same for the nasdaq and the s&p 500. in the dow, intel is the only thing that's positive, ty. >> as we have heard some of the transports have been doing very well this suggests a robust season. we saw an earlier about how the transports are basically all booked up. >> we will take it first time over a million passengers traveling with tsa. still we will wait on the stimulus talk happening this afternoon. thanks for watching "power lunch. "closing bell" begins right now. >> i'm sara eisen here with wilfred frost. stroks are selling off the dow giving up an early triple digit gain. the nasdaq looking at posting its first five-day losing streak in over a year global covid cases topping 40 million in europe and in the u.s. numbers are going up in 37

states right now in washington, fragile hopes for a stimulus deal remain speaker pelosi and secretary treasurer mnuchin are expected to talk this afternoon in hopes of getting a deal done. a full economic recovery has a long way to go and another expert said many lost jobs may not come back. all 11 s&p sectors are lower 59 minutes to go we are making new session lows with the dow down 400 points. >> let's get to the market downturn we just referenced. mike santoli is tracking all of the action no trigger but a clear response. >> the only trigger that seems clear at all is the mark of 2:30 eastern time, when the downturn accelerated. it seems as if it is essentially kind of getting ahead of the close, peeling down exposure we did have that good rebound into last week from the late

september lows we had some positioning indicators suggesting people were full up on equity there has been a pattern of strength overnight in equity futures opening up strong and selling throughout the day it seems like a little bit of a back and forth along those lines. i wanted to take a look at the year to date of the s&p chart. what we did with the selloff today is we got below last week's lows. that doesn't necessarily in itself mean anything necessarily because you do see we are still in the september, october range. but the bottom of the range is closer to 3,300 than it is up where we are right now last week's lows were just a little bit higher than where we are right now. that puts it in perspective. we started the day with a lift in treasury yields in fig, the cyclical tone of the market -- we are higher modestly on the day, up .78 earlier we are still below the june 8th level. it is a struggle to get any lift

at all relative to where we were before covid look at the s&p value index. it is a similar looking chart in its hape, struggling to get an upside to the june 8th high. that was the maximum reopening enthusiasm value is not just cyclical type stocks it is a lot of health care in there. a lot of big farm. a lot of telecom also a very big helping of finances guiding outperformance today but nothing too spectacular today. >> they are now down 1.3%. they have been a big part of the post 2:30 eastern time sell. you mentioned the september october ranges there if we narrow it to just october, it has been a roller coaster month but we are higher by 2% month to date. and higher than last year. these pullbacks as pronounced as it has been in the last four or so are introspective of the gains from the week before.

>> it doesn't seem like it is urgent it is just about look, we don't have a lot of impetus. i think we released the biological up tension about the election, whether it would be resolved or not, whether we might get some stimulus. all that stuff seemed to move in a direction where people were confident about the outcomes now perhaps we lack a little bit of impetus to have any buyers in there because we figure would priced a fair bit of that in. >> i want to put up the chart of bonds. yields have been higher all day long that in some parts helped explain why stocks were better and the mood was better during the open the bonds werin sniffing out an optimistic story, up 10.76 we saw yields off slightly what's story there how much are stocks teeing off of treasury? >> in general for weeks the tone has been look copper has been

higher the chinese economic numbers were pretty good there is all kinds of look about an additional finance fiscal push whether it comes sooner or later. the question seems to be when and how, not if. all those things, plus supply of new treasuries coming out down the road i think all that helped. but we are talking about lift within a range we are not necessarily break out in terms of yields a lot of concept mitchell that we are really going to get lift on those yields anything towards 1% in the ten year i think it is consistent with the idea that we have still a recovery trade on but it is not one that's pronounced enough that it gives people full clearance to bet heavy low on an economic acceleration. >> mike, we will see you in just a few. thank you. mike santoli. let's get to ylan moi with the developments this hour on the stimulus front what can you tell us >> house speaker nancy pelosi and the treasury secretary are supposed to be speaking on phone right now.

pelosi had spent roughly the last hour or so taking the temperature of her caucus on these relief negotiations. what i have heard so far is that there are still a lot of issues outstanding. some of the ones that are expected to come up during their conversation, testing, tax credits, state and local funding. those are just a few of the biggies as they try to make this last-dach attempt to seal the deal before the election meanwhile, over in the senate republicans are charting a very different course they are preparing to take up this week a targeted coronavirus relief bill that includes another round of ppp, more money for schools, enhanced unemployment benefits, and liability protections. this is essentially the same bill that republicans already voted on in september and that democrats unanimously opposed. that is not likely to go very far. neither is another bill they would vote on this week that

would be a stand alone addition to the ppp all three sides appear to be going in very different directions. >> all of them committing to some form of stimulus but i feel like there is a differing level of urgency how much stimulus is needed the market not sending a clear note about that. economic data is not sending a clear message about that retail sales are up, the jobs numbers continue to improve. how much is that shaping the fact that they can't agree on anything and get the vote? >> reporter: how bad does it have to get to force them into action is a really good question republicans have been betting that the economic recovery would dial back the amount of relief washington would have to provide. democrats said the case numbers are going up

in fact the need is greater than it was than when they first started the negotiations many months ago there are fundamental philosophical differences here the 48-hour deadline that pelosi suggested was a way to try to frame this ahead of the election because time is clearly running very short but it didn't do anything to move the two sides closer together because those log jams still exist. now the question i think that investors should be asking is is this going to get done after the election and how long after the election might we have to wait? >> ylan thanks for that. meantime, housing stocks are falling despite strong data this morning. >> builder sentiment set a record high for the second month in a way, it jumped to 85 in october. these are the first two months the index has ever been above 80 anything above 50 is considered positive the index was at 71 in october of last year

now, of the index's three components, current sales conditions as well as sales expectations over the next six months both rose to record highs and buyer traffic was unchanged at its record high of 74 stocks are the being builders initial reez on the news this morning but lost ground with the broader market with most now in the red. election, nna r&d r horton up 50% year to date others up 25%. despite the gapes in stock prices and home sales and builder confidence, the builders continue to say they are hamstrung by a lack of land and labor and material costs spiking. new single family home sales are outpacing housing starts by a historic margin. back to you. >> thanks for that those stocks losing steam throughout the session but they are not the only ones the broader market has sold off significantly. all sectors down a percent or more utilities down just .9%.

dow down 440 the nasdaq and s&p down 1.7% still ahead, the election and your money wohl look at how the results of the presidential race could affect cat, cummins and 3m plus big tech stocks pulling back amid the new focus on the role of social media and censorship we will talk about that when we come back. you are watching "closing bell" on cnbc. stock slices. for as little as $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership. schwab. own your tomorrow.

