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tv   The Exchange  CNBC  July 20, 2020 1:00pm-2:01pm EDT

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most prestigious universities in the country. dropbox is a great name. >> josh? >> i'm going to change mine. i'm going to reiterate verizon i think this is a smart place to regenerate capital >> joe >> dropbox >> good to see everybody kelly, it's all yours. >> thank you, scott. hi, everybody. here's what's ahead of us. the clock is ticking in washington to get another stimulus package done. we'll have the very latest and what happens to the economy if that $600 unemployment benefit gets reduced or goes away. mark cuban says the global pandemic reminds him of a dot-com bubble and warns people not to get too greedy. can anything stop amazon that would be all ahead in "rapid fire" today
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>> kelly, so remember last week we were talking about how value was outperforming growth last week that lasted exactly one week today we're back at the old pattern and it's basically growth and technology virtually over everything else there's the dow flattish on the day, but s&p 500 still trying to get over that 30-32 hump not easy to do, but tech overplaying, the investments, the bank stocks all did very well last week they're a little lower today amazon had an awful week, down 8% last week guess what, it's regained a good part of that loss today. alphabet, apple and facebook all on the up side the trend is we're back where we were the work from home stuff tends to do very well. this happened since that june 8 high we hit, so the pelotons and zoom videos of the world doing very well. what we call the reopening stocks, the travel and leisure
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stocks, are not doing very well, and we saw this last week fairly consistently for a while earnings, we're about 10% through earnings season. we have about 10% stock in the s&p this week. this is the worst quarter since third quarter of 2008. we'll see if we can get better numbers, but so far, that 44%, that's not rising at all, guys back to you. >> it's going to be rough when navigating all that, bob thank you for now, bob pisani. let's get to washington where the next round of stimulus talks are officially underway. kayla tausche is here. how you doing, kayla >> they met with republican leaders to hash out the roughly $1 trillion response that democrats passed totaling about $3 trillion in may as part of this new effort, president trump is again proposing a payroll tax cut.
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the president believes this is more politically defensible han helicopter money, and as a stimulus, it would help both companies and workers, as long as those workers are employed. >> i think it's a very important thing. it's very good it's been proven to be successful it's a big saving for the people il it's a tremendous saving, and i think it's an incentive for companies to hire the workers back and keep their workers. >> reporter: as far as the response in the room, senate majority leader mitch mcconnell did not appear sold, but for those americans who are part of the 11% or so who are unemployed, the administration wants to tailor the aid in this fifth package, narrowing the number of families receiving direct checks and targeting hardest hit industries like restaurants for business grants and also protecting stores that open from lawsuits if the virus spreads there. now, the treasury secretary said that this package in particular
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will focus on jobs, vaccines and kids discussions with democrats will happen next now that republicans are on the same age. kelly? >> we'll see how quickly they move kayla, thank you very much to talk more about one particular piece of this, that $600 a week unemployment benefit. it's currently set to expire at the end of next week isi estimates if that goes away, it could be a 2% drag this year and less jobs as a result. some could see their been fenefs cut by 72% former senior adviser and economist for the treasury department under the obama administration it's good to have you, ernie, and welcome. first of all, you're talking about a 2% percentage drag on gdp? >> sure. it sounds like a small
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percentage, but you can think of that as a typical pre-covid year of gdp that we would lose. >> i don't think it sounds small at all we can ill afford to lose that there are various proposals underway about maybe trimming the benefit by -- going from $600 to maybe something a little bit less the only reason it's at $600 in the first place is because the jobless benefit systems didn't have the technology to just replace the wages that people were making, which was the goal here what levels to you would kind of achieve that goal, and how long should it be extended before it does more harm than good for the economy and for these workers? >> i think the smart thing to do would be for congress to find some way to keep generosity constant and maybe finding a way to address concerns about job finding while still maintaining that if emergency unemployment insurance, if the $600 a week goes away entirely, that's $18 billion a week in federal support that would disappear
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and as you showed earlier, if you're a worker receiving unemployment insurance benefits, then overnight your pay would essentially go down by 50 or 75%. so that would be a major drag on the economy. >> although i believe there are some various state programs where you can receive a benefit on some level. of course, that would vary a lot depending on where you live. did you look at optimal responses? what would your analysis point to as to what congress should do next >> we looked at two things we looked at the macro benefit from this extra spending we also dug into the jobs data with a microscope to see if there was any evidence that the extra benefit was having an effect on job finding, which is the primary objection that you hear to this emergency response. what we found on the job finding front was really interesting there is no correlation between the generosity of someone's benefit and whether or not they found a job in may or june it doesn't mean it hasn't happened in isolated
