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tv   Worldwide Exchange  CNBC  July 31, 2020 5:00am-6:00am EDT

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. it is 5:00 at cnbc 2:00 in california and here are your "top five@5" big tech's big beat. and no deal in sight unemployment benefits for millions are set to expire >> another retailer reportedly ready to file for chapter 11 >> a one-on-one conversation
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with minerd and where stocks may go from here another exclusive. another midmajor oil company his first tv interview for years. good friday morning, we made it. good afternoon, good evening wherever in the world you are watching here is how your money and the global markets are setting up their day. futures are higher not by much, dow futures are up. look at nasdaq futures soaring. up 195 right now big move there this comes off yesterday's down
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day for the dow. all this as we wrap up the month. major index is on pace for the fourth straight month of gains gold on pace for its best month since january 2012 today, really likely to be all about the four horsemen of big tech, the same companies whose ceos who were grilled by congress, they all obliterated estimates with quarterly numbers and stocks are responding. there are some highlights. google did post first sales decline in history other numbers are solid, google one stock not really responding today. in the pre-market, apple up 6% facebook, 6% amazon 5.5%. apple splitting its stock. rare move 4-1. as we have said on the show a
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zillion times, those don't just matter to the market in many ways, those stocks are the market apple, amazon, facebook and google are 17% of the s&p 500. 34%, one-third of the nasdaq 100. if that wasn't enough, something else to watch following our lead mostly they are. japan down 3%. hong kong down but the european markets are green across the board. shanghai was up. earnings have gotten much of the attention this week, today, it might be something else
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that is what is happening in washington everybody watching if congress could get the job done on the next round of stimulus kate rogers joining us with that and more of your top stories >> good morning. so far lawmakers have failed to come to an agreement to extend jobless benefits those federal aids are due to expire today democrats tried to pass-- democs tried to pass a $3 billion stimulus gop negotiated that and they plan to continue talks today >> the parent company of men's warehouse ready to file for bankruptcy the company also owned joes of a. banks including to close 400 to 500 but will operate other stores.
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berkshire hathaway raised its stake in bank of america to 11.8 buying more shares bank of america looking slightly in the red >> we'll see you in a few minutes. pleased to have an extended conversation with scott minor. global chief and chairman helped manage $250 million primarily most with bonds and stocks we began asking if he is shocked by the spread of the stock market's recovery and if it does reflect the overall economy. >> i am surprised about what has happened with the stock market there is good reason that is the markets have fallen completely into the hands of the
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federal reserve. if you were writing an equation, you should write markets equal fat federal reserve. they are driving everything. if you look at core relation on the creation of high-quality bonds on companies like apple and microsoft, their stocks and their bonds have outperformed and other companies haven't performed as well. they have higher multiples and they are not performing as well. i don't need to tell you or your viewers that 30 percent of market cap being dominated by five stocks that were basically being driven around by the liquidity getting driven out by the fed into the bond market >> is there any sign that is going to end >> no. not at all
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the fed made it clear at their meeting that they are going to continue to purchase assets. they are in the midst of preparing to announce the results of the policy review i think wir going to get a statement about accommodation of the inflation the fed will push to try to make up for the rest of the two years before an average. >> it remained negative. have you changed your tune on the equity markets
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>> not really. it is interesting, we are having a phenomenal performance because we went to -- we put a lot of money into the high yield and investment grade corporate bonds which don't have the same down side than the rest of the stocks do between here and october, we normally get a selloff just how normal with more lockdowns and limiting to california i think the economies are very
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vulnerable and the market isn't really anticipating that >> you wrote a piece calling for a payroll tax holiday that would be paid off at the end you take the payroll tax holiday, take the 6% and pay seshl security later, that's how it is paid off we talked municipal bonds in states like california and jersey do you see a wave of municipal defaults coming because sales taxes are being destroyed because restaurants and the like are being shut down? >>s it amazing the power of the printing press as long as they can give money or giving money
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to the state of illinois, which is really fiscally insolvent, this is a question of totality this is approximately 10% of the work force, even with support of the federal government, they are having to lay people off and reduce their operating cost here in the state of california given half of the short fall representatives. this will cast cade to all of the money in the world where the
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people provide on the same time, it is not really going to be in the fed's hands to solve the problem of getting everybody back to work >> part of our conversation and conversation there is a lot more of the conversation that pent on another 6 or 7 minutes another bold prediction. watch the early part of that interview. we are getting warmed up on a busy friday. when we come back, why shares of gilead are down. plus the blue oval making a come back how ford posted a big time quarter thanks to that machine