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tech stocks taking a leg lower and threatening to close lower for the fifth straight session. twitter taking action over the weekend blocking a tweet from the white house coronavirus adviser scott atlas on the role of masks joining us now, "new york times" tech columnist kevin rusk. i wanted to start with the new york post story from last week twitter and facebook handled it with different levels of severity in their response the fact that both companies who

don't think they should be classified as publishers decided to sensor a post by a publisher, does that highlight the current rules and regulations and the ways they are applied can be sustainable forever more >> it points to the reluctance of these companies historically to act as referees as of their own platforms. we have seen what happens when they don't act as referees and now we are seeing what happens when they act. >> but the very fact that they are doing that or having to do that, whether that's the right move by them or not, does it not show that they are in come ways publishers and that they should therefore be regulated as such >> well, i would just say they have always had this control they have always had editorial

control over what goes on on their sites. this is not some new thing just they didn't exercise that control in visible ways. they did it through algorithms and buried it in product changes. now now they are doing it overtly. that clarifies the power they have had all along what they don't understand is that if you did strip away section 230 or some of the other legal protections they have what you would end up with is a platform with a lot more censorship, not less. >> yeah. i don't know that people necessarily realize that when they call for eliminating sing section 230. i know you are a to the guy. but we aredown on the dow, facebook is barely lower, twitter is down 2% wall street is not phased by the threats from both parties. why do you think that is what do you think the solution

ultimately is here do you think wall street is right not to be worried about the business model >> i think wall street is probably right to be skeptical of this talk about repealing section 230. i don't think that's likely to happen under the trump administration or a democratic administration frankly, even though it is the stated preference of both parties right now. but i think that the market is sort of maybe writing that off correctly as probably more of a talking point than an actual strategy that's likely to be deployed >> the whole debate kevin over the last week or two on the new york post story and suppressing it, was it successful or did it lead to infact getting more coverage and prominence on these platforms? >> i think there was an argument that it gave it more coverage, a kind of streisand effect where you try to cover something up and it ends up becoming a bigger story. i also think that the early action of these companies is

ultimately better than if they had done nothing and had to sort of scramble to catch up. what we saw in 2016 was that these platforms waited to act until it was too late to sort of contain this disinformation. now we are seeing maybe they acted too early or they were too aggressi aggressive i think most people would prefer that to a world in which they did nothing at all. >> kevin, we will have you back on i want to hear about what you are tracking on twitter these days, and facebook in particular around the election. we have got to go. we have a big selloff on our hands. thank you. let's talk more about stocks communication services are the worst performing stocks right now. it is old media getting hit the hardest. discovery, viacom, fox those are down 3%. let's talk about what is causing it scott wren is here from wells fargo investment institute why the sharp turn lower here? >> sara i think we are going to continue to be sensitive to any

talk that has anything to do with stimulus. the market's really -- the market is expecting better medical news in terms of a vaccine and things like that the federal reserve being very easy, and stimulus i think all of those things are very important and we have got one -- you know, one leg that has been pulled out or at least is wobbly. that's whether or not we are going to get stimulus. in our view, it's going to come but we don't know what the timing is. >> if you look at what's being sold the hardest right now, communications services, as i mentioned, health care, and technology what's holding up the best in the selloff, utilities, materials, and consumer staples. how do you make sense of that given anything right now, the ongoing debate overgrowth versus value and what part of the market you need to be in >> you know, on selloffs, generally defensives have been hanging -- you would expect defensives to hang in better for us, we have been leaning more toward growth

you want to be with these companies that can make money whether the economy is good or bad. i think right now there is -- it is a little choppy out there, a little confusion do you go for the traditional, you know, staples type of place to hide, or do you hide in growth i think that's -- you know, that's a battle that's going to continue to play out but for us, you know, these big down days, big down weeks, you know, those are opportunities. we want to lean toward large cap. we want to lean towards growth we like communication services we like tech we like consumer discretionary, and we do like health care that's the way we are leaning and we want our clients to step -- [ no audio ] >> been down weeks it is only the former at the moment month to date, we are up 2%. are you advising clients to buy

aggressively during this final 40 minutes of trade? >> for us we want the look out further. we have had -- if you look at the march 23rd lows we have had many many opportunities to step in and buy stocks. 400 points down on the dow that's not going to make or break anything we want our clients to have a plan, be ready when you see the big down weeks we don't want them in there trading but when you see the down weeks step in. >> not yet >> that's right. i don't think there is any reason to step in here expect some back and for the we are likely to trade lower do we expect a 10 or 15% selloff? we do not. but if you get down 8% or 9% it is another time to step in. >> we are about 4.5% off the record highs for perspective on the s&p 500. you are saying another 5%? >> no, sara. if you are looking from the record high we were down 8, 10% from the record high we were definitely telling our clients or recommending to them

that they step in. when you are north of 5%, 5 to 10% down we don't think the market has a lot of big downside right now because we continue to expect reasonably good medical news the fed is going to be easy. we do expect the stimulus to come probably not before the election, but whoever gets elected is likely to get some stimulus through, and it is not going to be a small dollar amount >> scott wren, thank you for jumping on the phone, from wells fargo investment institute thank you. we are down 400 points with under 40 minutes to go the only dow stock's higher right now is intel everybody else is lower. s&p 500 is down 1.5% nasdaq down 1.6% the russell 2000 index of small caps holding up better, down only 1%. you have odd things happening.

airlines are actually higher auto components as well. we will talk much more about the selloff after the break. we will talk about industrial stocks they lagged the margaret so far this year. what a biden presidency provide a boost to that sector we will discuss that question next. look at bonds. we mentioned yields moving higher today, though off their highs. better china data overnight. better gdp, production, retail sales. maybe that fuelled the ten year up to .76. again, off the session highs we'll be right back on "closing bell," following this selloff. dow down 430 this is decision tech. find a stock based on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

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welcome back dow isdown 455 points now. about 35 minutes left of trade industrials are down more than 1% today as stocks turn lower overall. the sector lagged the market all year long. could a change in the white house help boost this well weather group? seema mody has been looking into that story. >> white house trade policy will be watched closely by the industrials. while former vice president joe biden has framed china as a challenge he hasn't said whether he will remove tariffs tariffs introduced by president trump weighed on earnings on these tax.

caterpillar flat from when they were introduced in 2018. others down 3% honeywell and couple ips underperformed it comes as the sector's overall weighting on the s&p 500 has shrunk over 8% the recent rebound in china's economy, poised to be one of the only countries who will register growth this year industrial growth is back to prepandemic levels this could help boost demand for industrial equipment it will be the conversation when earnings start next week. still ahead we will talk more about the future of u.s. and china relations what it could mean for the industrial asks the broader market. we will speak with former national secured adviser h.r. mcstmaer plus more on today's downturn as we head into the final minutes

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welcome back to the "closing bell." let's check on the sector map.

red across the board all down more than 1%. utilities only .8% as we stand pretty broad with communication services and technology the worst performers down just shy of 2% as we stand. bob pisani is taking a closer look at what is driving the move lower. >> concerns about stimulus we talked before, wilf, earlier today about complacency in the market around stimulus it is starting to show up the concern we had look at the s&p 500. final. at 1:30 we dropped below the lows of the day. we dropped a little over 1:30 eastern time then an hour ago we dropped more notably. there were reports out all of them confirmed that a stimulus deal was not imminent.

