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tv   Fast Money  CNBC  July 29, 2020 5:00pm-6:01pm EDT

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earnings news, not just for the high flying tech stocks so we'll see if that changes tomorrow it seems like most investors are focusedond liquidity and the secular growth as opposed to what happened over the last three months. >> we're out of time here with all of those hearings today. thank you so much for tuning into "closing bell." "fast money" starts right now. >> "fast money" does start right. i'm melissa lee. guy adami, tim seymour and bono and icen and tonight no pain no gain that is the message from mike wilson, where he sees stocks headed on august plus boeing hitting new headwinds we heard from the ceo when he expects air travel to return to normal and we're all over the action, qualcomm and pay poll reporting results, how we are paying the earnings moves big day on capitol hill. let's take a live look where the facebooks of facebook, apple, amazon, alphabet testifying
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before the house anti-trust subcommittee let's get straight to kayla with the details. >> reporter: four hours in and a third round of questioning underway as republicans challenge apple, amazon, facebook and alphabet on political censorship and democrats take aim at the size and power the companies have amassed. here is david cicilini >> our founders would not bow before a king, nor should we bow before the emperors of the online economy >> reporter: these four horsemen of the technology industry responded in kind saying, in fact, they each face healthy competition in their respective fields >> competition drives us to innovate and leads to better products, more choices and more choices for everyone. >> customers have a lot of choices and there are products that face fierce competition companies like samsung, lg,
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huawei and google. we're okay with that. >> i there are concerns about the size of tech companies our services are about connection and our business model is advertising and we face intense competition in both. >> reporter: well so far the executives have largely side stepped controversy as they were probed over the app store, content policing, china policy, counterfeit goods, jeff bezos of amazon said that the company does, in fact, pursue aggressive pricing to promote its own products but that it doesn't harvest third party sellers data to do just that. but perhaps, melissa, the most direct questions about whether the companies are too powerful and to big came to mark zuckerberg when he was asked about instagram and whether instagram and facebookshould b split up jerry nadler, the full committee chair, cited 2012 emails from
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zuckerberg saying that essentially they were taking out a competitor and zuckerberg said actually in hindsight, maybe you could sense that instagram would grow but at the time we didn't know how much it would grow. and with the same information that the company had, the ftc in 2012 approved it unanimously melissa. >> kayla, thank you. and again the hearings are ongoing in washington, d.c we'll go to them occasionally as news warrants. but first, dan, if there was any company in particular that you thought suffered the most damage from these congress people who were pretty aggressive in their questioning? >> they were pretty aggressive but i think they show that they're outclassed, out of their league when asking questions of these titans and when you think about it, they came really hard for mark zuckerberg zuckerberg, though, went out of his way to kind of say that he is not the behemoth that some of the other counterparts who are in this hearing with him obviously, amazon, google with
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the size of their video platform, amazon with the growth of the ad platform and obviously apple with the, i think he even mentioned i-message the most widely used messaging app in north america. so he distinguished himself rather than being a battering ram, i think he caught a lot of questions. he has not fared so well in the past in these environments i think he did well sticking on skip here. but as kara swisher said this all of the time, and maybe at some point congress will listen to her, this is not how you do it, this is not how you grill these sort of people who built these sort of businesses so nobody was expecting too much here and i think we're going to walk away and the guys are going to be like that was a walk in the park. >> it givesa glimpse into the minds of the congress people when you listen to the lines of questioning. one question, tim, was to the effect of will you not rig the election base in favor the joe biden. other line of questioning is why does the echo, the amazon echo,
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when you say buy batteries go to amazon's batteries so there are a lot of pointed things to go to. >> yeah. and it seemed like the democrats were more aggressive than republicans despite the fact that doj, which is where a lot of this is supposed to be emanating, is some sense this might be from the administration led. but i thought google was getting the biggest kind of shot across the nose and not that they can't handle it and i think sundar pichai was good and i think the humility and trying to give explanations to folks that might not understand. but the assessment that google is not the gateway to the internet but a walled garden and talking about how they quit working with the pentagon and yet working closely with china so there were these attacks. i just go back to the stocks first of all, they fell 3.5 to 5% between the last four to five days off of blowoff tops that i
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don't know that we're too far away from getting back to. this started in june of 2019 where that is really where you should have bought these stocks if you're worried about this because they rebounded substantially through the rest of the summer. and since then, largely haven't looked back, subject to what has happened through the crisis. but this is right now, i don't think, much ado about anything the big issue for this company will come tomorrow when we talk about the earnings. >> it is interesting that you thought sundar pichai had more questions. this is as of 4:20 and granted the hearings are going on. but sundar pichai got 30 questions and cook got 12. guy, i don't know what you walked away with in terms of who got the most heat. i guess it doesn't matter in the end as these guys have mentioned because the stocks are not doing anything >> yeah, i don't think it
