i don't think we've got on it a point where we know what the right playbook is for coming back from a pandemic the fed anticipated some inflation, not as much inflation as this. the fed is maintaining a wide open policy so we'll have to follow this as it goes with really a lot of uncertainty at the federal reserve and really among a lot of economists. >> steve, thank you for that recap. steve liesman, eamon, a pleasure see you tomorrow that does it for "power lunch," everybody. "closing bell" starts right now. thank you, and welcome to "closing bell. i'm sara eisen market another red hot inflation number the major averages slightly higher as we head into the close. small caps are sharply lower >> wilfred frost earnings are front and center once again, more big banks reported results today the financials among the weakest sector with bank of america seeing a sizeable pullback

we'll speak with brian moynihan in a moment. fed chair powell saying inflation will remain elevated likely in the coming months before then moderating shares of apple jumped to a record on a report it wants to boost production of its next iphone by about 20%. 59 minutes left to go in today's session. energy is seeing the biggest declines a number of big names on today's show coming up, arc invest cathie woods talks about her investment in a fintech company taking on the likes of robin hood and latest thoughts on portfolio companies and new warning about chinese stocks and whether she'll continue to sell some of hers let's get to one of today's biggest stories and movers, bank of america, citi, wells fargo reports earnings before the billion. bank of america shares hit the hardest down about 3.3%. low interest rates did cause revenue to come in slightly

below estimates. ceo brian moynihan, good afternoon to you thank you for joining us >> good to be here, wilf good to see you again. >> we want to kick off on the economy. we'll get to the earnings in a moment but hot offeni listening chair powell you're seeing credit quality metrics were pretty good and another reserve release was possible how much of that do you think is down to the stimulus that's out there, compared to fundamentals and this growth and bounce back being sustainable? >> let's back up and talk about the broad economy. bank of america securities research team one of the best in the world has a 7% gdp growth predicted for 2021 and 5% for next year. a strong growth rate and economy gotten back to where it was pre-pandemic and so that's the backdrop what we see in our consumers is

they're spending 20% plus more money in '21 than they spent in 2019 in the second quarter, that's growing as we've gone on and that's going to be clearly a record amount of spending that shifts to travel and entertainment as things opened up, and on the consumer side staying with that for a second rkt the stimulus you referred to in the consumers accounts there are multiples in accounts of $2,000, $3,000 average balance, the money coming in and out, three times, four times bigger than they were during the pandemic a lot of cash in the consumers accounts if you think about that, you go to the commercial side, low line usage, plenty of dry powder if the opportunities present themselves and getting employees and get goods through the shipping process and so you're seeing the economy set up to operate nicely and brings up the inflation debate and prices go up because of supply and labor shortages and will those be permanent and all the things

chair powell talked about. >> what is your view on that optimistic outlook on the economy plus inflation trends in the last couple of days and months do you think the fed's at risk of being a little bit behind the curve? >> well, as was said earlier by i think it was steve, there is no playbook here but what the data is showing you and they will be data dependent, you have a recovery that gained steam, the spend something there, people are out and the whole thing will come down to the vaccine, the virus, the vaccines and the variants and how they'll ebb and flow and their job is what chair powell has said so make sure those three vs don't affect the full recovery and ongoing growth of the u.s. economy and they and the fiscal policy have done a great job of blunting the effect of this in winning the war against the virus in the united states and they've got to let it play out but be careful not to be premature. from what we see, you're seeing this build and we'll find out as we come to the fall, frankly and a lot of the one-time stuff runs

off and you see the fundamental economy come out the other side over the next 60 to 90 days and see how it plays out what we see in the consumer bodes well for the rest of this year and deep into next year for sure >> let's talk, brian, about the earnings and start with net interest income and margin clearly not as strong as you perhaps would have liked it but how confident are you that it did indeed bottom last year? >> well let's go back to a couple things. one is we made $9 billion, pretty good amount of earnings and part of it was a tax debate. we had one-off expenses and a great core earnings story, deposits growing strongly and loans beginning to turn around, so in the third quarter of last year we said that would be the bottom and while most banks have continued to deteriorate, ours has been flat for three-quarter subsequent and now the deposits growing consistently, $80 billion in the last quarter alone and the loans growing and you saw it go up each month and

we showed slides today doing that, that gives you an eye on the future and we have $1 trillion to invest every day not needed to fund the loans in the company and that we could put to work and securities to extract the value of the deposit franchise which is the best in the world, frankly >> in terms of that loan growth, do you think it's continued this month as it did in that final two, three weeks of the quarter where you alluded to the fact it picked up? >> it went up every month in the quarter and performing fine so far in july. you get some institutional clients ebb and flow, the mortgage company you lend to and stuff like that, the consumer balances keep building and mortgage loan production is strong the auto balances fended off when the new inventories started arriving, you see the bottlenecks go you heard sara talking about the 40% increase in used car prices due to shortages and honestly on

our commercial side lines are at an all-time low. as the shortages straighten out you see the loan growth on one side come up it's not dependent on so the movement small business less than 5 million revenue companies doing more production than the 19, not 20 it's finally grown the first month since the pandemic and those are fundamental businesses we have to go back to 40% draw rate revolver versus 30, that's 45 billion of loans we lost in the last year by draw rate difference, the last two years and when companies see opportunity you see that go up we feel confident given the economic projections the capital has to come from somewhere in the way people drive their business >> wanted to touch on trading brian, down to relative to a year ago and clearly that was off some extraordinary highs perhaps it's down less than

people expected and i guess my question is, in two, three, four quarters' time when we are past the pandemic related activity, do you think we go back to the levels of pre-pandemic or has that been a structural improvement in trading particularly for the big u.s. players and market share gains that will continue into the more medium and long-term >> i think two things. one, the amount of volatility last year sort of unbelievable as we were going through the stress of the crisis and helping people get to the market, et cetera but behind that, though, there's a fundamental market shift in terms of market shares that move towards us and the other large players, the competency skills and the cost in investment that you have to make in these platforms every year, the el electroniification, and we have been watching this build up to fundamental new platform its and one of the things we talked about last quarter, not so much that quarter our initiative to

let the markets businesses push to the same size relative to the company it was earlier it's just the company's grown around it. we could put more capitol work, good opportunity, a fundamental market share will there be less volatility versus last year, it was outsized due to going on in the markets. >> we have an interview with arc invests cathie wood later in the show fintech will certainly come up with her do you sometimes lament when fintech gets heralded and all banks don't get included in that you talked about in the call some of the stunning numbers in growth for digital products and zell included. are you a fintech company? >> we are a technology company, basically huge capability technology platforms, wonderful people that serve the clients and the buildings to make it operate. we are a technology company for years, we have 40.5 million

