed off on it, the chinese parent, does show progress. we'll see if he agrees >> we certainly will great reporting to day on that broader markets been jumping around in just this first 11 minutes of the session we're back down 340 briefly on the dow. now back to only down 270. you can see that little leg up in the last ten minutes or so. still 4% lower and still almost 2% lower on the nasdaq now bank stocks are still down sharply on the year even as the broader market recovered the losses we'll speak with the senior banks analyst fresh off a marathon week for him of executive commentary at his firm's annual financial conference he interviewed 40 bank executives in the last three

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nasdaq is down financials are one of the big sector losers year to date and are down as well today the groups had a rough year underperforming the broader market and is down 20% year to date of the banks down 30%. we heard from a number of key executives in the space this week at the barclay's financial services conference. joining us with the key take aways jason goldberg how many executives you have interviewed this week? >> in person, i think i did 22 of them. >> i said 40 so 22 sounds small now relative to that. you had a lot attending the conference great conference it was and all the headlines that came out of it net take away was more positive than when you came into this week or negative

>> i think it was more positive. there is a lot of angst around credit quality it feels like they're almost done with that process and loan losses which have been nonexistent feel like they're going to ring benign into the fourth quarter on top of that, income trends are better than expected mort ga mortgage rates are strong. they appear to be tracking expectations starting to see a rebound in other consumer related products as well. and then, you know, additionally, banks continue to manage their costs in, you know, in a challenging environment i say one of the negatives is clearly low interest rates are having an adverse impact and banks are finding that the income side can compensate for that >> when we look at the share prices year to date, jason, clearly, they underperformed massively. one factor people point to is the lack of buybacks which are so significant for the sector.

any update on when they might be able to return and do you think they're crucial as a catalyst to give the sector a boost that it is lacking for so long >> i think they're trying to figure that out. i think around the fourth quarter it is still uncertain. the point we make there, is you know, even though we don't buy back stock, they can buy back next year. it's not like that capital disappears there is a lot of capital in the third quarter. they're not buying back stock. so shareholders are getting that returns in the form of higher dividends or share repurchase. it's a matter of waiting an extra quarter or two the it shouldn't be the end of the world. >> it's been interesting to watch the banks underperform on good days and underperform on bad days alike, jason. are banks trading off fundamentals how do you explain the fact that relative to more cyclical groups

like industrials and materials, they're underperforming on a better economic outlook. >> they are. in fact, you know, the year ended today this would mark the worst year in relative bank stock performance in history we have data back 84 years so clearly they're unlocking earlier, i got it. people are trying to figure out the ultimate impact of this pandemic was with respect to loan losses. the i think now that we're six months through and you should have a better understanding of loan portfolios look like and rentering this record capital, you know, we think going forward further good news should be better received. >> jason, does the news flow this week explain why citi's down 11.3% in in, what, four trading days >> yeah. i think, you know, with respect to citi, they were, i would say, less constructive on the outlook of trading they also talk about some pressures and billion dollars

this years on risk and controls. i think investors took attention to that. and then on top of that, there was some headlines that they could be facing a potential consent order from the occ tied to the recent issues around revlon and that's giving investors pause in the near term as they try to flush that out. >> so which is your favorite >> i think we still have a bias towards the bigger names we think, you know, in the current environment, the bigger banks have the ability to leverage technology, adding customers and ability to just benefit from scale so j.p. morgan and bank of america show particularly well this week. >> thank you for joining us. >> thank you. >> off your busy week. >> we've got just about 40 minutes left before the closing bell take a look at where stocks are right now. we are lower the dow is down 250. we were down 300 at the lows of the day. it is a broad selloff on wall street salesforce, goldman sachs,

apple, those are the big losers on the dow as far as s&p 500, every sector is red now except for materials including dow. we'll talk to the ceo soon snowflake melting away gains of yesterday.

welcome back shares of snowflake falling after their debut. down 11% leslie picker has been following this story very closely. leslie, what is the latest is. >> small compared to yesterday's jump but pretty big decline compared to your normal average every day company. those commentators waiting for their chance to use that phrase snowflake is melting here is your moment. shares of snowflake declining a bit today, down 11%. still more than 85% though above

the ipo price. this comes after yesterday's remarkable surge in snowflake's debut trading day. that made snowflake the best performing ipo for a company raising a billion dollars going back two decades to the year 2000 with a german company it also meant that company could have raised an additional $4 billion in cash that was instead given to investors now yesterday's gains pushed snowflake's valuation up to the stratosphere the company was already poised to be the most expensive ipo ever among the most expensive ipos ever priced at 36 times forward revenue. with that stock doubling the multiple jumped to 70 times forward revenue. a lot of sources say they have never seen anything like that before today with the broader nasdaq selloff, investors decided well, just a pair back exposure a little bit guys >> what, leslie, do we think

this means for any other potential tech companies or nontech companies that are waiting to ipo snowflake seen as a special situation or one up or are others going to rush to market given the success of this one? >> yeah. so it's a really good question i think there is an interesting variable in it ipos now that may not have existed to the extent that they do now and that is the retail investor. as we talked about many times throughout 2020, you've got this entrance of the cool robin hood trader that is really interested in the market. ipos are, of course, in focus for a lot of retail investors. i'm told there was a tremendous amount of retail interest in this name yesterday. traditionally the underwriters talk to investors, price discovery that way they can't do that with retail they're too disoperate as a co-hort. it makes for a lot less

predictability on the first day of trading we could see more of that. snowflakes does have one benefit which is berkshire hathaway as an investor. that did attract a certain amount of retail interest into this name that may not be the case for other software companies down the road. >> mike, do retail investors get hurt when you have massive moves like this? >> yes if you're one of the retail investors relying on one of the hottest ipos in years, you're not going to get an advantageous price point whether it is broken from the issuer's perspective, that is the point that leslie is pointing to there. the this notion of leaving money on the table, i think it's a little bit of a flawed analysis that critics are using here.

