Closing Bell - Closing Bell: Stocks stage late rally, Tesla split takes effect, Retail goes on sale 8/25/22

Episode Date: August 25, 2022

Stocks staged a rally in the final hour of trading – with the Dow gaining more than 300 points, and the Nasdaq popping by more than 1.5%. PIMCO’s Tony Crescenzi joins to discuss the latest signals from the Fed ahead of chair Powell’s Friday speech. Meantime Tesla ticked lower as its 3-for-1 stock split took effect. Analyst Craig Irwin discusses what the split means for shareholders. And retail names like Burlington and Abercrombie pulled back as earnings raised new concerns about the state of the consumer. Dana Telsey from Telsey Advisory Group breaks down her retail shopping list.

Stocks moving higher as Wall Street awaits Fed Chair Powell's speech in Jackson Hole, although Salesforce is keeping the Dow's gains in check. The most important hour of the trading day starts now. Welcome to Closing Bell. I'm Carl Quintanilla, and for Sarah Eisen, here's where things stand this afternoon. Some steady acceptance of the Fed speak today, and the corporate results we've gotten, oil below 93, VIX below 23. Check out some of the big earnings movers today. Salesforce, as we said, weighing heavily on the Dow after cutting their guide. Peloton plunging. NVIDIA actually higher after that initial dip.

And Snowflake heating up on an earnings beat. Ahead on today's show, we're going to talk to former Ford CEO Mark Fields about California's new effort to ban the sale of gas-powered cars by 2035. First up, though, we're going to bring in PIMCO's Tony Crescenzi, talk about Jackson Hole today, and, of course, what may come tomorrow. Tony, it's great to have you back. We actually spoke a few days ago going into the symposium, and I wonder, after Bullard and Harker and George and Bostic today,

have they foamed the runway enough? Is the chair's job a little bit easier tomorrow? Well, it should be. In this day and age, transparency is the name of the game at the Federal Reserve. There aren't as many secrets as they once were, especially going back to the first time a Fed chair attended the Jackson Hole Symposium, Chair Volcker, in 1982. You could probably deem this symposium this year a Jackson hype, because the Federal Reserve has a very clear strategy in mind, which is to make it clear that it wants to move the policy up expeditiously to what it thinks is neutral, then probably into restrictive territory, and then hold it there.

So instead of the so-called stop-go policies of the 70s, which are widely viewed as a mistake, it would likely be stop and hold. And so a lot of the seventies which are widely viewed as a mistake but likely be stopping hold and so a lot of the work is done it's easy to meet there's an easy prescription and i again uh... probably a lot of hype one final word carl i'm just looking at the last decade yes and the five hundred is only moves about two tenths of a percent on average on the day that the fed chair spoke at these symposiums and so that tends to be uh to be an extra amount of hype surrounding

the day. Oh, no, we like we like to build it up. There's no doubt about that, Tony. I was curious. Esther George today did say she would want to see at least three months of consistent data to look in terms of looking for relief from from inflation. I was the first time I'd heard a hard number. But if we're really in for a Volcker-esque period, as you suggest, is three months even enough? Well, George is probably suggesting in terms of the downshift from the large 75 basis point hikes that we've been seeing to 50, then ultimately 25 and then to zero, it doesn't necessarily mean that the Federal Reserve will be lowering its policy rate. The Fed is pushing back on that idea. In fact, if the Fed

does follow through with what its plan is, and the only plan we have is what's in the summary of economic projections, a 3.8% policy rate, that's a level that would be above what the Fed expects on inflation, about two and a half or so next year, that would provide a positive real interest rate. So the lesson of history from the Volcker period, we're not talking about the same yields, of course, the levels of rates, but in terms of the thematic, which is to move the policy rate up enough. And then as the inflation rate comes down, let the real interest rate, which is the difference between the policy rate and inflation, let that move up, hold it there a while to ensure that inflation expectations aren't tamped down. And one quarter won't do it. It will take several

quarters or more. The idea of faster inflation is embedded in many generations now. It's not just the boomers, as I said in our last discussion. Many generations believe in the idea of faster inflation and will want to be convinced in a few months, absolutely, just from a human behavioral standpoint, won't do it. Fascinating, Tony. Stay with us for a moment. We're going to check in with our Steve Leisman right now. Of course, he's in Jackson Hole. Talked to Bullard a few moments ago. Steve. Hey, Carl, thanks. Yeah, St. Louis Fed President Jim Bullard striking a pretty hawkish tone, saying that he thinks inflation could prove to be more persistent. Tony was just talking about that and that the Fed needs to bring rates up now quickly to combat the current inflation problem that we have.