active digital customers in the consumer business alone. last month it was 900 million times they engage with us. so that's been growing at 25%, 30% a year the amount of engagement the usage of the stuff has gone up during the pandemic we saw that driving through our wealth management businesses which is the biggest and best business in the world, driving into our commercial businesses because the necessity and that is not going back at all. it's going forward and growing into faster, so all segments of customer and consumer, wealthy people, not so wealthy people, older and younger people using the platform, then we help with the fraud protection wonderful platform, tons of en engageiment and our merrill lynch product is $300 billion and growing 25% year over year, 4 million life plans of products a year been out like that, these are numbers that 17 million zell 14 million, erica 19 million, these are stunning amounts of

activity but what it really does, allows us to make the company better for customers and better in terms of operations, allows us to keep making the company better and investing more because of the cost dynamic and all that >> a tech company, brian, in the finance space but not quite getting the earnings multiple as some of cathie's companies but that is always the case. >> i'd rather make the money, wilf 9 billion of earnings is a good day. >> good point. do you think some of the companies are a bit stretched on the valuation? will they all succeed to into the valuations they have >> i think that's the age old question and you'll see it play out based on the better ones and not so -- you'll see it play at just like you see it play out with banks over the years. there are great companies and great ideas, we study them to figure out if it's something we should be doing and research heavily with our customers we're the number one bank in online and mobile by almost all

the different things and it's growing very fast so our job is to stay with the customer, not ahead of the customers and drive the usage and activities taking our retail, phones and everything into consumer business has gone from 300 basis points to 120 basis points over the last several years, because of the digital effectiveness and that's what we are shooting for. >> and brian, just wanted to ask about return to the office as well and just get your latest thoughts on that i guess the last time we heard from you, felt like you were a couple months behind your peers like goldman sachs, who we were with yesterday in terms of aiming for september full return than early summer. >> we are bringing people back and four months or five months ago when the vaccine started coming out we asked our teammates to put their vaccine tool and status.

we have 75,000 teammates told they're vaccinated in the united states, over 14,000 outside the united states and bringing them all back to work it's a lot of work we had all our merrill offices open by the end of the month, all our private banking office opened by the end of the month, but some of the big centralized office buildings we moved floors, gave up space so you have to get them in the right condition and that takes more time so we've basically 30,000 people were given a notice in the last week or so, come back, it's time to come back you're vaccinated, here is your return to office notice and they picked july and august we want to take it easy, let people work their way into it. as of september the rest come in and they selected a bunch in july, a bunch in august, a bunch in september that will come on and all during that time, more vaccinated people and the team's done a great job managing through. we are returning vaccinated people because it's easier to operate there and we can operate fine with people at home and

over time that will change >> brian, thanks so much for joining us on a busy day for you. >> thanks, wilf. >> brian moynihan, chairman and ceo of bank of america, sara >> i love hearing you ask about the fintech businesses and each bank and how they might feel it's not fair they don't get the valuation. >> i would say brian is not, just came up and that's the way the conversation went but's not one that typically does pause to lament or worry about those type of things but -- >> highlight how big of a business >> highlight how impressive the growth is and i discussed this with david faber this morning but but jamie dimon someone asked him about fintech, it's not just the smaller player. some of the bigger banks have made huge gains in that area but clearly the focus for

understandable reasons >> they're never called a fintech. when we come back bank of america not the only financial name in the spotlight. wells fargo comments up next mike santomasssimo on the show coming up tomorrow, treasury secretary janet yellen about the state of the economy, the senate infrastructure proposal, global taxes fresh off of g20 you're watching "closing bell" on cnbc.

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wells fargo reporting earnings before the bell this morning, smashing profit expectations, boosted by the release of $1.6 billion in funds that set aside to cover defaults due to the pandemic. shares fell earl whier in the session but turned around during the conference call in part on comments from the company's cfo and wells fargo's cfo mike santomassimo joins us. good to see you. >> thanks for having me back good to join you from the office for the first time >> it's good to see you. all you bankers are back in the office, as wilfred showed us this week. on the quarter, mike, overall very strong and revenue growth was there. i know you did have a one-time gain and loans were soft what are you seeing in the economy right now that's driving the growth >> well first let's start with the quarter. $6 billion in net income and we

had a $1i.6 billion reserve release, a good sign for the economy and the confidence around that. we also had some gains in our venture and private equity business underneath that you saw progress first progress in the overall economy, you're seeing continued high levels of liquidity, credit performing really well, growth starting to happen, consumers really starting to spend money and that really accelerated through the quarter and you look at our results, you saw progress across a lot of our priorities, healthy efficiency agenda we've been auking about, you've seen us continue to support the recovery through a lot of what we're doing for small businesses and minority deposit institutions and investing there and then you saw progress across some of the things we're doing on the product side as we launched the new credit card into the market a few weeks ago. progress really all across >> what about net interest margin the spreads are always a big deal for you guys and came in

better and there was resiliency there especially against some of the other banks. what is the forecast we heard from chair jay powell in the last hour, does not seem in any hurry to raise rates or start to taper sf purchases, still thinks inflation is transitory what is the outlook? >> yes, look, i think it starts with loan demand many of the businesses we haven't quite seen that inflection point yet in our commercial bank loans are down, good activity, good conversation hasn't translated into the loan side some of the other commercial businesses like our corporate investment bank you see a little bit of growth in commercial real estate and other products. on the consumer side you see some green shoots there in hard spend and in the would space but we're still seeing a lot of activity on the home lending side that's bringing balances down i think we have some room or time to let these trends play out a bit. on the rate side it's all over the place over the last few

weeks and i think you're seeing a lot of the patience that the fed is showing really sort of resonate in the market i think as inflation really looks like a lot of what's driving the prints on inflation to be higher than people expected are the things that are transitory, but that will take some time for us to see if it's going to persist and sustain and have a real impact >> as you said, mike, in the quarters numbers there was clear progress, the share price reacting positively well ahead of the group to date because of that i feel like the share price is starting to react on the earnings call when you suggested that the buy-back amount could be increased 18 billion is the number that's out there at the moment. what sort of increase are we talking about, just an extra billion or two or something more sizeable >> we said it could be higher or a little lower where we are now the restrictions coming off, we have the flexibility to do what we

think is prudent based on the earnings capacity and our view of what's going to happen over the coming quarters but i think the good news is we start with a place where we've got a tremendous amount of excess capital and we get the ability to start returning it this quarter and so it will be a significant return starting soon >> on the asset cap and other regulatory issues, charlie said on the call "the work remaining there is significant." so is that to imply asset cap in place for at least the rest of this calendar year >> i think you have to think about the body of work we've got to get done across all of the risk management build-out and regulatory mediation there are a number of things out there and many of them are public, and so you can kind of see the multiple consent orders. there is a significant amount of work for to us do to complete all of this work i would say it continues to be our number one priority, we're

