>> absolutely the valuation concerns me.th anything, i think we've heard many of the panelists and guests come on and say, listen, it's probably the proper time to put in a stop loss or kind of express your view via options. if we go back and look at what has led us higher, it has been stocks with stretched valuations >> it is time to vote. america, the world, whenever you're watching, are you buying bonawyn's pitch on fortune brands >> hopefully you can see this. if you can't see it, it says i heart icebreaker icebreaker is bonawyn's nickname which i gave him which i happen to love. it continues to go higher here >> tim, what do you think? >> i thilike the call. here's what i say about valuations we've seen materials plays and resource plays during boom times. you don't buy them when they're cheap. you buy them when they're expensive. buy. >> brilliant dan, what about you? >> so kevin our producer is going to get mad at me i have buy my pen ran out here, people. i'm sorry, it's a difficult time my one caveat is i would buy

i think the valuation is challenging.hink nvidia has the pole position in some of the hottest sectors in the chip space. >> dan, your take? >> yeah i take issue with the thought that skpktations are low heading into the print obviously the stock is up 6% today. on the heels of this note it is also up 100% on the year 160% from its march lows yes earnings are growing 35% this year. 40% g. sales growth or so in the middle of a pandemic, that's phenomenal, but trading it 60 times seems a little aggressive. this is $300 billion market cap company. i want to put that in perspective. intel is $200 billion market cap company with -- $705 billion in sales. it is a expensive chip is it stock. they do have a good balance sheet. everything seems to going their way right now but investors start pricing in massive deceleration ratio next year and year after so acquisition of arm makes sense to me. >> dan points up the stock is up 109 year-to-date % it is up 210% over 12 months. do you take a chance on a stock people 12 months ago made

. >> kim >> it is the evolution of valuation. i think that we find creative ways and not necessarily we, but the analyst community and maybe we do, too, because we have to explain it. to take former comps and find new comps, and apple is a greatm example of that, because it was a hardware company, and then the blended multiple and now katy huber huberty, she is talking about comparing it to other technology platforms and talking about where apple trades at a slight premium or brands or consumer platform. so we have come up with the entirely new way to value apple, and maybe that is fair with 555 million subscriber-based businesses and all ancillary, and wed have seen and dissected it over and over again, but that is what is happening, the evolution of the valuation, and katy huberty in january had a 368 in the stock, and well out in front and we talk about it all of the time in a complimentary way, because she is clearly one of the most thoughtful analysts on apple, but in july she went from 330 to 430 effectively when the stock

levels, these are histor historical times the valuations are quite high. you got to be more selective we think we'll be facing increasing period of volatility due to seasonality factors as well as the political environment. we're increasingly more cautious at these levels. >> jim, i've been dying to ask you about roku we're looking at some of these stocks that have had earnings. you're not in roku now the stock has pulled back. it had me thinking the natural question as to whether you're ready the buy it back. >> here is the thing you got to decide whether you're going to trade roku or invest in it this is not from trading perspective isn't where we were in 019 and 2018 where the stoc triples over nine months yeah there was a little run recently but nothing like we seen in the past there isn't enough momentum for me to trade it, scott. on an investment point of view, you run into the obvious problem. it's got 18.5 billion market cap. i don't know how to value that people are going to say, detective, somebody will take it over amazon will buy it maybe that

the valuation can make sense tesla i have trouble with. shake my head every day. can't believe it's up on the same news of a stock split for weeks now. >> the stock split story, is there a reason why people would want to buy a stock after a split goes into effect in the stock and in essence goes from $100 stock being split 4 for 1 to four $25 stocks at the same time is there a reason fund menl lmey to want to buy these types of stocks >> is there a reason fund mentally absolutely not this is stimulus and liquidity and if you look at essentially what is going on, right? you have people as opposed to out laying $1500, $2,000 or $400, $500, out laying 150, 120 and 300. so it's to me like two things. the retail investor and cosmetics as you've said and fractional shares aside, i think it's not about fundamentals but you've got to pay attention what is going on. if enough people believe that the stock split is a positive and the stock continues to rally, the stock is going to continue to rally. hate to down trend on the question it's not fund m

thereafter, i think the risk reward is much more balanced the you have an elevated valuation in apple and per your previous -- for the previous discussion on cnbc, you know, there is some risk as we look into 2021 that nontech stocks and stocks that haven't done as well this year will have superior earnings growth and play catchup or maybe outperform >> tony, thank you for joining us >> thanks for having me. >> after the break, the u.s. economy showing signs of life today as jobless claims came in below $1 million for the first time since mid march we'll discuss the state of the economy with bank of america president of retail that, is coming up next ♪ ♪ i keep working my way back to you, babe ♪ ♪ with a happiness that died ♪ i let it get away servicenow. the smarter way to workflow. >>> let's bring in steve boland, pred of retail serve 3z 3 million mass market consumers. it's also part of the overall executive management team at bank of america. very good afternoon to you thank you for joining us, steve. >> good to be here, wilf let's kick off with the consumer the area you have such