I like the front loading. I like I like the idea that you get the rate increases in earlier rather than later. We've got inflation right now. We've got a strong labor market right now. It seems like a good time to get to the right neighborhood for the funds rate. Now, not everyone from the Fed we spoke to was quite so definitive. Philly Fed President Patrick Harker said he hadn't decided what to do in September. He could go either way, 50-75, and wouldn't figure out until he sees the inflation data for the month of August. But he wants people to remember 50 basis points is still a hefty hike. I want to see the next reading and then decide.

Next inflation reading? Yeah, next inflation reading. That said, I want to put this in a bit of a historical context. Since 1983, the Fed has raised rates 86 times. 75 of those were under 50 basis points. And I think we have to recognize that a 50 basis point move is still a substantial move. Okay, we're both agree is that rates need to move higher with Harker pegging 3.4% by year-end and Bullard 375 to 4%. The question for tomorrow is the extent to which Powell affirms Bullard's hawkish talk or a more modest approach to rate hikes. We're going to get a chance to,

well, a full coverage of Powell's speech and a first-on interview before Powell talks with Atlanta Fed President Rafael Bosta. Carl? Steve, really quick. We began the session today 10-year 3-12 or so, and we ended up around 3-0-2 after Bullard. I wonder if that reaction overall fits with what you heard from him. So, yes, in terms of the idea when bond markets, here's more Fed, the long end tends to come down, the short end tends to come up. And if you would look at the Fed rate outlook from the futures market, what you see is that April 23 contract hitting 379.

I'm pretty sure that's a high for that contract. So what's happened is the market is moving up its outlook for Federal Reserve rate hikes. And the market and the Fed now coming close together. Remember, 380 is the rate that the Fed consensus has pegged in for 2023. So now not much difference with where they're going. Still, that rate cut is built into the market that, again, several of our speakers today pushed back against. Yeah.

Strong work today, Steve, as the blue skies came out. I'll, of course, a lot more ahead. That's our Steve Leisman with the great crew in Jackson Hole today. Tony, really quick, before we let you go, there's the rate discussion and then there's this ongoing warning, I guess I would say. Morgan Stanley today, QT is going to be a lot worse than people expect so far. How much of that becomes part of the conversation after tomorrow? Well, imagine, Carl, if you went to a supermarket and there were 1,000 items on the shelf one day and zero the next, and only a few trickled back a few days later.

The price of those few items would probably still be high. This is another way of saying that what the Fed has taken off the shelves, the trillions of dollars of bonds, has a long-term effect, what they call a term premium effect, the stock effect. It's greater than the flow effect, and it can last many years. So I wouldn't overly worry about the QT in terms of impact, because lots of bonds are off the market and will have a meaningful impact for a while.

Tony, appreciate it very much for helping us kick off the hour. A big day tomorrow. That's our 20 Crescenzi. Thank you. When we come back, California lawmakers voting today on this proposal to ban the sale of gas-powered cars by 2035, a move that could spark a seismic shift in that industry. We'll talk about what it means for the automakers with former Ford CEO Mark Fields next.

You're watching Closing Bell on CNBC. Let's check out today's stealth mover. It's Frayer, the battery cell maker charging higher today after Goldman upgrades the stock to buy because it sees the company as a strong beneficiary of the Inflation Reduction Act. A catalyst for the stock is its partnership with Koch Strategic Platforms to build a gigafactory in the U.S. And Goldman says Fryer's Giga Arctic factory in Norway is set to be the most capital-efficient and sustainable gigafactory in the world. In some other EV news, California is set to issue rules that will require all new cars sold in the state to be free of carbon emissions by 2035. The rule will phase in over time.

35% of new passenger cars sold by 2026 would have to be carbon-free, climbing to 68% by 2030. Joining us today, Mark Fields is the former Ford CEO. Mark, it's great to have you this morning. I do wonder, between the California prop and the credits in the Inflation Reduction Act, if we are at some kind of tipping point on EV policy? Well, I think we absolutely are at tipping point in EV policy. When you look at the Inflation Reduction Act and what's in there in terms of not only incentives for consumers, the tax credit incentives, but there's a lot of grants and incentives there for manufacturing

and automakers to build battery you know, battery facilities, manufacturing plants here in the U.S. So it very much is a watershed moment. You know, it all comes down to how it gets executed. And obviously, it's quite confusing right now, given some of the criteria that you have to meet to get the tax credit incentives. But that'll work itself out over time. But it is very much is a watershed moment. Do you think, is California a good tell on how national policy, emissions policy develops? Well, it is the bellwether. If for any other reason, there are 17 other states that typically follow California's,