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right there. a busy hour of "worldwide exchange" after this
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machine mach good friday morning. welcome back today's stock stories are all about burgers and biotech. >> starting with ford. shares rising and top expectations the company had to deal with shutdowns of its plants but
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benefitted from a faster than expected recovery in vehicle sales. shares of gilead pulling back. the remdesivir maker as demand declined >> shake shack posting wider than expected quarterly loss shack sales dropped nearly 50% don't miss the company's ceo this morning on "squawk box" at 8:15 >> are you shocked by that decline in sales i thought the one group of restaurants that were benefitting were the fast food companies or is it just the drive throughs >> it has been the pizza players dominos and papa johns, chipolte and wing stop. the fast food guys are doing
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okay shack did see a rise in digital sales. that is a big drive and i think that will move forward >> very personal question before we go. papa johns or dominos. >> i'm the restaurants reported. i will literally never answer that question. >> you could say half of each. >> i'm going to gorge and eat pizza for breakfast and wings for decertificate. still ahead, one top-ranked analyst said he is not sold on amazon's quarterly rate and even suggests a sell. is that even legal >> announcer: today's big number, 38%.
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that's how much of the nasdaq value apple, amazon, alphabet and facebook account for by market capitalization. the tech heavy index has outperformed this year, up nearly 23% companies will need the right tools. that's why salesforce created it's an all-new suite of apps, expertise, and services. to manage this crisis today, and thrive tomorrow. everything companies need to return to the workplace. let's reopen. safely.
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futures are up here is a question can most oil companies make
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money with crude speaking with the chairman wpx energy based in oklahoma one of the few oil stocks wall street likes with an average price target nearly $3 higher than the current stock price in his first tv interview in years, we begin asking about the company's second quarter results and its ability to generate free cash flow despite $40 oil. >> we have the luxury of being very well hedged this year we came in to 2020 and were about 75% hedged we backed off activity, cut our capital, we basically matched our health book, if you will we are hedged at about $75 even with the rapid pull back, we were very well protected. we did slow down activity. we went from 15 drilling rigs to
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our current nine we've been very thoughtful in measure. it was the position with our hedges and cash flow assurity that allowed us to be thoughtful and down shift in a moderate way. >> the industry has shrunk we are down 700 or so year over year do you think the industry and u.s. output has gotten as small as it is in years to come or even smaller >> when you look at this year, shortly after, i think we peaked at 13 million barrels a day. a lot of people are forecasting in that 10 million barrels a day range. i was asked the question, in a $50 world, how much do you think the industry will grow next year i don't think you'll see growth. it will arrest the decline of
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production with he keep it relatively flat at $10 million barrels a day it is going to take a commodity price, i think, in the $60 a barrel or higher to once again see the u.s. growth. >> are there too many oil and gas companies in america >> we have been an advocate for console i had dags once we've made the move to the permian basis, have a very, very nice position now. if you step back and look, there are simply too many producers we feel it takes time. you have to work through a lot of social issues not only social issues but many times strong companies have the ability to be very, very selective. we certainly are in something that we would want to acquire. so, if you have a high bar, you
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need to be thinking about balance sheet and future liquidity and inventory of projects right now, you need to make sure it fits within our framework of being able to generate free cash flow, not damage or balance. there will be some opportunities for companies, if they are thoughtful to make some nice transactions and we'll see how it all plays out >> one of the stocks and research firms they recommend, your biggest worry now investors have read about is getting the pipeline out of north dakota that project has been put on hold i know it has been appealed. if it ends up not happening
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ever, what does that mean for wpx? >> on the earnings call we released last night and had the call today, i think we were pretty clear assuming the worst case scenario is that is that that pipeline is taken out of service and stays out of service. what that means for us is about 50 cents per barrel deduct in revenues for the entire oil volume base. while it is an impact, it is fairly minor the way we look at it we've signed a one-year rail deal and been able to move some barrels around to different -- based on relationships we have and long-term history of operating, we've been able to manage that. with he think we're going to be fine >> all right our thanks to wpx energy ceo
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still ahead, another friday exclusive. just so many we are going to show off the stocks whose execs bought the most here is a hint number two on the list, down 24% this year and caught in the thick of the streaming wars. one insider buying a lot of that sty arrit tethis you say the customer's make their own rules.