making progress but there's still a lot to do. we're a multiyear journey to get it all done. >> mike, you're obviously a huge player in the housing market and mortgage banking quadrupled from last year. do you think, though, the housing market has peaked? >> it's hard to know exactly what we're going to see. obviously we've seen home prices shoot through the roof in many different geographies across the country. we' will that sustain itself it's hard to know. the consensus view originations in the mortgage market will continue to decline as the refinance activity burns out and i think that will be the case. the question is exactly what pace as rates have been moving around a little bit, a little bit higher than people expected over the next couple quarters but we're certainly in a trend downward i think in terms of the origination volume particularly if your view is rates will continue to increase over the median term. i think the good news is for us,

we've continued to really focus our energy on the retail channel that we've had and we made some progress there and you can see that in our results. >> mike, we just looking at the share price down 4% today, takes you up 49% year to date so congrats on that thanks for joining us. >> thanks to you both. talk soon. >> mikesantomassimo, ceo of wells fargo. 35 minutes left of the session dow, s&p higher, the russell down 1.4%. cathie wood with the ark invest ceo and thoughts on china's tech crackdown and personal investment in a fintech company jumping into the world of commission free trading as we head to break, check out some of today's top search tickers on cnbc.com ten-year on top, followed by apple, bank of america and amc and citi, a number of the banks earnings there on that one we'll be back in a couple minutes.

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32 minutes left of trading today. >> president biden was on capitol hill to talk to senate democrats about his economic agenda democrats are saying this would be fully paid for and a source tells me they plan to use three methods, higher taxes, savings on health care and economic growth i did ask senator bernie sanders how much money needed to come from each of those buckets he said that is still up in the air but that the tax increases would be imposed on corporations and wealthy individuals -- $400,000 a year. now where would all of that money go toward things like universal pre-k and expansion of medicare and extension of the child tax

credit and incentives for electric vehicles. agreeing to a budget solution is a first step in a long process the president told reporters on the hill they'd get this done. back over to you >> thank you so much for that. the dow, s&p and nasdaq are trading higher today just below record levels. let's send it over to mike for a closer look at the day's market action and the key levels. mike >> wilf, a little bit hess taken throughout the day during chair powell's testimony small caps weak, huge caps holding up the indexes we're holding to trend the one-year chart continues to look very orderly and we keep hugging that upper end of that general trend line bottom end of the range and bobs back up. we'll see if this continues. we've eroded a little bit of the breadth of the foundation of this rally below the surface, localized corrections going on in different sectors one of the banks, up off the

lows significantly intraday but a five-year look at the s&p bank's etf it's a test of this multiyear breakout that we got, going back to 2018 highs you have things like wells fargo and citi are lower than the 2018 levels, jpmorgan, bank of america still comfortably above. it shows thaw we're having a little bit of a retrace of the strength of these guys i look at how vertical the comeback was not too surprising but you have to monitor it to see if we have a give up in this sector the mega cap growth segment of this market has really reasserted its dominance over the tape now mega cap growth etf very much faang and non-tech mega caps compared to the equal rate of the russell 1000. the median stock in the large cap universe and this is an aggressive steep recovery in leadership from the mega cap growth sector and it's not exactly what we saw out of the

pandemic or into that september 1st 2020 high. it's getting a little bit stretched, small caps versus na nasdaq things like that look like they're pulled tight see if we get some snap back for now this is the action that's been insulating the s&p 500 from showing the same kind of weakness that the typical stock is >> mike, to your point about some of the banks pulling bank from their recent highs, some down about 10% from the recent highs, still up 30%, 40% year to date as you said, some are well above 2018 highs still like jpmorgan, others below 2007 highs. >> that's right. >> quite a wide range there. what is interesting as we assess the numbers this week, there's a big range within that sector of the six biggest unlike other sectors a big range of the earnings multiple as well that applies and quite a big range on the potential for buybacks to really move the stocks in a sector that has the ability to do quite a lot of buybacks >> yes

in terms of building book value, intrinsic value, you do it at lower valuation, the buybacks are much more effective. cash all the same back into the markets they soak up shares from shareholders i agree there's a different equation when it comes to what the buybacks are doing and how it might support valuation and of course as we mention the other day, right around earnings reporting dates the banks themselves typically can't do share repurchases so that will kick in within a week or so. >> mike, thank you see you soon for the markets zone still to come, pod stocks taking a dive bess site a push from chuck schumer for legalization we'll bring you up to speed on the latest there plus what delta's ceo said about the impact of covid variants like delta on bookings. we'll break down today's earnings report with a top analyst from jpmorgan. a check on bond yields, slipping today amid more inflation data that came in hot and coming from fed chair jay powell he still

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time for a cnbc news update with rahel solomon >> hello, here's what's happening at this hour the property where the collapsed condo once stood in surfside, florida, is going up for sale. a florida judge approved the move, court records say the sale could raise $100 million to $110 million. proceeds are intended to go to victims of the deadly disaster

a record 93,000 people died of drug overdoses in the u.s. last year, up 29% from 2019, experts say that lockdowns and other pandemic restrictions isolated those with drug problems and made treatment harder to get. britain is reporting a six-month high in covid cases, this five days before england is set to drop most covid restrictions today's 42,000 new infections is double the figures from last june the eu landmark legislation to cut greenhouse emissions by 55% over the next decade, it includes a ban on gas in diesel cars by 2035 and measures to shift power consumption from power consumption from fossil fuels to renewable sources sara, back to you. >> thank you up next on "closing bell," the path to legalizing pot, we've got new details on the proposal the senate is unveiling on the hill. plus tomorrow on "closing bell," can't miss interview with the treasury secretary of the

united states, janet yellen, fresh off of her g20 agreement on global taxes, on inflation, the economy and much more. we'll be rightac bk. yeah...uh... doug? sorry about that. umm... what...its...um... 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.