the current auto emission standards. So the vote that they take today by CARB or the California Air Resources Board, that's going to reverberate well beyond the borders of California. And that's going to cause the industry to speed up its switch to the EVs. Of course, then it comes down to the ability of the industry to actually do that, given the fact they have to procure a lot of elements. They're in short supply and very expensive and battery plants to get the capacity there. So it's going to come down to the execution. But yes, it is a bellwether for the rest of the country. As for pricing, we do have Ford opening

up some order books on the Mustang, I think, with some price increases. Tesla raising the price of some of their software. All of that's happening as used car. Mannheim data is starting to roll over and we're a couple months away from it maybe going negative year on year. What is happening with auto pricing right now? Well, auto pricing right now, you do see seasonality in the used car options. So that's a little bit of seasonality there. But what you're seeing in pricing, particularly on EVs, is listen, all these automakers, they know that the margins they make on EVs are lower than the ICE vehicles or their internal combustion engine vehicles. And so if you think of just the input costs for electric vehicles, whether it's, you know, lithium, the

elements like lithium and cobalt and nickel, or just the battery packs themselves. It's gone up exponentially this year. So to protect those margins from going negative, you're seeing folks like Ford and GM and Tesla be very aggressive in pricing. And they're saying, hey, listen, it's not a problem right now because they have large order books and waiting times, which is true. But the real test is going to come when it comes to mass adoption. And when they're bringing out all that capacity, at the end of the day, the consumer has to be able to afford it. So I think that's going to be very important going forward that the industry is going to have to face with rising input costs,

but having to sell more to the mass market, which can't afford $60,000 vehicles. Yeah. Speaking of being aggressive in competition, Mark, Ron Barron was on our morning show today, Squawk Box, talked about being bullish. Tesla thinks it can still be a three or five bagger over the next 10 years and talked about how he is maybe obviously unhappy with Mercedes competing product. Here's what he said. I drove in a Mercedes car last night. I hated it. An electric Mercedes. And it's just the battery's in the wrong place. The center of gravity isn't right. Is that just a taste of the trash talk we're going to be hearing next few years? Yeah, you're going to see a lot of trash talk. I mean, what do they call it?

He's got a big position in Tesla. So what do you call that? Talk in your own book. I mean, you know, everybody's got their own opinions. But listen, the bottom line is all the major automakers are coming out with really, really good electric vehicles over the next 12 to 24 months. And the question is, are consumers going to show up, particularly at elevated levels of pricing? But there's going to be a lot of trash talking going forward. Hey, finally, Mark, Experian had some data out today speaking of pricing,

the surging pricing and the surging reliance on financing a car. The average new vehicle loan, record high, $40,290. How much are you watching the trajectory of delinquencies? Well, you have to watch that. I'm watching that very, very closely. It's not only the delinquencies, but it's things like repos and things of that nature. Interesting enough, Carl, back in the Great Recession, you know, at Ford, we had expected that, you know, you would see big spikes in collections and repossessions, etc. Actually, what we saw is people were more willing to stop paying their mortgage than actually stop paying their car payments because that was a way for them to get to work and things of that nature. So you might see that going forward. But, yeah, it's not only just the rates and the dollar amounts per month, but lenders are actually extending the time periods. I mean, 96-month loans, that's a long time. Yeah, and you're right.

Repossession is a handicap if you need to get to your job. Absolutely, it's a lifeline. Mark, fascinating time in the business. We'll talk soon. Good to see you. Mark Fields. Thanks, Carl. Let's check on the markets here. Mark, fascinating time in the business. We'll talk soon. Good to see you. Mark Field, thanks, Carl. Let's check on the markets here. Dow hanging into a pretty tight range, but all in the green for most of the morning and afternoon. Dow's up 130, S&P 4173. After the break, the dark cloud over Salesforce, the Dow component falling hard today after trimming their guidance.

Mike Santoli is going to take a longer term look at that name when we come back. Time for today's market dashboard. Our senior markets commentator, Mike Santoli, is here with a closer look at this sell off in CRM. Mike. Yeah, Salesforce actually the biggest drag on the S&P today, also happening at a time with lowered guidance where there is a lot of pressure on the cloud from high heights, though, here's a good look at the changing tastes and fortunes of parts of this market. So you have the virtual economy ascendant 2018 into 19. That's metaphorical clouds. That's Salesforce. And then, obviously, the real economy, the real asset stuff, like ExxonMobil.

You had a complete run away from it. Now, of course, we've come all the way back. Actually, ExxonMobil more than doubled the market cap now of Salesforce. At one point, Salesforce was bigger. So it does show you how things have turned. Now, since it became a public company, Salesforce, better part of two decades ago, it has been very expensive on all traditional metrics. Take a look at what's happened here relative to Microsoft over the last decade.