credit spreads come down, valuations are almost always moving higher.redit -- directly by credit, they are indirectly saving the equity market. we are all debating whether the fed will buy stocks. they are already 80% of the way there by buying credit. alix: does that mean that we 's, even ifigher p/e the e does not go anywhere? michael: we are seeing higher p/e's. record low interest rates impacts that. when credit spreads tighten, the higher p/e. the most overlooked component of valuations is just the index composition. in a world of slow growth, very low interest rates, you have tech, discretionary, all of the growth stocks adding up to a huge component of the market. let me flip it around. if you take financials, industrials, energy, materials, they are less than 25% of the index today. that is an all-time low. those cyclical sectors usually carry lower p/e's. the fact that they have a smaller index representation is making the overall p/e go up a lot. investors should get used to hire p/e's for that reason. fed and the government will do whatever t

we have been talking about the heady heights and valuations. you think the nasdaq 100 may have hit a wall here, or can it pull higher? >> i think -- we can continue to go higher for no reason at all other than sentiment. as a fundamentally biased investors, you believe -- you need to have some cyclical rally that comes through for most of these sectors to come to fruition. i mentioned that because growth is outperforming value like 35% year to date. that is the historic spread. i think apple's market cap is higher than that of all russell 2000 together. it tells you about these distortions in the market. present opportunities to go perhaps in areas that have not participated. something we only look at with covid, but not all industries have done well. it is trading at a 20% discount today. i would suggest health care would remain an important part of our daily lives and therefore companies that are in the pharma and biotech will be bid up because of the fundamentals. i want to ask you an esoteric question about the types of people in the market

valuation of , we are aboutocks gdp.e you look at the markets, some can look expensive and some less expensive. ift we hope for is that global growth continues to be seen in the numbers, there will be a rotation a bit out of these expenses stocks, although they have great feature perspective --, they far expensive. we would expect a rotation from these stocks to other parts of the market which have been lagging since the beginning of the year. francine: fiona, final question on gold. gold?o you do on fiona: gold has become a substitute for bonds and it is a perfect asset that plays to roles.- plays two before, it was not interesting, you would rather prefer to have the korean won. but today in the u.s., korean won has negative yields. gold is a defensive asset which can protect in the downturn. an asset that can protect against inflation. we tend to believe it is interesting to have gold in the portfolio. francine: thank you so much, fiona frick chief executive officer of unigestion. coming up, a full roundup of what we

its valuation rises by 42.8 million bucks. it is 467.25. a little shy of two trillion valuation.storage, how much we use. ashley, the number. ashley: draw down of 1.26 million barrels. not as much as expected. we were looking in the 1.62 area. we had a big you are drawdown of 1.45 million barrels. i'm not sure how much a proxy for the overall economy and theory as demand goes up on oil the economy is revving up. so based on that theory, there may be the economy not drawing as much on oil as it has but again, a drawdown, at least it is not building of 1.6 million barrels. stuart: got it. oil at $42 per barrel. >> >> back to apple. stock of the day. what is that new high, what, apple? okay. okay. got it. now, susan, am i right in saying that apple's stock is probably the most widely-held stock of any in the world? susan: on the planet, yes, that is absolutely true. also the most influential on the s&p 500 since going back to 1980. so it is worth around five, 6% of the index and no other stock has had this type of influence in 40 years. now apple, we know that, look, iphone sales, y

companies which could really be -- i don't want to say devastating but it could impact valuations for sure. >> if you think about the companies that we'd be thinking about here that have the most exposure to china, it's really apple, as guy pointed out, but i'm not so sure that the valuations of google and facebook really reflect a significant amount of china. so, you know, i'm not terribly concerned about that i think the bluster and the focus on china and the common enemy and the things that, first of all, make a ton of sense, and i think are fair, but that also the -- the dynamic of just the political salvo that's attached to this, i think that's what it is again, i think it's a case where if anybody -- microsoft benefits from this. and the stress around this and by working with the white house, making it very clear, doing a public show of, we will make sure -- whether it's the capital markets revenues that need to be allocated or not, but that they're very clear, we will solve these issues with the government before we move forward, or there's no deal. i mean, what more can you do

it is worth looking at again, valuation matters in the long run. i do think it is worth looking at it balance out. you might keep asking yourself why do i own these >> in the 90s, a lot of companies were fake and didn't really make money. i remember them well there are real companies now where are you seeing value one sector has not performed there has to be sectors where investors aren't paying attention? >> you are right banks, it is ugly to think about them now and financials. it is not a great environment for them you'll see loan losses they are very cheap and that will work out. i don't know how quickly that turns. i think some of the industrials adding leverage to the economic recovery along the way if you are thinking about a lower risk area. utilities have traded poorly eventually and looking into some sort of yield. they look cheap relative to interest rates certainly not exposed hardly at all with regard to economic slowdown >> if you had to pinpoint what percent is government rauun and the stimulus, could you put out a number >> they did