nancy pelosi and steven mnuchin aretalking but we have no idea when the report will be out. stocks sensitive to stimulus, home stocks, mohawk drifted lower there. less money to buy home furnishings with no stimulus retailers dropped firly quickly. ross stores, of course a discounter i would note a few things about this these have been drifting lower in the last few days we just moved lower on this discussion today, but ross stores was almost $100 a few days ago look at it there, $91. drifting lower e-bay some story on some of these stocks yes, lower on stimulus concerns. e-bay was close to $59 a few days ago here you see, $54. almost a 10% drop in the last five or six days the reits, that was $53, six,

seven, days ago. now $45. drifting lower at the bottom of the day. good news is earnings are doing very well going into the third quarter. the bad news is the complacency we talked about all morning that a vaccine is going to come and save us, that the stimulus is going to save us and that the stimulus is the bridge to the vaccine. as you see here, guys, when that story gets difficult to justify on the headlines on the real news, things start getting dici dicier, back to you. >> bob pisani, thank you. with that in mind, mike santoli, we were asking why the market was going up last week and the week before, it was hopes for stimulus well, there was no real new news on that front either >> yeah. >> i guess it shouldn't be a surprise that with no real news on that front today no deal news is the chatter did the market wake up and realize we are two weeks from the election >> i think we overplayed

stimulus as the reason the mark was doing anything it was the obvious reason to wish for or play for or bet on the odds of. i don't think that was the main driver the s&p 500 went up 3 points in a straight line in a straight line we are giving back part of that. we are rebuilding anxiety. we are in a two-week window. companies haven't traded well despite better earnings. all those things are moving us around i think it is very important to keep in mind that we are roughly just chopping around a very similar range we have been in most of the last month or so >> down 1.5% on the s&p, mike, thank you. let's get a cnbc news update with sue herera. >> hello, everybody. here's what is happening at this hour president trump says americans are getting tired of listening to coronavirus experts and he described pandemic expert

dr. anthony fauci as, quote, a disaster, and possibly, a quote, idiot. you can go to cnbc.com to see what else the president told his re-election campaign and in georgia, election officials say early voting continues at a record pace with 1.5 million ballots expected to be cast by the end of the day. and that is a look at the carolina panthers. they are closing their training facility for two days after receiving an unconfirmed positive test for someone in the organization coach matt rhule says the team continues to prepare for sunday's game against new orleans. and now a lesson in how not to celebrate dodger cody bell i thinker hit the go ahead home run last night smashed his foerms with a couple of teammates afterwards. he did it -- that will do it he did it hard enough that he basically could continue playing but he dislocated his shoulder doctors were able to pop it back in, pparently.

but that had to hurt anyway, you are upto date, sara. the economy has a long way to go to recover what a prolonged recovery could mean for your money. stay with us sales are down from last quarter but we are hoping things will pick up by q3. yeah...uh... boss: doug? sorry about that. umm...what...its...um... boss: you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today.

21 minutes left to go. stocks are selling off here as we head into the close federal reserve vice chair richard clarida predigging a long road ahead for a full economic recovery. in his speech earlier he said it will take another year for gdp to return to last year's levels and for both the need for additional monetary and fiscal policy do you is down 370 points. let's bring in david rosenberg he joins us by phone i would imagine you are less optimistic even than vice chair rich clarida that it will take a

year to get to the gdp growth we were seeing david? >> look, i think there are so many -- we have to make, including how long the pandemic going to last and how effective and how widely distributed the vaccine is going to be you are making wild assumptions how all of that is going to affect people's behavior and making assumptions on the political backdrop and the fiscal stimulus we are going to be seeing. larry summers coauthored this report last week showing that the hole in the economy over a ten-year period is going to be something like $15 trillion. so it is not just getting back to, you know, last year's level. it's getting back to the baseline growth rate of the economy that would take you back to full employment that's really the we when do we eliminate the inflationary notebook gap? that's three or four years down the line. >> if we do get full stimulus

and vaccine in the next months, where would the yields and stocks be in 12 month's time. >> you will be a huge risk on trade into the marketplace flows out of the equity market i think you will see in that scenario a shift to value stocks that's when you get the replace in trade i have to say being a long term bond bull for a period of say six months -- we saw this recurringly with all the stimulus look at all the qes that came out in the last several over that ten-year period you went through months where ten year wend up 75 basis points i think it will be a good buying opportunity. vaccine, huge fiscal stimulus, we are off to the races then i think we are going to have the treasury market sell off again i come back to -- think about what it means to go back to the way things were before the pandemic what was life like before the

pandemic low growth, low inflation, low interest rates principally for a lot of reasons two of them are things that aren't going to change which is an egregiously high level of debt, which is a huge constraint we can't get out of it it is a huge constraints over the pandemic and the aging population profile. these will keep interest rates low for a long period of time. >> i wanted to ask you in particular about utilities you have been spotlighting them in your notes. they are faring the best in today's selloff despite the fact that bond yields are higher. why should we be paying more attention and why should investors look at this group to buy? >> every dog has his day utilities were one of the few sectors that actually didn't participate in the rally this year you know, i would identify them as having solid dividend growth characteristics.

and you want dividend growth in the portfolio. their long term -- on dividends is around 7% they pay three.25% yield you are getting barely 2% in the triple b market for example, i mean on the outer edge of investment grade you are getting barely 2%. you get a 3.25% dividend yield in a good growth sector in the market i think people look for yield in the corporate bond market. utilities are a surrogate for getting yield and growth in the yield. maybe today is the way investors woke up to that reality. >> up next the final minutes the volatile session plus what to watch from ibm's earnings report those stories and more once we take you inside the "market zone."

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uh, i need a price check on honey. don't get mad. get e*trade and get more than just trading. investing. banking. guidance. >> announcer: the "market zone" is sponsored by e trade. trade commission free today with no account minimums. 14 minutes left in the trading day. we are now in the "closing bell" "market zone." commercial free coverage of all the action going into the close. mike santoli here as always to break down the crucial moments of the trading day today we have also got paul hickey back as well. the broader market stocks are selling off this afternoon the nasdaq on track for its fifth straight day of decline, longest losing streak since august of 2019 there are a lot of losers out there. we heard it chalked up to the

stimulus negotiations lack of conviction we are going to get a deal you are not seeing it in terms of other markets currencies, dollar is weaker bond markets are higher. that's not indicative there is a growth scare out there why do you think stocks are weak >> i think a bigger short-term concern for the market as opposed to the election is earnings season. we are coming into earnings season following a quarter last year where a record number of companies raised guidance. and we have seen analysts revising estimates up at a pace we haven't seen in many quarters the expectations bar is getting set pretty high. what you see in those situations more often than not is you tend to see some sell the news type reactions. last week we saw the sample size was very small what we saw was companies selling off in response to earnings it wasn't just financials. fastenal, johnson & johnson,

uil, and semiconductors. i think it is the market setting itself up and resetting, getting to a better baseline we will have to watch the bigger reports coming out and see how the stocks react whether it is going to be a long earnings season or an enjoinable earnings season. >> we were at the top of the september october range last week and then we started to pull back from it and the macro factors and overall technical themes are more important than earnings at the moment. >> in part it is how we got to the top of the range last week. which was a very aggressive sharp run higher from the depth 23rd lows. over the course of that you started to see some of the behavioral yellow flags pop up as well. in other words tons ofpeople speculating in the short-term on tech options again an echo effect of what happened in august when you had a lot of

