good afternoon back home again. stocks are under pressure across the board. the dow now in the red for the day and for the week the s&p 500 on track for its third down week in a row that hasn't happened in almost a year plus, another day, another hot ipo. shares of unity software began trading hours ago and they are up more than 31% as you see right there. the ceo of that company will

join us for his first interview since trading began. it's a good day. the showdown between the u.s. and china over tiktok and wechat is coming down to the wire the white house saying downloads of the app will be halted on sunday get them while you can if you want them. we have the latest details "power lunch" starts right now as tyler mentioned, we're watching big intraday sell off in the tech stocks the nasdaq down 2% apple down around 3.5% let's bring in dom >> we're just hovering right above the section lows that's sell off accelerating throughout the course of the last hour on the exchange. the dow industrials down 331 points over 1% declines 1.5% for the s&p 500 and in nasdaq continuing that volatility we have seen as of

late down almost 2% here here is a key level to watch 10,995 what that represent s the 50-day average price for the nasdaq composite. remember, we're still not that far away from record highs we will continue to monitor whether we find a bid. some would argue the valuations are stretched. semi conductor, software as a whole and cloud computing. cloud computing still up about 41%. still though these particular sell offs and stabilizations

have been ones to watch right there. continue to watch these as perhaps leading i understand caters for technology and a check on the hot ipo of the day. unity, we mentioned that pup $319 was the intraday record high kelly, back over the you >> thank you very much >> the president is still not satisfied with oracle's deal to take over the u.s. operations. kayla has more on this developing story for us. kayla. >> reporter: the u.s. is now facing a negotiating dilemma satisfying the presidentially ensuring that oracle or any buyer of tiktok would have a majority stake in the resulting entity while allowing china to maintain some sort of control over its digital champions

if china were forced to se ed t control then it could block the transaction. a senior administration official is sent to favor a transaction while other administration advisers are not keen on some of the revised deal terms especially as president trump seeks to run on a re-election platform that his administration has been tough on china. it has bought a little bit of time to strike a deal. while one could still be reached over the weekend, the u.s. has until november 12th accord to a recent executive order to reach a deal for tiktok. this block on wechat and tiktok would go into effect over the weekend. here is how it would play out. while current users of these apps could still use the app, they would be block from inapp tra

transactions and updating or refreshing the software. this would significantly degrade the user experience and senior administration official says that wechat will be dead after this even though the u.s. does appear to want to reach some sort of tiktok deal because it has allowed a bit of protracted time frame here. we'll let you know as the situation is rapidly developing throughout the day what the latest is when we hear from the president momentarily. >> you said the administration, the president is concerned that whoever tiktok wechat and bite dance make a deal with that the owners -- the u.s. company must be a majority owner. does that mean that oracle or oracle walmart pairing would have to have 51% or all of the american owners and there are other investment funds that are part owners here would have to

surmount the 50% level >> reporter: the president a couple of nights ago at a press conference said it needed to be 100% american owned to satisfy his interest what needs to happen is for it to be politically palatable enough for the president to say yes i demanded the sale to happen i demanded that because of national security concerns that a majority ownership resides here in the united states. if they can configure a type of deal structure that allows the messaging to be as such, i think they would probably be happy the question is, how the you get there without politically weakening china and president xi which would have to sign off op this transaction because there's two politicians in this fight. >> thanks very much.

>> tiktok is work through a tangle of concessions but it's running right up against that deadline ha happens if and when time runs out? >> right now you have hundreds of employees, u.s. employees of tiktok maybe about 100 million users and whether it's going to exist or be able to be used on monday, is all in hands of one person who isn't part of tiktok >> julia, we have been running a headline on cnbc.com and i believe kayla just mentioned it. the rules regarding wechat, would wechat be dead in the u.s. after sunday >> that's the message that's being sent the message that wechat would be dead after sunday and then for

tiktok would be a different situation. if you already downloaded the app, you could keep using it but you wouldn't have access to new updates. the deadline has been moved out for tiktok to november 12th and the question is what happens not just before sunday but happens before november 12th it will be raeally interesting. tiktok had sued to block the president's order. the question is whether they look for any additional legal action to prevent from being shutdown. we could see a deal in next couple of days which would prevent any changes from going into effect on sunday.