but there's no hiding behind the fact that nvidia trades at a rich valuation, a very large premium to its peers at about 56 times next year's earnings as optimistic as i might be on this particular stock, i do think it's thefairly valued and there's somewhat limited upside. i'm going out to september and i'm selling the 450-415 put spread collecting about $22.60 selling the september 450s and paying about $10.60 on the september 415 put. net-net i'm collecting about a $12 credit on this $35 wide credit spread which is about a third of the width here. that's about $12 out of the money. my break even price is 438 i'm only risking 5%. so in the unlikely event that nvidia blows out earnings, i'm risking only 5% of the stock trade to take this bet. >> i definitely like the trade structure. it's almost impossible to short a stock that's this expensive and is definitely going straight up the street is pretty overwhelmingly bullish on the name but the stock has gotten well ahead of the average analyst price target sometimes that's a sign that investors know something that the analysts don't o

that's not reflected in the valuation today. we think as that acquisition is digested, margins and growth will accelerate both on the mortgage insurance side, think about who the customers are. first time buyers. and so they're in a unique position to win to the demographic shift as well. the market is concerned about credit they're concerned about forebearance we think it will be manageable we've seen the numbers come down significantly month to month since may. and, you know, these companies are significantly, you know, well capitalized and can handle the default rates four to five times what they are. i think as we get through the next quarter or so, there will be some relief on the credit side and those are, i think, one of the best places to look at housing today. >> darrell, let's talk about areas where sellers in such control that there are bidding wars for houses and what is it that buyers want today that they might not have valued so highly a year ago give me 30 seconds if you don't mind >> more than half of offers subm

> valuations in general let's be clear have come up across the board. i think when you deconstruct the three of them like a walmart, home depot and lowe's, i think walmart will have head wind because the expectations were so high and because i think it was around 80 million people getting $1200 checks that's in the stock. it does have a nice yield. i will say with home depot and lowe's, housing starts which we haven't talked about came out today up 22% which annualizes about a million and a half new starts that's incredible. really bodes well for lowearthquakelowe's than home depot. i think as the economy recovers this long term move into the suburbs whether you're remodelling or buying a new home will bode well for those two names. >> i agree that's such a key point. household formation was already poised to explode before the pandemic we didn't know if the 29-year-olds of 2020 were going to be renting in large metropolitan areas or going to be buying and moving into actual houses in the suburbs of those metro areas. i think we have our answer based on

i think where our valuation is centered is what you have to believe. to get to $900 a share, which is our price target, we have to believe that tesla sells 6 million cars per year in 2030. that's more than the combined size of mercedes and bmw today, and we have to believe it becomes the size of volkswagen, which is the largest car manufacturer by 2050 and we would need to have 10 to 12% margins at tesla so tesla is basically saying we're going to be way more profitable we're going to be a mass market car dpacompany, and we're going be may more profitable than a mass market car company by 2050, and that gets us to a valuation of around $900 a share that's purely our concern. it's not that, oh, tesla won't be a significant player going forward. it's that the market is baking in tesla being a very large player and having, you know, wildly profitable margins on top of that. >> really putting that $900 in context. we really appreciate you joining us today. >> thanks for having me. >>> we'll take a break here. still to come, he's got the third largest follo

company to reach that milestone, doubling valuation in just over two years. apple first reached $1 trillion in august 2018, 500 billion in 2012 remember, tim cook was named ce oh back in august 2011 the stock has surged higher this year, now up about 60% in the past 12 months, it has soared more than 120%. what explains that run of course, there was that earnings report in late july that blew past expectations, but analysts will mention other broader trends, too. one, they'll say that cash is king in uncertain times, and apple, as we know, has a lot of it with a net cash position of $81 billion. two, apple does benefit from the work from trend home as well, like the mac and ipad. plus many investors clearly betting here that apple is well positioned to benefit from the trends and digital health. kelly, back to you >> and what caught investors' attention as well was its growth in the service business to well just short of revenue, and is it short now? is that why the multiple deserves to expand one piece of that that will be so important is what happens with t

let's get to the first one on benchmark valuations through history.hat is the effective way of doing that? james: if you are going to look at history, you've got to be very clear about which portion of history you want to look at. i would say that the really important issue is to look at the connection between bond yields and valuations, and by extension, the equity risk premium. the forward return to taking equity risk relative to the current bond yield. i would say there, we are still looking at equities being cheap, hence my expectation that we can get to 3500 for the end of the year. wrong if goes horribly bond yields rise very dramatically, and there is a selloff in global treasuries. but i don't see central banks and governments permitting that to happen because to get rid of the real cost of the debt overhang that is now around the next of the global -- around the necks of the global economic participant, the real value of that debt is run down. for me, the long-term losers are the bondholders. the obvious long-term winners are investors in goo