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circumstances, but it does mean there are lots of people who had very generous unemployment insurance, maybe even getting paid more than they got paid in their jobs before, and yet still took a job in may or june. so i think the risk of cutting this macro benefit too early that is clearly helping consumption, the economy overall, right now outweighs the risk to possibly job finding from having ui benefits that are too generous >> what about some of the other ways to get cash to households, basically? the payroll tax applies more if you're working, but it does apply to savings for employers who could use it to hire people. there have been an overlap to those receiving checks and those on unemployment. is there another way that the program could help people displaced by covid >> i think unemployment insurance is a typically good, well-targeted program, because it goes to people who need the money. and prior economic evidence has
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found that they have a high likelihood of spending that money, so that means for economists like me, we see a lot of possible stimulative effects from ui spending payroll tax cuts can have an effect as well, but it's twofold. number one, payroll tax cuts are already deferred up to two years under the cares act, so you could cut businesses' ultimate tax liability if you want to, but that may not help liquidity in the very short term the second thing is you obviously have to be employed to see a benefit from a payroll tax cut, either from the employee or the employer's side. so if you're one of the 30 million people currently receiving ui benefits, that by definition doesn't help you. >> no, it makes a lot of sense is there a dollar level here that you think we should kind of focus in on as a takeaway? >> i think that the smart thing to do for congress with regard to the unemployment insurance
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benefits would be to maintain the generosity in the short term if they're concerned about the risks of, you know, generosity being maintained too long, they could tie that $600 a week to state level unemployment rates so that, you know, the $600 would only go away if your state saw an extraordinary recovery. the other thing they could do is they could keep the $600 and give an extra benefit to workers, to people who find jobs that's another way of aligning the prices between unemployment insurance benefits and work that would address some concerns about it i think either one of those would be big maintaining $600 a week for the rest of the year would cost about $4 billion, but the economic outlook is getting more uncertain now, not less. so i think going bigger is the smarter play at this point >> like you said, the idea is to avoid a self-inflicted recession
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which would probably cost a lot as well. ernie, it's great to have you. thanks again ernie tedeschi from isi. investor mark cuban is warning investors about the week's lows. on "squawk," he compared this to the dot-com bubble of the '90s >> in some respects it's different because of the fed and the liquidity they introduced and the inflation that comes with that, but on the bigger picture, it's so similar the only way you get to keep that money is by cashing out don't get greedy fat hogs get slaughtered >> head of investments and brian weinstein is head of fixed income at morgan stanley management just to what mark cuban was saying, are you similarly warning your clients >> well, it's certainly befuddleing the way the market
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has acted. the gdp is going down 20% in the second quarter relative to a year ago and earnings going down 44%, as you pointed out, yet the market is only up 4% from the high in february the outlook from now to the next couple years, compared to back in february to the next couple years is quite different so why is the market at the same point? it's got to be liquidity driven and not really fundamentals driven that's why we're recommending safer, low-risk stocks without paying too much for them, because there's certainly some pockets of the market that are way overvalued at this point, including the tech sector, for example. >> so we'll come back to some of your top picks brian, i know you're more in the fixed income space, but liquidity should raise all boats. do you find it pushing the value to the extreme >> we watched the equity markets
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with awe and a lot of this is amazing in liquidity real estate interest rates really aren't moving and people need income. if you're going to sell your equity, if you're going to take profits, you can still get 5 or 6% in high yield, you can still get 3 or 4% high yield we're seeing a lack of volatility, and that is a good thing. it causes investors to find yield, to find a place for their money if they don't want it in equities >> mark, whydo you think some of this is at 5 or 6%? those kind of yields are getting harder and harder to find, are they not, and will continue to do so, i imagine you've got the fed in there buying >> the market has been very efficient, right if you look longer at the curve, obviously the higher quality companies have done better and