people getting aggressively long in the nasdaq 100 future a lot of those positioning issues that restained the market in august and september had to be worked off. what that kind of means is you have to rebuild the reservoir of anxiety or uncertain out there maybe before the market resets itself but it has been very technical the lows were very much right along the lines of where you would look for a pullback to maybe culminate. you can talk about the technical stuff but yes i think it is tactical, the knick ccal and on the news the stimulus deal. american airlines announcing a return date for the boeing 737 max. phil lebeau has the details. >> let's start first off with american and the max at this point it is simply a plan it it has people saying now we might know when it might be

flying again in commercial services december 9th a flight from new york down to miami, scheduled to resume passengers on the flight will be notified in chance that it will be the max if her not effort canible with that they can be put onto another flight for boeing they are getting close, i would say within the next several weeks week probably get clarity if not a final decision from the faa in terms of the 737 max recertification it is certainly expected before the end of the year. all of this comes as more people are flying look at the passenger level yesterday. it was the first time over a million passengers in one day since march. keep in mind, the travel level is still down 61% compared to the same day last year nonetheless, all the airlines stocks moving higher on the hope that this could be the beginning of building a little bit more momentum when it comes to travelers getting back on board and getting in the air guys, back to you. >> phil, thanks so much. paul hickey, what do you make of

these names and how are the charts looking in terms of whether they can break out of the recent sort of lull and have a lot of up side >> i think what we have been seeing with the airline stocks is they have actually been tracking the passenger data on the year over year basis pretty well if you compare the year over year change in passenger data traffic to the airline etf they track each other relatively well in june we saw big optimism in the market that things -- when covid cases first went down, that we were behind it then the second wave came and then these stocks pulled back a little bit but i think it is very encouraging that we are seeing a million people again, as the last graphic you just showed, we are down 61% on the year over year basis even though we are at the highest level in seven months. you know, it -- i think there is more room for these stocks to go here as we go on but they are slave to the headline risks here. any bad headlines recording

covid, they are going to get hit. >> is it one of the bad headlines that they are susceptible to, paul, that we are not going to get a stimulus and that seems to be the general tone or view of the market at one point they were trading on every stimulus negotiation because they were first in line. >> yeah. that group specifically -- the idea with the stimulus, though, all this debate. we see the headlines day in and day out. it is like the china trade war headlines. our view when we talk to people is people aren't optimistic there is much of a chance of a stimulus bill coming before the election at all because it is in neither party's interest to do it i think we -- we thought even when you saw the positive headlines this a stimulus bill is unlikely before the election. and then depending on how the election turns out, that will tell you whether or not we have an increased likelihood of something getting done or if the republicans keep the senate, that could be problematic if

trump loses the election >> two worst performing sectors, technology and health care let's zero in on health care, custom is, as i said, under performing bertha comes looking into that >> we are watching health care, down for the fourth day in five. we started much higher on the morning with optimism with news out of the uk with the oxford astrazeneca folks. health officials there saying they think they could see a vaccine by around christmastime. so we did see the drug makers higher this morning starting the day. and astrazeneca as well, among the stocks that were high every. it has faded as we have seen the stimulus talks fade this afternoon and hopes or a resolution of that situation really weighing on stocks overall. cvs was another standout this morning. going to be hiring some 15 workers, 10,000 of them pharmacy technicians to be able to help

with both covid tests and flu shots this fall and prepare for the eventual vaccine hopefully next year. to administer those. they expect to be strong demand. endopharma is the only one bucking the trend on an acquisition. tough day in health care overall. >> bertha comes, thanks. paul, do you like this group >> we don't have a whole lot of exposure to health care. johnson & johnson is a name we like in the group because of its dividend and its overall business not specifically tied to them as a covid trade i think when you look at the health care sector one of the areas you really want to folk us on, how are long term behaviors going to change? i think going forward the testing companies will continue to see a benefit not just this year but in years forward. even just for the flu. people are going to be a lot more likely to get tests when

they are not feeling well. that sector, if you want to play specifically a covid trade but the vaccine trades i try not to focus too much on individual company investments based on the efficacy or the potential for their own vaccine. >> meantime, zoom keeps going higher despite the broader selloff. up again today on track for a record close, up 1.4% today. just 21% added in the last 19 days this month with a market cap now of $160 billion. zoom isn't the only stay at home stock holding stock up on this down day peloton, twillio outperforming and higher today mike, pretty impressive. we talked about this last week, they weren't knocked off their perk when fastly was again, not knocked off their perch today when the broader market is, and tech specifically, and communication services specifically all

suffering today. >> zoom in particular i think has a constant halo effect of everyone ubiquitously using it and then throwing around these metrics that purport to mean something, like 3 trillion minutes they have reached or something in zoom calls. i think it is a self reinforcing issue right now. it is a very long term play on a very fast growing market that the market has said you can worry about the profitability levels and the valuation another time so i get why that happens, there is reflex muscle memory that says, you know, when the cyclical stuff gets hit, we are seeing case counts go up, there is a basket of stocks that will benefit. not sure that's going to change any time soon as we head into fall and winter. >> zoom is like in its own sfras sphere, paul yes we are seeing the stay at homers outperform like peloton and etsy right now zoom is on another planet. is all the hype worth it for the stock rice >> to what mike was saying

it is like a pavlovian response. on june 11th we put out a list of stocks for the covid economy. believe it or not, zoom isn't the best performing stock in the list peloton was the top performer. up over 500% but these stocks, there is a group of stocks that when the headlines get bad investors flow into these stocks. in the case of zoom, the best thing that happened to it recently is the ipo snowflake. it looks down right cheap on a price to sales multiple compared to snowflake it is all relative i guess for the people buying it at this point. >> look at that, up 735% year to date for zoom. ibm set to report results after the bell deirdre bosa with a preview. >> we got the preliminary results with the spin-off news a few weeks ago. investors will be looking at cloud and for more detail on

so-called structural actions aka layoffs and or closures. they will also be looking at whether ibm reinstates earnings guidance shares are almost facebook where they were before the spin-off was announced. the question is can the new ceo execute on the plans we should hear from him on the earnings call. he does run them his predecessor did not. >> two minutes left on the selling day. where do we stand, mike? >> earlier in the day the market was holding up firm in terms of the average stock. now you see well more than two to one declining that's not washout levels. but pronouncedly negative. look within the consumer discretion father sector amazon against the s&p consumer discretion father the largest piece of that. amazon down a full 2%. s&p retail is down just 1% compared to that so if you took amazon out of

that, actually, the equal weighted consumer stocks are holding up relatively well, down less than 1% another indication this isn't really an acute macro panic in terms of domestic economic trends then the volatility index on the upside right now it has been stubbornly up in the mid 20s. now above 29 i think you are getting people to rehedge parts of the election period now that we are just about two weeks out, sara. >> as we head into the close, less than a minute left to go, we are seeing all sectors lower right now. we are to have worst 4re68s of the session. the dow is down about 400 points right now. we are down more than 450 earlier this hour. we are heading south a little bit here again intel is the notable outperformer s&p 500 down 1.6%. energy is the worst performing sector, down 2%. communication services is getting hit pretty hard as well. netflix is an exception there. technology having a rough day, down 1.8%.