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matters. if anything it just reinforced why the companies are so profitable and why their stocks do go higher they just made the case for them in the questions that they asked. the hypocrisy is what strikes me as most of the congress men and women will go home in their cars and google or use facebook to see how they did with their line of questioning and they'll wind up with their apple phones in their hands to the front porch and get their amazon boxes like we all do, by the way so the entire thing is folly and theater and we've talked about that the stocks are valuable for a reason i don't think anybody walked away with it injured i don't think anybody did any disservice to their companies and i think the theater that we typically see was on display again. >> it is amazing, bono, that throughout the course of the past couple of years each additional, whether it be by federal regulators or by state a.g.s, that the stocks continue to chug higher you could throw almost anything at them in terms of
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investigation and it doesn't matter to the price. >> yeah, these things are pretty impervious and as a lot of the other panelists have said, the more this is a repetitive issue, it seems as if it comes across as if this is a witch hunt. of the companies, i would say apple seems the most insolated in terms of the dynamics of its revenue attribution. but it didn't seem substantive and i don't understand the logic in terms of questioning these tech titans on the technicalities of their business again, in a wouldn't be the approach, not necessarily what i expected but i've just grown accustomed to throwing spaghetti ata wall and watching it slide down and buying the shares. >> let's get more reaction to today's big tech hearings. joining us now from facebook, al alex stamos. great to have you with us. >> thank you. >> i'll ask you the same question i asked the panel did any company emerge from this injured in any way
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>> i'm not sure. i think what we're seeing is two different hearings layered on top of each other. from the democrats questioning, most of it was about anti-trust. and i think in that area, there is a lot of legitimate complaints from the various representatives. the problem is that their all very different so the anti-trust concerns for the four different companies come from very different directions they're talking about amazon's use of the knowledge to compete in the physical world. of apple and google having platforms that they control. and a facebook buying or copies competitors. so while all of them took some shots i'm not sure there is any outcome for that on the republican side, it was mostly a litany of various complaints about other policies that are completely irrelevant to anti-trust. and from that side, i think it is going to get some sound bites for the various representatives but there is not any real outcome from them pushing on this. >> so, alex, we just talked, there was a democratic side and
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a republican side. but isn't this anti-trust battle that is coming for these tech behemoths going to come most likely from the eu we know there has been some dust kicked up there already. and isn't that what we would expect to see how they fare and then it comes back home to our showers. >> yeah. i think for the ceo's, if the biggest concern is with eu regulations, the competition, did you comp and investigations from that side because competition regulators are going to look at the impact of markets which is something that you didn't hear anything bib in this hearing. you heard very little about any actual harm to consumers where the europeans have a theory of the size of these companies harming european competitors and european consumers and in the long run that is much more effective than having the litany of complaints that can't be solved with anti-trust >> do you think -- it is tim welcome and thanks for joining us do you think that there is any
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of the ceos, no one wants an anti-trust breakup but a lot of people have pointed to that some of the companies are a lot more valuable based upon the sum of the parts. and how do you think these ceos are thinking about that? do you think of them have contingency plans or this gets into more of a corporate tactical strategy, but as we look as this as investors, i wouldn't find it catastrophic, i think maybe the opposite, if doj really pushed hard. >> it is an interesting question again, it is such a different issue with each company. i think in some cases a breakup would at least change competition. so the facebook case, you could make facebook, instagram and what's app separate companies. and that might increase shareholder value over the long run to have them compete against one another, it might not. that is hard to make a prediction but it is a remedy for facebook. when you talk about apple and google, it is not realistic to
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break apple into multiple units that compete on iphone the issue there is the control of the app store and whether or not they're using the app store to suppress competitors. same thing with google and dominance in search. there is no good way to break up google's dominance in search so i think for those kind of companies, the outcome could possibly be some kind of consent decree or another agreement that keeps them from utilizing their incredible power and the amount of data they have in competition. i think the only company that probably should be worried about breaking up in facebook. and maybe amazon, although there has been very little discussion of the fact that amazon is both a massive retailer and the world's largest cloud provider which is something that it talked about a lot in tech and here in silicon valley, that halloween made - that hasn't made it to the floor yet. >> but the bottom line is you think all of the guys go home or maybe are already home and they just sort of think, wow, that was tough but i'm glad i'm done and life goes on nothing comes of it?