This is in terms of free cash flow yield on the forward 12-month estimates. And you see actually a higher free cash flow yield at the moment for CRM, meaning it's less expensive than Microsoft. Boy, look how cheap Microsoft was a decade ago. It has massively outperformed Salesforce over this time period. And you could argue that both of them look a little rich right here. It's actually lower than the overall markets, free cash on multiple. But it seems as a sign of maturity for better or worse, Carl, that Salesforce is now in this category. Right. The other thing that got some notice today were the industrials XLI versus the S&P today. Yeah. 52 week high. Yeah. Industrials have quietly been an outperformer. And that's a sector where it's not dominated by one or two stocks. It's actually very well distributed. So it's tough to really

get too concerned about a global steep slowdown, at least in parts of the economy, the business-to- business world, capital goods and things like that, when that's the case, when the relative performance looks good. Yeah, we'll keep an eye on that in these last few minutes of today's session. When we come back, retail names on the move today, names like Abercrombie, Burlington, Dollar Tree with results. Top analyst Dana Telsey is going to weigh in with her shopping list and some pretty interesting thematics after a break. Bit of a pop in Pinterest today on the surprising strength of its new app, shares just a few dollars from a four-month high. Julia Boorstin's watching that. Hey, Julia.

Carl, that's right. Pinterest shares surging over 12% today on the success of its new Shuffles by Pinterest app. Now, this is an app for making and sharing collages, and it's invite-only. Users must get an invite code. It surged to number five in the iOS app store for the lifestyle category in the past

week, rising in popularity after trending on TikTok. This is a big win for Pinterest, which has been struggling in recent quarters with the declining engagement, but it did see the stock get a boost when Elliott Management took a 9% stake in the company in July and boosted by that stake. And today's move, it's worth noting that Pins has outperformed Meta and Snap so far this year. Carl? Okay, well, watch that, Julia. Thank you. Meantime, a fresh batch of retail earnings came through today. Abergrombie and Fitch, Burlington stores in the red after both companies saw challenges around consumer demand. And after the bell, we'll get earnings from Gap, which is expecting net sales to decline. Joining us today on the news line is Dana Telsey, Telsey Advisory Group

CEO. Dana, it's great to talk to you. One point that you've made is that even after all of these prints and all of the comments about inventory in the lower end of the consumer bound, that the market was prepped for it in a sense. Exactly, Carl. Thank you for having me. Nice to see you. So, yes, I think overall when we're taking a look at these recesses that are going on, it's been six months that we've been hearing about what the catalyst could be, and whether it's inflation, the higher cost of living for the lower-income consumer, risking a bifurcation from the high end and low end. And what's happened is that

the reset in stock prices anticipated what the reset in earnings is going to be. So they've anticipated the stock price is already down, and now they're looking to 23 and 24. So now that we're looking ahead, we're sort of in the midst of back to school. But if we're looking for a clean holiday holiday which areas of retail will we look to first overall no one's going to have a clean holiday because of all the promotions if you have to say who's going to be the cleanest luxury goods will continue to be the cleanest because that higher income consumer is spending the other area we're continuing to see cosmetics doing well with social occasions and going out and what this holiday season could be with events i think

you can see strength in cosmetics i think everyone else on the apparel side it is batting the hatches for a very promotional season mark down pressure and margin pressure and what i'm looking for what's inventory levels at the end of the fourth quarter so we can go in with some better anticipation for 2023 and what margins could look like. Yeah, interesting. You know, after on the heels of Williams-Sonoma, which was pretty decent quarter relative to the rest of the space, you actually see some interesting differences between the home category and, say, home improvement. Exactly. And one of the things that's been so interesting on the home side,

we've seen on soft home, you've seen pressure at Kohl's, at Target, at T-Jaxx, and even Walmart called it out. Yet on the flip side, home improvement is holding up, especially among the pro customers at both Home Depot and Lowe's. It's a real difference in terms of soft lines versus hard lines. Finally, I mentioned some of the themes you're working on in some of your recent work. One was, I thought this was fascinating, that European exposure is benefiting now because of tourism and spending there, Ralph, VF, LVMH. That sort of runs counter

to the broader concerns about the health of the European economy. It does, and they're benefiting certainly from tourist spending, but some of these brand names on the softline side are benefiting from local spending too. And that's why, as we look forward, I think some of the weakness in Europe that we had last year, you're going to see outside growth. They reopened later than we opened here in the U.S. Pretty interesting, Dana. We'll see what Gap says in a little bit. Good to talk to you as always. You too. Thank you, Carl. Meantime, the Dow is picking up a little steam here, up 176 as we get closer to the end of the session, pretty much session highs. After the break, the street is buzzing about this expanded tie-up between Amazon