health care, as we noted also being sold off utilities, materials, and industrials holding up well. dow's worst performers, j&j, microsoft, and apple bond yields though remaining higher and the dollar remaining a little bit lower there is the close lower on the day coming off of another positive week, wilfred. and five straight down days for the nasdaq it closed lower by more than 1.6%. welcome to the "closing bell," everyone. i'm wilf frost along with sara eisen and mike santoli, cnbc senior markets commentator everything turned around intraday oil was higher, closed down. gold had been higher, closed down the equity markets opened higher, slightly, the dow's high was at 106 points. closing at 408 it had been down 460, 470 at one point. that was a 1.4% decline. next and s&p down a little bit more than that, 1.6%

all the -- all 11 sectors down in the s&p 500 coming up, charles schwab chief investment strategy liz ann saunders will join to us discuss today's selloff. investors awaiting earnings from ibm. we will break down those numbers as soon as they cross any minute now. paul hickey with us and liz young joins the conferring as well mike, to you first of all. the sector performance clearly led lower by the likes of tech energy as well but pretty broad today in terms of everything down and everything down almost a percent or more. >> yeah, which i think argues against it being particularly news driven or who would be the beneficiaries or not of a potential stimulus bill. it seemed like it was really a broad based kind of slouch lower in the markets

in the morning we had great home builder survey data. the home building stocks couldn't hold up the rally softened up into the close i think it served as a gut check into the most recent phase of this rally we got down to levels that people are saying are pretty much make or break if we are going to believe that the post september rally is -- 3,400 on the s&p 500. people don't want to see that hole low volume in s&p 500 and etfs to me it didn't seem like a catalyzed sam paid out of stocks >> liz, as mike mentioned, home builders couldn't hold their rally after better housing data. as we talked about, some of these earnings -- the stocks haven't been able to hold rallies or even rally at all off better numbers is too much good news just priced into the market at this

point? >> i think there has been a little bit of come placen see in the market through the first half of october. you have to think about the bigger picture we are heading into an election where obviously there is an expectation of a change in the white house. the market doesn't usually rally through that i think directionally a selloff here and a shakeout in the next 30 days or at least until we know the outcome of the election is reasonable. but i don't think that it is something that investors should really do much about i would expect especially on a day like today, i think the sectors and the behavior we are seeing in the sectors makes sense. you are going to see the sectors with the biggest gains go first. when there is selling pressure in the market it is easier to sell the stuff you have made big gains in technology and communication getting hit harder today makes sense to me. again, i don't think this is going to be a long lasting issue or that we are starting a bear market or anything like that but i do expect a 5 to 10% shakeout in the near term.

>> what level should investors do something about it immediately? what level of pullback if it was related to short-term tick technicals or the election would be enough to warrant investors putting equities away. >> in the double digits. 10% pullback it would have to be coupled with a catalyst, something in the news maybe another issue with the fiscal package maybe there is vaccine issues. there would have to be a catalyst that made it worse than a 10% pullback then we would have to worry about it being more long lasting. >> paul, we are about to get into heavy-duty earnings mode starting tomorrow with some of the consumer giants like proctor and gamble next week we will get some of the big tech giants. are these companies going to be able to provide guidance, any real outlooks, with the uncertainty still over the virus's trajectory and the stimulus path? >> i mean, that's a big question coming into this quarter -- last quarter they were all raising

guidance they had some visible. i think companies will see if they can -- i think companies have a good idea what their businesses are i think stepping back from the broader perspective here, the decline we had today, it was accompanied by semihe is outperforming down about half a percent. a then we you a a broadening out to the market. that's not the type of activity you would see from a market truly spooked about the economic outlook. i think those internals as long as they continue to hold up is something that makes us more optimistic about the longer term path of the market rather than, you know, these day to day declines which you are going to see from time to time. >> paul, i wanted to pivot back to something we discussed ten minutes ago all those companies that reported earnings beats last week seemed the sell off. more of the same today with the bank continuing their slide. does that suggest to you that the market is actually calculating p/e multiples again

and getting concerned by them? or is it something more broad and less specific than that? >> well i think for stocks like zoom that's probably not using p/e multiples or any multiples for that matter. for the banks i think you know the selloffs were i think justified in many cases. the strength in the numbers relative to expectations was more a result of adjustments to reserves rather than strength in the underlying business. so i think investors are acting rationally to at least the weakness that we saw in the financials but as far as the broader margaret is concerned, again it was a small sample size we saw last week. this week we see a bigger pickup in the number of companies reporting, how does that continue to play out do we see selling on the news? if we do see selling, what are the overall internals of the market doing alongside if we continue to see

outperformance of the semis, high yield spreads hold up and breadth measures hang in there, then these sell the news reactions aren't as concerning to us. >> mike, part of the problem here is there is a really big uncertain over what the fourth quarter looks like everyone knows the third quarter is good. i raised this before but the economist's estimates for q 4 are all over the map without having that stimulus piece of the puzzle and without knowing what the true underlying economy looks like without that. and i guess that makes it hard to figure out what these multiples should be and where earnings are headed. >> for sure. i mean i think we have gotten by for a little while on the aftereffects of the original stimulus and looked like the trends even if they were slowing down after initial improvement have depressed in theory that could be more of a challenge in the fourth quarter. i think the market is much more focused in general on steering toward 2021 earnings picture of

right now it is looking like the forecasts say we could be matching what we were in 2019. between now and then, you do have the fourth quarter that has to show pretty good improvement because pretty much the premise of this rally we have seen for months right now is that the second and third quarter were going to be ugly and finally in the fourth quarter you might be able to start the turn the corner i think stakes are rising along those fronts but still as paul was saying it is not as if we are seeing tremendous signs of new macro stress on the credit side or sector performance relative to the overall market. >> mike, to liz's point of election fears weighing on the market again, how much lower were we a couple of weeks back when we were sort of at peak lexicon session fear >> 3,200 as the downside the pendulum swings. i don't think that's unusual,

where we front loaded a lot of the worry about the election then we kind of got a release from that maybe when people thought there was more clarity about the possibility of having a good firm result in a timely way. and now maybe we have to -- maybe we overshot that a little bit because, hey, these are two weeks, you never know what's going to happen by the way, the election is not the only thing we are worried about right here. we are looking at the case counts, the rest of the world having restrictions added on probably some buyers' fatigue after we went up almost 10% in a straight line in a couple of weeks. >> i want to bring up another risk, which is one we haven't talked about in a while. but the brexit deal europe sold off after china had really strong data. i am wondering to what extent that's being factored into the global growth picture. >> interestingly in the last six months, say, versus the couple of years -- god this story has

been going on forever. it played out more in the currencies i think than necessarily the stock market, particularly the stock market here this confirmation of we are heading towards no deal came late thursday and friday as opposed to today it rumbled on today. talks might be starting of might not. i am sure there is going to be back and forth again i am not sure this is an issue that links hard to s&p 500 levels as it does potential for a strong dollar rally and a weak euro, custom is already largely priced in of course, back down to 1.29. but i am sure there will be more turns on this story again even before the end of the year we will have to wait and see if they manage to come to a deal or not. >> it is just sort of out there. i wanted to let you fill everybody in on that all the twists and turns. >> the way it is still out there is the unbelievable monotonous and depressing thing. >> it really is. liz young, we will give you the final word here as far as what you are going to be watching over the next few days to