they could have found unvestors at $245 a share for snowflake. in the ipo offer itself, and therefore that was the clearing price. but the only reason you have buyers at $245 in my opinion is this was a stock hot enough to go from 120 to $240. i want to own it because it's going to the moon. not because i've evaluated the $240 is the exact price i believe is fair right now. fewer people want to buy it at 190 than 240 >> i guess it's a nice return to an ipo jumping on day one. >> when we talk about opportunities, we talk about the money on the table we can't quantify what it means

to have a company give up $4 billion from the perspective of momentum later on. one company that gave up $5 billion is visa back in 2008 that stock is up 1200% since the ipo in march of 2008 and it gave up $5 billion. clearly that company isn't struggling since its ipo despite having left so much money on the table. >> thanks for that story fascinating one. snowflake down 11% today still ahead, we'll speak with the ceo of palo alto networks about how companies are using cybersecurity solutions to protect data as employees work from home. that's up 80% from the march lows here's a check on bonds. yields lower today the ten year yield hovering at 0.68%. the s&p 500 is down 1.5% we'll be right back. when the world gets complicated,

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welcome back time for our daily coronavirus tracker. the daily case average is ticking higher in the u.s. some say it's experiencing large increases in cases, those include colorado, utah, and south carolina and in europe, the who warning of a very serious situation as cases rise in france, italy and elsewhere. bernstein is out with a note arguing a second wave is more likely than not the firm says economic activity metrics for this year will remain flatter. reopening businesses and schools cause infection rates to rise. meantime, in an attempt to

revive the tourism industry, hawaii announced beginning october 15th, travellers can bypass hawaii's 14 day requirement by taking a coronavirus before arriving in the state. hawaii planned for the rule to take effect on august 1st but postponed it twice as the state saw a spike in cases, sara >> time now for a cnbc news update with sue herrera. >> hello here's what's happening at this hour along with on shore damage along the gulf coast from hurricane sally, the storm is also disrupting off shore energy production in the gulf u.s. regulators sat almost a third of crude oil production remains shut along with a quarter of natural gas production >> michael bloomberg is starting ad buys in florida for joe biden's campaign the first spots will start airing tomorrow in all ten of that state's media markets they are part of bloomberg's pledge to spend $100 million on pro bide n adds in florida where polls show a tight race with president trump.

>> the 75th session of the united nations general assembly is under way with today's ringing of the peace bell the u.s. secretary-general though says peace is never a given. >> it's getting close and centuries to be able to have the stable societies but peace can be squandered in an instant by policies and approaches you are up to date back to you. >> thank you, sue. we have got about 30 minutes left before the closing bell take a look at the markets we're still lower on the day off the session lows down more than 200 points on the dow. s&p 500 is down about 1.4% we're wiping out the gains for the week materials, the only group that is higher. and on that note, after the break, we're going to talk to the ceo of dow about the outlook for global manufacturing amid the pandemic and how this year's active hurricane season is impacting production we'll be right back.

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welcome back the credit suisse global basic material the company pointing to reductions and restructuring program. the ceo and jim welcome to and they hop back in april what you would say you are along this transformation they have come out of the spin i think we took very strong

actions to respond to the economic and there is cost and we took actions on lowering our cap ex for the year. we'll need to do to get ourselves ready for a turn in the economy and some recovery. and we're starting to see that in third quarter we're starting to build some momentum into the economy as countries around the worldcom out of shutdown and out of lockdown >> you're stock is reflecting that you characterize the economy right now. it is gradual and uneven do you see what you're seeing through the various businesses >> we have resilient businesses. the home care business and industrial institutional

cleaning health care and hygiene. you know, they held up relatively well. in fact, in packaging we're up year over year what we've been through in the pandemic that's a pretty strong statement about the demand and the accessible market there. we're starting to see. >> that are is something that wasn't there in the second quarter. there is interest rates and you're seeing home sales and that usually holds some durable goods and aplans sales and that is actually heated up here in the quarter. and so today we talked about the fact that our outlook is improving. 250 million on top of the guidance and just based on that improved demand and they're up 20% in

operating rate >> what about plastics, jim? there was a big effort globally to reduce plastic waste. in a way that is a threat to your business. so you've been well ahead of this issue on the forefront of fighting it. are you worried about health kerns and not as much about the environment or recycling as we were prepandemic >> well, we're using more plastic for a lot of reasons i think we will continue to. one reason is because it's the most sustainable material on the market today it has the lowest co-2 footprint. we need to address issues like plastic waste and the economy that we created over the years but that's more about stopping the waste and closing the loop and having more revenues for recycling. that effort is going well. last year -- it's been about two years ago we launched the license to end plastic waste

that effort is taking off. have ten projects around the world that are actually demonstrating how to do a closed loop society where you can actually bring more plastics back in this past quarter, you have seen some tremendous efforts including efforts by ourselves to bring more recyclable material into the markets. so we launched lines of products that include up to as much as 70% post consumer recycle material brand owners and packaging converters that we work are also giving demand signals to the market that they're going to incorporate more recycled material in. so we're making good progress on that mission and everybody's fully committed to get to a circular economy and get to an economy that will work >> despite all the measures that you have taken yourself and have been leaning on, if we get a

more pro environment, is that good for dow or if they were forced to use less plastics as you already got your own measures that are trying to embrace environmentally friendly practices? >> well, regardless of the way the election comes out, we're prepared and so i would just use europe as a talking point and europe you have a very progressive eu grain deal that is out there today that is driving to the next level. and in some ways it is going to put more cost on society and the consumer is going to pay more for circular plastics i mean, one of the things about a free capital market is we're making product today most efficient way we can so that is going to happen but there is also a cost of not closing that loop. so we have to be prepared for that and i think what we're working on is how do you come up with a business model that increases capital. you can't just be in this

economy. it has to be something that puts a value on that recycle material >> gets it back into the beat stream >> globally, jim, do you expect covid-19 pandemic to have any permanent or lasting impact to the chemical supply chain? >> i don't know that vcovid-19 will have lasting impact i believe that we're seeing other things that are having a bigger impact, geopolitical relationships are having a bigger impact. i do think we're making good progress on covid-19 through testing, through better treatments and i'm optimistic that we'll get to a vaccine. relative to the previous topic, i think covid-19 is a short term topic. plastic waste and carbon neutrality is a longer term topic. you can't take your eye off that longer term target while you're