you start to see some kind of valuation, multiple contraction here, combined with some general market weakness, that could hit this pretty hard i'm not opposed to spreads i love spreads, but this is a situation where if we start to see the market roll over, you're going to want to work your way into that spread wait until it starts to roll over and then look for your opportunity to sell downside strikes or roll this one this gives us more flexibility is there more risk yes. we're still looking at less than 4% of the current level of xrt by putting this on it's not a significant risk. it's a lot less risk than shorting xrt would be. >> carter, are there retailers whose charts you actually like even though you don't like the overall index. >> sure. i think walmart is quite good, target's quite good. we heard about overstock of the 88 stocks, overstock is the biggest weighting in xrt it's 5%. the next closest is 2. overstock is basically priced for bankruptcy before the covid hit. it was trading at $2 it's now at 100. if you look at all s&p 500 stocks, all technology stocks, stocks in th

she uses some of the parts valuation. i don't see why you would use sum of the parts valuation for apple. you use that for ge. it was 5% earnings growth. i think there's too much of a focus here on the magnitude of growth in a short period of time and not the bduration of growth i take this as a very weak, as a very weak upgrade and someone trying to justify getting on the apple band wagon and trying to use valuation models that be bolster their argument versus something compelling >> we seen this time and time again where the stocks get way ahead of the most bullish analyst. the fact of the matter is she was at 431 at a price target she had the raise the price target to bring her rating down effectively. does that make you a little bit more skeptical when analysts come out here putting forth a lot of the same arguments that existed for the stock before except for maybe the 4 for 1 stock split that didn't happen until a few weeks ago. everything else is pretty much in tact. >> i think over the last 8 to 12 weeks, you've s

the market has a melt up, it puts more air between stock prices and earnings in other words, the valuation multiple has been on fire. we had a p.e.-led meltup from 4.9 on a forward p.e. basis on march 23rd now we're over 22. it looks like we're going to go higher led by the big tech growth companies, as you can see today, for example. >> it's been a nice move back today from those companies what do you make of the debate between dprout and value, and that you're going to need or people think -- certainly there are those making projections that value will take you to the next level growth has gotten you here, but your scenario suggests that things are snapping back from the virus, that growth stocks are going to fall back, and it's value that is will take the lead. >> i don't know if it's fall back perhaps on a percentage change basis, you can see the lead for a while. i don't know about energy, i don't know that there's more up side in the price of oil, but the financials probably do have some up side here. especially if the perception is we are going to get a vaccine sooner or later, and

again, those high valuations for who are uncomfortable with those high valuations, options.ther e.s.g. factors could make a lot of sense, for example. could assess the split between the winners and losers hat this covid environment has created. alix: lauren, it's good to catch up with you. with new york life investments. investing e.t.s. trends. talk more about the growth and move into tech. this is bloomberg. ♪ alix: let's look at e.t.s. joining me is someone that market zes on those trends. sylvia, managing director of at direction, joins me now. sylvia, i was talking to lauren goodwin. look, the large cap work from ome, have a good balance sheet stocks that continue to work in this market. ow do you see this through the e.t.f. world? sylvia: i agree with that. the top eight names we hear bout every day are moving the market, particularly megacap and growth. microsoft, alphabet, amazon of the world, they're eally keeping the market going up. it makes complete sense. think most of the world impacted by covid and staying at additionala need for technology, semiconductors and

this valuation is reasonable they still lost money in the last fiscal year i'd point you towards slackn announcement that sales force made last week that they will allow employees to work from home until july 2021 when you keep seeing big employers like that making announcements, you want to own them it's getting harder and harder to own a zoom as it touched $300 today. $85 billion market cap but slack to me, ticker work, that can fill a valuation gap between the likes of zoom and i like that. >> a brand-new big name entering this year's spak boom. and later, filling the gap, the retailer is recovering nearly all post covid losses but what do they think is in ste?or we'll bring you the trade when "fast money" returns >>> welcome back to "fast money. spac, let's get to leslie to enter the game leslie >> melissa, when you thought who else is left to do a spac? another one hits it's gary cone teaming up with cliff robins now, robins' spac was on file from july 31st then yesterday the filing was amended with a new name, cohn robins as co-chairman of that spac they join a slew of other famo

i think from a valuation stand point people take that into account. when you buy in index etfs, there's no manager that making sure you are buying it on dips or the right valuation at this point in time american investors are saying they want in >> they want in and they want in the qqq despite the fact when you point out 48% of its value is represented by facebook, microsoft, amazon, netflix and google if i put money in there, aren't i just chasing the winners >> you're participating in this new economy. 66% of gdp is based on small businesses all small businesses have had to change we had to be embracing technology, communication, buying online. putting our data into the cloud. all these companies are pretty much in line with that and their growth rates are exacerbated by what's going on in this economy. nasdaq 100 embraces that >> david, let's go to a part of the investing world that is about as opposite as you can get from netflix and facebook and so for forts and that is gold gold has been on a run money is doing into it is it a smart place to put