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>> yeah. i don't think any of the ceo's are worried for the outcome here i'm amazed at these hearings of the fact that the structure is to incredibly inefficient and it is so poorly designed to actually nail down these folks you're breaking it up into the five minute chunks for different representatives and going back and forth between republican and democrat means that you have no consistency in the questioning you're talking about actual competition and the moment get somewhere interesting, it is over and now you're talking about oh, this guy got taken down on twitter and it is not even there and all of the complaints about twitter who isn't even represented is one of the silly things going on right now. so i think if they want the hearings to be more effective, they need to find a model where somebody who knows what they are talking about is spending 15, 20 minutes asking questions. >> and then the ping pong in between the ceo's is very disruptive alex, great to have you. thank you. alex stamos. it is a dog-and-pony show.
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let's put it straight. let's call it what it is and at the same time, if we get at some of the remedies that could be proposed, which company could be the most scathed, which would be the least guy? >> i think remedies the most potentially one hurt i would think facebook and i think the least one hurt would be apple. just back of the envelope stuff. maybe you could argument on facebook but i think it seems to me that apple is probably the most impervious to any of this my opinion. >> tim, what do you say? >> well, apple seems to me with the app store and the complaints from the developers and people like spotify, we heard the ceo offer the bell that seems the most vulnerable and i think apple and if you look at their revenue and their services revenue and i've heard dan talk about this, too to the extent that we have thrown so much in terms of a fresh multiple at apple on services, if you -- that seems to be the place where ultimately, look, the competitive environment is such
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where in an efficient market should settle that score it hasn't so far i think apple remains under pressure >> yeah. byron, what do you think >> i think just in terms of again, in terms of revenue attribution, i believe the app store is about 10% of the apple overall revenue. so while there may be a higher probability that that thing becomes a headline issue, in terms of the overall business mix, i would think that they're the least affected amazon to me seems like there is a bit of an issue there. at least from a headline risk. facebook has been through the ringer and they've been -- for lack of a better word -- exposed or pressured from amazon's point of view, keeping data and using that to change the competitive landscape, i think that is something that could be probed more and they'll have to provide some pretty logical explanations and answers for. >> it is interesting how bezos
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came out saying who he was telling his story. he whas a child of a high school -- a teen mom and the whole nine yards it was a very convincing story and from the rich evident man perhaps on the planet at this po point, it was probably a smart move. >> listen, bezos is the goat there is flo dou-- there is no t about it. >> that is the greatest of all time, guy. >> yeah, guy his business is the least likely go ahead and try to spin out aws and all of a sudden you'll have a top ten nasdaq 100 company on your hands that is just going to steam roll everybody else anyway so to me, i don't think there is a strong likelihood that that company gets broken up if anything, even with facebook, when you think about it, the discussion about instagram back in 2012, it was a no revenue company for $1 billion well what happened, you have seen facebook's proper vertical
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move over to instagram and instagram has a lot of risk right now. mark zuckerberg, we talked about it last night and mentioned it today, tik tok is the real deal here and it is coming after them and then when you have upstarts like snapchat, which is a $2 billion revenue company but that commands a lot of mine share abelong teens, you have to be worried so me facebook is the one that i think posed the most risk. and we didn't even talk about trust and safety yet that is the grievance of the republicans in some ways, it is just kind of the pushing their voices down to the side. the democrats have a real argument on the trust and safety and if there is any ill toward action on that platform that affects our election in the fall, they're coming for facebook with the picket -- with the pick forks there. >> we'll continue to monitor the tech hearings and bring you any news as it develops. meantime, let's turn to the other big story of the day and that would be the fed. policymakers wrapping up a two
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day meeting with chairman powell let's bring in steve liesman he added a thinking to thinking about thinking about raising rates. >> yeah, i don't know exactly how many thinkings there were. when i asked the question last time, it was not thinking about thinking and i think there is three now or there might even be four which means it is way down. and he kind of took the back of his hand and swatted away the question about inflation saying we're just not worrying about that and it was a fun quote from the chairman if you will where he said, upside, we're not worried about the upside, we know what to do. we're all prepared for that. >> and the opposite? are they prepared for that >> well, that's where he's focused. and it has been a really interesting kind of dynamic here, where i think the fed has had this right but i'm not sure that following the fed having