trying to deal with a virus situation which i'm confident the scientists and companies will help us get under control >> jim, just want to dive a little bit in and the strength and construction clearly that's been mainly driven by residential. do you think that it can't raemy get much better than it is at the moment or is it possible, is it your expectation that commercial construction could pick up at some point in the next year to overall boost the levels you're seeing >> as you indicated, commercial construction has been relatively slow i mean, we're seeing people complete commercial projects that were already under way going into the pandemic. new projects have been a little bit slow on the uptick but the move towards residential home sales and rez debtial constructi residential instruction and we've seen strong do it yourself numbers that we've seen in the last decade. that seems to be pretty robust i think with low interest rates as the fed signal for the next two to three years, i think

you're going to continue to see people look at that. i don't know what's going to happen as we get kind of post covid-19 whether some of the trends we're seeing short term and terms of people saying i don't want to necessarily go back into the cities and large apartment complexes or condominiumbuildings, i don't know how long term that's going to be. we have to keep an eye on that that's going to take a while, i think, for that to develop and for us to get a long term sense of that. >> you kind of gave us a good picture across some of the businesses, jim. just wrap it all up. how long do you think it will take to recover back to the growth rate prepandemic for dow and the end markets that you're seeing >> i think around the consumer markets, the end of of this year, beginning of next year we're going to see year over year growth. i think in durable goods and construction we may see

improvements into next year. automobiles to get back to the levels that we were at in 2019, 2018 h that might be two to three years down the road. and we got to prepare ourselves for a shift that's going to happen, i think. and that's one of the reasons we launched our new e-mobility platform is get ourselves ready for this coming shift. and i think as you go through these changes, you always see a little bit of a step change in the direction that the automobile production is going >> jim fitterling, thank you for coming in to update the business on the announcements of restructuring and divestment the dow was down over 300 points, 384. it's now down over 150 after the break, moderna's ceo gives clues about a vaccine time line and update on the snowfall on wall street snowfall on wall street. ere thwe go.

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lawelcome back we're now in the "closing bell" "market zone." mike santoli here to break down the crucial moments of the trading day. today we have hightower strategist with us, stephanie link let's kick off with the broader market all three major averages under pressure today the off the worst levels of the session. the dow lower for the first time in five days the nasdaq is the notable underperformer today we continue to see a rotation out of tech. nasdaq is down 8% so far for the month of september mike, the dow is down 200. we're down 400 so a nice little bounce in the last, what, 30 minutes or so the. >> yeah. the market has been sort of making this tentative stand here few times we bumped along these levels in the s&p 500. and 3330 is overnight low. that's where we saw the lows of last week, too so you could say maybe the market is in fact finding some kind of support in here. seems very orderly i think everybody is onboard

with this idea that it's mostly just a correction. mostly just air coming out of the most overinflated parts of the market you see some undertones of strength in more cyclical areas. all that stuff is too t the goo. we don't know if it has to flush out further and generate a little more fear, maybe it seems like everyone's got this one too figured out for this to be all there is but, you know, not everyone has to be all that damaging. >> the problem for the major average, stephanie it's not just tech when they pull back yes, it makes up a big portion of the s&p 500 it is three sectors, tech, communications services and it's consumer discretionary amazon is in there it is also under a lot of pressure and, therefore, that takes down the whole market has the thesis changed around the hot stocks >> no. i don't think so to your point of they are -- they represent a lot in ermz it

in terms of the weightings you need all the other industries to do well to more than offset that i think the selloff is an excuse you have a dovish fed. you have the bickering going on in washington over the fiscal package. i think people are just taking profits. if you look at the technology stocks, sara, year to date, apple is still up 49%. that is after this correction. salesforce is up the same. zoom is up 494%. we could see this last for a couple of days i do think the rotation is real. i think it's real because the economy is showing signs of life faster than what most people were expecting you and i and wilf and mike talked about this for months housing is recovering. auto is recovering listen to what the dow ceo said about auto consumer is part of consumer's recovering and manufacturing is absolutely seeing a v shaped recovery this week we got great data that supports all of these segments

we had the industrial production number that was solid. the empire manufacturing data was at a two year high the philly fed is up four months in a row you had single family home starts and permits so all of these are signs that the economy is getting better and in addition i'm looking at copper at a 36-month high. that is indicative of them running high >> retail sales were not great and claims are still very high but your point is well taken higher treasury yields and strengths in industrials and those are cyclical airline executives meeting with mark meadows today to discuss fresh aid. phil lebeau has the details. phil >> getting close to crunch time for the airlines if they're going to avoid thousands of employees from being laid off, furloughed as of october 1st that's why you had five of the large airline ceos at the white

house today meeting with white house chief of staff mark meadows. they believe that they have the support on both sides to get a deal done. problem is they can't get a deal done because washington can't get a deal done. they're expecting to lay off 30,000 workers unless they can get more airline aid it would provide payroll to support payroll through march. the de many. s and gop, they agree. but it's contingent on a broader relief bill. problem is they don't have that right now. as you take a look at the large airline stocks, they moved higher within the last month they gave back a little bit today. keep in mind, passenger levels still down 65 to 75% compared to the same time last year. guys, back to you. >> phil lebeau, thank you. mike, how correlated have the stock moves been to the question of whether the airlines are going to get fresh aid >> it seems like they've been more correlated with a lot of

the real time mobility data. in other words, are people going to go back to flying there say pullback related to just post labor day volumes. obviously, market would like and probably assume the idea that they will. but i'm not sure the market is kind of lost that bet along the way. by the way, you know, you could arguably say there should be like the governors of the five states that are having the layoff tens of thousands of people right now ought to be, you know, at the white house too and saying we need this just as badly as airlines. so i think if you get down to policy making, it is tough to say we're going to do an isolated bill for this one industry yes a very important one and others who are equally in need and equally at the mercy of policy out there they don't have it >> shares of snowflake down 11% after more than doubling in the debut trading day yesterday. reaching a valuation of more than $70 billion at yesterday's close. down 11.4%

stephanie, putting aside this debate as to whether the company should have asked for a higher price, that is somewhat silly given they got such a great valuation, would you have liked to have seen a slightly less hot first day of trade when you see a move like that, does it worry you? not so much about snowflake but all of the outperforming stocks this year that you get that discussion again of are we in a bubble are thing joefs overheated >> definitely does worry me, for sure that reaction was insane yesterday. but, look, at the end of the day, if you believe in cloud and you believe in sass cloud, cloud is going to be a $600 billion market total addressable market by mid decade. ai mean they certainly have room and runway for growth. but i can't justify that valuation at all and, yeah, i'm not that happy that zoom and z-scale and all these names have done what they've done year to date including tesla. those are the worrysome points for me in this market for sure but i think if you are a disciplined investor, you focus

on what you're comfortable with over the long term, you focus on profitability, balance sheets, cash flow, et cetera, those are things i do as an investor these other moves, they're really crazy it's hard to explain >> but, mike, for those that have called this stock market a bubble, they have to be pointing to things like yesterday where at one point the valuation was i think $90 billion for a company that has less than $300 million in revenue in the last fiscal year and doesn't make a profit >> yes well, this market has been very overaggressive in just front loading the credit for a lot of these companies that seem to have a better software mousetrap. no doubt about it. i think almost anybody on every side of this trade would say it's an incredibly aggressive valuation. but what we have seen in this market is that companies that started smaller and more slowly like a shopify got to $100 billion. that's the tradeoff.