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they do well when equities rally really, really hard. the fed has chosen winners, that's investment grade and falling angels and a little higher index that stuff has done the best really i think the stuff investors need are security right outside that band. the fed didn't buy everything, so there's still some good yields out there, but you're right, there are securities that yield 5 or 10% and those are riskier so you have to build a balanced portfolio >> you think the sector is much overvalued, you much prefer the russell value trading at 18 times. what about people saying this is about the world is changing and change has accelerated because of the pandemic, the way people work is different, the way people live and order online and hop is different and these valuations match that. >> no question about it. amazon, facebook, google, all these companies are going to be around and they're going to be
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very dominant and they're going to do very well. whether you want to pay 149 times earnings for amazon today, that's a different story and especially in this environment they're going to do well they are covid proof stocks because they actually benefit from work at home and all that the question is the outlook is so murky for the market that you really don't want to pay that much for that safety you would rather buy companies that save in their own way like costco, kroger, autozone, companies that have a focus away from cyclical stocks, yet they're not in the tech sector which is so expensive and you're paying anywhere from 15 times to 25 times for eli lily, for example. so you're not overpaying, but yet you have safety and low risk, because it's important in this environment with the outlook so uncertain, especially
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given the fact that the pandemic is accelerating and we don't know what's going to happen. we don't know if it's going to go down again, how quickly it will there is so much uncertainty jeremy diamond said it it's hard to predict the outcome. it's best to stay safe with your picks and not overpay for them, and that's what we're trying to do in our global investments >> lots of examples of that as you just gave us thank you both, ernesto ramos and brian weinstein. we're reading the tea leaves and they don't bear well for europe, with several countries faring worse with covid. we'll look at whether other nations could follow britain in leaving the eu plus mall owners sweeping to the rescue of retailers. is it what the industry needs right now? take a look at the sectors technolo
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but there's a stark difference between those airlines and air freight and everything else, landbound like fedex, c.h. robinson and j.b. hunt donald is back with us i hear europe is doing better than the u.s. and i hear that u.s. is doing better than europe what's the story >> it's a bit of a curse, if you will, and in some areas they are so strong you just want to be e bbe be elated. other parts are just bad and continue to get worse. volumes in and out of the eurozone, particularly out of -- in and out of the eurozone
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things that are very high tech, things are shipping back and forth with asia in particular. >> so let's start, actually, with what you just said about -- was that a chinese port, was that gwong-do? >> fedex's main hub, gwong-do. >> how does that tell you it's doing around the globe is it almost back to normal? >> what's indicative is the way each and every economy is responding to covid and the prevention of it or the dealing with it. and more and more, what you're seeing both in north america and asia is our technological responses. we're going to figure out how to automate, we're going to figure out how to do it with technology, not do it old school economy, and in order to do that, you have to ship lots of parts and pieces, high-tech
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stuff. in areas in which they're not doing that, they're leaving -- staying with the old school economy, you're not seeing that and you're not seeing a return -- rebound in the economy as well. >> let's zero in on what you're seeing in europe in particular, and again, the risk here as you've described is that they have kind of a multi-speed recovery you had the south get hit worse than the north with coronavirus. of course, the economy is responding differently as a result and it's a fundamental tension between those economies. >> the charm of going to certain places in italy or spain or the coast of france, greece, the little shops where all the bread is baked by the guy that you see behind the counter they didn't experience going to big box, much less going from
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big box to amazon. they're still doing mom and pop shops everywhere that's part of the culture it's the charm, but it also means they're way, way behind in introducing technology and make their businesses not only more efficient but hyper-efficient. >> this is an opportunity, like you said, to maybe make that quantum leap forward and go tech heavy and tech forward and all that does this suggest they don't have the resources or a lot more is going to have to be done at the european macro level to get the whole recovery on track? i can't imagine it bodes well for the u.s. we're still big trading partners >> i think we'll be just fine. i think part of it is resources, but i think really much more of it is culture. it's the old alvin toffler future shop. we're willing to adopt a much bigger change in technology than they are, and as a result, as we put that in place, technology is productivity, productivity is