and Plug. We'll take a closer look at what that actually does and what the deal means for the future of hydrogen power. And, of course, you can always listen to Closing Bell on the go by following the Closing Bell podcast on your favorite podcast app. What is the street buzzing about today? Plug power, for one thing. The hydrogen fuel cell maker surging after Amazon said it'll expand its partnership with the company to power some of its operations. Pippa Stevens has a closer look at the company and the deal. Pippa? That's right, Carl. This is an expanded partnership between the two companies. Now, before we get to the deal, a little refresher on Plug Power. The company makes

hydrogen fuel cells that are used in machinery, trucks and stationary power. Some of this is so-called green hydrogen, which is made with renewable energy, thereby cutting emissions during their production process. The company's customers include FedEx, Boeing, Walmart and Home Depot. Now, today, Plug said it will supply Amazon with about 11,000 tons of green hydrogen per year starting in 2025. To put that number in context, that's enough to power 30,000 forklifts or 800 heavy-duty trucks annually. As part of the deal, Amazon also gets a warrant to acquire up to 16 million shares of Plug. Now, Wall Street liked what it heard. Evercore ISI saying it validates Plug's strategy. Oppenheimer saying

it could bring additional large-scale customers to the table. And Wells Fargo saying it improves the visibility of long-term revenue targets. Now, Plug Power may not be a household name, but the company's been around for decades. It hit an all-time high during the dot-com bubble, and shares are down 98 percent since. Hydrogen's struggled to gain widespread traction. It also has its fair share of critics, including those who say the renewable energy used to make green hydrogen should simply be used, Carl, for electricity. Pip, a couple different thoughts. One is the Inflation Reduction Act. We're still trying to parse through the impact of a couple of different thoughts. One is the Inflation Reduction Act. We're still trying to parse through the impact of a lot of these green initiatives in that act. The other

is when you think about Amazon's scale and its power, is Rivian a cautionary tale or not? Well, first on the Inflation Reduction Act, that is a huge catalyst for green hydrogen, shares the plug power up about 80 percent. Since we saw Senator Manchin and Senator Schumer announce that deal, we've seen other names like Ballard Power and fuel cell systems all rise. And that's because there is a tax credit for green hydrogen specifically that right off the bat would make it more cost competitive with other forms of hydrogen, like gray hydrogen, which is when fossil fuels are used in the production but you know hydrogen power has been kind of the next thing for several decades now and so it's certainly these stocks are getting

another look here but whether or not it proves long-term viable that really remains to be seen right well a hard to discount this as we said the scale that Amazon can bring to a company like that. We'll find out a lot more, I imagine, in the months to come. PIPA, pretty interesting, definitely getting buzzed about today. That's our PIPA Stevens. Tesla's three-for-one stock split taking effect today, but one analyst says there are better bets to make in the space. That story, plus Peloton backpedaling as preview of firm earnings when we take you inside the Market Zone. Next. We are now in the closing bell Market Zone.

CNBC Markets commentator Mike Santoli is here to break down these crucial moments of trading. Plus, Roth Capital's Craig Irwin on Tesla's split and Bertha Coombs on Amazon's health care pivot. But we will start off with the market sitting near some session highs. Mike, I wonder what you make of the market really not going into Powell's speech tomorrow with a lot of hand-wringing. No, I think the market is reading the messages that have been out there from other Fed officials and essentially saying that they're not out of step with what they're likely to hear tomorrow and the idea that the Fed, sure, they're going to prepare market. To keep rates at a higher plateau for some period of time. And not look for an opportunity to cut them. Let's say next year if there's some weakness but that seems digestible given where the markets have been the S. and P. five hundred really been just kind of grinding or even drifting higher here we've now gone back above above the levels that everyone was hoping might hold on the downside when we got that first little pullback. So it's progress. It's a benign reaction. I wouldn't say that it's really driven by any particular catalyst or growth indicators. It's

much more about, I guess, we're more or less in gear with what the Fed's going to tell us. You do say today that it seems sensible to work on the premise that the June equity low was a good one, although you and I did talk this morning about Goldman's warning that liquidity will fade here in the next few weeks. For sure. And, you know, even if that low from June is going to hold and maybe is even the start of of a significant uptrend, it's a ways down from here. Right. So we're at forty.80. Those lows are just above 3,600. So it would feel scary on the way down if you got close to it. But I just think that there was enough proven in the ramp off the lows that you have to kind of keep that in mind if you really wanted to get aggressive on the downside or avoid trying to participate in this market now.