a lot of moving parts here it's still unclear what addit n additional concessions the president would want to see from this deal. >> dan, it sounds to me like on the american side, we want to be sure that data that is available to whoever owns this is used in the right way and that americans data and privacy is not in any way compromised and there's no national security threats. the chinese are reluctant to give up control of a company that is domicile there and that they have built and has hundreds of millions of users around the world. at the heart of it, what is the key, the ability for oracle or oracle and partner to get into the source code to understand there are no back doors from which data can be slew over to beijing or what. >> the real key is what kayla said is can president trump save

face can there be a deal that lets him declare victory even though he's not getting victory which is an actual sell of tiktok. that's off the table the thing about back doors, there's never been any proven to exist. the real question has been under chinese law if the government requests the data, the company has to give them the data. tiktok has said if u.s. data sits in the u.s., that's been a question the big piece of this which i think probably frustrates bike dance, treasury on wednesday night sent back a marked up version of their proposal saying these are the changes we want. >> you have a busy weekend ahead of you >> moving to goal line very little time to go.

>> you'll both have a busy weekend watching this story unfold thanks kelly. still ahead, we'll have more on these markets with stocks lower this hour and the major averages having given up their gains for the week all 11 sectors are in the red. there's a new stock on the block today and it's unity software making its public debut. it's in some of the most popular video games out there. the ceo will join us after this quick break. more power lunch nt. main ch ex stay restless 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.

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. welcome back it's been a little more than six months since the covid shutdown crippled the u.s. economy and ripples through it the economy is clearly out of the real doldrums, that doesn't mean there aren't speed bumps. steve has been looking at where progress is and isn't being made steve. >> we're looking at the high frequency data that wall street has opinion using in order to gauge the economy and the bounce back from the covid-19 shutdown and it's been kind of a bumpy ride as you suggest. first of all, seeing some decline in some of these i understand indicators. others we have seen a slowing. the chase card spending is down 6.5% compared to a year ago. we'll look more closely at that

in the next slides there let's look at the cronos time punches. that's up half a percent compared to last month. divided by the high and low unemployment claims stakes, you can see they are lagging in terms of spending. looking at the kronos data a and time punches, these are people who clock in and clock out, those strong gains and in july, august and september, it came down quite a bit then september, '05, i think that corresponds with the 1.3

million job gains we had in august tyler, the atlanta fed president said earlier today that he is definitely seeing a slowing in the recovery this high frequency data seem to corresponds with that. >> by the way, we did see some better signs in the consumer sentiment data the top level macro data hasn't shown as much of this weakness, would you say. >> it depends how you measure it part of it is a slowing in growth the retail sales figures were a disappointment earlier this week they were still up 0.6%. good numbers for any other time but when coming back from the pandemic, what we're looking for are big numbers. millions of people brought back to work. big bounce back when it comes to retail sales the other concern is the service sectors. we'll be watching that manufacturing has come back strongly your data is timely.

we'll see if it's just a data lag issue. the markets are starting sthto show signs of stress the dow and s&p are on track for their third week in row in the red now. it's great the see you both. couple things i can't quite square if the weakness in market is about the economy, some of the stuff steve mentioned, stimulus package, if it's all about that then why would we have materials out performing, even the financials were up until just a little while ago today what do you think is going on he here >> i think big tech has been over valued and folks saying by most measures we're seeing valuation stretches we have not

seen since p 1999 and 2000. i think the high frequency data means something. when you think also going into the fall and winter, when some businesses that have been able to recover a bit, hospitality businesses, restaurants and the like in areas where it will get cold will have to start shutting down somewhat relative to where they have been the data will look worse going forward. i think the market is pricing that in. manufacturing is doing better. some of that could be predicated on china's rebound without a vaccine, without a therapeutic and concerns about another wave, this market's got some choppiness still ahead of it just to make things a little more fun, we have an election inless than a cupouple of month. >> how do you tie everything together >> i mean there clearly was a valuation excess you're seeing it in speculation.