nvidia, this one scares me because i can't justify the valuati valuation. i think it's stay at home because they have benefitted from the gaming exposure and ai and data center. on the flip side, they are open open name. that is because they have auto exposure i kind of want to play the auto side of things i don't think it's really well discovered or well talked about in terms of this part of the business you got a fabulous management team this one makes me a little nervous. i'm going going to hold on because i like the trends of where i see. >> i love it i can't justify the valuation. you can say that for like, i normally don't eat cake for breakfast but today i'm going to make an exception. it sounds like everybody is saying that. jump in here josh. >> i would just say on nvidia, while i can't justify the valuation, i like a lot of their end markets and total addressable markets. i have managed the position sizes. >> go ahead, josh. >> i just want to point out like apple is absurd. it's the greatest company on earth and maybe the greatest publicly traded

we break down the valuations.omberg. ♪ coming up tonight, coverage of the democratic national convention will continue with david westin at 9:00 on bloomberg television and radio. ♪ the s&p still going nowhere. so is euro-dollar. the dollar index had a powerful rally, the biggest since march. there is still a bid in the bond and in europe. the yield is down about three basis points after the fed disappointed by not advocating any yield curve control. in the markets, let's talk about unicorns. take is outperforming. airbnb is going public. they filed for an ipo. we will bring in scarlet fu for more on the platform. there is a plan confidentially and now in this market where you can make an argument, it is really rough. >> the company needs to write some money. there is no word on the number of shares or the timing of this listing. the valuation is a moving target because after six rounds of private funding, airbnb's valuation peaked at $31 billion mark on 2017. different world. along with over and lift, -- lyft, it

and this valuation that we are experiencing right now. you know, another thing that we have been talking about as we see -- and this is a great chart. i love it. in the white, you see u.s. tech stocks. and in the blue, you see the stoxx 600. u.s. tech stocks equipping the total value of the stoxx 600. another thing that has contributed positively to weakness in european stocks is the strong euro. 119, now, we see it around but we are starting to get more and more forecast for 120, 125, even 130. what do you expect in terms of the euro? because that clearly contribute to european -- at least european investors are interested in this stock. stephane: absolutely. so the first element i would say, in the move that you are describing, it's coming more from the dollar weakness than from the euro's trend in the euro is nothe appreciating against other currencies. there have been two elements that can explain a little bit this appreciation of the euro against the dollar. the first one has to do with european politics and the european union to mut

risk when youd of get these kind of valuations. of reality.ose last time you were on, my daughter interrupted us with a tantrum wearing a helmet, so only fair. bringing his ian thoughts on the u.k. and brexit talks yet again. this is bloomberg. ♪ alix: this is the european close on bloomberg markets. brexit talks resume in brussels today, the u.k.'s top negotiator will be discussing at half to a deal over dinner. seven weeks ago for the u.k. and the you -- and that you -- toi-e.u. -- and the e.u. make a trade deal. can you update us on the main two sticking points? the main sticking points in the talks at the moment are a --heries -- of the series fisheries. one of the main aims of brexit was to reagan control of its fishing waters, that is a big sticking point that has not yet been resolved, and you also have an issue where the e.u. once the u.k. to continue to the aligned with labor policy, state aid. whereas the u.k. wants to have the freedom to make laws in such areas to the benefit of brexit. headways there been any during the

it's not going to change the valuation of the story for the company, but hey, stock price might go uprasso? >> i think you have the ability -- we're really on the precipice or the cusp of seeing some rotation out of tech and into value i think once apple started with the split conversation and then tesla piggybacked it, it really put all those plans of a rotation on hold i think what you're going to see now is this maybe won't be what history has shown us, brian, and maybe you get an opportunity to watch value and kicyclicals sta to perform on the cusp of what we could see another rotation on the back of what powell had to say yesterday as well. >>> now it is time for final trades already bonawyn bonawyn eison what is your trade? >> goldman sachs trading about 60 basis pointed priced to book. >> nice 6% pullback on dl horton i would be a buyer there the valuation is still good. i'd be buying dhi. >> bk? >> i'm actually concerned that the yield curve has steepened but the financials haven't really caught fire yet so i'm a seller of xlf >> steve grasso, maybe your pick was shake shack o

i like lowe's better just from a valuation perspective. typically home depot trades about two times higher than turns. right now 4 1/2 turns. i do like that over home depot but i do think ultimately those stocks could be in a position where if you do get a stimulus deal, you get a little bit of a short-term pop >>> on deck, the market sputtered for days before posting a new record close coming up we're going to be joined by mike wilson to find out where that might y that mig for concern. >>> later, a natural gas breakout something we haven't seen or talked about in a long time. before money, people traded goods. tools, cattle, grain, even shells represented value. then currency came along. they made it out of copper, gold, silver, wampum. soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. that's why it's time for digital currency and your investment in the grayscale funds. go digital. go grayscale. and then foun

with the elevated valuations, there are gains to be had.estor believes he or she can benefit from a lower capital gains rate going forward, i think it does prompt more interest in putting capital at risk. i have always been a believer of a risk-based system of investment in this country. i do think it would be additive. the question has been in washington about the president's or any executives of authority to affect the rate. we have not seen a lot of details on this, but i believe the way the white house and president trump go about this is to provide an indexing on the which woulds rate, then allow for an investor to avoid the inflation of the impact of an increase in valuation. as you say, with rates and inflation so low, perhaps the impact of a move like that would be more muted. it will still send a signal that risk-based investors should look positively on an development like that. david: as a matter of governance, with the president coming in with four executive orders and talking about liberal arts colleges. what are you doing to p