we know some of the businesses can scale faster than we ever thought possible before. but we maybe don't have the patience to wait to see them prove it you have to have more than one deal we're pointing to there the are 500 ipos i don't think we're seeing something quite as pervasive as that right now >> all right the good point let's talk vaccines. moderna's ceo says the company should know whether the vaccine is effective in november meg has the latest details meg? >> moderna holding the r & d day this morning and releasing numbers for the covid-19 vaccine. they now enrolled more than 25,000 of anticipated 30,000 participants and importantly, they have given more than 10,000 participants their second shot in the trial this is a two dose vaccine we asked the ceo this morning what that means in terms of the timing for potential results here's what he said.

>> we have a base plan for environme efficacy to be in november that's our base plan our base plan is october i think it's unlikely. but it is possible and if infection rates in the country were to slow down in the next weeks, it could potentially be pushed out as a worst case scenario in december >> meanwhile, pfizer has said the end of october and today that company publishing the clinical trial protocol or surrounding all of the statistical analysis that it will take in its trial saying that transparency is paramount they did that after moderna this morning was the first company to make all of those details public this is stuff the drug industry normally doesn't share right now during a pandemic being called on to be more transparent. guys >> yeah. get all the information out there. really quick question on the treatment front. it's been a little disappointing we haven't had more data on the trials for the antibodies which

were supposed to be out this fall and really help bridge us to the vaccine i know they did have an update on this drug what is happening with this class of drugs >> yeah. it's a really important part of the response to covid-19 we did get data on lily's antibody yesterday the results looked a little mixed. it is more about how the trial is run it didn't necessarily meet the primary goal except on one dose. but it showed some promise when you start parsing through the data we're expecting to see results from regeneron they said by the end of september. so we're looking for that and you know, everybody continues to hope these will be really important tools in this battle >> meg, thank you so much for that by the way, we're off the lows but just softening again a little bit as we approach the close with the dow down 170 again. mike, what are the key things you've been focusing on in the

internals? >> the internals again have somewhat outperformed the indices. if you look at the volume on the new york stock exchange, it certainly to the negative side the but only modestly so and despite the fact we have significant losses intraday down to those, you know, let's say month to date lows earlier and then also, if you look at the nasdaq 52-week highs versus lows, something you would tend to see if the market was really ku kind of in full selloff lows is the new lows starting to perk up there is a lot of lift in the nasdaq going into this phase but we're still making more new highs than lows. this number has been something to watch they've been perking up lately so this doesn't really show a lot of damage under the surface. volatility index again, it did have a bit of an upside move given the fact that we got more equity weakness. 26 and change. still been kind of down trending over the course of the last couple weeks so not giving a very clear signal but also not evidence on each incremental move lower in stocks that much more stress building

up even if there is this continuing bid for volatility protection going into october. sara >> as we head into the close, the dow looks set to break a four day win streak. we're down 154 points. it has been recovery off the lows we were down 384 at one point. lower for the entire day and there are some stocks in it there that are up. there is buying in industrials and materials. dow is leading the dow walgreens, caterpillar and 3 m doing well goldman sachs, salesforce and nike bringing up the lows. it is doing a little bit better than earlier in the day. real estate communication services, consumer discretionary are lower. a lot of the tech stocks are also weak today which explains the weakness in the nasdaq just seeing some green energy just popped into positive territory along with industrials and materials as far as sectors that are outperforming on the day. at one point today, the selloff looked so intense that we lost

all the gains for the week but that does not appear to be happening. we're actually still looking for a positive week going into a friday they're certainly off the worst levels of the session no doubt the tone improved in this final hour of trade. the we're closing only down 130 points on the dow. >> indeed. only down 130 points on the dow. 0.5% welcome to "closing bell." mike santoli joins us and sara said a strong 45 minutes of trade. only down .5% on the dow only down 0.8% on the s&p 500. three sectors in the s&p 500 ended positive, materials, industrials, energy. communication services, real estate, consumer discretionary the worst performers in terms of that week to date performance, the russell 2,000 up 3%. the nasdaq 100 negative which tells you that the rotation has

been going on so far this week oil continues the strong run coming up, we'll ask mohammed el-arianh stephanie link joins us from hightower. and joyce chang, j.p. morgan global research joins the conversation good afternoon to you, joyce mike, we've been pointing to this rally into the close today. and takes us once again off the levels you keep pointing to on the s&p 500. >> yeah. so the market -- the tactical traders made an effort to say maybe that was all the down side necessary for the moment also we have a expiration happening tomorrow it seems like there is squaring up going into. that in other words, didn't want to be traders and market makers not leaning too far in one direction. so at this point we're looking

at a 6% to 7% pullback from the highs a couple weeks ago the you have 11% or 12% at the lows so it seems like that certainly skimmed away a little bit of the excess that had built up if note all that was necessary i think that's where we are. we keep coming back to the fact that there is not a lot of macrostress being evidenced in the action industrials are working and this rotation into a lot of the underowned names like a ford motor company and some of the even energy stocks that had been really kind of let behind. >> joyce had, you know, fed chair powell always gets criticism no matter what he does or at least, you know, traders blame him for the selloff. is there any reason to think that any of this was fed induced? we did see the selling yesterday. the maybe traders didn't get more, any fresh data or fresh impetus for stimulus from the