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>> senate democrats unveiling a draft bill today to end the federal ban on marijuana on yesterday's show, irwin simon told us he's optimistic something will get passed in the next 24 months >> i think something happens in the next 24 months and there's a lot in regards to what could happen in congress, what could happen in the house, what could happen in the next lelection i come back and say voters are saying we want some type of legalization

93% of americans say we want legalization of cannabis >> let's get to ylan moye in washington with the latest what is in this proposal >> reporter: top senate democrats legalizing cannabis at the federal level clearing the industry to have full access to the banking and financial systems. the bill would remove cannabis from the controlled substances act and also establish a minimum age of 21 to buy marijuana the catch though is that democrats want to impose an excise tax, 10% in year one climbing up to 25% by year five. after that calculated based on weight and concentration and equal to 25% of market value >> i will lay myself down to stop an easy banking bill that's going to allow all the corporations to make more money off of this as opposed to focusing on the restorative justice aspect

>> reporter: one key company's publicly supporting this proposal, canopy growth ceo david klein is thrilled and ready to work with congress to establish a well regulated adult use market in the u.s. guys >> i was just quickly trying to google, ylan what the excise alcohol tax was and comparable it's listed as dollars per proof per gallon so i'm not sure how easy it is to compare. to be expected some excise tax to be put it in place. >> reporter: yes, so part of the reason for the excise tax is because that actually creates a disincentive for adolescent use. it establishes a floor for the price of cannabis so it's not something that would be easily accessible to you. however, it could also act as a disincentive to businesses and consumers who have to pay more for the products they purchase this is an eis enrvel piece of

the proposal democrats see it as part of a way to create revenue to fund programs that would help neighborhoods and communities that were targeted during the war on drugs, so they see these two pieces as inextricably linked both the legalization giving them access to the banking system as well as the taxation >> ylan, thats much, much appreciated. 14 minutes, 15 minutes left. shares of apple are jumping on reports it's ramping up iphone production we have the details next in the "market zone" and later, ark's cathie wood latest on her stock moves in her portfolios. dow is up 50 we're back in a coleup

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just about 11 minutes left in the trading day in the "closing bell" "market zone" all the action going into the close. mike santoli is here to break down the crucial moments of the trading day and today we've got reynolds wealth management ceo management josh brown back as well we'll kick it off with the market stocks are mixed. the s&p 500 is up, so is the dow about 54 points after fed chair jay powell testified in congress, nothing new i would say from the fed chair, stuck with the transitory theme even though he says inflation is coming in higher than everybody thought. the dow went above 35,000. >> 3:00 or so, 3:30 on monday so

that has been the ceiling. we'll see if that lasts for now. this is a familiar feel to the market, below the surface a lot of weakness, a lot of stocks are in pullback correction mode but you do have the big growth guys really working and supporting the index and what's interesting is what that really also tells you is the market is absolutely at the moment transitory inflation mode meaning anything that would benefit from a real acceleration in inflation that wassustained is really not bee working in the stock market and vice versa whether that's a verdict or ebb and flow of the style and factors and the themes and the flows is the question. >> what are your views on the small caps, the russell rolling over more significantly this week, this month >> it's tough. you don't want to see that if you're trying to stay constructive on the market you go back in history and look

at periods of time there was this much separation in trend between large and small caps and that could go on for a very long time, like nine months before there is some kind of resolution and one direction of the other historically over the last ten years that resolution of small company weakness versus large cap strength resolved to the upside meaning small companies had a chance to play catchup notable example is after donald trump got elected in late 2016, had a furious u.s. small cap rally to catch up with how well u.s. stocks were doing and we've seen other examples. i try not to make too much of that the most notable thing that's happening we have an all-time high in xlk, the s&p 500 tech sector all-time highs in apple, microsoft and alphabet, the three biggest stocks in the world. that's notable in contrast to the stocks that cannot maintain

their valuation in a taper they are the ark stocks, negative earnings club, nose bleed valuation club ark had a constructive cha are the from the middle of may to this week. it was making a series of higher lows how a sector of the market recovers that got negated down almost 3% today. you look at the holdings in the etf that is the most speculative money in the market. tesla, roku, teledoc, which looks atrocious, shopify, square, zoom, coinbase, all of these stocks are down, some of them down 4% and 5% on the day i think the market is more comfortable with the idea the fed has to at least start the taper and when it does that, you're going to lose valuation support in a lot of the names that i just mentioned because

we're pricing these things on cash flows that are four and five years out into the future, and investors stop doing that and the spigot gets slowly turned off speculative tech not so great, that's more important to me than large cap versus small cap right now. >> let's talk about bank stocks moving in various directions today after reporting quarterly results before the bell today. shares of wells fargo jumping after beating on the top and bottom lines, boosted by 1.6 billion, decrease in its allowance for loan loss reserve. citi today moving a little bit lo lower only by 0.6% and bank of america as we've been discussing down about 2.5%. let's get to a comment from our interview earlier with brian moynihan, what he had to say for outlook for trading volumes.

>> the amount of volatility last year was unbelievable going through the stress of the crisis helping people get to the market, et cetera. behind that, though, there's a fundamental market shift in terms of market shares moved toward us and the other large players, the cost investment that you have to make in the platforms every year, electronification, the fixed income market you name it. will there be less volatility? yes, versus last year it was outsized due to what was going on in the markets and we're watching that come back through. >> an interesting theme on trading from all of the players, this is a structural gain. it's an interesting note forward and week to date, morgan stanley is up the most along with wells fargo and goldman is still higher as well week to date. interesting to see how they do tomorrow on the trading. i go back to what we touched on

earlier, a lot of differentiation and performance in week. not just yield curves moving, we get performance difference wells fargo is up 4% today bank of america is down nearly 3% and you know, we haven't had that off of the back of an enkz season long-term do you buy tech or banks we're seeing differentiation >> there is a judgment going on about how much more room for operational improvement, you know, for margin help that you can get in a wells fargo it seems in a different point in its own cycle, not really the overall sector cycle and it seems like it's getting a benefit plus the valuations got pretty depressed >> apple is hitting a record high thanks to a report the company is boosting iphone production, josh lipton with the details. >> bloomberg is saying apple is asking its suppliers to ramp up production of its next generation iphones by 20%

looking for as many as 90 million units. skyworks and qualcomm moving higher tim cook would ask for more units to get built given this uncertain environment with ongoing chip shortages and constraints. why not lock in iphone supply now and if need be scale back if warranted in the months ahead. back to you all. >> thanks so much for that goldman sachs out with a new note today predicting the biden administration's efforts to crack down on anti trust practices that it will not hurt big tech stocks. it may be a slight positive. risk premium on tech stocks is not necessary given lengthy investigations and the fact these cases are often overturned in court even so, facebook is seeking the recusal of ftc chair lena khan

julia boorstin has the details >> facebook believes the ftc chief couldn't be impartial as the agency decides to file an anti trust case against the media giant. khan replied how the law should be applied "when a new commissioner has already drawn factual and legal conclusions and deemed the target a lawbreaker, due process requires that individual to recuse herself from related matters when acting in the capacity of an ftc commissioner." the fc has no comment on this and this comes about two weeks after amazon, which faces multiple ftc investigations filed a similar petition guys >> julia boorstin, thank you very much. interesting strategy the giants trying to recuse lena khan from