remember, these higher valuations, especially growth stocks, are occurring because they're long durationong bond when rates go down, long bonds do better than short bonds same thing in the equity market. that's been a huge tail wind for the big high capitalization growth stocks that have carried the market higher. move up in interest rates. even a little bit probably casts a bit of a slowdown in all that good activity. >> and this submit between the real economy and the stock market, how long will this be a divorce that is ammicable? >> well, that's a great way to put it look, we are in the midst of a very strong gdp quarter. third quarter real gdp is going to be 15% to 20% maybe higher and therefore, earnings are going to be pretty good. but it desell rates from there as you know, the stock market likes that second derivative if it's going to start slowing down at these valuations, kind of what's the impetus to move things higher? >> bob, if we were to get approval of a vaccine. what would that do to markets? >> it pushes them higher for a period and then people will step back and say,

even though valuations are getting high.ery short term, next couple weeks, no longer than september i think you can still go with momentum and be safe. particularly with your semiconductors, so like qualcomm and nvidia, those guys that have some much their highest prices above their moving average. 50 day, 30 day, i think those continue to be winners in september. charles: i mean semis act great together. advanced micro through the roof. nvidia with new game cards. that stock is rocking. you always rock, shah, phil, erin, thank you. have your pencils ready when they speak. on thursday i'm hosting a town hall "america invests together." when it comes to your own wealth. we have bar stool sports founder dave port i don't will join us. how you can take control of your own wealth. on fox business and instagram. invest in you at foxbusiness.com. we'll try to answer as many questions as possible. watch to be a part of it. joe biden wrapping up the speech moments ago. he took no questions as he tries to get ahead of president trump

also valuations. we really like ross stores valuation. this is a pun that we were talking earlier with tom about you have to select where you're going to put your dollars as it comes to retail stores they are maintaining their social license to operate. that's an example of placement we feel good about in the retail space. >> why does it have to be what it sounds to me, i know i'm going to be a little over the top in the way i ask this but lulu or bust can't there be other retail winners beyond lulu. it didn't mean that everybody is wearing lululemon every day, all day for the rest of their lives or the stock would be up like 8 p million percent. >> you really do make a great point. i agree with that. if i'm going to have one of my stocks that i continue to ride that trades t a pe multiple that's extremely high and they still have growth, that's the one i'm going to select. i'm just comparing those two because the multiples are so close. >> we'll take a quick break and come back. we have our call of the day on dex. we'll debate that, next

i think the valuation is really tough. since about $110 i took a position and cut it by 80% i'm happy to still be long on the stock. i took a lot of exposure off $40 ago. my sense was it was very expensive then and i was playing with the house's money it's a fascinating company i think everything that's good about square is why you wouldn't want to own bank of america. therefore, i think you do want to own some square but i would be waiting for a pullback today. >> the big question is can it even come close to replicating that going forward if government stimulus is not quite the same as it had been during this past quarter in terms of getting reduced? that was a big reason why we had that boost, dan. >> listen, the cash app well positioned they have been moving into investments and loans. you know, some of these square capital business was something that was really exciting until small businesses went into the tank it was that peer to peer now it's going to be a pay with square cash will be the huge thing. they're taking

one of the dynamics that is curious here the premium valuations will be one we watch for sure.a decade now. >> a good question thank you. why don't we get that question and more answered right now. maybe you can answer that. you just wrote a big piece about walmart as well investors really don't seem to care that much about values right now >> you talk about stocks and walmart in particular. they are the big winners in covid. drawing investors more than anything else is the fact that these retailers and some other technology, i'll make that parallel not only have had an opportunity to stay open and grow their businesses but they are doing so in a way that i think they are going to keep clients permanently. they've had an amazing opportunity to show what they can do through customer service, delivery, et cetera. because of that, you are saying, okay longer term, who are the stocks not only doing well but have an opportunity to do well no matter what happens that's drawing clients in. this is one where you are truly trading off future valuations and the fact that business can exp

this has been a darling of silicon valley for quite some time, the valuation has changed.hey've been able to raise plenty of money in the private markets as so many companies have, but there seems to be a hope that unlike many companies that were able to do so and therefore push off their public offering to the point where they weren't growing anywhere near as fast, there seems to be a hope that in this case their larger growth prospects are still ahead of them. >> we had a discussion about this yesterday, sort of related to how covid flipped the switch on a lot of issues, jim, would a pre-covid airbnb ipo have been as compelling as it appears to be in the offing now >> no, not at all. >> snowflake today -- >> i'm sorry. >> it's turned a bunch of things upside down. >> their business fell off about 80%, they didn't see anything come, they did layoffs, then the tables were turned people decided hotels were more dangerous, lobes, elevators, difficult to clean versus homes. a pool at a home versus a pool that's a community pool at a hotel. so now business is off the charts an