All right, Mike, we'll talk more in a few minutes. In the meantime, take a look at Tesla. Keep your eye on it, dipping a bit lower. It is the first day trading after splitting three for one. Shareholders received two additional shares for each one they already owned as of August 17th. Companies split five for one August 2020. Stocks up better than 165 percent since then. Joining us today, Craig Irwin, Roth Capital senior research analyst, who I think, Craig, fair to say you remain wary because of valuation still? I am bearish on Tesla for valuation. Huge admiration for what they've done. But I think there's a lot of other properties people can go and put money to work in

and make a lot of money over the next many years. And I think Tesla is likely to give relative underperformance versus those other companies. We've talked a lot about splits last few weeks, but again today, is there a sense, net-net, whether or not, I mean, is it a wash? Is it net bullish? Is it net bearish? How do you view Tesla in the 200s rather than the 900s? Usually what it is, it's an indication that management's themselves excited about further value creation. Tesla's going to be doing 40,000 cars, making 40,000 cars a week by the end of the year.

Their capacity jumped to 1.9 million units in the second quarter. So they're obviously executing impeccably. So they want to hold on to the valuation. They want to make it easy for retail to buy the stock because retail is such a large component of the shareholder base. And Tesla is such a large driver of the valuation. So, you know, functionally, yeah, it makes sense for them to do this. And typically large cap stocks, when they're splitting, do perform pretty well. We're just skeptical because we see a lot of really good things on the horizon.

You just talked about Plug. There's many other companies in the EV space that are doing really exciting things. And Tesla's done the heavy lifting, the hard work, making it much easier for them. And frankly, they're able to poach employees from Tesla and execute business plans with less risk and more capacity available in the market. Mike? Yeah, I mean, you know, I totally agree that part of what keeps Tesla where it is at close to a trillion dollar valuation again is this constant encouragement of the public excitement and the idea that they are building and creating the future as they only can do it. And, you know, if you look at that valuation premium as the ability,

if they need to, to raise capital down the road and attract people, that's half the product in addition to batteries and steel. You know, no real reaction today to the split itself. That's probably a good thing. And keep in mind, we're still trading, you know, I guess on a split-adjusted basis. What's the high? $400. And now we're just trading, you know, I guess on a split adjusted basis. What's the high? 400. And now we're just under 300. So it seems as if we're still kind of chopping around this range, held up relatively well compared to some of the other stocks that really,

you know, went went into moonshot mode during 2021, but still hanging in there fine. Finally, Craig, we had a talk with Mark Fields a moment ago about EV policy. I mean, Ron Barron on our air earlier today would clearly argue, although to his own benefit, that policy is moving EV's direction and as obviously consequentially than Tesla's direction. EVs are the future. There's no question. You know, I encourage everybody that's considering buying a new car to go and test drive an EV. I bought an EV. I love my EV. I'll probably never drive a nice vehicle again. I'll have one in the driveway, but it'll be my wife's or my kids. You know, policy is aligned with the future. And, you know, President Biden has done the right thing with the baby or the baby, baby triple B or, you know, the the infrastructure bill as well.

Both of them have driven great support, both for EVs and EV infrastructure, incentivizing investment in materials and supply chain. This is what we needed. This is what the United States needed to actually pick up the reins and start leading again. Tesla did this with very little support. And now there's support for the whole industry to run in behind them. That's, again, one of the reasons why I'm pretty skeptical on Tesla. You know, I think you've got some great automotive behemoths that are going to do really well over the next several years. The Mach-E is an awesome car, right? Ted Penis at Ford is doing great things. If you hear his vision for the spinoff, it's exciting. You know, I think people have lots of other exciting

things to invest in other than Tesla. Right. Well, it's going to be a cage match for sure. Craig, appreciate it very much. Good to see you talking a little Tesla today. Actually getting some news this afternoon on Twitter, some orders from a Delaware judge. Julia Boorstin's got it. JB. That's right, Carl. Some orders from a Delaware judge after that hearing yesterday. The Delaware judge has ordered Twitter to turn over some of the data sought by Elon Musk, specifically asking Twitter to turn over data from 9000 accounts that were reviewed by Twitter in a fourth quarter audit. Now, the judge did reject many of Musk's demands for data from Twitter, calling those demands, quote, absurdly broad. But they did respond to this request for data on those 9000 accounts. And this is essential here because this is all going

back and forth between Twitter and Elon Musk's attorneys ahead of that October 17th date. So we're going through this ruling by the judge here on the issue of the data. And this just coming through today on the heels of that hearing yesterday, Carl. Interesting. I'm just looking at the share reaction here. I can see an argument, Julia, where you would say, well, a little incremental fuel for Musk's case, but maybe that quote you gave, absurdly broad, adds to investors' notion that maybe there's the pressures on Musk to prove something. Well, look, it was so interesting because, of course, the whistleblower, the news of the whistleblower came out just as there was that hearing yesterday. And listening

into the hearing, Musk's attorney certainly seized on the fact that there are these new questions raised by the whistleblower to support their case. But on a number of the accounts, the whistleblower did say that Twitter was dealing with some of those issues of spam and bots. But there just is this whole question of more questions being raised through this whole process here.