fed? >> it seems at least 2023 based on the new inflation guidance. i you don't think it's a message from the fed some of this was coming because the market rallied the focus is also turning towards the u.s. elections and, you know, uncertainty around just how long it might be to get a clear result reported out. so i think that's going to continue as we go into the presidential debates later this month as well. >> stephanie, i mentioned it there at the close the oil price strength but other commodities have been strong of late as well what do you make of that >> well, you know, i cited copper being a 36-month high that is absolutely an indication that the global demand is improving. of course, there is a supply situation with copper. it is favorable for copper i do think that is the one commodity i look for as a tell they call it dr. copper for that very reason, right

so that to me is very important. and that's where i have actually invested in terms of the underlying commodity in a free port thing so i think, look, the economies around the world are healing they're not booming but they're healing. that's because we have fiscal and monetary policies in place everywhere and as the fed just told us yesterday, they're keeping rates lower for longer and also they're going to let inflation run hot. hotter than they have in the post past. that is one of the reasons i think the cyclicals are doing better and they will continue. i think this has legs. >> burt stephanie, we did have fiscal and monetary stimulus we still have monetary stimulus. a lot of the fiscal stimulus has run out. there is no sign anyway they can make a deal. more of it to come before the election does it really make sense to buy the cyclical groups with that big uncertainty hanging over the economy? >> yeah. i mean, i do i think you're going to get a fiscal package

they're down 12% on average from the august average levels. so that is -- we're seeing improvement. they're much too high. absolutely you have to do something. if we have to wait until the elections, maybe we have a speed bump in the economy shorter term but there is a lot of momentum that is building in other parts of the economy as i mentioned, manufacturing is seeing a v shaped recovery without a question and a lot of that does have to do with the weak dollar, also with the stimulus in place, with the favorable tax environment. so i think that you do want to have exposure to cyclicals you also want to have a barbell and secular growers. i really believe the total addressable market stories especially in the technology names. you just have to be valuation sensitive in my opinion. but you do this barbell. they both can win. >> one other quick point the rest of the world is probably on a manufacturing side booming pretty well. i mean, you look at china long growth

you look at the manufacturing sector they're kind of back to business so i think the stuff that is working in the market and those industrial areas are generally global so that's another piece of it. >> joyce, you mentioned the election so did stephanie do you think this is something that affects all u.s. sectors equally or is it more of a sector specific concern for snashgts. >> we've done some modelling about this i mean we basically looked at a scenario that what if you rolled back about half of the tax benefit? and what that means for eps? we take about $9 off of eps. so i do think that with the infrastructure plans that, you know, proposed guide and administration might put into plays, you would have certain sectors like materials do better here but the questions we really been building have been about the tax outlook. i think the other thing that we're looking at is really some of the market technicals as we go into quarter and rebalancing. there could be about $200 billion of negative rebalancing flows. now that's more technical. of it's short term

but it is something that is a real reminder that market liquidity and market depth is still a problem. >> let's get to bob pisani now to join this conversation for a recap of today's biggest winners and losers, bob. >> and a little bit of a shift in narrative going on. not sure it's a long term trend. it is notable. we are down today. we came off the lows mega cap did not get much of a rally. materials and industrials are continuing to do well. there is a specific story around ge mao sayic, ford, they're down. this rally has a little bit of legs here to this rotation if you look at materials and industrials, they're all pretty good they're doing better here. dow is up 13%.

i talked to them recently. ge, caterpillar. this is a pretty good trend overall. mega cap in september meantime, they're not buying into the buy the dip mentality. these stocks are still sitting down there the equal weight versus the s&p 500 itself, now this is just this month, but the quae weight is essentially flat and the s&p 500 which is down 4% that is a very widespread. unusually widespread and it shows you, i think, that portfolio manager looking for a little more breadth out there in the portfolio in the event the reopening story really starts to broaden out. this rotation is looking a little stronger than the past rotations and deval that fizzled out. we'll see. >> all right bob, thank you stephanie, what we've been talking to, whether it is a reopening rotation or a cyclical

rotation, is this -- does it have to be either/or with the mega cap technology names? is this a time where if you've been in some of the names have big paper profits from an amazon or a netflixnetflix or google, i make moves right now >> i mean, i think so. look, i've been trimming amazon. i trimmed facebook and a long time ago. like a month ago and they kept on rallying. and so i just think it's prudent to trim. you know, my benchmark is the s&p 500. and technology is 27% weighting. and you had had asked earlier is if these stocks continue to go down, do the other parts of the economy and the other sectors in the markets have to do well? if you add up financials, energy, materials, and industrials, that's 25% of the s&p 500 benchmark. the so they really do need to do really, really well to offset

technology i don't have a problem taking some gains in tech to putting it and allocated it to the cyclicals. the i don't think you need to go crazy and buy speculative cyclicals. the you can buy high quality companies, ups, union pacific, caterpillar, deere there are a lot of names that have strong balance sheets and they're innovating they're not the old industrial companies that we used to know and so that's why i think you're going to see such positive operating leverage if you get demand to increase next year because the margins have stayed very lean. the companies stayed very lean i think that there is a lot of upside to the names. and they're underowned >> joyce, clearly there is a massive underperformance year to date u.s. markets versus european markets some countries more than others. do you expect that to turn around is there any data coming out of europe that makes you think it's time for a catchup for the stock markets? >> well, the macro data is better than had been expected.

but we are seeing a rise in some of the infections in certain countries. and a lot more attention now that's being put on brexit and whether you could have a binary outcome. you know, recent discussions, you know, show this government is taking a much harder stance with the eu about this and so there are real questions on whether they come up with a free trade agreement here. i don't see, you know, a major rotation that is going to happen away from the u.s. but i would say the euro area recovery has actually been surprising and has actually been better than expectations but attention recently has kbgoe to brexit. it has gone to sterling as well. i think that still you're seeing north asia here continue to outperform we do look at china as having actually very strong export and manufacturing numbers.