there's valuation there.hey're going to get market share, it's a defensive way to play tech because it is in the tech space, but it certainly could participate in an economic recovery through the payroll. >> and then really quickly, last question here, a lot of people have questioned after the executive order and the memoranda this week from president trump if we will ever see another coronavirus stimulus bill if it will be need and that's baked into the market. if we don't see another stimulus bill, what happens for the markets? are investors on shaky ground or does the fed step in what happens then? >> think you definitely have a fed backstop here. they've shown a strong commitment to providing support and liquidity to the markets. i think the markets should be relatively a new front. a lack of a stimulus bill, i think, the ultimate outcome would be that you would potentially see a larger divide between economic activities and asset prices as the u.s. consumer may be left behind in that situation. >> and, m

let's get to the real valuation question. >> valuation, as you know in the market has been fascinating topic right now. i think investors this year valuation we're really looking at multi-year story. when you look at that, there's two key things, technology test the leader in both areas. liu at the number of vehicles on the road, approaching a million, equity which aring data, that's incredibly important and order of magnitude more vehicles on the road than anyone else. the power train technology really proven a differentiated battery technology as well as engineering through power train as well as operating system technology really still the only company out there that has updates on the operating system. when we look at the efficiency of their power train batteries, make the claims, really production at this point remotely close for this sort of performance. so from that perspective, you know, we're still very bullish on the position. market found its level in terms of stock prices but we see tremendous amount of operating leverage, certain people paint a premium for disrupter in the

are there new valuations how long can they keep up this incredible move? let's start with the $2 trillion apple. i've been recommending this since it was at $5 it's now at $503 my haters admit i got this right. must have crushed them apple trades 33 times next year's earnings making it expensive for tech stock but is apple a tech stock if we value this like a consumee superior apple has great technology but the real value proposition is service revenue stream the 99% customer loyalty assures there is a lifetime value to everyone that buys any apple device you think proctor and gamble as that, colgate, clorox? no they have comparable valuations where they are and just like that apple makes necessities in this digital era plus, unlike those stocks apple has multiple revenue streams, smart watches, air pods, the hardware is a mighty river running in parallel to the service revenue stream which would be one of the largest companies in the world if they spun it off. not that they would do that. they can get you paying for news, entertainment, cloud ba backup an

i think that is where people are missing if they can't get their valuation three to five years down they high margin that sells into all of the other factors. >> what does this run in tesla validate, if anything, except for just tesla itself? >> i would love to see other companies spending money on r m mr&d. they have so much cash and they don't know what to do with it. disregarding those like apple and google but they have not figured out ways to reinvest that because that would be great for the kmern economy as well, right more investment in r&d it would be great for our economy overall. if you're taking anything away from tesla, make moonshot bets, spend millions of dollars it takes to create products that might be three or five years away the hesitation toward spending money and innovation was so high because you're trying to hit quarterly eps arguments, right wouldn't it be great if everyone earned a little lesson and said let's invest more in r&d walmart is a terrific company, but they launched their amazon prime competitor 16 years after amazon prime was launched. it took 16 year

investors pushed back on the company valuation, and they believe that rocket should be priced as a consumer or financial company rather than as a technology business. rocket is controlled by billionaire dan gilbert. that is the bloomberg business flash. tom: i really want to say the data right now is more than interesting. green on the screen, but that is not the story. yields come in, no question about it that the 10 year yield moments ago broke down to 5.313. atyear bond at one point -- .0012. yen 1.0561. -- at 105 .61. lira unravels this

we'll see it go back to what we typically look at in a market environment where as we have valuation may still be a positive contributor but we don't see it as the surge that we've had in the last two or three months we're seeing a calming of the market we'll be in a range because we're also seeing that the profitability stocks are once again taking a lead of the market and we'll see some more positive relative to high profitability stocks relative to low probability stocks and we're seeing that going forward. that's what we're seeing in the marketplace. we don't expect the surge to continue >> kate moore maybe even more reason why you need a sustainable move, perhaps in those value or cyclical names. >> yeah, perhaps i want to go back to something josh said that some of fear has been removed from the market i think a lot of this has to do with coming out of second quarter earning season the confidence has been restored in companies ability to sort of navigate this very difficult and uncertain environment. you didn't have to get a lot of guidance in order to really pick up on a posit

bubble, stocksa trading at ludicrous valuations. more you have much impressive companies in dominant market positions. it is not the same, but there is the sense that the fed has got my back, don't worry, we can take risk. >> clearly, this market is betting the fed is going to keep on keeping on. what does it need to hear from jackson hole? >> there is a lot of discussion about what they might here. there have been articles talking about the fed moving from a 2% target to a 2% on average through the life of the cycle. if that is the case, interest rates can stay low even if inflation goes beyond 2%. we are not on the cusp of that, but in theory we could go to 3% or more before the fed has to act, if they go to the 2% average. we will hear what they have to say. it is an ongoing study they have been looking for over a year. it is not just about covid, it is about how do we fend off the potential for more the potential for more to various things like deflation? more nefarious things like dictation -- guy: will rates stay low forever?