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this right made anybody some money. and if you give me a second to explain. powell has been hammering this idea of the uncertainty about the economic effects of the virus. the uncertainty about the course of the virus and i think if you go back and like look at him hammering that uncertainty, he's been correct about how things ended up. we were not coming back very quickly. there was a good chance we were going to have another spread of the virus. there was a good chance that we're going to have another downturn that is a big part of what he emphasized today, is that the high frequency data that they're look at has gone flat to turning downward all of that has meant an enormous amount of stimulus from the federal reserve and that meant the stock market could go about its plmerry way, oblivious to what is going on with the virus and now the ensuing downturn or slowing of the pace of the recovery. so powell has had this right the fed has had this right but i think following them would
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have led you to a much too pessimistic of a view about what would happen with stocks. >> we had our panel on power lunch, you are part of the panel, steve, and mona had made the point that the next meeting in september is the last peting before the election. so the probability of making any sort of major move, whether it be, well with rate, that is not going to happen for the foreseeable future but any moves that could possibly change the market trajectory, changing language, et cetera, would be very unlikely? >> i don't agree with that i think this was a pause of a meeting. i think depending upon -- now, remember what the fed did today. it inserted that the outcome of the economy is dependent upon the course of the virus. that will tell you what is going to happen with fed policy if this gets worse. but i think the fed is prepared to make a variety of moves, at least one in september where it goes to a more firm forward
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guidance perhaps related to economic data and might even be prepared if things get worse in september to launch a formal qe program. so i don't think the fed is going to be dissuaded by the election i think it is influenced by the economy and the data. >> steve, always great to speak with you thanks for your analysis steve leaseman quickly, here. can you believe that they got more dovish. guy, was that even possible. apparently it was. you throw in an extra thinking and make it three and you're move dovish. >> it would appear -- well clearly the market thought that for the majority of the afternoon. but it is interesting and again i'm not an economist but i understand that the u.s. dollar does not fall under the purview of the federal reserve but the u.s. dollar has had a decline over the last month, month and a half whether you realize it or not, and i think people that watch sort of understand it, as the dollar diminished in value, that
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creates inflation, although it is not called that so you're buying power going down is inflationary i don't know if the fed takes that into consideration or choose to sort of gloss over that but that is problematic. i mention it because it is their actions that are making the u.s. dollar go lower. so you have to really examine these things for what is happening below the surface and i think it is really problematic at a certain point. >> let's talk more about the fed and bring in mike wilson at morgan stanley great to have you with us. >> thank you. >> just to remind our viewers, 3,700 and the most likely scenario was a range of 3350 to 3700 given what the fed or what jerome powell said today about not thinking about the -- thinking about raising rates, do you think that the more likely scenario is closer to 3700 at this point >> well, look, i think this policy that is being talked about today, this is not new
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the ferd has been dovish since march and quite frankly they've been probably the most pessimistic economists out there that i've listened to. and i think part of that is the strategy that allows them to remain dovish. they wouldn't stand in the way of the recovery. it is not their fault if this recovery falters and i think that is the right sort of stance for them to take at this point but if you think about the upside for next year, it is not going to come from multiple expansion. we've already had that it is going to come from earnings and that is the story that i think folks are going to start to focus on next, which is that there is a lot of operating leverage in the business models because they have cut costs so deeply whether it be employment or sg and a, this is come down dramatically if the stimulus works, there is tremendous operating leverage stories and that is what we're excited about for next year and even in the fall and a lot of the stocks that have the most operating leverage are actually the stocks that have been underperforming for
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the last month and a half or two months as interest rates have come down. so we think the pendulum will swing back as people get more comfortable with the economy reopening. i don't know if rates will shoot up, but ultimately they will i think what guy was talking about is really important. that is atory for next year. and that is going to invoke more interest in things that are positively related to nominal gdp and interest rates going up and that is our position so we like a bar bell right now. cyclical stocks and recovery stocks paired up with the covid winners which seem to be defined by evaluation in the near term >> mike, i appreciate your comments is there a point on the chart where lower rates become a head wind and furthermore is there a point where you say, this weakening u.s. dollar becomes sort of a head wind for an economy here that is obviously at 73% driven by the consumer. >> yeah, i think there are two