confirm whether this ugly little selloff we saw today is something more lasting what do you watch? >> i think over the next week or so or maybe up until the election you want to watch the differences in the indexes one of the things that's still promising to me today is that the russell 2000 is down less than the large cap indexes you want to watch the direction of the dollar. i know we talk about vix all the time as being the fear index i think it is actually the dollar if the dollar continues a down trend and stays lower, that tells me there is not as much fear in the market i want to see large caps doing better on down days and on up days, too. that there was risk appetite that confirms the recover lee longer term is intact. but shorter term, there is no sign of market weakness. hang onto your seats and wait it

out. >> thank you paul hickey thank you for joining us as well. thank you. up next on the show, liz ann sonders will be here to tell us whether toy'das selloff could have lasting impact or whether it will continue ♪ ♪

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ago. currently flat $17.6 billion in revenue adjusted ops of 2758 right in line with what wall street was expecting as those numbers were released about a week and a half ago. looking beyond them. cloud of course is key as a spin-off, will let them focus on a $1 trillion hybrid cloud opportunity. cloud and cognitive coming in slightly better than expected, $5.55 billion versus $5.48 billion. tikds up just a little bit but shy of estimates the company, this is important, not reinstating guidance in the earnings release analysts were hopeful they would reinstate guidance we will have to wait for the call at that kicks off at 5:00 p.m. eastern to see if the ceo gives us more details especially on those structural actions which we think to mean layoffs and closures also important how he plans to

execute on the spin-off strategy back to you. >> a lot of focus on that call i would imagine for that reason. thank you. a check on the markets at the close. selloff day on wall street the dow closed lower by more than 400 more than 1.5% move lower on the s&p, 1.6%. nasdaq down 1.6% technology was one of the hardest hit sectors. joining us by phone is liz ann sonders of charles schwab. what was today about >> we have had this up and down back and forth with regard to the stimulus relief package. i think some uncertainty has crept in, depending what state you are in, in a third wave of the virus or a second wave i think that factors in as well. in early september the markets were hitting all-time highs the

vix was accelerating because the november 11 contracts were pricing in election volatility then traders flipped the switch and traded on lower volume it the. i think there is a need for elevated volatility certainly if there is a contested election. >> 12345 a reason why a lot of companies who beat earnings estimates traded down on the week >> it might have been. there have been a lot of funky things on the ektsds side, especially in the options market opposite happening in the index option versus the vix option i think there has been a lot of positions that has been broadly positive on some of the momentum stocks i don't really think that earnings on an individual stock basis have been a significant driver i am not necessarily surprised to see some companies that did

fairly well relative to expectations not get a huge bid. i think we are in a silly part of the phase here where although much like second quarter companies are beating estimates we are still in an environment of very, very little guidance and analysts when left to their own devices slash estimates to the bone setting the bar low enough that companies can fairly easily exceed it we are still looking at an earnings loss of between 18 and 19% based on where the consensus is i think the whole notion of level is coming into play here, not just relative to expectations. >> given all that, we are still -- you know, earnings are still posting double digit decline. the uncertainty over the election, the stimulus, the covid path -- what do you tell investors to do right now? where should he be should they be using opportunities like today to get into those spots. >> yeah. so we have been telling investors first as all as we would always tell investors,

make sure you are applying a disciplined approach including diversification. a lot of people don't realize when they say what's the int above diversification. well this year the total return in both long bond and intermediate bonds is actually outperforming the total return on the s&p 500 by a significant margin so we are living in a year where the merits of diversification have been brought to the fore. but we have also been suggesting that rebalancing, which many investors do on a calendar basis. they might do quarterly rebalancing -- maybe do it on a volatility basis let your portfolio tell you when it is time trim something back, high momentum areas and use these swings in the market to rebalance more frequently and stay in clear without having to make a timing call. >> to your point i mean we are in an extraordinary scenario where both bonds and equities have risen in price and that has been happening a number of years now, which would raise the

question whether they could both fall together in the months or years ahead and whether you want to have the same kind of traditional balanced portfolio going forward? >> it depends on, say, what would cause bond yields to rise. what we have had this year so far is generally falling bond yields but reflecting lower inflation risk, not necessarily a forward massive impediment to growth basically, the reasons why bond nields have generally been declining have not been negative for the stock market if bond yields move up on the basis of serious concerns about inflation that would yes be a risk to the equity market. we don't think it is a significant near term risk i am talking about inflation here we think particularly the virus has a still more diss-inflationary impact aside from causing price increases in

some areas so it is in a inflation factor that i think is worth watching in terms of the relationship between stocks and bonds. >> liz ann, thank you for joining us >> thanks to you both. let's pivot back to ibm. stock after hours after essentially in line earnings let's bring in emmitt from ever corps isi. what's the stan out for you on this set of numbers? i guess it had a pop a few weeks ago when it announced structural changes. pullbacks since then. >> the numbers are in line to what most expected software is doing better than expected hardware, more disappointing gross margins i think seem to be standout they were better than expected really as you get into the call i think the focus will be what is the new ceo going to do differently than what happened in the past? more details on the managed infrastructure asset management

sale and what are they going to do with the plan that everyone excepts them to announce the money created from the savings, do they go to the bottom line or is it invested back in the business i think that's what the focus of the call will be for folks. >> i get that everyone, wall street wants to know about layoffs, cost savings and cost cuts suspect the bigger longer term question with ibm is whether it can grow get to real growth again and whether this split is going to accomplish that whether it's timed right for it? >> you are absolutely right. i think ends of the day what you want to solve for is can you grow in line with the ip spin-off better. i would argue what they divested was a much faster declining business than the rest of the ibm sales. it is a bit of addition by sub subtraction. the second part is cost reduction. you have all of this money you created. do you flow it to the p&l and

the bottom line or use it to buy assets that can drive growth up? that's what it is going to come down to is can ibm grow in line. >> it is down after hours as you said much expected much like when they preannounced the dole. breaking news in on the stimulus negotiations between the treasury secretary and the house speaker. ylan moi has the details >> we are now getting a readout of the phone call between the house secretary and nancy pelosi they spoke for about 53 minutes according to her office. they say that they continue to narrow their differences according to her office the speaker tasked the committee chairs to reconcile difference with republicans on key areas and they hope by the end of the day tomorrow they will have clarity on whether something can be passed before the election. her office says they will speak again tomorrow and staff continues to work around the clock.

so this is not a no, but it is also not a yes this is, they are still talk asking trying to hammer home those differences. we were told that on the conference call with her caucus just before the phone call with mnuchin they spoke with testing, liability protections, the importance of state and local funding. so the road blocks that have been there still remain. as of now, pelosi's office saying that the two sides are narrowing their differences as they move toward this ends of the day deadline tomorrow. guys >> ylan thanks for that. hard to make any firm conclusions as you say though relative to the last 90 minutes of trade perhaps this will be taken as slight positive. still ahead former national security adviser h.r. mcmaster how no mteatr who minutes the presidential election doesn't hurt their status in the china

trade.