But it's notable that there's this question of how long it will take to get that data on those accounts. And Twitter's attorney said it would be a week to 10 days with some manual labor from Twitter to dig up that data again. So there's a question of whether or not could this trial be delayed. There is a sense that the trial will go forward on the 17th of October as planned. But Musk's side is pushing for a ton of data. The fact that all of his requests were not addressed by the judge does mean that it does seem like there's some sense that Twitter has been sharing data with Musk as required. Yeah, that's well said because it's about the

arguments, but also about the timing for sure. Julia Borson on Twitter this afternoon. Julia, thanks. Let's get to Amazon now. The company shutting down its telehealth service, Amazon Care, according to a leaked memo first reported by GeekWire. That news is boosting virtual medicine competitor Teladoc today. Comes just days after reports Amazon is joining a bidding war for home health provider Signify. Bertha Coombs joins us and can talk maybe a bit about how big of a surprise this is as the company's moving forward with some other acquisitions in health care, Bertha. You know, Carl, one source told me last night, he said, you know, he doesn't see this so much as an end as a beginning. Amazon was playing from behind and trying to build a virtual care platform for employers. It was

playing, you know, behind Teladoc, behind Doctor on Demand and even One Medical, which is it is in the process of acquiring. And if it does acquire One Medical, One Medical has relationships with 8000 employers, something Amazon just was never able to really build on or get any traction on. So it makes sense to kind of cut your losses and focus on where you can grow, move to where the ball is going. The Signify Health, if they get that along with one medical, those two acquisitions would definitely be very transformative for Amazon and make them a much potentially bigger player in health care. But still, they'd have a big hurdle to really grow both those platforms. Yeah. To that point, Mike Santoli, I had to laugh. Bernstein today said, I get the sense investors are a bit confused about Amazon's strategic priorities,

and today's announcement does nothing to alleviate that. Right. It's fair. I guess one of the benefits of being a $1.3 trillion company that's all about kind of the future as opposed to delivering current numbers is you can experiment, you can find your way, and obviously run down some dead ends, which might be what this was in this particular venture. It really does remind me of Walmart in prior generations, where it would do something similar to this, open up a bank in Utah, say we're going to be in the banking business. And it didn't really amount to anything, but everyone got really excited about the chance that we're going to disrupt another industry. So I get the confusion. I don't think it's the big thing swinging the needle for Amazon in terms of the overall outlook. But fair to say that maybe the market likes the fact that they're not going to just sort of continue down a road that they didn't feel as

if they were going to gain an edge in. Right. Yeah, maybe some sunk costs in there. By the way, Dow picking up a little steam up 250. Bertha, thank you very much. Let's take a look at the drawdown in Peloton today. Shares falling after reporting widening losses, slumping sales for Q4. A day after surging on that news about the partnership with Amazon marks six straight quarters of reported losses, and Peloton says it hopes to reach break-even cash flow by the end of fiscal 23. Shares down about 63% since McCarthy took over from founder John Foley. CNBC.com retail reporter Lauren Thomas joins us now. We've had some fun today going through some of these metrics, Lauren. Yeah, definitely, and unfortunately for Peloton,

it does look like the company's going to erase today most of the gains that it did achieve yesterday. Like you said, on the heels of that Amazon news of the Amazon partnership. I think, you know, obviously the fourth quarter results that Peloton put out this morning were disappointing in and of themselves. But Peloton also leaves investors and analysts with a lot of question marks. Right. The company didn't offer an outlook for its upcoming fiscal year. Now, CEO Barry McCarthy certainly is trying a lot to turn this business around. You know, Peloton has tested everything from renting out its bike to hiking membership fees. It's also played around with pricing of its equipment products. But at the

end of the day, it really remains to be seen if those are going to play out. So McCarthy said on the conference call this morning, you know, this is really something, a turnaround that investors are going to have to stick around for. He certainly hopes that they will stick around, but it's proving to not be an overnight success. But, you know, something that the company is going to continue to work to. And like you said, does expect to achieve that break even cash flow by the second half of fiscal 2023. Mike, a company did take pains to say, look, we're already getting searched for on Amazon and our presence is not even really there yet. I saw a lot of notes today trying to guess which will be the next big retailer to carry Peloton bikes. Sure. And clearly would enable the company to soak up whatever latent demand is out there that they haven't reached yet. I think the bigger question, the issue for the stock is the question was always what percentage of the likely number of Peloton customers had already bought bikes and gotten into the ecosystem during the pandemic and how much was left to follow after that.