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important points first of all, the bond market signaling from the nominal interest rate market is a false signal right now those are being affected by what the fed is doing so i'm focused on break evens and precious medals and things that are telling us that there are inflationary buildup going on out there and the weaker dollar is part of the story. guy, you hit the nail on the head and i don't think it is a constraint now but it does challenge this fed ultra dovish view. i think at sundar pich i think spo point they do care because it is putting constraints on them but they are supposed to be stewards of the currentsy. but we want to see it the u.s. dollar fall out of bed that is a con training factor at some point later this year. >> mike, you just mentioned next year, you're expecting operating leverage, companies realized a lot of efficiencies and cost
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cuts and that sort of thing so when you think of 2021 that is how you get to the multiple not just based on expansion but earnings growth. and here is the one issue with that argument. we're seeing corporate america shed jobs that may not come back so we're coming off of 3.5%, 60 year low unemployment and we may be at high single-digits for 2021 so how do you square that with what -- i'm just thinking that at some point in the next few months, we're going to be talking about a double dip recession, the same way we're talking in 2010 and '11. but this time it might happen because technology did it. the winners of the pandemic, the very ones that you just kind of mentioned, also. >> yeah, look, we're not anticipating employment back where we were any time soon. it will take multiple years. but we do think modest progress will be lower over the course of the next six to 12 months and i would gather by the end of the
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year we're back in the single-digits and then the recovery begins. but dan, as you know, that is what the operating leverage shows up it is unfortunate that these folks are out of work for another few years and would love to get back to work but it is going to take time and companies will be slow to hire folks back and as long as the fiscal stimulus remains in place, which i think it will, i think the deficits will become more structural in nature, if we have a blue sweep, the revenue will come back we've seen that already. it is remarkable how fast -- people spend money other ways if they can't go out it a restaurant or big gatherings of people, they find other ways to spend the money. so i think the pump will continue to be primed and that is where the revenue comes from and the operating leverage will flow there. >> mike wilson, morgan stanley this is a weird would you rather i'll pose it to bono wynn. >> good luck, buddy. >> gold or equities right here
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>> oh, my goodness last time i played a game i got in the penalty box so i'm trepidacious to give you a answer gold >> wow >> for all of the reasons that everyone has touched upon. and i realize we're at nose bleed levels but this is not going away any time soon we talk about the effects of multi-nationals and the weakness in the dollar, all of those things will contribute to what is now the safe haven commodity. and if you look at sovereign yields global ly, where else do you put the money. equities, you have to take a ton more volatility particularly being that the new investment is going to be value or growth or recovery so if i'm going to take chalks to the system, i would rather own gold. >> coming up, earnings alerts and we'll bring you the trades an we're still monitoring
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we've got earnings alerts on qualcomm and paypal. let's quick off with qualcomm. higher by 12% after an earnings beat and settling a license agreement with huawei. so tim, what do you like this b this quarter, if anything. >> first of all, i think the ran for 5g is important. huawei expected and as much as the headline seems like it might draw some attention, i don't think it is all that extraordinary. i think it gets back to valuation. i think the valuation
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deferential with qualcomm and other chips makes this kind of attractive, frankly. especially with the roll out of 5g. >> maybe we knew this but the 8-k they said there was a negative impact in the fourth quarter which includes delay of a global 5g flagship phone launch and maybes it rumored that apple would delay the phone, dan, that it is not reacting at all to this but i thought that was interesting, that there are some delays to some of the phones >> yeah, listen, with the pandemic, it wasn't just a demand it is was a supply thing and that pushed product maps out a quarter or two so you're seeing a company like qualcomm ramp and i think they said in the release they're expecting this kind of second inflection point in demand as some of the companies now start to ramp. so, you know, listen, apple not going to tell you tomorrow night when they report they're not launching a 5g phone but it is
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not any material size. what call qualcomm is doing right now after the last six months, given some of the headwinds, it is pretty impressive trading at a if y-- all-time high. >> i mean, think of the massive moves that we've seen in this space on the back of some earnings and obviously think about amd last night and then qualcomm today, guy? >> it is remarkable. to have and have nots. that is a good thing at least the market is discerning the winners from the loser which is encouraging the qualcomm quarter, not only was the quarter extraordinary, i think the guidance encouraged people given the fact they seemed to have clarity that companies don't seem to have the previous cited dance point was 96 and change in january and we're significantly higher than that now. this seems to be breaking out once again to the upside and not unlike what we saw with amd over the last couple of days personally, i do think we have to come back and revisit 96 at a