>> most european mashgs are down year to date except for one big exception outperformed. >> germany >> sweden. >> that's right. >> it's always a positive. they're only down 0.3% >> that's right. i know, but interestingly -- >> and the swedish krona had a good run too >> they had polar opposite approaches to the virus. both had had relatively good results compared to a lot of the other countries. there is a lot of other factors to joyce's choint. just the makeup of the market capitalization of the indices. apple overtook the whole ft-se 100 in terms of market cap earlier. about two weeks ago. they put it back on top relative to apple something we have to celebrate >> they don't have an apple. choice chang, thank you.

stephanie link, thank you. >> good to have you. >> thank you >> up next, we'll ask the chief economic adviser whether the ba is a buying opportunity. we're back in 90 seconds 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. and tailored recommendations. ♪ 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. welcome back the dow snapping the four day win streak closing lower along with the other major averages. finishing well off the lows of

the session. for more ton day's selloff, let's bring in chief economic adviser. mohammed, great to see you thank you for joining us >> thank you >> big intraday moves today. also really every day so far this week. what do you draw from that are markets suggesting to you that there is more people willing to step in and buy the dips than the opposite >> so the last 24 hours i've been fascinated. you've seen massive tug of war and it's all happening in the liquidity sphere it's not happening in the fundamental sphere and i think what happens basically is the fed first surprised on the positive side and then some misstatements and the fed -- at the press conference shook a little bit the impact of the fed. and now we're seeing the tug of war going on they're questioning the market, test valuations because we have no fed meeting for almost two

months versus the buy on dip mentality. and that tug of war, we have to look very carefully. if we lose the liquidity support, this is below valuations. >> what was the fed mitsstep? >> there is no doubt that in terms of what they had in the statement it was much much more dovish and the markets went up. when we got to the press conference, the tone of chair powell, the way he dealt with fiscal issues and then as steve said yesterday on your show, he stumbled he stumbled when he came to answering quet about financial stability. he stumbles when he came to answer the question between the difference between guidance on the interest rate and guidance on the qe.

i think it's the stumbles is what impacted markets the most >> really? i mean, i don't know i think those are all really hard questions you know the forecasts going out several years to predict inflation number for the forecasts is impossible. i think the message is clear and that is we got a new framework and we'll be on hold for a very long time and a little bit higher prints on inflation aren't going to scare us will i'm not sure that there was any actual missteps or message that's didn't get hurt >> so you and i think that way step back a little bit on that you are specific on interest race so qe is really important.

weights are zero for a long time issue number two, what about financial stability? the answer was very backward looking. that raises concern. will financial stability be a problem to this policy paradigm? finally, there is a question of how long can you disconnect the financial system from the real economy? if you're not that confident of the real economy, can you really continue pushing asset prices higher i think it is a really complex time the answer to all this is it's not about the fed. it's about lawmakers in washington >> what is your answer to your own third question there how much longer can markets be disconnected from the economic reality? >> depends on two things one is starting to fade which is liquidity coming in it from a new set of investors and the new retail investors have a tremendous impact on this

market but they've gone from being market impactful to being name impactful. the other arab u is about the fed itself at what point do people start losing confidence that fed can develop -- can deliver one magic ach another? you know, it is amazing how robust this market has been. and it's because of this incredible liquidity to support we've received >> if the fed makes it clear it's going to be there zshgs anything change on the thesis for buying the dip buying mega cap growth stocks? all the things propped up as a result of the fed stimulus >> the one thing i worry about is bankruptcies.

because the fed can protect the investors of a lot of things but not permanent capital impairment that's one thing that will break this the other thing that would is if the investing mindset changes from being relative to being absolute and relative framework starts to achieve everything else. in an absolute framework, you start asking the question, am i being compensated enough for the risk i'm taking? so far the fed has managed to keep us in a relative framework. and that benefits stocks and has benefited stocks enormously. the. >> great to see you as always. thank you for joining us. >> thafrgs for having me >> home builders under pressure after disappointing housing starts data. we'll have a look whether this hot industry has reached its good as it gets moment reminder, you can watch or

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let's go back to mike santoli. amid new data showing housing starts fell more than expected and so did building permits. >> they did. single family housing starts were still strong. definitely some scrutiny on the numbers. things like home builder sentiment have been so strong. this number came out yesterday the nhb, you see this surge to a new all time high. at least 20-year high. remember the peak of the last housing bubble, that was right in here. very high levels nothing like the dramatic come back here. they move out of theciy. you have record low mortage gates. affordability gets questionable. now in terms of market tactics, it becomes a little dicier you see here this is the xhb home builders and home related home improvement stores and

things hike. that a similar v also to a new all time high. it tauz you back to 2006 so it man a be careful moment in terms of laying bets on the stocks themselves. you have the record builders sentiment numbers, sometimes the immediate term the building related stocks don't necessarily do that great simply because of a lot of it is priced into the market >> so that is just the august housing starts what if we started to see a few other key data points on the economy show similar little disappointment a little disappointment on the economic data enough to derail things is of late, the economic data held up fine >> yeah. it has there are things like retail sales or somewhat soft depending on how looked at them. i feel like the leash is not, you know, all that long.

there are things like transportation stocks. i think you certainly need to have the numbers come in relatively okay for the next little while here. housing related, they've been unequivocally strong everybody is on with this idea that it's a very long lasting tail wind for the economy. >> okay, mike, thank you >> cybersecurity stocks have been soaring during the coronavirus pandemic up next, we'll as the ceo of palo alto networks how much the work from home trend is benefiting his company's bottom line and whether he thinks it wi continue once the covid-19 crisis is over my mom has super powers. it's like she can see the future. what?! it's like she time travels in a rocket ship. that's cool! and then she comes back saying "try this" or "try that." she helps everyone. she helps them feel less worried. wow! mommy, so what is it that you do? i'm a financial advisor.

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their incident response services joining us is the ceo and chairman of palo alto networks great to have you on the show. welcome. >> thank you, sara it's been a while. last time i think we talked was in davos >> a long time and doesn't look like we'll have this year. so thank you for joining us. obviously remotely whast is going on with your business the give us some color as to what you're seeing beneath the numbers which i know you just reported double digit revenue growth again >> sara, what is interesting is you think about the pandemic, when it stted, everybody wt to a bannic moment trying to figure out how this good s. going to impact us and our customers and companies have to go pivot overnight to make sure team can work securely from wherever they want to there is a bunch of things associated with. that the last few months what is clear to all of us is that we're going to be doing this for a little bit longer. not quite clear how much longer

this little bit longer is going to be. and we're seeing the impact of that customers are reark teching to start developing sort of a hybrid work environment whether you have to work from home or you have to work from the office or wherever you are. so that bodes well for people like us in the business of providing the most security. not only that, because the services increase, now, you know, you're vulnerable at home. people are getting more and more aware of the need for better security and we're seeing things associated with what >> you just closed this acquisition you announced last time what capabilities does it give you? you've been on a little bit of an m & a streak. >> yeah. you know, sara, as i started the enterprise industry and what happens is once you have great products, you use that to build a large sales force which can go and be the partner of choice for the customers. and when they're there, you have to make sure they keep getting better products over time. that way you keep cementing the

relationship and providing security for your customers. one of the aspirations we have and the largest cybersecurity company, we have the aspiration of being the partner of choice one area where we're not there for our customers is when they go to agree, when they go to an incident and what they do amazingly is they address about 1500 incidents there and they're there to help them navigate the breech and true to figure out how to get out of it we have a phenomenal sense of products we believe they allow us to steer our journey and mission to be cybersecurity partner of choice very excited about the acquisition and welcoming the team to palo alto networks >> during vud and then everyone's increasing engagement with their devices, everything is pointing to higher risks of cyber risks, have we seen a massive spike? in which way it is targeted? it is more to individuals or network themselves