welcome back let's get over to mike, who is taking a look at what to expect this earnings season >> we have been talking a little bit about how the market has slugged at even some good earnings reports this season this from bank of america illustrates that it is quarter by quarter this is the reaction of the

share prices to companies that both beat on sales and earnings and those that missed. you see right here only a few dozen companies have reported. there was a minimal benefit to actually beating on the top and bottom lines in the latest run of earnings. we will see if that changes. jp morgan has a separate chart that look at the expectations embedded in tech both the stock price, what you see here in orange is the stock price on a relative basis of tech stocks has done extremely well it has continued to go up as the net estimate revisions, in other words how many up versus down forecast revisions have there been in tech versus the rest of the market, that's gone the other way. a warning sign that perhaps there is complacency in big tech one of the reasons you didn't see revised earnings in tech, at the beginning of the year they weren't revised down something to keep in mind as we see if the tone of the responses

to earnings results changes in the second week as we get into that this week >> we are gob to get a whole lot more of that mike santoli, thanks. safeguarding vaccines. up next, former national securitied as visor h.r. mcmaster on whether the government and drug make remembers doing enough to prevent coronavirus vaccine data from being solen by foreign adversaries. for as little as $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership. schwab. own your tomorrow. ♪

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for skin as alive as you are... don't settle for silver ♪ gold bond champion your skin welcome back down day on wall street today. the dow lost more than 400

points all sectors closed lower technology among the hardest hit. energy the worst performer the nasdaq composite down 1.6% notable because it was down for the fifth day in a row the russell 2000 down 1.25%. a lot of focus around nerves around getting a stimulus deal done we now nancy pelosi and the treasury secretary are talking we just got an update that progress has been made on the front. but fading hopes on the deal provided jitters on wall street today. a latest poll indicates joe biden leads by 11 point. our next guest says regardless of election outcome china is still the biggest challenge to american security. let's bring in h.r. merry christmas master author of battle grounds, the fight to defend the free world lieutenant general, thank you for joining us good the see you again. >> good to see you wilfred

thanks for having me. >> as we mentioned you have been writing recently you still think china is the biggest security thread to the u.s. regardless of who wins the election. before we get to looking forward, looking backwards is china stronger today than it was four years ago both in an absolute sense and a relative sense compared to the u.s. >> absolutely. if you go back further since the 1990s china increased their military spending 800% the largest peacetime military build up in history. it has also been aggressive in exporting its authoritarian mark can tilist model and attempting to craft servile wips with countries across the indo-pacific region and globally the setting of death traps through oftentimes unneeded infrastructure investment and loans that then give the party coercive power over those countries. >> to what extent do you think it is inevitable that their strength will continue to grow

and catch up to the u.s. and perhaps overtake the u.s. regardless of who wins the election >> i don't think it is inevitable i think what happened is the covid-19 crisis catalyzed the competition with the chinese communityist party and focussed the free world on this significant problem. not only foisting covid-19 on the world by repressing the news of human to human transmission and punishing doctors who tried to raise the alarm and subverdicting the world health organization but adding insult to injury with this wolf warrior diplomacy, massive cyber attacks on our pharmaceutical research organizations. increasing aggression from bludgeoning indian solders to death on the himalayan frontier, imposing a national security law in hong kong xi jinping saying he is going to put more additions onto the

concentration camps when interned more than a million uighurs. and the marshaling of missiles opposite of taiwan, saber rattling this as well as aggressive actions in the south china satisfy. this isn't just a u.s./china problem. it is a free world-china problem, if they work target i think we can go a long way in convincing xi jinping that his aggressive strategy is not working. >> well, that strategy of working together, general mcmaststers sounds a lot more like what we might expect from a president biden than we got from a president trump, the go at it alone kinds of thing is that what you are saying? would you be more optimistic who has a history of favoring multilateralism more might be able to confront china in a more aggressive or effective way? >> i think whoever is sworn in

on january 20th has to ramp up international coordination and cooperation. i think there has been a lot of cooperation lately with europe for example, who has been stung by this -- diplomacy and covid-19 and huawei is banned from putting in the 5g network from wawa france is likely to follow suit. they have a quad format of india, australia, the united states and japan is even more meaningful with the recent ministerial meeting in tokyo last week. whoever comes in needs to ramp it up. i think working to the u.s., japan, the eu and now the uk can have a tremendous impact on ensuring that china isn't able the make the world less free, less prosperous, and less safe. >> if china's enemies, adversaries do successfully ramp

it up in a coordinated and effective fashion, who will china's response be? are you worried about what their response might be? >> i think we ought to be worried about what they are doing right now and make it clear to the chinese communist party that this continued aggression is not going to pay off for them china is very good at using what i describe in battlegrounds as the strategy of cooption, owe ergs, and concealment. i think now they have overplayed their hand in many ways and can no longer conceal these forms of aggression it is just norm-- can no longerl these forms of aggression as normal business practices. >> we are linked now the two biggest economies. how far should a u.s. president go toward actually risking decoupling the world's two biggest super powers in terms of the economy? >> i think we have to reject the scenario that we are trying to keep china down. we have to compete with the

aggressive policies of the chinese communist party put us as a disadvantage and that also violate the rights of not only their own citizens, but others as well. i think we ought to try to expand relationships with sectors of the chinese economy and so forth that are not directly connected to the party's campaign of cooption, coercion and concealment ed isly, because of the party's efforts to extent and tighten its grip on power the space for those kinds of relationships is narrowing. as you mentioned we have become enter twined i think it is clear from covid-19 that our supply chains were biased too much in favor of efficiency we need to also prioritize resiliency also i think it is clear that we should not fund the people's liberation army's effort to gain a differenttial advantage over our armed forces many of the u.s. companies listed on exchanges for example,

don't meet the transparency reporting requirements and are also involved in the development and application of technologies that give china's armed forces a differential advantage over us i think there is a lot we can do just in the area of due diligence. as i write in the book i mean this is really a competition that cuts across the public and private sectors. so it is really important, you know, for our companies and academia to be aware of this threat and to proeng us against various forms of aggression. >> general, switching focus a little bit in the book, battlegrounds, in the preface you write that people had wanted an account to confirm the judgment that he, president trump, was a bigoted nar cyst unfit for office and they wanted me to immediately write it so that the book might influence the outcome of the election end quote. was that a tacit criticism of some of your fellow former administration officials that have come out with books in the last year or so with slightly more aggressive angles in them

>> wilfred, i just thought i don't think the world needs another tellall on the trump administration what i hope to do with this book is deepen our understanding of challenges to our security and prosperity so readers can evaluate the candidates for themselves can evaluate leaders for themselves what i hope -- what i hope is that if we are more aware of these challenges to our future that we can dmend better, better foreign policy from our leaders regardless of political party. wilfred while we are at each other's throats, while we see this polarization associated with the partisan and vitriolic discourse the it is not going away and adversaries are taking advantage of how polarized we have become. >> thank you for joining us. bank wretches are soaring thanks to wall street's trading boom why 2020 could be a tough year for bankers' bonuses despite ro rults