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certain point. but that is your level right there to stay long and get long in this name. >> up 11% after hours. so moving. go to paypal those shares are higher in the after-hours session following the earnings report. let's get to rate rooney for the details. kate >> pay pell benefiting from the boom in digital payments during covid. the company saw the strongest quarter since splitting from e-bay five years ago paypal topping $5 billion in revenue for the first time, beating wall street estimates. eps non-gaap jumped 49% year-over-year total payments at $222 billion $10 billion above estimate and $37 million came from venmo. and net new active users hit a record at 21.3 million and paypal is back on track with a full year forecast it reinstated full year guidance
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after scrapping it in may due to covid uncertainty. paypal now expecting 20% revenue growth in the back half of the year and eps growth of 25% that is way ahead of the high single-digit growth analysts were hoping for. take a look at the stock popping about 4% 3.5% after earningsings. the ceo just now saying this is coming from the world accelerating from physical to digital and fuelling the rise of online payments. i'll be hopping on a video call with john rainy this evening catch highlights on cnbc tomorrow and on back to you. >> thank you, kate rooney. and the pandemic has been an accelerant to trends prior to the pandemic including the shift from physical to digital occurrence who wants to touch money these days it is dirty and germy. >> i'll take my chances i assure you, with the germs. i have some hand gel on deck so
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i'll wave it in. this is a darling of the pandemic and still in a strong uptrend. they knocked the cover off the ball, beating at top and bottom line user engagement just across the board. so definitely remarkable earnings the only thing that might give you pause and the reason you might see the stock up 3.5%, 4% after earnings, and it is trading at about 44 times next year's earnings. but again all of these tech names or all of the work from home names are facing stretch valuations but there is really no holes to poke in it they absolutely crushed it. >> dan, you like this in the past >> yeah. so, listen, we talk about venmo, kate just mentioned people want to see the profitability of that peer to peer payment and that is a big story, peer to peer payments before the pandemic now it is really pay with venmo. that is the next leg of this story. but we were talking about this the other day. the steepness of this move off of the lows up now 125% or so,
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it is just i don't know how you invest and buy a stock like that the stock had been consolidating over the last few weeks or so. which set up the stage for even with high expectations, beating them the way they did and the pop that you have. i wouldn't be surprised to see people take some profits here and let's hear about the next leg and hear about pay with venmo in stores and what that means and to bono's point about trading 40 times next year, some of the stocks will have to take time and grow into valuations. >> coming up, boeing company reported earnings and what the ceo had to say about the future of the business. and later, picture this. much more on that monster move in kodak yeah, that is a name we haven't said on this show in a very long time and why the options market said this isn't going to end well as we take a live look at capitol hill, now in hour four of testimony before congress "fast money" will be back right after this
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check out shares of kodak, up a whopping 318% today and this move after more than tripling yesterday now you remember kodak, of course the photography pioneer. it was trading at just $2 on monday securing a $765 million loan from the trump administration to make components for drugs to combat the coronavirus take a look at ceo jim continenza had to say this morning. >> kodak wanted to see what we could do to participate. we were making hand sanitizer and face shields and stuff for
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ventilators. the government reached out and we found a path that makes a lot of sense >> now there are many reasons why you might at this whole thing and think that is interesting. the $765 million loan was more than 7 times the company's market capitalization the day before the deal was announced. so a very outsized loan for that size of company. if you look at trading volume on monday before the deal was announced, it was over 1 million shares traded. normally this company has about 100,000 shared traded on a daily basis. on june 26th, that same million shared traded was crossed when the average volume is typically 100,000 shares so all of this put together, tim, you sort of think, hmm, this is an interesting story >> yeah, it is interesting in a lot of different ways. obviously five days ago you could have reached into your pocket and probably bought this company and i think you have a case now, it is just -- look,
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this feels like an insider's game they were making film, some type of chemical ingredients and now a company that today the president referred to as more relevant than a trillion dollars stimulus plan because they're making pharmaceutical ooirnieng between the department of defense and the idc, you have this bunch of new executive orders that have toppled together a better use case for this company than we had a week ago. so it is hard for investors to feel like they have any edge here it is hard to understand exactly what this company will me doing. it is hard to justify this valuation other than the fact that they have a government contract and a loan backed by the government and it does look like a company that certainly is in the right place so, no, this is -- look, we spent a lot of time on "fast money" in the last two months trying to point out that in many cases there are names that are justified only by momentum and not by fundamentals.