>> the only thing working is technology the we take retailers and any part of the economy, technology is the backbone right now. a lot of things are functioning. and nobody wants that backbone to get disrupted or be vulnerable in that context, we're seeing a lot of volume. to your point, we're seeing a lot of focus from bad actors trying to figure out how to intercept that you're seeing that motive at an individual level because now we're all many individuals and we push out the network parameter to our homes so it's a lot easier to get into a company by getting into your computer or home network and go from there into your business. that is kind of we're seeing more vulnerability on the individual side. you're seeing the old hacks come back people are not protecting for those at home. we're also seeing lot of activity where people are trying to go after information whether it is vaccine related information, there is a bunch of covid-19 related scams

so you're seeing a type 5:00ing going on at this point in time >> is this foreign governments the state sponsors that we've seen happen and cyber hacks? or individuals what kind bad actors are we talking about? >> there are both. there are individuals and it's not always clear who these individuals represent. and can you see some nation state activity around the world associated around the vaccine data and people's information. >> long term, who will be responsible for cybersecurity? going back to the individuals, technology providers it's interesting how when we use social media companies they get to own our dat yachlt ba. but if there are hacks, the individual loses out >> yeah. so that's a great question i think anybody who takes custody of our data should be

held responsible to keep that data secure and only use it for the purpose that they've been grant access to that data for that is a great responsibility for any person that takes our data should be held responsible for it we have to make sure that we're sharing data with people we can trust. and i think right now it's not always clear to the consumer when we share data on our apps and phones where that data is going and where that data is going for. i think there is enough conversation about who that data belongs to and where it should be be kept and who is responsible for the security you can see government is getting the act of ensuring the security of data of their citizens >> tough questions you mentioned they're going after vaccine information. what about the election? have you seen spike in activity around certain companies i know you do work with the government a bit what can you tell us there versus 2016 where there was such

an issue >> well, clearly there is a lot more awareness this time around the election data. you're also seeing activity from the other side the interest in access to the data or systems as can you imagine a lot of the frinth activity around the elections is supported by facts and special purpose groups and they don't have all the money to invest in making sure that securities supreme. i think there is a lot of activity in it that area you're seeing a lot of companies like ourselves offering support to the organizations to make sure that we can have saip safed secure elections >> another thing i want to ask you is whether you had any opinion or insight into this deal that is being worked out for tick to being. it is obviously about national security and protecting americans' dat yachlt i think you have some perspective here do you think that it is safe, american consumers data is safe

if by dance partners with an oracle to have that data in the cloud and oracle can see the algorithm without an outright sale of that business? >> i'm not privy to the details of how the deal is constructed ut it is hard to have an opinion i think you're seeing around the world that governments are interested to make sure that data of their citizens to some degree stays localized for most part and you're seeing that activity across the world there is a lot of countries that they want to make sure that data doesn't show up in different places so beyond that, it's hard for me to have a perspective. i have not spent time trying to study the deal >> no. it's a fast moving target that changes a lot. we appreciate the insight. thank you. good to have you on the show >> thank you very much for having me, sara and wilfred. >> still ahead, snowflake shares cooling off after the massive post ipo jump. the blockbuster debut is a topic of debate which we'll discuss.

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♪ i'm like you on-demand glucose monitoring. because they're always on. another life-changing technology from abbott. so you don't wait for life. you live it. ncht we're getting in news for new aid for farmers. we have the details. >> sara, the u.s. department of agriculture is set to announce a new program for farmers and ranchers will total up to $14 billion. of president trump could announce it at his rally in wisconsin tonight. this just the latest round of direct aid for farmers that is coming this year there was another one of 16 billion dollars in direct payment that's was authorized this spring. and this were tens of billions of dollars in payments paid out in 2018 and 2019

unlike other industries like airlines that have got more direct health, the usda is in a unique position. they have a bank for farmers called the commodity credit corporation. that gets funded by congress every year they can reallocate funds within that to send directly to farmers. and that is how they have funded these payments in the past no other agency has anything like that to directly prop up the industry that they regulate. the farmers are in a unique position this will be welcomed news as the harvest season is set to begin and president trump could announce that tonight. sara and wilf? >> thank you want to go now to sue herrera for a update >> thanks so much. speaking at the national archives to mark today's anniversary of the u.s. constitution, president trump promised to create a 1776 commission to promote what he called patriotic education

he wants to counter what he's referred to as left wing inof course trination in schools that tries to make students ashamed of the country's history especially when it comes to the issues of race joe biden called into the daily caucus meeting for senate democrats today stressing that despite a lead in the polls, he is taking nothing for granted. he told them he plans to be more physically present on the campaign trail, especially in key swing states >> and take a look at these pictures that we're going to show you in a second the they're not from america's west coast actually that, is palo alto video. they're having some very, very big fires in brazil's wetlands it's having the worst fire season ever. more than 15,000 blazes so far this year. scientists say part of it is climate change the guys, you're up to date. sara, back to you. >> all right sue, thank you >> up next, snowflake shares tumbling after the massive ipo

surge yesterday. we're going to dig in to that move find out what means for valuations in thtee ch space overall when "closing bell" comes right back ♪ ♪ [ engines revving ] ♪ ♪ it's amazing to see them in the wild like th-- shhh. for those who were born to ride, there's progressive.