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prosperity, and part of it -- the technology is available, it's whether or not you are, as a society, willing to adopt it and accept it and make it part of your everyday life. if you are, you benefit. if not, it might be a charming place to visit but it doesn't mean you'll keep up with the rest of the world's economy. >> i ask you finally what would you say to investors across your coverage universe, does it expose more names you might want stay away from? >> certainly ups has a far larger asian exposure than fedex does, fedex has a far larger u.s. exposure. that said, beyond that, it's do you have companies like fedex, xpo who are willing to adopt, you know, massive amounts of incremental new technology xpo literally wants their
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freight people to never type when you adopt large -- it's the technology age if you take it on and they're willing to put it in place, guess what, you get to be more efficient than your competitors, and so you provide better service at lower costs, and that usually wins >> yeah, so you're betting not just on the locations that are investing in tech, but on the companies themselves donald, great to have you, as always thank you, sir donald broughton coming up, a closer look at the coffee wars. the stocks that have been outperforming. as california blocks most schools from in-person instructions, will parents opt out? we have the very latest from california you can always listen to us looi live on the go on the cnbc app "the exchange" is back in a couple ♪
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welcome back to "the exchange." here's a quick check on markets about half past the hour look at the nasdaq just storming out of the gate today. it's up 1.4% amazon is up nearly 6% remember, that's declining about 8% last week, so it's already climbing back. nasdaq is about 8 points off the lows there, the s&p is up, splitting the difference about 15 points. big deal in the energy pack, chevron agreeing to buy noble energy it's the largest oil patch takeover since the coronavirus pandemic hit shares rallying at just about 5% how about cal-maine? they're the world's largest egg producer egg prices have been up, consumers have been stockpiling during the shutdown.
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the company said it will not pay a fourth quarter dividend given its current variable dividend policy finally let's look at mod n moderna after they overvalued the stock. they're still up given their promise of delivering a vaccine. they're down 14%, so a pretty sizeable chunk today here's your cnbc update at this hour. the uk has suspended their treaty with hong kong. under the law it suggested access and collusion are punish believe a by life sentena life . in the united states, they have accused hong kong of chomping down on autonomy mississippi governor tate reeves extending a face cover mandate on monday for an
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additional two weeks in 13 counties adding two more counties to that list they have been issuing a statewistat statewide mandate. its gas visible. once that gas disappears on thursday, it will not be seen again for 6,800 years. that's your cnbc update at this hour kelly, back to you >> frank, i've never seen a comet because usually i just don't want to get up in the middle of the night to glimpse it >> we've got some video. pretty great stuff >> that's something. thank you, frank holland meanwhile the title on the streets for the biggest amazon bowl plus safety now has a new meaning in the nfl it's all coming up in today's edition of "rapid fire" right after thsht e orbreak. stay with us
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welcome back let's catch you up on a couple stories that should be on your radar today. it is time forfire . here to take on the headlines, welcome, everybody we'll dive into amazon, getting price hikes today, boosting their targets to 3800 there a$3. the rapid growth during the covid crisis can continue to drive the stock higher jefferies says they can continue going forward. what is the multiple right now for amazon >> the multiple on that target
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price if you listen to goldman sachs is sometime around earnings for 2021. i look at the multiple and it's close to 50. it's pretty much highest it's been for five years. it's roughly a $29 trillion market capitalization. analysts finding ways to justify higher prices, and the interesting thing is the stock price has outraced the consensus price target on wall street, and often that happens when people have to find a reason for keeping this on the further upside clearly don't overthink it great tailwinds for the business, but in recent years the increase in share in the cloud business and the overall valuation and the lower cumbersome business is a reason to buy the stock
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>> then maybe down the road we get to breakup concerns. the thing about amazon, rick, isn't that already information that was there, but i would have said that three or four years ago. the stock continues to perform >> that's a pretty sizeable move up, and it makes you ask what were they thinking a couple weeks ago when they said we have to move this up almost 30% you wonder if at some point will this catch up? >> look at that stock chart. it's at 70% for amazon one of the numbers in here that's pretty shocking, this is according to mastercard, they say consumer spending at amazon, kate, has been at 60% up year on year that's the kind of number a new company with, like, five people should have, not amazon. it's amazing >> i agree, kelly, and we are getting amazon packages at my apartment. like i said last week, it feels like almost every other day at
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this point i'm curious to see how much continues to change post-pandemic. we're leaning so much on amazon and e-commerce right now it feels like the safe thing to do you're not necessarily going out in stores and seeing other people in person once you get into the habit of just relying on this company more and more, i think this is likely here to stay. i mean, i'm willing to wait a little longer to get something else in just because of the convenience factor >> maybe we'll have pent-up demand for wandering on main street again, if there's a main street left. let's talk about coffee wars starbuck's is getting a nice boost on the street, kate, analysts saying they're more suburbs focused, saying there's 24% upside i guess they're more suburbs focused than dunkin' >> they talk about the