the cases. they're scared of her. >> certainly they don't want her driving this aggressive push but also these are massive businesses and underearn if anything, they have billions behind to make their case. it's difficult to stick in court with the long haul [ cheers ] it's like get huge fast. >> the noise is the wheels up crowd i think. >> it's not for us >> no, it could be but i think, mike, it's the market internals. >> there you go. they know when 3:58 comes around here we are. market internals are not something to cheer more stocks down than up you look at the volume, a billion shares more in declining stocks on the new york stock exchange than there are in advancing shares below the surface as we say kind of rolling direction been new 52-week lows and the nasdaq new

highs. unprofitable more speculative stuff is getting hurt. the volatility index is mostly quiet, under 17. we had a pop yesterday above that level, not giving you much of a directional signal. we are bumping along a floor here as the s&p kind of bumps against a ceiling. >> one minute into the close, it's really the yield sensitive defensive stocks that are leading the s&p 500. the dow is up 52 points. what's working real estate the best performing group along with consumer staples, utilities and technology you are seeing lower treasury yields dictating the action. energy, financials and consumer discretionary of the worst performing sectors in the market record highs including microsoft, apple, trading near highs as well. [ cheers and applause honeywell, visa adding to the dow and apple.

into the close -- [ bell ringing ] >> sorry to say, mike, sara's got a bigger chair than yours. welcome to "closing bell," i'm wilfred frost along with sara ice and mike santoli, and very much celebrating wildly at the close so they deserve it the s&p and dow up about ten basis points, 0.1% each, the nasdaq down by 0.2%, russell the big mover down 1.6%. real estate consumer staples, utilities the best performing sectors, energy and financials and energy in particular down

3% coming up an exclusive interview with cathie of ark invest, where she's joining the board of a fintech company whose subsidiary is trying to compete with robinhood. josh brown is still with us and leah bennett from westford wealth management joins the conversation as well mike, slippage there a little bit into the close but positive territory still week to date and as you said, the key levels that we're working out if we want to break through or not >> holding up on the index level for sure it has a more defensive feel to it this stuff doesn't always necessarily extend day to day. could you say apple is responsible for a tremendous share of what happened in the s&p today. faang is defensive that's how it works in the market staples and utilities up mean stocks blasted, biotech down 2.7%.

seems the risk of enthusiasm is waning it feels slightly lightweight last summer. everyone else knows mid-july is when often if you want to look at the historical tendencies things are less generous in the market >> josh, what are you noticing about the market and we continue to see bond yields -- >> i was going to say i'm noticing kenny going absolutely wild on the platform today smashing the closing bell. >> his stock ended up 16%, right? >> yes, u.p. is the ticker, wheels up. kenny comes from my hometown of maricone island. congrats on the ipo, we're all very proud of him. from an investing perspective not a lot changed from a trading perspective a lot has changes. some of the hottest areas for shorter term traders really have gone against them hard

cyclicals to freeport down, energy stocks haven't been great and money gravitating toward the div dividend payers. i'm not sure if that's a shorter term or longer term phenomenon we tend to measure longer term in hours but look at the consumer staples what are they telling us look at the reads. continue to be on fire as we talked about all year, a lot of those are making all-time record highs. why are people clamoring for "yield stocks" right now that's an interesting puzzle i suspect we're going to find out more over the coming weeks why that's the case. >> thanks for the most part suffering today despite decent earnings on the bottom line. leah, is that a buying opportunity? >> yes, i think it is a buying opportunity.

it is an interesting environment. the correlation between securities is low and i think the powell speech is a great example of opportunity being created in market. you had a fed chair that reemphasized the fact he's focused on employment number one and price stability as a distant second and that is continuing to create this great debate between inflation. the market continues to have that debate you get a lot of volatility in the yield curve creating some opportunities in financials if we look longer term we really like banks but right now there's no, very little demand on the loan side, and as the yield curve has flattened, it's created a lower profitability environment for banks near term but we think it's a great buying opportunity for quite a few of them if you have a rise in more than six points. >> financials off half a percent today, down just about 5% from

the highs. investors paid close attention to the fed chair, testimony on capitol hill steve liesman joins us with some of the highlights. steve? >> powell yielded very little in terms of plans to throttle back the fed's easy monetary policy >> high inflation readings coming from a small group of goods and services directly tying to the reopening of the economy. >> with all due request chairman powell it's housing, it's appliances, food price, it's electricity. it's gas >> we are monitoring the situation carefully and we are committed to price stability >> powell said the fed will keep to the current fed funds rate around zero until its employment and inflation goals are reached.

the labor market has a long way to go. only concession if inflation is "materially and persistettely" above the fed's target policy would respond. a six-month time frame determining whether that was the case the beige book released while powell was testifying prices increasing at an above average pace around the fed's 12 districts and some folks passed along the increases and others did not. growth is moderate to robust around the country >> what should we be looking for in the transitory debate to see whether he should get worried. clearly a lot of it is the bottlenecks and temporary fattors around reopening what is the wild card, housing rising in terms of prices making the fed rethink the whole position >> i think that's a great question, sara and a bunch of

ways to cut that up. one is to look at the sectors where we've had the rebound, the consumer spending, dining out a place that has seen inflation. if that keeps going that's more of a problem, rather than a one-time adjustment. look at airline prices they came back, down below where they were. you've had several months of strong increases once you see the strong increases did they level out across the board and start to bleed outside of the sectors that were the reopening sectors. >> steve, thanks so much for that when mike's pickup truck gets

purchased. >> quickly, you know "the view" led with their opening segment today about inflation, "the view." this is no longer a story confined to the "wall street journal. the problem that powell is going to have is going to go way beyond anything he's had to deal with before. we haven't had a scenario with main street seriously questioning the wisdom of continuing these fed policies and i don't think it's going to stop at "the view. i think this is going to become front page news all over the country if it continues at this pace and that's going to be trouble politically. i think this is a bigger deal than the contacts at the fed that talk to steve think it is >> josh i got to say i'm surprised you're not up for "the view." >> it's possible you love "the view" more than "closing bell.