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more prove it is big tech world and we are all just living in it. more dominating. futures are up 1% as apple does something very rare these days we have experts here on all of it >> watch out tesla, there is a new electric vehicle maker in town and its shares are soaring. that's all here on "worldwide exchange" on cnbc. welcome back and good friday morning. i'm brian sullivan nice to see to you end out your week we are half way through the 5:00 hour it's going to be a big day for the markets. nasdaq futures are on fire up 200 points. not only up 1.1%
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it's a rare day where nasdaq futures are up on a number, a nominal basis. up a triple than the dow the nasdaq is where it is all going to be today and where it has all been implied open up 1.8% i rescind that triple comment because it is expanded more since the beginning of the show. major averages are still on pace for the fourth trait month of gains. the market has rocketed higher off those lows it is not just stocks. gold on pace for its best month for january 2012 breaking news out of ueurope, eurozone gdp plunged by a record in the second quarter. not a stun to anybody. >> the four horseman of big tech
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same companies whose ceos were grilled by congress. they obliterated estimates with their numbers. the stocks with the exception of google are responding. three of those four are posting big pre-market moves look at that apple, maybe the most important as far as waiting stock in america. up 6%. facebook up 6% amazon up 5.5% only alphabet is down 1.5% they posted the first decline ever revenue splitting its stock 4 to 1. that is something we never see these days as we have said a billion times, these stocks do not just matter to the market in many ways, they are the market apple, amazon, facebook and google alone are 17% of the s&p 500. an incredible 34% of the nasdaq
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100, that's a big slice. something else to watch today, the expiration of the big monthly s&p 500 index contract that many passive funds use to hedge and could add some volatility >> the monthly insider buying. you will only see it here on "worldwide exchange. the data comes exclusively to us from insider big names in focus let us start with number three they just lopped off number four number three, intel, ceo buying 8,000 shares he had a trigger to buy when the stock hit 50 getting to bigger numbers. the company with the second most insider buying, at&t
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a board director buying $2.9 million that director has been buying a lot. total of $8 million since february the stock with the most insider buying this week is that one on the right, kinder morgan buying $4.2 million of his pipeliner company. breaking a streak of not buying a stock in more than a year. intel, at&t, kinder morgan that is your insider buying top. >> all reporting results after the close and adding a roughly $200 billion in market cap just on their pre-market moves alone. this morning, we have an
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all-star cast to break down these reports. for all things facebook and google, we have kevin. amazon a and for more for apple, raising his price target on apple shares beginning with you and start with apple, shares are up more than 6% pre-market announcing that rare 4-to-1 split what do you make of apple's quarter? >> brian, thank you for having me on your show. phenomenal quarter look, it is very clear the pandemic is not affecting apple whatsoever they were very specific about it iphone sales are up 2%
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they are specific that stimulus is helping them. in june, they saw openings in some stores, which affected small degree of apple services, which came in a little below expectations but the rest of the products, ipad, mac all doing great. the pandemic isn't going anywhere at least the rest of the year, we expect work from home, distance learning, and tools such as apple phones to do really well along with the variables for the rest of the year >> i guess that is hardest part for you or other analysts, if you are working, you probably saved a lot of money because you are not commuting or traveling your free cash flow is up. if you are not working, you got a stimulus check and expanded benefits and if you have kids, they are stuck at home and
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everyone is rushing to get what they need for virtual learning how much of that quarter, do you think that may have been >> certainly for the mac and ipad, it would have been a great quarter but look, this is sort of a new normal and the way we would go back to work in 2019 and prior to that. you look at productivity tools and laptops. very quickly and closely followed by a phone. more than likely, the iphone we not only feel that this is a fantastic year, with he see a tremendous setup for the next year that is coming from the delay of the iphone 5g, which makes the 5g fall into the first fiscal quarter for apple.