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shares of snowflake selling off a day after the blockbuster ipo. that is intensifying the debate about traditional ipos we have the details. the. >> sara, on one side there is benchmark bill gurley, he is the most vocal critics of the traditional ipo in recent years in the wake of snowflake's ipo, he tweeted that the debut which, of course, doubled was final proof of how broken the process is another prominent vc firm is taking the other side in a blog post defending the traditional ipo writing, an ipo is far from

perfect. but this narrative is almost completely false that narrative, they described, of investment bankers intentionally underpricing traditional ipos to steal from companies and line their pockets of the fat cat wall street clients. we heard the debate before on our air too. but what they say is hate the game, not the player strong stock performance actually helps build support for more liquidity the post concludes that april ipo or direct listing that each make sense in the right context for the right company but that ipo pops are a side show and there are other opportunities for true improvement and certainly this is a debate that is far from settled back to you. >> far from settled. thank you. we're going to continue the tech discussion just a moment. there is breaking news getting crossing from the federal reserve board about that second round of bank stress tests that is expected in the next couple of weeks or months

again, after the recent stress test results in june, they said because of the current environment they would go through another set of stress tests. we're getting through the severely adverse scenario will be that they'll be tested against. it's going to be two severe recessions that they'll be tested against as opposed to one in the normal stress tests the fist one has unemployment going up to 12.5%. and then dipping to 7.5% the second one has unemployment going up to 11% and then dipping to 9%. one more severe and a quicker rebound than the other one quick take away from that is the price of a stress test, the severely adverse scenario is 10% unemployment perhaps given the craziness of this year, this new severely adverse scenario can be worse than up to 12% or up to 11% given that it was already a 10% test it does have other factors to it as well like stock markets falling 30%. which again is not that much

worse than the normal severely adverse scenario the other point i just bring out that stands out here, mike and sara, in the statement coming from fed vice chair for supervision, a statement at the end saying the board had required banks to take several actions to preserve thur capital levels in the third quarter they are year he goes on to i saw the board will announce by the end of september with whether the measures to preserve capital is extended into the fourth quarter. we don't know what they will will or won't do there a glimmer of hope that the ability to start doing buybacks might possibly be allowed in the fourth quarter not confirmed in this release that definitely not allowed in the fourth quarter yet maybe reading too much into that final line of his statement. >> here's what i don't get about what you just laid out it feels like we already went through this stress test in real time the unemployment raut went to 14.7%. that is worse than the adverse scenarios you just mentioned and stocks fell more than 30% which

is also worse than the adverse scenario which you just mentioned. >> exactly anded adverse scenario either way is not that much p worse from how they were tested in june which they all passed as you said, things have improved since they last went through this test. and the test hasn't got that much harder. i agree if this is what you're implying that on the surface of what is release heerd and we're not just looking at ut li at ii there perhaps a little slglimme of hope on the capital return plans. but remains to be seen this is just crossing as we speak. financials there, what, not doing too much in after hours trading. >> i guess my point is don't we know how they would do in the scenarios? they went through ut in real ti time they came out of this. and according to the -- right? they set aside their credit

losses and their provisions? >> the test obviously, you know, goldman sachs, for example, was pretty close to what its required capital level was in a position where it is able to rectify. the test got a little harder so for some banks very close to the most, you know, worst case scenario levels, they have to go through it again it's not a good thing they're going through the tests and not guy thing that they were told they couldn't return capital for q-3. and that still seems possible for q-4. we'll have to wait and see but perhaps the test could have been harder still than what is being announced here is my initial take away having just seen this cross moments ago. we'll keep an eye on the bank stocks in after hours trade through the remaining 11 minutes of the session perhaps return to them -- of the show return to them at the end of the show let's pivot back to the tech and ipo market shares of snowflake ending the day lower. this comes a day after the company's blockbuster market debut. and raising new questions about

tech valuations. joining us now, elliott robinson, partner where he focuses on growth investments and software in cloud companies. good to see you, elliott thank you so much for joining us my big picture question for this sort of subsector of market before a question for the sub sector of the market is how many more years do you think we've got of structural growth before this starts to become a business line that is tied to whatever the economy is doing to become a bit more kick cyclical >> that's a great question i think it's relatively in the early innings, i would call it may be three, four, five we talked about how much room is left where cloud software we're

predicting cloud software will become the overwhelming delivery method and product in the states but we've still got time we're still early. >> does the snowflake price action, first of all, were you guys in that deal at all and does that action make you question the ipo process as some of the major capital hitters are doing? >> i don't spend nearly as much time thinking about it i know that everyone's out here trying to do the best job they can. i don't necessarily think about it too much. what i really care about is folks like us on the venture side have the opportunity to back really ambitious founders frank is just an incredible founder that's got an incredible product going after a massive and still-growing opportunity.

that's where i focus most of my time. >> when we look at this particular ipo, it looks incredibly expensive what are the key metrics you look at? >> we spend a lot of time with our emerging cloud typically we use something called the rule of 40. kind of a juxtaposition between your growth rate and your cash flow margin. typically companies today are 35% growth year over year. those companies receive about 17 times current run rate if you juxtapose that against snow, this is a behemoth because their rule of 40 scores much above 50% plus, they're going to see revenue multiples in the 30s >> elliot, thank to leave it the

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mo the dow broke a four-day win streak maybe a little bit of pressure after hours. we knew there was going to be another round of stress tests. we learned that. i guess you just got the requirements and you broke it. if nothing else, it's a reminder that it's a heavily regulated sector that is at the whims of the government and the federal reserve and all these regulators that are still feeling nervous about the outlook. >> absolutely. perhaps the severely adverse scenarios for a set of tests we knew were coming, the extra cost of these tests is already sort of priced in because we knew they were coming perhaps not quite as bad as feared but a reminder that at the moment they're not allowed to do buybacks now agai just looking at some of the share prices after hours, the

regionals doing relatively well. big banks down a bit the initial take only ten minutes after this news came out, not as bad as it could have been >> certainly not as bad. you know, i do think the big question is are the regulars going to be very conservative about waiting to see what the wear and tear is on balance sheets "fast money" starts now. i'm melissa lee and this is "fast money. tonight's trader line-up guy adami, tim seymour, karen finerman and dan nathan. the major warning for one market watcher. why he is calling for a 20% pullback in big tech plus ford giving details on its electric pickup. and later airline ceos back at the white house today looking for more money we found 67 billion reasons why that might not fly