it's with what was going on in the options market recently having options, trading volume larger than the actual underlying shares. there were lots of pockets of speculative excess i think we're seeing a bit of that rotation. it doesn't square on a day-to-day basis with what we're seeing in the economy. i agree with ron we're going to see fits and starts. that past are the days where the law of small numbers worked in favor of these huge percentage increases off the bottom whether in metrics like retail sales or even payroll growth. i think now we're at a point in the cycle, particularly absent any additional fiscal stimulus given what we have seen in the labor market of declining and temporary job losses but sadly rising permanent job losses and the impact that has on the psyche of consumers and small businesses i think there's ris incok in the economy but the rotation is not

finished >> i'm hoping it's the good rotation and not the bad kind. if it's all part of this healthy move into the boring parts of the economy that do well then we can stomach that as opposed to this being the leading edge of trade that's taking the market lower because the economy is losing momentum. >> from a rowtationaler spectiv, you can look at the growth you have to be a bit selective and careful about how you go about doing this

if there's a break out over something like this where retaliatory actions could be severe and aimed at very large u.s. companies then we have a different story to talk about. i'd be a little unsure about making big moves here. >> you're right to raise the china issue. we talked to bill bishop, he said apple is as a rule neverable here they have so much at stake for the u.s.-china relationship and apple, underperforming today have to lever it there thank you both so much we'll check back in soon ty thank you. still ahead, we will explain why the november election could bring a wave of selling with it especially after democratic nominee joe biden wins we'll explain that when power lunch comes back after this

quick break. unity software making its public debut the company is one of the leading platform for video game developers the ceo will join us after this break. more "power lunch" is xt ne 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.

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and the peace of mind of knowing that important things like your prescriptions, and ballots, are on their way. every day, all across america, we'll keep delivering for you. welcome back another day, another huge software ipo and that's in down take unity opening before noon with shares getting a nice pop in early going. they're still up more than 30% trading below $69. joining us is unity ceo. no stranger to this network. he's the ceo of electronic arts. congratulations. it's great to have you back. >> thanks. it's great to be here.

>> tell me about taking back control of this ipo process. you guys got to call the shots looks like goldman was very interested in helping you with that how different a template would this be for ipos going forward >> i can't really comment as to whether others will follow this particularly but we had a couple of aims in mind. one of them was to get better information. we put an indication of interest in it clollapses the game. it helps an outstanding base of investors. the other side that was different is this company was built by 3700 amazing people i've always hated the notion that the employee doesn't really participate for six months and i get why that's true. i wanted to see if we could craft something where they could participate on the first day we were able to do that.

>> i'm thrilled with what we have raised. i don't know about the stigma. i didn't do this to set up i set it's because what unity would do in the situation. it's who we are. others may follow it it may meet ha their needs are it may not i don't know about that stigma i do know it seems to have worked for us. great partners at goldman and credit suites helped us execute something that's never been done before we feel good bt about it >> john, how are you going to use the money? >> well, i was going to make a bad joke the company is growing really well we're confident.

we don't have or any history of sizable mma. i like the discipline of financial reporting. that discipline is helpful around here we're certainly ready for it we know have to forecast and run the business second thing is, this company life law is talent i started out why we wanted to include employees in our ipo we recruit over 100 new people in this country every month. i think a lot of help was to do better as we go forward. the primary reasons for going public more related to what was

right for our company, not so much about the quantum of capital we were raising. >> i have to say, john, you're probably first and maybe the only ceo in america who would say that you go public in part because you like the idea of quarterly reporting. most would say the exact opposite they hat having to make quarterly numbers or having to respond to wall street estimate quarter by quarter >> i didn't say we're going focus necessarily on quarterly numbers. i said i like the discipline >> i didn't mean to suggest that >> we're definitely investing for the long term. what we see in front with the market, it will double and double again the world moves away from traditional content creation we got half the world's market in gaming. they are building on our