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you are almost looking into the situation where you have a trend to start the quarter which is a quarter for apple. we expect the launch for 2021 for the typical september launch, which will also help >> you can't minimize the effect of kids going back to school if she's going to be on zoom all day, you want to have a clear screen that is big is there a weird pandemic benefit for apple, harsh >> they are clearly seeing that. there is no denying the fact some of the stimulus money went towards imacs and ipads. kids have to learn, parents have to work. that's just the reality. if your kids are doing remote learning and you are working from home, you absolutely have
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to have an ipad or something of that nature. the tremendous strength of the iphone, you cannot undermine that that is the biggest piece of revenue for the company still. for that to be up 2% is just quite shocking >> it truly is waiting on the iphone on apple with the 4-1 stock split thank you for joining us nice and early. thank you. turning now to amazon, that stock also up 6% right now apparently after everybody bought everything on their website. they crushed bottom line estimates by, this is not a misquote, 380% despite spending $4 billion for pandemic related upgrades. back with us, reiterating a sell rating on the stock with a 26.46 price target i didn't know you were allowed to have a sell rating.
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do you revisit that rating >> we did. i think clearly the sell rating was not correct during the quarter, almost everything went right for amazon i think you brought up some interesting points in your last interview. the second quarter was very much an anomaly we had the company destrakting income because of the stimulus checks and unemployment. the question is can this last. we'll probably get another round of stimulus out of washington. our forecast now for disposable income to start falling. consumers didn't have a place to spend some of this money travel, looeeisure this was all closed up the third factor that would help
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a bit was the fact that basically, the pandemic went on longer and more impactful than we envisioned a couple of months ago. that all worked in their favor and it blue the quarter out. it is as good as it gets for the company. >> historic patterns will last about a year as long as we can remember this would go on through spring of next year does amazon benefit? >> i think it does i think the question becomes as was pointed out, they are the market 34% of the economy the fab five putting microsoft in there the question is, can they le
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levitate above a macro economy now they've done that. we are not saying their revenues go negative. when you look at the businesses and what is going on there will be pandemic benefits, you have to worry there will be slowing of things like aws and there was a little bit slowing of memberships they had more prime memberships sign on. at the time, we will think these growth rates will come in. that's the premise we look at the valuation of the company. we just can't make it work we use the discounted cash flow. >> to be fair and i've been covering amazon since they went public in '96. valuation never made sense to people and it never really mattered is there a down side to the
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upside we watched congress grill jeff bezos about being too big. they just got bigger is there a breakup put on this company, if you will >> yes, is the answer. the biggest risk is that washington steps in the bigger they get they didn't pay much taxes on the quarter even though they had tremendous earnings. so, yes, that's the biggest risk valuation, it really has mattered you look at the company and as big as it has gotten i would put forward, that was true at the beginning or a long period of time but lately it has mattered a little more the whole market has gotten very expensive in our opinion >> fair enough, appreciate the most polite you are wrong i've ever gotten. i appreciate the civility.
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have a great day and weekend >> thank you now to facebook, earnings and revenue topping the street social media giant increasing user engagement. in other words, more people spent more time on the app the outperform rating on the stock with a $300 price target i'm not going to knock anybody on the industry. i heard some people talking about the boycott. the boycott wasn't in that quarter. that was in this quarter, it would have zero affect on the quarter we just saw. we'll jump ahead are you worried that that could play havoc with this quarter >> we did get the disclosure around the first few weeks of july that's plus 10% year on year the full q 2 was a massive blow up
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despite the worst macro back drop in several decades and comments around the brand boycott and what many feared was the largest advertisers in the world, we are still seeing double digit growth. really the call we have, if the question was the durability of social advertising in a challenged or slower growth environment. we are in that right now, what would that look like and facebook delivered a resounding conversation that yes, durable and defensible in a way that moster n appreciated until today or last night. >> in this boycott this quarter, companies come out and saying we are pulling our ads from facebook that doesn't mean they are stopping using the back end advertising machinery facebook provides there are two different businesses for facebook and that
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back end mechanism, from what i understand, is still ripping >> the comment around being two separate businesses might be a little bit off but at the same time, what is clear is that facebook moves product for marketers. if you are a marketers that grown its business on facebook, you are probably not in a position to say we're going to stop our facebook spend. not to be cynical, some of the companies that have come out against facebook it has been a pr strategy for them >> oh, a little dark way to look at that. an added 4,300 employees in the quarter. the biggest hiring spree that does not say to me a company that's afraid of the future >> absolutely not. in terms of the key growth
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initiatives in merging or converging with e commerce by way of facebook shops and the arvr development and infrastructure that supports that business. that growth remains very much on track. really no deceleration from when we started the year. they continue to brace for the future >> thank you facebook stock right now up 6% on the market. coming up, watch out tesla shares of another ev maker are soaring. and their company's american debut are ahead. as we head to break, other top headlines. financial technology startup affirm, the ipo that could value the company at as much as $10 million. it let's users pay for goods in
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installments with small-term loans. >> and benefitting in strong demand for video games as everybody's kids in virtual learning by playing maden. >> and isaias has strengthened to a hurricane off the coast of bahamas. forecasted to move towards south florida tomorrow >> the dwe are back after this
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no shortage of stock movers. all about ev, gambling, travel or lack thereof. >> expedia shares under pressure bookings dropped 90% during the latest quarter shares of lee auto jumping in the u.s. debut above expected range and closed above $16 in trading and higher by more than 4%. mgm resorts reporting revenue drop of 91% as casinos remained closed amid the pandemic and global travel came a halt. telling investors the near-term operating environment will
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remain challenging >> thank you very much on deck, the great market debate roars on growth, value hear what scott has to say on thatss iue reaction with lee baker of apex financial.