>> i like both >> the "new york post" is the trend. >> that could be a sign that it's peaked. >> exactly the midterms are in 15 months. if we're still talking about inflation then, it's going to already have gotten powell's attention. >> yes >> hold on, inflation doesn't -- it's an economic data point not influenced by market die namm ins. >> goods based market prices >> leah, what's your take on whether inflation is a big fear for equity markets >> i think it is a fear and it will create additional volatility, how long if this is transitory inflation, how long is transitory? this is something that will go on for months if not the remainder of the year. one of the big things to watch as we're coming out of this is

the innovation and people talked about the amount of technology embraced by companies which is deflationary and can offset a lot of pricing increases by nature, but i think about 2008 for example. if you think about the pressure we went through, the economy went through and how we adapted and the unintended consequences that came out of that period, the obvious consequences, banks became more conservative with lending but the unintended consequences we created a whole generation of people who were scarred and didn't want to own things you had the whole generation of uber, airbnb, and peer-to-peer lending networks took off and the shared services were deflationary and had a price decrease prices on the more traditional services that were out there. so i'm curious as i look forward over the next year to see what comes out of this. there's no way we have stocked

the world and economy for a year and restarting without the birth of new industry so i think that's something that's going to be interesting to kind of keep our eye on >> josh and leah, thank you very much for joining us. much appreciated as always i wonder whether the peak we see is the number people willing to say the inflation is transitory despite ongoing huge prints. i almost wonder whether that's the thing that is more likely peaking. we don't need to worry >> there are a lot of people and a lot of the banks still saying this is a problem. the "wall street journal" every single day pushes against the transitory debate on inflation >> there's a mathematical drag on inflation >> and the month over month numbers continue to be strong. >> have continued to be strong, yes. >> yep >> we'll see

three months, i don't know it could still be transitory the ark innovation etf falling more than 20% since mid-february but up 50% over the next year. cathie wood on her performance fort portfolio and brand new board membership of a fintech company, pretty interesting move there. airline stocks have been grounded over the last month amid new covid concerns. coming up a top airline analyst on whether he thinks the stocks could soon take off. we're back in two mitenus.

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ark invest cathie wood joining the board of tiffin platform for wealth and asset management joining us now ark investor ceo cathie wood and benet meyer. congrats on the deal i don't think of you as a private investor, we think of

you for etf management it's super interesting you're investing in joining the board of this company. how did you choose tifin >> when i first met venet at an etf conference where i was or ark was kind of a curiosity, in 2018 and nobody believed we would make it, everybody was curious. how could an active manager work with an etf rapper it's fully transparent but venet believed we would be successful and transparency, active information flow and he's run with that, with the tifin companies, focused on transparency and bringing in intelligent access to especially registered investment advisers and institutional investors. so we were intrigued with his business or we have been intrigued. we've piloted some of his

services and have been satisfied with the result. >> obviously there's a lot of money going into fintech, not just venture capital but biggest banks, jpmorgan and visa doing billion-dollar deals i think of the magnifier subsidiary as a google for investments but you're expanding into selling the investment talks. talk about what your vision is >> thank you, sara, for having me here. cathie thanks for joining as well you're right fintech investment has gone from 4 billion in 2016 to 8 in 2018 to 35 billion last quarter in fintech. the activity is focused on payments, lending, neo banking and what's happening in the space of wealth and investments

is still new tifin is part of the solution. we build fintech products for the world of investment and wealth management and what we are doing magnified one of the subsidiaries when we presented it here a few hundred thousand users the number of searches on our platform exceeded 10 million last year telling us that the marketplace needs a simpler easier more natural way to discover, compare investments and the next natural step for us was to enable action how can you discover compare and then maybe invest, which is what we're doing now our announcement of brokerage capabilities. >> so how do you make a profit in that sense, vinay you used to push people after they searched stuff to other asset managers and brokers now you do it yourself how do you take your commissions? >> great question, wilfred i think that this goes back to my academic background

it's pretty clear there's lots of research and evidence that excessive trading hurts performance. and guess which segment of the market trades excessively? it's the discount brokerage audience, and the discount brokerages all have an incentive to promote training through commissions or through selling flow so we thought about how can we build a platform that is investor focused and encourages investment so we don't make revenues from selling flow or commissions. what we do is charge asset managers, investment managers who access the investors using a platform, and we do that in a transparent, simple way, where if you search for example e-commerce without amazon the first result sponsored in a transparent manner we also have subscription

services >> cathie, wanted to talk more broadly about fintech. we know you're a big fan of it across all of your portfolios and it's been a great play for you. some of those stocks on simple multiples can look quite expensive, and we wondered whether we'd found a cheaper alternative for you. earlier on the show, we have bank of america chairman and ceo brian moynihan and here is a sound bite from that interview >> we are a technology company, we're basically huge capable technology platforms, wonderful people to serve the clients and the buildings to make it all operate so we are complete aly technology and have been for years. we have 40.5 million active digit digital customers in the consumer business alone. last month 900 million times they engaged with us, so that's growing at 25%, 30% a year the amount of engagement the usage of the stuff has gone

up what we saw during the pandemic that driving through our wealth management businesses which is the biggest and best business in the world, driving into the commercial business because of necessity, that is not going back at all. it's going forward and growing even faster. >> krcathie, i'm being cheeky would you consider buying bank of america for your portfolios >> we would not. eight not what we do we are very focused on innovation and very rapid growth companies so our revenue growth is north of 25% of the banks in traditional retail we have walmart, costco and target, they're doing very well while a loft the market is hurting badly. we think that industries that are going to, under attack from

fintech from many directions, no question about it. the biggest and those who invest in technology in the smartest way possible are going to basically consolidate the industry we do believe what has happened to retail is going to happen to financial services at an accelerated rate >> cathie wanted to take the opportunity to ask about some of your other investments obviously a lot of buzz and people pay attention when you come in. you made a lot of news warning about china and unloading some of the chinese names amid the crackdown we've seen from the chinese government what do you think is going on there and what happens to your holdings that are still quite substantial in names like al ali alibaba, you continue to unload? >> well, what you've seen is mostly in the flagship strategy, which incorporates all of our innovation platforms, all of our

ideas. scarce real estate, 50 names and when we see an assault, and i would say it's more on the valuation of many of these names, we will pull out, and consolidate towards higher names. in our other portfolios, which you'll see in our autonomous technology and robotics strategy arkq for example we haven't done that much except at the margins with those companies that we believe need to expand outside the rest of the world in order to sustain growth rates. we believe china is clamping down i don't know if it's capital controls i know there's a little bit of a retaliation against the wide biden administration's policies, a continuation of the trump administration's policies. that's been the biggest surprise for china, and i think for most

investors u.s./china saber rattling would diminish somewhat that has not and what you will not see is the chinese stocks pull out of the names more indemic to china itself. china wants to be a leader in innovation and is supportive for its companies scaling as quickly as they can internally what i feel is going to hurt at the margin, though is any company and in fact in their last policy announcement they said any company with more than 1 million users and as you know in china wechat has over 800 million users under tougher regulatory scrutiny so i think that's a valuation downgrade i think that has happened and let's see what happens from here as i said, i don't think china wants to cut itself out of the innovation game.