And, you know, the market's struggling with this idea. You see revenue going down. Yeah, subscriptions look like it's solid. It's growing as a portion of the overall mix, but it's not quite the whole company yet. So that's the in-between state that the company's in, even as it tries to kind of get to that next phase when maybe there's another wave of converts to the Peloton brand. Yeah. Look at those wild swings just in the past 48 hours.

And, of course, Lauren's been all over it. Lauren, thanks. Buy now, pay later. Company Affirm, meantime, reporting Q4 results after the bell. Shares moving higher into the print along with the broader market. Investors going to watch for a sense on the strength of the consumer and to see how the business model is holding up amid some softness in the economy. Joining us on that, Steve Kovach. Steve, what should we look for before Apple actually tries to own this space later? Yeah, that's right, Carl.

But first, let's talk about today. We're looking for, with the firm, we're looking for gross merchandise value. That's the total cost of stuff people buy through the platform before the merchants get paid from a firm. Last quarter, that was up about $4 billion. So we'll see any growth there that more transactions are happening. And speaking of growth in transactions, that means growth in transaction costs for a firm. So they guided up to about $355 million in transaction costs. That's their biggest cost that they have to do every quarter.

And then speaking of the consumer, what kind of health will we see in the consumer? We've gotten so much data during this earnings season on that. And by the way, we're getting fiscal year guidance for their 2023 fiscal year, Carl. And that should give us some guidance as to what they expect going into the rest of the year and into next year from consumer spending standpoint. And then, like you said, yes, Apple, within just a few weeks, they're going to be launching their Buy Now, Pay Later product called Apple Pay Later on just about every iOS device out there. So that's going to be a huge new level of competition for a firm to grapple with, Carl.

Yeah, Apple's in for a couple of wild weeks between that, the phone, the event. Tim Cook and Johnny Ive and Laureen Powell, jobs at Code. It's going to be pretty interesting. Steve, thanks. By the way, don't miss a firm founder and CEO, Max Levchin, tomorrow on Tech Check, 11.30 a.m. Eastern time. We'll get those results in just a few moments. In the meantime, a little bit of a climb here into the end of the session.

Dow's up nearly 300 points. Interesting ahead of the Fed chair. Mike, what do you think the market knows or thinks it knows? I don't know if it necessarily has a fixed idea of what's going to be said tomorrow. It's much more about nothing that is being said already. Seems particularly surprising. We had a 2 percent shakeout on Monday. There was no downside follow through. Ten year Treasury yield kind of making new lows through the day. It's at 3.02 just a second ago. So it seems as if there's a little bit of an inverse move here in some of the mega cap stocks. Now, the internals of the market have

been pretty sturdy all day. You've seen the average stock outperforming. It's about 2 to 1 advancing to declining volume. And now it's up to 5 to one. In terms of that volume so clearly people felt under invested if this market wasn't going to break down still keep in mind the highs of last week or about forty three hundred we're just approaching forty two right

here- take a look at the high beta sector of the S. and P. S. P. H. V. is the E. T. F. on a. Quarter to date basis since June thirty it's obviously been a risk seeking move. That's recovered relative to the market up eighteen percent% in just those, you know, month and a half or so. And then the volatility index has come in, clearly, you know, underscoring the idea that nobody's on

alert for too much of another stress event tomorrow, 21. Keep pointing out, if you go back a year, every low in that chart on the VIX has been higher than the one before for the last, you know, 10 months or so. So that's a pattern that would probably have to break if we're going to get some kind of really sustainable uptrend. But for now, it's cooperating down a full point going into Chair Powell's speech tomorrow. Just about a minute left here, Mike. Really quick, I was going to say, with NVIDIA and even CRM, it's not like the Bears didn't have a shot at the ball today. No, absolutely. So far, the misses have been kind of sequestered off to the side, not really blowing up full sectors, at least for right now.

And that's obviously a net benefit. Most stocks are still well off their highs in those hard hit areas like retail, like semi. So that explains part of the resilience, perhaps. All right, well, as we get the close here and start counting down the minutes, the hours in the minutes to the Fed share tomorrow, Dow up 306. We see the S&P with about a gain of about 1.3%. As Mike said, the VIX did settle a bit below in the low 20s.

Oil settled a bit lower. And after Bostick and Bullard and Harker and George, it all leads up to the big event tomorrow in Jackson Hole.