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flexibility that starbuck's has. they have this massive awards program with nearly 19 million people they are also changing their format they have more to-go format and pickup locations they're going to build in larger cities, and they're also looking more toward drive-thru and to go into the suburbs. dunkin' has more of a to-go model, but people are definitely staying at home. starbuck's' sales fell 43% in may. sales had fallen about 23%, so they're both really struggling and i think you'll feel the brunt of the pain in this current quarter. we'll hear from both companies next week. people, as you said, i think there will be some pent-up demand to go out and get your coffee in stores i see it even here, my local starbuck's, the lines are getting a bit longer as we move
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forward in the future. >> mike, can you have this tension where amazon continues to do well, but i agree, as soon as you can't make your coffee at home, people will be pretty anxious to get it to go. >> starbuck's and dunkin'a are i the business of serving people iced drinks while they're doing something else it's a mobility play and it's people doing that stop along their route. that's why i don't necessarily think it's a zero sum game with amazon, because your stuff, you'll still be in that habit of getting through prime. >> i'm going to make my iced tea today. >> put it out in the sun it works let's talk about what's going on in sports right now, because nfl owners are reportedly meeting at 2:00 p.m. eastern time to finalize their plan to start the season
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this is as training camp starts for the kansas city chiefs and the houston texans their rookie players are reporting today. the bigger players report tomorrow and the rest of the week people are talking about these tweets from quarterbacks who are upset, i guess, about the lack of safety protocols. bring us up to speed what's going on here >> they've been creating a coordinated tweet effort that says we want to play we have all this confusion around what are really the safety protocols there are a lot of details missing. the league in the last couple days put out a whole bunch of rules. you can't do this, you can't do that, you can't go to restaurants, we have to space things off it goes on and on and on and on. but we still have all these other questions. the at-risk family member, do i still have to come it's a complete mess, kelly. >> here's the question by the time we got to football, we had a few other sports to
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kind of figure out the kinks is it just because football will always be a harder one, as anthony fauci was saying, or are other leagues just handling it better than the nfl. >> in the football case, they had a lot of time to figure it out. they were waiting as long as possible to see how this virus would end up these are teams that will be flying to all these games and these are total contact sports people are climbing on each other and clobbering each other. the guys that really want to play say, why are we worrying about so much in the locker room then there's those who say, wait a minute, this is too much risk, i don't know that i want to be here >> what about the nba? in both cases we've seen people drop out, we've seen people who aren't comfortable playing, but it seems the seasons are moving forward. >> they haven't played any official games yet, it's still a
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couple weeks away, but the nba bubble has a snitch hotline. you can call in and complain about other people that are breaking the rules, and now they're saying, should we be snitching on each other, is that allowed or not allowed with our code of ethics here. >> and we have baseball with their own experience >> it's completely bizarre i almost feel like the games are the least impactful, especially for football you're playing once a week i think it's the training camp piece, it's being together beforehand, the traveling to and from and those are bigger elements of baseball where you're on the road constantly. >> kate, what are you going to do >> i watched the mets-yankees game i saw it i was interested to see what this looked like and anybody who knows me knows that this was not my thing it was just surreal, right the cardboard cutouts, as mike mentioned, the queued sound. i know some in my house was
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happy to have sports back on i didn't really miss it, but i just wonder if america can do this safely and all the safety concerns what does this look like that's the big question. >> we'll see if we get more in just a couple hours after that meeting. the airlines might be more turbulent as well. u.s. air travel fell last week for the first time since april as covid spikes around the country. we have phil here. not a big drop, sir, but a drop nonetheless? >> right, you shouldn't have a 4% drop at a time when travel is expected to be increasing. remember, this is the busiest time of year traditionally for airlines some are taking trips, summer vacations and they were expecting travel to increase that clearly hasn't happened when you see the levels plateauing where they are right now. by the way, as you take a look at the airlines, a couple things to keep in mind. you have a couple earnings that people are focused on. one is united which happens tomorrow, and united are saying they're down below 50% now because they've added more planes but not as many people