i think it will encourage it internally and we'll wait for things to settle down, and then again, reopen and allow its companies to scale more into the rest of the world. >> what about, cathie, china's clamp down on bitcoin? did that also warrant a valuation downgrade in bitcoin >> well, it was the combination of that and esg concerns that elon musk headlined at one point in time. yes, there's been a downgrade. in comparison, 2017 china shut down all of its exchanges, the bitcoin exchanges and the market went through a big fallout bass many people thought most of the trading is taking place in china. this is the end. guess what it migrated elsewhere, japan, korea and thailand were the

biggest beneficiaries back then. you remember after that, bitcoin started to scale from $1,000, it was less than that to $20,000. with miners 50% and 75% of all bitcoin mining was in china. it's a healthier phenomenon to disperse that mining, a lot of it is coming to the united states, and we've done a paper with square and have a conference july 21st, where one of the hosts with square, we're going to explain how bitcoin mining will probably become part of utility ecosystems and proliferate renewables faster than would otherwise be the case so we're pretty excited by that and think elon musk and tesla

generally will become a part of that ecosystem we think this is temporary we sthink institutions pull back esg is top of mind and answering the questions and at this conference there could be nothing better than bitcoin in terms of esg, governance with the transparency, social, this is a little bit of a use, a different use case, but enabling economic empowerment throughout the world, and environmental, if we're right, that this community, bitcoin community is very environmentally conscious, as are the institutions. i think that we're going to see all of the e, s and g answered at that onference. >> well, it's a nonconsensus view on certainly bitcoin right now, cathie, but maybe reassuring the bitcoin fans they don't have to hate elon musk speaking of mr. musk, you know i was going to ask but that and

tesla and your position. >> yep >> he said this week at a trial, cathie, tesla would die without him and i'm curious whether you agree and what it says about a company you value at almost $2 trillion that the ceo says without him would be worthless >> yes, well, i think that getting through the '08-'09 near bankruptcy was elon musk brute force determination and creativity ingenuity, and i believe also that the move up to this point, he has been very critical especially around the move towards autonomous. i know most people don't believe that's going to be successful, but we believe it's going to be very successful, and he has been driven and focused and has not let short term oriented shareholders divert him from that mission

i do think amazon if jeff bezos was not there, i suffered with it, gladly in hindsight but all the years jeff bezos during the tech and telecomcrash and through 2006-'07 after, he was saying we are not going to be a profitable company we are going to reinvest all the upside from revenues into the business and we are going to take the lion's share of this business, not only that one and aws. thooe these leaders willing to buck up against their largest shareholders and say no, we must invest now, if we want to capitalize on this exponential growth opportunity i think i put elon, jeff bezos, steve jobs in that category. apple certainly would have

disappeared were it not for steve jobs these are special visionary leader, not very many of them. they don't come around there aren't this big set of opportunities either, we think there are more now than hi historically because of the innovation evolving but i understand what he says he doesn't like to be a ceo but had to be and i agree with him i do agree with him. >> vinay i wanted to come back to tifin and earlier answer how you monetize things and raise on debt behind the offering i wonder whether you were critical of the apps for example robinhood but many others, too, that are incentivized by drivin volumes and what makes you confident you'll attract the retail traders that at the moment are engaged by trading stocks whether or not your platform might offer better long-term returns for them or

not. >> yes, wilfred, great question. i think robinhood has built a great business for sure and we respect them for bringing participants into the market a natural evolution that once you democratize access, i think access without intelligence is detrimental, and our focus is different from robinhood's we want to promote investment longer term trading and better outcomes we believe in gaining knowledge for better outcomes rather than gamifying trading, if you will, but one meets one step had to proceed the other is my view on this today there are enough participants beyond robinhood, there are many discount brokerages the segmentation of the audience across brokerages provides enough opportunities we believe to attract folks who probably want to invest more responsibly,

more intelligently >> finally, cathie, i ask you every time you're on, what you think is the best opportunity right now. a lot of the hyper growth names have been hit and not rebounded with the nasdaq and some of the mega cap tech names. where do you see the best opportunity among all the names you like or even maybe some new ones >> well, you know, we've had a good -- sorry, we've had a good rebound since midway, mid-may. so growth has come back into fashion. i think we're in a duelling match, risk off right now for the market, you were talking about inflation earlier and if i could just lob in a few examples of major deflationary forces we're seeing, lumber prices today dropped by almost two-thirds since the middle of may, and i believe the fed today is talking about housing risks and so forth, perhaps that's one

reason that's a severe drop copper has come down 10% to 15%. we are seeing in the auto space the mannheim used car index for the first time in 13 months ticked down. we believe used car prices are going to fall. they've gone way too far, way too fast, and we talk all the time about the deflationary forces associated in inflation i believe leah earlier mentioned it but it's not just on the disruptive innovation side, companies causing these falling pri prices that explode demand that's good deflation. another thing going on creative destruction. companies who have not been keeping up with innovation and have been leveraging up to buy back shares and satisfy short term oriented shareholders, they are going to have to service their debt by cutting prices

so i think not only do we have good deflation and bad deflation at work but seeing the beginning of cyclical deflation and i think we're in a risk off period i know we got hit today, a lot of growth strategies got hit there was a shift towards defensives and a lot of confusion but if growth is going to be scarce because inflation is going to come down, our kind of strategies which generate revenue growth rates in the 25% plus range are going to shine longer term. >> cathie wood, didn't mean to cut you off. >> i was going to say our top names as usual, tesla's head of the pack, roku is a very important name to us, square, zoom, shopify, teledoc, these, many of them are described as stay-at-home stocks and we're going back to work why are you paying attention to them these what we believe is the

world coronavirus crisis changed the world dramatically and permanently and when consumers and businesses find faster, cheaper, better, more productive, more creative, they're not going back to the old world. so many of these stocks have been cut in half and then some, because there have been other than saying their stay-at-home stocks fall we think that's a mistake. >> cathie wood and vina, thank you for joining us and congrats on the new addition to your board. thank you both >> thanks. >> bank of america didn't make the list i tried, brian, sorry. >> high growth companies we go to "market flash" on aig. christina partsenevolos. >> aig selling 9.9% stake of its

life and retirement business to blackstone for $2.2 billion all cash transaction, that's part number one part number two aig entered into a long-term relationship with blackstone to manage $50 billion of the life and retirement existing investment portfolio, that's point number two and point number three, we also have over here the aig is selling certain affordable housing assets to blackstone's real estate income trust and that deal is going to be worth $5.1 billion, in the press release that just hit the wires right now, you have the president of aig stating that specifically about the housing assets, they are no longer core to aig's long-term investment strategy, that's why they're giving them off to blackstone. back to you guys >> blackstone hoovering up the assets christina, much appreciated. up next, mike santoli looks at the earnings growth

expectations for the quarter, and why comparing estimates of 2019 may not or may we blle more relevant we're pack in a couple minutes (realtor) the previous owners left in a hurry, so the house comes with everything you see. follow me. ♪ (realtor) so, any questions? (wife) we'll take it! (realtor) great. (vo) it will haunt your senses. the heart-pounding audi suv family.