technology as these folks come to our platform, we're excited about that the fact that we're public makes it a little more credible. i think it sets us up and continues to lead the market it's not the quarterly reporting per se, pit's the transparency that causes us to be discipline. >> one final question. why not direct listing >> we looked at everything what we came to believe is this was the right combination of advantage as well. we liked the partnership with goldman and credit suites. they did great work with us. i wanted to do things our way for the purposes that we set out

to do. we think this was right for us >> i think one of your customers is media tonic which makes fall guys i only mention that because we'll talk to the ceo a little later on it's like the hot new game go ahead >> say hi for me >> we'll tell them maybe take some shares john, thank you so much for joining us we really appreciate it. >> thanks for having me. >> ceo of unity software st up about 30%. ahead, we'll speak with their customer who makes this video game called fall guys that's one of the hottest video games in the market right now. we'll have that for you. developing testing and manufacturing of covid-19 vaccine isn't enough it also has to be shipped and stored that's why companies are building freezer farms and we'll take you inside. retail traders are piling into the market thanks to app like robinhood these big bets may not pay off

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welcome back, everybody. here is your cnc news update the cdc is versing a controversial change in its

covid testing guidance and now says that anyone who has been in close contact with an infected person but doesn't have any symptoms should be tested. last month the agency posted guidance that those without symptoms did not need to be tested even if they had been exposed to the virus the new york time has reported that last month's change was not written by cdc scientists and was posted over their objections british prime minister boris johnson acknowledging it's hard to maintain the discipline needed to stop spreading covid amid sign offense a second wave but warns another national shutdown may be needed if people do not follow the government's guidance in washington, four of the smithsonian museums are opening for the first time nontss. visitors need to book resignation varez reservations in advance and face coverings are mandatory. you're up to date. back to you. thank you very much.

we appreciate it the dow is off its lows. you see it there down about 280 some points. a little more than 1%. the nasdaq as has been through most of this month on the down days it's the one that's down the most off 154 points or 1.4% on the session if you've been watching cnbc, you know 2020 has been a pretty decent year for the stock market despite everything going on >> joe biden calling for a capital gains increase if history is any guide, that will lead to a big jump in stock

sales. 1986 is part of the reagan tax plan, the captain gains rate went from 20% to 28% investors sold stocks in advance of that increase capital gains realizizations or sales soared by 60%. in 2013 we had the same thing happen capital gains increased from 15 to 23.8% again, investors sold leading to a 40% increase in realizations research shows that the increase proposed by biden because of its size would lead to a 60 to 70% in increase in realizations or r asset sales. that doesn't mean the market will go down that's because investors they could sell capture that low rate and then jump right back into the market given that we have zero interest rates now. there aren't many other places to put your money. they are more likely to say in the market this is interesting.

only 25% of the stock market right now is owned by individual investors who pay any kind of capital gains tax. that could dilute any impact from any inclees >> at least from the capital gains tax hike we appreciate it ty volatility builds ahead of the election that's what's happening. is that the best thing for investors to do might be in that volatility to do nothing at all. don't just do something, stand there. actively manage large cap funds under perform the s&p 500 after ten years. 82% of the time. after 15 years, they fail 92% of the time why? joining us now are two people familiar with the active versus passively managed arguments. larry is chief researchbuckinghb

>> thanks for joining us you've got a new book out. a new addition of your book. your key finding here, stock picking is bad and it's getting worse. what's the problem why can't active managers out perform their risk adjusted pen -- benchmarks why can't they do it >> the number is very low that do and those numbers you saw were even before taxes which are the highest expense. t somebody has to under perform.

that supply as collapsed 60 years ago. 90% of stocks owned by individuals in their brokerage account, today 90% of trading is done by big institutions so there's no dumb money to exploit and the other factor is the competition has gotten much tougher. today's active managers all have phds from top programs or the world class scientists hired by firms. tough competition makes it hard to win a game. >> most active managers don't do well what about the super stars what about the warren buffets or peter lynches? they did out perform for many years. they had some kind of secret sauce. there were some super star investors. >> that's obviously true what the academics have done is

reverse engineer what the great stock pickers did looking for common traits to see if you can buy the same types of stocks there's paper that showed if you bought stocks that warren buffet told you to buy low p/es, higher volatility, you earned virtually the same returns as warren buffet every investors can buy funds that buys the same types of stocks that buffet bought and you can get it in low cost passive strategies like index funds. >> larry, i follow this debate for many years as you know i'm believer that passive investing on cost effectiveness should be the heart of most individual investors portfolios.