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we are back. time for a cnbc news update with sue herera hi, sue. >> hello, wilf hello, everybody here's what is happening at this hour president trump on the campaign trail in phoenix, arizona,

speaking to a rally where few if any masks were visible before the rally the president seemed to contradict his criticism of dr. anthony fauci calling the disease expert a, quote, nice guy who has made a lot of bad calls during the pandemic. in florida, vice presidential candidate kamala harris holding a drive-in campaign rally she says justice of many kind are on the ballot in november, including criminal, climate, and economic justice. new hampshire is suing massachusetts. at issue, massachusetts wants to tax new hampshire residents who no longer commute to their massachusetts-based companies. new hampshire is taking that case straight to the supreme court. in boulder county, colorado, a new wildfire has already damaged more than two dozen homes and burned 9,000 acres about 3,000 people are under evacuation orders. you are up to date sara, i will send it back to you. >> sue, thank you. up next, hawaii reopening to

tourists after being closed due to covid jane wells has made it over to kona, hawaii for us. jane >> sara, yeah, hawaii does not want to bring covid across the ocean. at the same time tourism is down 98% and they have a $2.3 billion projected deficit. up next, paradise reopens. but with a fuel rules. few rules when i was in high school, this was the theater i came to quite often. the support we've had over the last few months has been amazing. it's not just a work environment. everyone here is family. if you are ready to open your heart and your home, check us out. we thought for sure that we were done. and this town said: not today. ♪

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hawaii officially reopening for tourists but there are a few hoops travelers have to get through before getting their vacation started of jane wells got a taste of that. she's in kona, hawaii, with more. >> aloha, sara not all the hotels are open. the hilton in wakiki is open and not here on the big island marriott and the four seasons not opening until november pent up demand caught the state off guard. my home videos don't show it but 18,000 people arrived during the first two days under new rules saying tourists don't have to quarantine for two weeks as long as they have a negative covid test from a tested partner within hours of landing. tourism has plunged 98% during hawaii's shut down the lieutenant governor said all the steps to get here could be confusing. >> we do expect some people only

read parts of the instructions and they may have gotten the right test but gone to someone who wasn't a partner, which means we wouldn't be able to verify the test and it hasn't been approved by us. >> reporter: that was such a big issue thursday, friday, and this weekend that the state started letting people who had any negative test not from a trusted partner. that waver ends today. here on the big island where i am they have been the most resistant to reopening of kona is pretty empty, and arrivals here are isn't to a second antigen test you can't leave without a test you can't even rent a car. if you are caught violating you will be isolated and issued a fine you >> mentioned not all of the

hotels are open. how much damage has been done to the tourism industry there any of it permanent? >> it is going to take years they say to recover, years because this economy is so based on tourism, again, they have $2.3 billion in a projected budget deficit because of it the royal kona here is open. but when we were there yesterday we are told it is only approximate 10% capacity so this is going to take a very long time. >> jane, thanks so much for that up next, big banks and small bonuses potentially, why employees of some of the world's largest lenders could see a smaller payout this year the full story next. tomorrow is the cnbc financial adviser summit bringing together the country's top advisory firms to explore the state of the markets to risr,egte head over to cn cnbc.com/events/fa summit.

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employees could see a smaller bonus this year. citigroup, jpmorgan chase and bank of america all wanting employees to temper expect a

expectations a person familiar with the jpmorgan strategy, saying the firm will continue to be highly competitive on pay, but finds it unreasonable for employees to expect oversized payouts morgan stan by, one ron is they plan to it -- and those who saw revenue in increase due to their favorable performance. and overall, sara, i think the take so this is i'm not that surprised, in that clearly if you're a bank with another part of the brings not doing well, clearly that will influence the payout of people's bonuses, even if your sector did well. when what i think will be interesting is what the top brass, what the top executives get. i think that will be a very difficult environment with all that's happened, to see them get big nicks.

subsectors, maybe you'll get an increase, but that doesn't have to be reported again the idea that top executives or the overall will be tempered i don't think is that much of a surprise. then individual traders, if they get paid out a lot, we'll never know i wouldn't say this is a huge surprise either way. >> not a huge surprise certainly looking at maybe that the company and the state of loans, and even bank stock prices, but some of them investment banks are booming, we talk to goldman sachs last week, ipo activity heading to a record here m & a activity those areas, those bankers have to get bob newses? >> they'll get bonuses, maybe not quite dollar for dollar what they might have expected like a year or two ago, but yeah, they'll be paid well, i would

expect the point is we won't necessarily know what those individuals got paid i think that's the point that can still happen until the surface without everyone being aware of it. i do think the banks are more pr aware than they were of the last crisis in 2008 it created a bit of a pr disaster for them then i don't think the banks will be running to repeat that sort of thing this year, even if you're goldman sachs or morgan stanley where you don't have a commercial bank. i'm sure they'll be plenty big enough, and i don't believe the people right at the top that would attract most attention when it's made public will get the blowout bonus that is perhaps the pure numbers might suggest. >> i think that holds for all of corporate america. even the stock market they have a pr problem, they have to start takinging big bonuses. >> which the banks haven't done.

they've a bit more dover, but probably not sufficient to go to massive bonuses. up next, your wall street look ahead the key names and themes we'll be watching when "closing bell" comes right back ed to help protect myself. my doctor recommended eliquis. eliquis is proven to treat and help prevent another dvt or pe blood clot. almost 98 percent of patients on eliquis didn't experience another. -and eliquis has significantly less major bleeding than the standard treatment. eliquis is fda-approved and has both. don't stop eliquis unless your doctor tells you to. eliquis can cause serious and in rare cases fatal bleeding. don't take eliquis if you have an artificial heart valve or abnormal bleeding. if you had a spinal injection while on eliquis call your doctor right away if you have tingling, numbness, or muscle weakness. while taking eliquis, you may bruise more easily- and it may take longer than usual for bleeding to stop. seek immediate medical care for sudden signs of bleeding,

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it is a huge week ahead for earnings tomorrow we'll get numbers from consumer staples giant procter & gamble, netflix and snap wednesday tesla and more thursday american airlines, southwest air and barclays and american express will be reporting on friday. mike, it seems like we should be watching the outlook, if any, and also share reaction has been weaker even with better than expected numbers what else are you looking for? >> one of the early tests will be net flex tomorrow even though it's not representative of all of faang as a stock, you have a lot of people leaning one direction on. maybe warning that growth will slow

that's perhaps a big tech responsibilities. >> always a fun earnings report. mike, clearly a big sell-off the last 90 minutes or so. >> though i do believe after hours the s&p index fund has firmed up a bit. maybe we'll still be on this treadmill. >> there's still hope. >> there's still hope. not a breakup yesterday. thank you so much for watching "fast money" starts now. i'm melissa lee, and this is "fast money. tonight on fast we are all over the after-hours action of ibm. that stock is lower as the earnings call gets under way plus we will tell you what just happened at our airport that has not happened since march and why it's good news for the airlines. later, james is pitching the mound, he says this stock is