a question mark are we now entering the next phase where it has to, let's say, catch up with its valuation? two more slides. this is a slide incredibly if one had put $10,000 into tesla at its ipo, a whopping 1.2 million. that's nifty just to put that in comparison, the final slide, look here if one had put 10,000 since tesla's ipo in other marquee names netflix would have returned your 10,000 you'd be at almost a three bagger, 239. amazon you'd have 280,000. and apple 130. not bad 10,000 to 130, but no tesla. in any event, the thinking here is it's a bit hot, dormancy, sideways >> amazing first off, 10 grand into 1.2 something million. unbelievable your dormant chart made me think about charge time versus run time maybe the stock will be the same way. mike khouw, what's the trade now on tesla >> it's interesting the technical setup carter is talking about. if you take a look at how options are currently priced, they're not exactly expecting a really dormant period. the implied volatility on tesla in the options market is about 80%. so if we think about it, that means the options market is

divergence within the market in terms of valuation. one where youe is have a partnership, a monetary-physical partnership. >> we got less supply. we've got demand being stimulated. that should lead to higher prices, otherwise known as inflation. >> if you have a ton of cash, you've got to step up and put some in. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. simulcast on bloomberg radio, bloomberg television. lots going on here, including jon ferro and lisa abramowicz out, and only one person can replace the two of them. that is anna edwards in london. we are thrilled she is with us today. off of the fed minutes, the markets adjust, and they readjust back today. steve engle at standard chartered with a blistering note about the fed minutes being reinterpreted. we've got some breaking news. i don't know if you see it there i home in london, but this is critical. alone,leaves the rate and we get turkish weakness of that headline. mr. erdogan simply doesn't want to ra

let's talk more about that now with who else, the dean of valuation. it's good to have you here my main question surrounds apple whose p/e mull approximatiple i time high and been building over the past weeks is that a red flag for you >> by itself, it's not i think the pandemic has played to the company's trend it's made them stronger while making the competition weaker. as i looked at the last five months, this pandemic has rewarded companies that have flexibility capital and can make it scale up and down think about the companies we're talking about, they're all have that capacity. maybe you can argue, but at this price they add value but i think it's a solid base. >> you would be comfortable with apple at these valuations? >> if i were entering apple right now, i'm probably asking for a bit of trouble because it's priced to perfection. if you have apple already in your portfolio, i'm not selling right now which i think is an indication of where i think apple is at the moment >> let's talk amazon do any of these jump out to you as being overvalued?

♪ >> you thing a lot of divergence within the market in terms of valuation. >> there's a disconnect betweenhat is happening in markets and what is happening on the grounds. >> main street is dragging. >> the pace will probably slow down now that we've had this quick rebound. >> we've got less supply. we've got demand being stimulated. that imbalance should lead to higher prices. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. it is a simulcast. good morning on bloomberg radio coast-to-coast, good morning on bloomberg television. good morning particularly to those of you on sirius xm. lisa abramowicz survived camping in the adirondacks. [laughter] lisa: i did survive, and i heard that you are really good at portage is, so we are going to do a lot of canoeing. back then, it used to be birchbark canoes. of course, lisa was totally wired up in the adirondacks. did you have anything at all? lisa: no communication, no internet. i am glad to be back, though. a pretty active late august, all things considered. tom: it is, lisa, w

but at some point over the long haul valuation matters. >> market structure.ppreciate your time and your candor have a great day, okay. >> thanks for having me. >> all right take care. coming up here on world side exchange, joe biden talking taxes and a potential tax increase for some. he becomes president we'll tell you who first as we head to break, some of the other top stories on this monday long time trump aid kelly anne conway leaving the administration she will depart to focus more on her family meantime, the on going outbreak lead to a record number of bankruptcies by large american companies. according to the financial times as of last monday, 45 companies with assets of more than $1 million have filed for chapter 11 surpassing the level seen during the financial crisis. >> a record setting auction this weekend as an autograph mike trout rookie baseball card selling for $4 trillion. the previous record of 3.1 million for a 1909 back in 2016 not bad for a kid from millville, new jersey. you go mike trout. go angels. not your year but congrats for the c

we talk about the relative wakeness but i think it's important to point out tha just in terms of valuation at a $270 billion enterprise value and that number might surprise some people, but they have taken on a little bit of deb since this began and the valuation of the business might not be as cheap as you think, probably at the pea of $318 billion and of course it is trading at a lower valuation and just consider that virtually every aspect of the business is severely impacted by what's going on except for disney plu as tony pointed out. and of course as good as that is it is not enough to make up for the other things going on here. >> for everything "options action" check out our website. while there, you can sign up for our newsletter here's what's coming up next >> announcer: coming up, mike khouw has a way for you to share a ride on uber >>> plus, calling all "options action" fan, reach into your and jab your phone and tweet u your question@options action if it's nice we'll answer it on air. "options action" sponsored by think or swim by td ameritrade ♪ ♪ you say the customer's makle