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time for a cnbc news update with shepard smith >> thanks, for the news on cnbc here's what's happening. senate democrats meeting with president biden on the hill unveiling a $3.5 trillion spending plan. the senate majority leader chuck schumer says that human infrastructure will be transformational with investment in jobs, families and climate programs, schumer calling republican concerns about deficits hypocrisy after the trump era tax cuts in afghanistan, the biden administration getting ready to evacuate afghan interpreters and translators who helped the u.s. military during the nearly 20 years of war the flights scheduled to begin later this month, potentially tens of thousands of afghans could be flown to the united states the white house says it's working with congress to streamline the process by

changing legislation on the special visas that are needed. and anger in the skies the faa reporting 150 cases of unruly passengers in just the past week. that's the biggest weekly surge of the summer, about 75% of those cases reportedly involve people who refused to wear a mask much of the infighting and anger in flight directed at flight attendants their stories first person and the fight to keep flights safe, when tempers boil over, on the news, right after jim cramer, 7:00 eastern on cnbc sara, back to you. >> shep, see you then. thank you. shep smith up next, opec reportedly reaching a deal on oil production levels after nearly a two-week stalemate the impact that could have on energy prices ahead. tomorrow our exclusive interview with janet yellen on the outlook for the economy, inflation and her return from g20 and the global corporate minimum tax deal that she is

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welcome back back to mike santoli for a closer look at earnings expectations this's season whic are high >> gaudy, the estimates for this

quarter versus a year ago, 65%, 68% for s&p 500 earnings and two-year path for quarterly s&p earnings this is about the june quarter two years ago in 2019, $42 a share. the estimate is around $46 say we finish where we did in the first quarter $49, that looks okay, 12%, 15% growth over two years is not that impressive what have stocks done since the end of 2018 coming off the sell-off late that year, look at the s&p over that span, up something like 50%, 25% annualized, have essentially resumed the path we had before covid right from that low in 2018, so obviously aggressive valuations, 21 earnings versus 15 it doesn't mean it's crazy we're baking in future improvement to companies back then we thought it was the end of the cycle and now double digit earnings growth, probably not the case, next year is more

important on that score. >> earnings growth not necessarily top line growth but most trending down mike, thank you. energy the worst performing sector on wall street today and this as opec reportedly finally reached a deal on oil production levels brian sullivan has details for us hey, brian >> wilf, thank you very much i don't want to put the reported and reportedly there is no formal opec deal what opec meeting? the one from more than a week ago remember if where it was supposed to be aceasy one-day meeting, increase 400,000 barrels a day. united emirates saying no we'll agree to that but we want to change their baseline, lower production number where the quotas are based the meeting got scuttled and markets have been nervous that opec may blow up but here is the odd thing, guys. the reports are that there is a deal a couple fine tune things got a workout.

you'll add 400,000 barrels to the market which is not a lot, considering supplies and demand are going down by millions so you think the market would stay calm but the reality is, they're worried about covid variants, worried about future demand as well we may get an opec deal but it's not done yet we may have 400,000 barrels a day but demand could fall faster than that, stocks down today, oil the worst performing sector with energy stocks as well >> brian sullivan, keep us posted on that deal and by the way, thank you don't miss brian "fast money" where he will get former pimco chief economist paul mcculley's take up next on "closing bell" a top airline weighs in delta earnings, clindo 1% day.osg wn.6

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delta reporting its first profits since 2019, as travelers return to the skies. ceo ed bastian was cnbc earlier with an optimistic outlook despite the rise in covid vafrants >> we haven't seen any impact from the variants. we monitor our bookings, pretty good visibility, 60 to 90 days out as the news of the variant spreading we haven't seen any slowdown, any downtick in bookings people are ready to go the vaccines work. we have 72% of our delta people vaccinated and continuing to grow

>> let's bring in jpmorgan senior airline analyst jamie baker. thanks for joining us. what was your key takeaway from delta's numbers? >> we were pleased with ed's performance on your show earlier this morning and certainly with the guide. unfortunately it was not as well received by some of my competitors, largely on the basis of costs you'd have to ask them on your show to explain or give some granularity on but the cost guide that delta dropped was spot on with our forecast we would expect overnight that consensus of around 30 cents goes up to 45 cents it's the first time delta has actually raised, you know, relative to consensus since the fourth quarter of 2019. we have a positive view on today's report. >> doug, the whole group, jamie, has had a rough go lately, almost in a bear market down 19% or so from the recent highs. is that on concerns about the delta variant eventually hurting travel demand as it spreads in this country or -- what is it?

>> that's part of it i do think the reopening trade for airline stocks got a little' head of itself recent capx and capacity guides have created consternation from investors, the delta variant, a sluggish pace of international reopening. what i would say is that these corrections in the past 20% short term corrections have largely proved cathartic it's painful for current owners but this is usually the kind of correction from which, you know, we can look for an inflection point and new investors have a better opportunity to get in >> jamie, to what extent are people focusing really clearly on the debt levels of some of these names in a way that over the last year have been a bit more binary? things are reopening, stocks are going to rally kind of regardless >> i think it was refreshing that, you know, probably the majority of equity analysts on delta's call today did inquire on that topic and the plans for balance sheet repair and how the

company is going to, you know, balance that mandate against other priorities so i think it's absolutely a focus, but it's manageable and the fact of the matter is we expect the industry to emerge with x fuel costs that are sufficiently lower than future interest costs or the incremental interest costs so we actually see a path for the industry in the next three or four years to generate higher margins than it generated pre-covid. >> jamie baker, great to see you. thanks for stopping by. >> likewise. nice to do it in person. >> next time hopefully we will. up next, the key earnings and data every investor will be tcngn moow ssi wahi itorr'seson if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades.

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stocks close up slightly today, dow rose 44 points, tomorrow morgan stanley and united healthcare report results. we will also get jobless claims on a thursday and more testimony from fed chair jay powell. also a big exclusive interview here on closing bell, the treasury secretary janet yellen full interview 4:00 p.m. eastern.

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tonight on fast, we go right to the core of the market, apple breaking out investors giving the company a big shout out as apple looks to bust out, building more iphones. we'll lay out how to trade it. plus, big oil springing a leak the one top sector cooling off, but if you still love the group, have no fear, we have spotted something in the options market that could point to a big break out in one of those big names. and then pot, not hot. cannabis shares down even as congress talks up legalizing it. tim seymour is here to break down all the action. welcome, i am brine sullivan in for melissa tonight. thanks for joining u