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it doesn't mean that this company can't be successful. i'm not sure what made them in the pole position for this time of sponsorship but i think the best move was two days ago and today >> yeah. i mean, i hope for the country's sake this is all legitimate and that kodak is able to produce these supplies, which are needed in this country, guy but you got to take a look at surface and there are too many things that make your eyebrow go up >> as do, i mel. but this is a completely separate topic i think would you agree. obviously we wish them success for a myriad of different reasons. but to your point about the volume, let's just call it like it is. somebody or some group of people knew something ahead of time >> they knew. >> the volume suggests so you tell me so if that is the case, there should be some forensic accountants right now working on who that person or group of people were. because that is not how it is supposed to work
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on a side note, we obviously wish kodak the best in terms of what they're trying to do for the country. but that issance illary to the point about somebody knew something prior to all of this the volume speaks to that. that is just the way the game works. >> option activity has been crazy. bo bono wynn, what are you looking at. >> it is very fishy. if you look back over the course of the last month or so, i think options traded at about 7,000 options between puts an calls on average. fast forward to yesterday, 100,000 options traded and today over 300,000 options traded. so we're talking about an explosion in terms of volumes and interest but really what stuck out is taking a look at the august 2.5 strike put mind you this stock touched $60 i think yesterday and closed around $30 ment two and a half strike put traded 100,000 times around 10 cents. this is not about the implied
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move this is someone, the buyer at least, betting this is not going to end well for kodak. being that it is a short option, you pay 10 cents for it and if there is a violent move, i believe we saw a move from 44, 43 into the later half of the session today so this is an opportunity for you to take advantage of some cheap options. spend about a million dollars in premium and then sell those at a profit the seller is betting that it is just not going to get down there. but selling lottery tickets is not the business that i am in. >> yeah. dan, what do you make of the whole thing? >> i hope you have your waiters on, people, because welcome to the swamp. this is one of the sketchiest things i've seen in the market in a very long time. i'm just telling you that right now. listen, maybe this company on its merits because of the 100 year history in manufacturing something is deserving of something to help our country
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through this i just can't imagine how we arrive at $735 million loan for basically what looked to be a blank check company. that ceo on squawk and friends this morning looked down right giddy. and he bought 47,000 shares or something last month when the stock was trading for what tim could pull out of his pocket so i don't know. this one is not done and i think it is interesting what bono wynn mentioned about the puts trading in august down there because they lose that loan, this thing is going to zero. >> the ceo did purchase a bunch of shares as dan had said, i think it was june 23rd or 24th and it could have been a pre-planned purchase of shares by the company ceo but keep in mind that just days afterwards that is when the more than 1 million share spike in trading volume happened, too so there are a lot of things here that are interesting, that are probably worth looking into and we'll to follow the story for you. and keep you posted. tune into the full show of
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"options action" 5:30 eastern time. and moving on, data pointing to turbulent times for the airline industry cnbc teamed up with chain research and when asked if is it safe to fly, only 24% of respondents said yes that sentiment ringing true as boeing shared dropped on missed earnings phil lebeau joins us now with more. >> and when you take a look at shares of boeing, nobody is surprised the stock moved lower. as you mentioned, the company did report an earnings miss. they lost $2.4 billion in the second quarter a wider than expected loss and obviously covid-19 shutting down at assembly line, fewer deliveries and that weighs on the company. three things came out today from the company as they were saying, this is what we're expecting, not only for the rest of the year, but as you look out over the next couple of years you have lower production rates or a slower ramp up of other models like the 737 max. that will likely mean or
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possibly mean, we should say, more job cuts. remember they're already eliminated about 16,000 to about 19,000 jobs this year. and then the airline recovery. the ceo david calhoun said i agree with what they're saying on the international level in terms of airline recovery is at least 2023, maybe 2024 nobody is quite sure and we're seeing that here in this country where passenger levels are down, what, 20 -- at 76% 74%. it is just a fraction of where it was at this time last year. here is dave hall coop talking with us this morning on "squawk on the street" about his view of when we might see a recovery >> just that early recovery post the first spike, and the fact that bookings came back and they came back fairly robustly, for me says that the underlying demand equation still exists and that eventually we will solve this >> and as you look at shares of