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are flying then you've got southwest reporting on thursday, and today southwest ceo gary kelley is out saying one out of four employees at southwest are either taking early retirement or opting to take a voluntary leave of absence. this is what we're seeing from the airlines now it's all about deciding who are going to stay, who are going to go, who will take retirement, who will take a leave of absence and will there be furloughs? >> a piece of this is how many layoffs we'll see coming i think for some of the airlines, they didn't get the business they were hoping for and that's why layoffs are looming. >> they sent out warn notices to 25 to 36,000 saying potentially they could be laid off come october 1st, but they still have their early retirement and their leave offers that are out there for employees. so once we see the final number of how many people take those, then you'll know how many people may be laid off at each airline.
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again, it's still in process, too early to know how many will be ultimately laid off at certain airlines >> one final observation, it does seem like we're seeing a lot of differentiation between what america is doing versus delta and -- who is getting it right, or do we just not know yet? >> there's no way of knowing who is getting it right. it's a matter of what you think. i know people who fly on southwest who say, love it, love that the middle seat is empty. i know people who have flown on united and they say, no big deal it doesn't matter to me. ultimately it's whether or not all air travel can come back i think at this point it's just not there. we're just not seeing it, and we're certainly not seeing the increase in august that was expected >> all right, phil, thank you. anybody else here gotten on a plane yet? mike >> no. not been tempted >> you're not tempted by the low fares. what would you say about the stocks where people look at the debt loads and wonder how tomorrow with bet on that.
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>> it's about how long we can get to a sense of normalcy a lot of change in traffic on a week-by-week basis, and now you've got a stall because the capital of these companies are not built to go into next year in this cash burn mode it's very difficult. all the companies have tried to maintain staffing as normal as possible it will be interesting to see how long that lasts. we'll leave it there, guys thank you all. really appreciate it for this edition of "rapid fire" today. pandemic pods are in the bay area as some schools are barred from reopening take a look at biotech etfs all tthiing all-time highs we're back in two.
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welcome back there is a new trend in education gaining steam as the bay area schools are mostly blocked from in-person instruction. they're called pandemic pods aditi roy joins us now to explain. aditi? >> hi, kelly a lot of parents are scrambling to figure out alternatives to virtual education, especially after governor gavin newsom's announcement friday that most schools in the state will not be allowed to open for in-person learning unless they meet strict criteria pandemic pods are finding an in-person solution they're clusters of three to six kids led by a private tutor. to provide that in-person instruction, the teachers are often parents themselves who are homeschooling their kids or others who are seeking in-person learning or teachers who lost
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their jobs a full-time certified teacher costs about $50 an hour per child, plus $5 an hour for each additional child that's in the bay area that brings up a lot of social justice questions like whether that will lead to an exodus of high-income students leaving public schools parents setting up pandemic pods tell me there are ways to set up these pods more affordably, for instance, having parents swap days where they're watching each other's kids, but still a lot of people are concerned this will only further widen the achie achievement gap between lower and higher income students kelly? >> so what demand are you seeing for these kind of setups >> especially over the weekend after the governor's announcement, there's been a flurry of demand over the weekend there is one facebook site dedicated to this topic that garnered more than thousands and thousands of followers. i think they're up to about 10,000 so far. even on my own parents' site,
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people are really talking about it as a possible solution. >> what about safety we're still talking about people from different families who are going to be interacting, even if it's on a much smaller scale >> sure, and that's a really interesting point. a lot of people are worried that this may also lead to unsafe conditions on one hand you have stable groups, which is inherently one thing that is safer. but on the other hand, though, you do have an intimate setting, so things like wearing masks or socially distancing, those have a tendency to relax a little bit more with those smaller groups so it's really up to the teachers and the parents to do the policing >> exactly but it does seem like it would be really bad for people who can't afford this option aditi, thanks. we'll continue to follow it. aditi roy out west still ahead, some of america's biggest mall owners are making what could be risky bets to keep certain retailers bins.inuses we have all those details, next. by spreading any missed p
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welcome back dow is up 25 points as it continues to join the other averages now in positive territory. this is a fresh session high for the blue chips the real headline is the nasdaq. it's up almost 2%. it's up 197 points to 10,700 powered by amazon which is up nearly 6% today. all but erasing its 8% drop last week the nasdaq more than erasing its decline last week.