as we looked at those number, yo if you took individual shorter periods that the numbers would know better. sg maybe not a ma jurorty will out per frm bform but better performance. this year if you were lucky enough to be riding with a pilot, a fund manager who had the big five of the year, apple and alphabet and amazon and tesla, you would have out performed the market are there occasions when the active manager does earn their keep >> it's never a majority one year periods it's about two-thirds fail. as you increase, the worse it gets there literally is no market

circumstance we have ever been in where active managers out perform, for example, bear markets. thaw tend to do even worse on average in bear markets despite having the advantage of being able to go to cash >> not better in short term. not better in bear market. not better in merging market investing where there may be more inefficiencies in pricing >> research shows, it doesn't matter what the asset class is emerging markets is one of the worst markets for active managers despite the fact that there may be information in efficiencies but the cost of trading there, are so much higher, including thinks like

stamp taxes there may be information getting swamped by costs. there are no markets where the winning strategy is likely to be active management which is why we use only systematic funds >> alrealarry, thank you very mh -- sure bob. >> tliyler, you were mentioned larry's book 25 years ago when you were the executive editor of money magazine, you wrote a story on this and you were ahead of the crowd on this. i don't know if we can put that up but for money magazine in 1995, tyler had an article cited by larry in his book on jack bogle noting that bogle decided outperformance by passive was the way to go.

money editor 1995. you were on top of this from the very beginning kudos go out to you for that >> 25 years ago. i take no credit it's jack bogle's credit that he found that larry, thank you bob, thank you as well that's a long time ago, 25 years. kel kelly. >> i love that i wish we could see the actual manag magazine too we'll talk to one of unity's big customers. unity just had an ipo today. the shares are surging they help games like this.

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welcome back let's check in with the bond market rick is tracking the action this afternoon. >> good afternoon. look at intraday of 30s. the longest treasuries on the yield curve. it's challenging and making new yields highs lower for the day fp you open the chart up month to date, you can key we're challenging the top of the closing range on the long end. tens are just a little bit behind when it comes foreign exchange, everybody has been watching the historic run whether it's this month or the recent quarter with regard to what you want. you can see what i'm talking about. this goes back to march 1st. it's a rare update for both currencies against the chinese yuan today tyler, back to you what are freezer farms and why are companies racing to build them why are they so important to

getting life and the economy back to normal we'll answer those questions about freezer farms right after this break i have an idea for a trade. oh yeah, you going to place it? not until i'm sure. why don't you call td ameritrade for a strategy gut check? what's that? you run it by an expert, you talk about the risk and potential profit and loss. could've used that before i hired my interior decorator. voila! maybe a couple throw pillows would help. get a strategy gut check from our trade desk. ♪

as the race for a vaccine to treat coronavirus continues, companies will be researching, developing, testing and manufacturing it it still needs to be shipped and stored at temperatures as low as negative # 4 degre 84 degrees celsius the let's go discuss freezer

farms. >> you heard of server farms we got the first look inside the new freezer farm that ups is building in louisville, kentucky, to eventually store a vaccine. now the company is investing in cold storage capacity because the vaccines under trial need to be kept anywhere between two to four degrees celsius to as low as negative 80. they plan to make this site one of the two global hubs it is also building a new covid-19 command center right there in louisville. >> we know that every vile counts we're seeing that right now. every single vile is being tracked carefully. every one of them has to leech the destination. there are no spares. >> the competition in this space is hot fedex added ten new cold storage facilities to the network over the past three years this summer dhl built a new 20,000 square foot freezer farm in indianapolis. and even beyond that, companies

are trying to figure out how to maintain that super cold storage on planes, trucks, and even ocean liners to ensure that the vaccines stay at the critical temperatures back to you. >> well that was my question for you. it's another thing to keep it at something approaching those temperatures while you got it on a truck delivering to a hospital or a vaccination site. >> that's even one piece of the puzzle there may be multiple components to the vaccine that all need to be kept at different temperatures this is a giant logistical challenge. that's why companies are starting to think about it now >> kelly >> coming up, the cute and simple game that is taking the video game industry by storm fall guys is one of the fastest selling independent games ever and we'll speak to the head of the company behind it. llhest iepdeor f

long what about apple stay with us [squeaky shopping cart] [sniffing] is the salmon wild-caught? she only eats wild caught. [cash register beeps] uh, i need a price check on honey. don't get mad. get e*trade and get more than just trading. investing. banking. guidance.