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boeing and airbus, we get the first half results from airbus tomorrow and we'll see the same thing with boeing in terms of a terrible quarter with production and delivery and they're in the midst of severe job cuts at a number of facilities in europe because airlines are cutting back on their orders, deferring or canceling. and one last thing, all of this brings up the question, you're not seeing many people flying. are the airlines going to roll out special fares like $15 between houston or newark or on frontier, friends fly free you'll see more of that. because the airlines have to put people in these seats as much as possible and this brings up the bigger question down the road, when do you see some pricing power whether it comes to fares. but nobody is worried about that right now in the airline industry they simply want to get people on board. >> phil lebeau i pulled up united you could fly to orlando between august 14th and 18th for $27
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or tampa, tim, you could go there for $27. it cost you more to get to the airport than to get to tampa at this point >> yeah, no big flying to florida right now for a lot of reasons. it is hotter in new york, by the way. i think you have the application with boeing, we didn't talk about the need to see max. i recognize that there is not necessarily high demand for the 737 max, but you need to see deliveries start in early 2021 liquidity story for boeing is better than expected so they have about $30 billion in liquidity they burned less in the last quarter, the second quarter, around 5.6 versus 6.4 expected but it is -- yes, this is going to be a slow slog. the most important thing is that this is a company that also has a defense business which hasn't been destroyed. and that from a defense perspective, i think it is still a critical company to our country. but that the commercial aircraft
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business is about liquidity. but when people start flying again is something we talk about every night in different shades of the economy that we're look at so you don't have to run out and buy boeing tomorrow but in the longer term, this is a stock that i've been long and i've been trading around it but i remain long and i'm confident this company is coming back. normalized earnings or something more difficult to judge than the other companies but if we're putting that to 2022 for a lot of other companies, this company is very cheap here. >> guy >> a few weeks ago, and i know you have a memory like an elephant. >> steel trap. >> you played the game you love trade it or fade it and karen finerman was on and boeing is what you asked about and to her credit and the stock was 198 and she said fade it and we talked about the entry level of 165. if you look up today on your google machines, i think the
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stock closed around 165. so this is about as good of an entry point for quite sometime and tim is right in terms of the cash flow position for sure. but we all know that could get precarious pretty quickly as well, especially if we're talking about 2024 being somewhat normal and i i'm not sure how they they have that clarity. so 165 makes sense but you wonder if that s&p is around the corner. just something to think about. the most important chart in the market and we'll reveal what it is when we come right back. ♪ ♪ ♪ ♪
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welcome back to "fast money. the big tech hearing still underway you see there jeff bezos first appearance before congress men and women on capitol hill. you could catch full coverage on dan nathan is calling this chart the most important chart in the market there are a lot of charts in the market but this one caught your eye. what are you seeing? >> yeah, i look at a lot of tension building here in disney. and for a lot of the reasons we just talked about. tim just said, no bid for $27 to fly to orlando or whatever it is i think that the way that this wedge in disney breaks might be the way that we're going to see the economy break over the next few months at least into the back half or the end of this year and think about what is going on with disney here they have the nba down in orlando in a bubble. we see what is going on with major league baseball and if the nba doesn't go well that is a negative sign for how our economy reopening is going to go you know, a lot of what mike
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wilson said about his bullish outlook for the back half of this year and into next year is predicated on the fact that the virus disappears like a miracle. and let's be frank right now, it is not disappearing like a miracle. it is raging across the country and in a lot of places like where disney really needs things to happen. so right now, people don't want to go to theme parks they couldn't go see sports or concerts and couldn't go to a movie theater, there is just a lot of things that this company has exposed. i love this company. i wan to see them do well. but the way this thing breaks and i'm not particularly optimistic about it, i think it is the way that the economy breaks over the next few months. >> bono wynn, are you worried about disney >> yes and i've said so previously. dan makes some great points. at the end of the day, we've talked about disney plus and some of the other verticals. we've talked about their direct to consumer business all of these are strong businesses but at end of the day, parks and recreation, that is where they make the bulk of the money and
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until that is fully operative, i definitely think there is med winds with the name. >> up next, final trades
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time for the final trades. tim. >> ups i think you'll hear that the residential mix is not catastrophic and the shippers stay in this trade. >> dan >> yeah, ex pedia reported tomorrow i would not be a buyer i think you're going to get an opportunity in the 70s to buy this. >> bono wynn. >> i reiterate, i would rather debate what is going on in the short-term and adjust than the long-term, i'm sticking with
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gld. >> guy. >> i just purchased the venmo app since you were talking about it. >> is the store open. >> -- >> it opens for me nxpi reported this week and i think the stock is dheep here. >> thank you for my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm just trying to make you money. my job is to entertain and teach you so-call me at 1800-743-cnbc or tweet me @jimcramer you know why so many bears keep
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