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tech stocks are on the move. >> just watching the software names, igv, the etf that tracks the names, in green today. it's on pace for its fourth positive day reeders include dropbox, zoom. zoom is up 280% year to date another software name would be microsoft. back to you. thank you. turning to retail. dozens of retailers have filed for bankruptcy some mall operators are sitting on cash are pulling these storied retailers out of bankruptcy there's a catch. lauren thomas has more details on these risky bets for us how are they playing out
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>> thank you for having me today. i think it's a really important story to be following as this landscape evolves. it's not necessarily private equity money getting involved to rescue the retailers it's some of the biggest mall owners in the country. namely simon property group and brookfield simon has already with authentic brands group which season apparel licensing firm supplied an $80 million loan to help carry brooks brothers through bankruptcy simon and authentic brands are the stocking force bitter for lucky brands tha declared bankruptcy during the pandemic simon is also looking at rescuing jcpenney from bankruptcy the key thing to note and pay attention to is there's not case good case study to follow to determine if this will pay out
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simon, the ceo of simon said the company did make a will the of mon -- lot of money on that deal. i think this something to watch to see if it pays off for them a lot of risk involved >> that did seem like a successful turn around as the company said they quote, made a ton of money on it either this is that on a larger scale and investors would be thrilled if they are able to buy low, sell high on an acceleration of the demise of chains going bankrupt and in that case, these would be terrible bets. >> the key thing to remember is in a lot of these cases the retailers are huge tenets within simon's portfolio and brookfield's portfolio probably not every mall owner could make these types of bets when you look at simon, they have one of the biggest and best balance sheets in this space they had about $8.5 billion of
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liquidity and that included 3.5 billion of cash on hand. look at aeropostle that was $240 million deal it's not a ton of money, if you're simon the goal is to make the businesses profitable and control the stores they do still have within their malls. >> it's exposing the strong balance sheet of simon and some others which is not something you would expect after their malls have been shut down by a pandemic is there more they could do to help these stores, we've heard from the likes of tilman, they are furious at landlords not this one but in general for making them pay rent should and could these mall owners do widespread rent forbearance, maybe help keep these chains from going into bankruptcy >> sure. you do hear a lot of these discussions remain ongoing
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there are a lot of negotiations happening behind the scenes in terms of retailers paying less rent any of these companies, these mall owners, you have your own bills to pay you have mortgages to pay as well we saw triple five group, the owner of the mall of america was, skipped a mortgage payment. was delyinquent on that. these landlords have their liability to keep up with as well i don't think it's as simple as, i think they can try to strike deals but they need their on in flow of cash as well >> is that thing going to open in. >> i know. it's a mystery i visited it late last year before the pandemic when they opened the ski slope it's a sight to be seen. i think the goal is, this project has been designed with more of an entertainment aspect much less than 50% was going to be retail. wait and see i think there's still gunning ahead with opening
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>> yeah. we wish them luck. they will need it. thank you very much. it's great piece you can read more on cnbc.com. i'll see you on the other side coming up next hour, shares of tesla have soared more than 260% one analyst has downgraded the stock to sell. he'll join us with the red flags he's seeing on "power lunch. this is decision tech. find a stock based on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology
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welcome to power lunch the market is shaping audiotaei reopening roll backs investors anxiously await whethe

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