with americans stuck at home much of the year, many turned to video games for entertainment. shares of the three major publicly traded companies have done well this year, electronic arts up 16%, take two and avtivision is up they're facing challenges from epic games, the creator of fortnight and now fall guys. from a media company called media tonic, it exploded in popularity it's a series of mini games where the goal is to get your cute avatar to survive it's been downgraded ten million times at $20 a pop the company that makes the software used to develop the software is unity software that is the big ipo today. we spoke to the ceo earlier this hour shares were up 31%

and joining us now to discuss the fall guys popularity and the video game industry is dave bailey, the ceo of media tonic dave, welcome. >> hi. >> i mean, it's fascinating to me that you are more or less as popular as fortnight let me rattle off some of the stats here the most downloaded game of all time more than 110 million hours have been played on pcs, seven million down loads, number five on twitch in september 67 million viewer hours. is it true you're not even available on apple devices >> that's right. we're only available on pc and play station plus subscribers. >> is that a philosophical issue, vablavailability with ap? >> no, not in our case so really it's about resource ands how quickly we can get to all platforms and initially we had to start with what we could afford and we have been building

up for this for a long time. really pushed ourselves to make a game of this size. so it's been amazing to have this reaction. >> yeah, you're like the old elizabeth taylor line. it took her ten years to be an overnight success. founded in 2005. i almost went out of business in 2016 you several promising games in the pipeline where the developers pulled out leading you to want to make more games in-house now this is so successful that you're struggling to have enough server space to support it >> yeah. that is the best and worst thing that ever happened to us in 2016 it allowed us to stop focusing on our nip and we got more into it as you say, the shift scale of this game within the size is putting a lot of pressure on our service. putting pressure on play station service. it's been that impressive. >> wow what do you do now to make sure you have the resources -- to support the continued

popularity >> we have a massive inflow of capital. that allows us to do much more than we could have ever dreamed of before. we already doubled the size of team already we're working on third parties to help us w he had other game industries work out to help us like epic to help us we're really putting everything we have into growing as quickly as possible and repaying the trust that they put into us. >> dave, how does a game like this from a company that very few people have ever heard of become so popular so fast? it's not like you have a pre-existing brand like madden or nba 2 k or call of duty how do you do it how does this happen >> this is a confluence of things firstly, we spent 15 years getting to here. we have technology and scale

over the last year, we signed up about 5,000 streamers in particular who wanted to get involved in it our beta testing and wanted to promote the game when we did go into this we gave out codes which they could give to viewers which allow viewers to install the game. and that really is what makes thing goes viral and ever since, you know, the game being a game in design, it really and pure content for them trying to empower. >> fascinating stuff fascinating stuff. dave bailey, congratulations thank you. media tonic, co-founder. quick market check as we head into the closing hour of trading on the "closing bell." the you see the dow is down 271. s&p 500, there is the nasdaq down 150 or 1.3% kelly, we close out yet another week in the red. >> yes, and, tyler, apple down 22% from the recent high

that is the name everybody is watching >> all right, everyone have great weekend kelly, you too and let's turn it over wilf and team >> welcome the "closing bell." it's been an action packed week on wall street from a blizzard of tiktok headlines to snowflake's blockbuster debut and amid all that, the major averages in jeopardy of notching up the third straight week of losses the let's look at what is driving the action today nasdaq lower once again. amazon, apple, alphabet add to their losses for the month tensions with china and the future of two of the country's biggest tech platforms remain front and center the commerce department announces a ban on business transactions with wechat and tiktok we await a decisio