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the rotation out of growth to value at some point will be a worthwhile trade i suggest that tech and growth stocks would have the biggest part of their run. the biggest companies out there that will survive and make interesting value plays. >> that was part of our one on one. his take versus value versus growth becoming less uncommon now on the street.
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joining us now, great to see you again. we've been waiting on this growth to value rotation for, i don't know, a couple of years now. nasdaq futures up about 2% do you think we will at some point see this as great rotation, if you will? >> brian, i absolutely think we will see that. the thing is, nobody knows when. we are looking at what is going on pre-market with apple and the gang up 3% they are all solid companies we've got this thing where this growth orientation all the momentum and cash that has flooded into the economy has pushed higher. it could last longer right now, upwards of just a handful of companies i do think we'll see solid companies right now that are cheap but they can fall out of
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favor for an extended period of time >> yeah, that's kind of what scott said he could spell the stock market with three letters, f.e.d. it's about the fed the fed is buying up debt. so trading floors have more cash to spend they use that to buy the same stocks which have always been, which to your point is one-third of the market. everything goes up, rinse, wash, repeat you've got all this cash sloshing around. those companies are benefitting from it. they are good and solid companies. at some point, all of that has to come to an end, we are at a very unusual circumstance to be polite about it but we won't be here forever so what starts to happen once the fed is no longer pumping all that cash into the economy with
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coronavirus being the key driver here we are going to be on the other side before we see that rotation the issue becomes if we are looking at a two-dose vaccine process, how long does it take for the vaccine to work and feel like we are on the other side of this at some time after, we'll see that rotation back to value. >> that could be a ways off. it is an interesting take. you hear, i don't know what it is like for y'all, every day is kind of the same on lockdown in new jersey is still on lockdown it sounds like investing is the same and don't change the way we've been doing it until our day-to-day life fundamentally changes. >> absolutely. here in georgia, things like in other parts of the country,
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things have gone backwards just outside of many et row atlanta has gone back to phase one. it is not lockdown but encouragement to wear masks. unfortunately, there is still some resistance for people wearing the masks. while things have gotten better and the pull back of 9% on the quarter. some really don't think it is fair to tout that number but the reality is, that's bad you can't dress up that. >> i hated that lead line either i get it i work in the media. it was a 9.5% drop i can annualize anything
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i can shoot an 81% in golf and annualize that out to my overall game >> i was just told we are done good to see you, lee >> absolutely. see you again soon >> take care i've got a four-day weekend. i'll miss you on monday. have a great long weenekd, everybody. dow futures are soaring. we'll pick up coverage next. ac. you're good to go. i have to take care of my coworkers. that's how i am. i have a son, and he said, "one day i'm gonna be like you, i'm gonna help people." you're good to go, ma'am. i hope so. this is my passion. if i can take of everyone who is sick out there, i would do it in a heartbeat. if i clookentertainmentour experience: xfinity x1.
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good morning tech tough futures point to a higher open positive reports from tech giants apple, facebook, amazon and alphabet we are ready to bring you
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complete coverage. plus the stimulus continues in washington with no sign of a deal as federal unemployment benefits set to expire within hours the latest plus the market implications coming up it is friday, july 31, 2020. "squawk box" begins right now. good morning i'm becky quick with andrew ross sorkin and wilford frost the last trading day of the week and month. the deal not getting done for any additional stimulus at this point. you are looking at the dow futures up


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