hi, everybody. welcome to powerlunch. the market is moving higher. this even as job losses pile up over three million more americans file for jobless claims last week tomorrow morning we'll get the april unemployment report. is now the time for the fed to go negative on interest rates. numbers as this crisis drags on. one award winning economist will make his case. a warning from the department of justice. china wants your data. we'll get much more on that story straight ahead first to tyler who is in the kitchen. >> i wish i were serving power hundrlunch but i'm not. thank you melissa.

let's go to bob. >> hello there are a number of reasons we keep rallying. the bottom line is for the moment generally the market is choosing to see the glass half full what's the glass half full a number of data points. we did have better than expected china export data. that's pretty good news overall. we're in range bound territory but the trend is slowly on the upside moving to the upside. let's review the data. that's a data point we had generally we're seeing reopening hopes. we're also seeing a mass i fiscal monetary stimulus most people believe the fed is real the fed put is real and hopes for improved treatments and vaccines glass half full for today. there's days when the market is glass half empty and they recognize the risks.

you can see that in down days. further downward earnings revisions. a third of the s&p is given no guidance at all. it's hard to figure out where the multiples are. flst concern it will get bogged down in partisan debate in congress we all need more fiscal stimulus and there's concerns about additional tensions with china for the moment today, powerful rally, five to one advancing and if look at the market temperature, we're range bound trending up. the brent has been improving volatility, the vix is the lowest level we have seen early march. volume, we're trending lower this is very interesting may has been very low volume a fraction of what it was back in march and april keep an eye on that one as well. finally, want to point out those meg cap names. everything here, the five biggest stocks up 5% in a couple of cases

when those five move, the overall s&p will move even if the other ones don't do that much back do you. >> robert, thank you very much stocks are surging on this thursday afternoon on pace for their first weekly gain in three weeks. oil on pace for its biggest weekly jump since futures contracts were created back in the 1980s. the nasdaq crossing 9,000 for the first time since the first week of march. it's close to being positive for the year our next guest is trimming his connect expo equity exposure. we'll find out why russ, let's go to that point you say or my note says you say that you believe your base case is equities will finish the year higher than they are today why are you trimming equities now? >> we are trimming equities a bit but there area couple of n

a, nuances. we're entering a part of the year where under normal circumstances markets are range bound. clearly these are not normal circumstances. there's going to be a lot of back and forth as we learn about the pace that stayed openings. the market had a record advance in a short period of time. we're taking a little bit off the table. what we are doing is we're looking in a trading environment to harvest income. that means strategies like selling volatility and it's a way to get some carry. >> that good news would then make you edge back into equities and what could that good news be if we get good news on a vaccine that would be one thing but what would make you move back into equities >> just to be clear, we never left equities and we still have an allocation that's just around our benchmark around 60% we're still committed to

equities we have been taking a little bit of profits the answer to your question could be a couple of things. it's going to be good news the other thing i think will be key to watch is the progression of the state openings. will we continue to see that states can cautiously but consistently open their economies, get people back to work that's really what the economy, that's what the market needs >> i didn't mean to suggest you were out of equities by any sense. you say you've been trimming equities and my question was when would you go the opposite direction and maybe add to your equity stakes. you explained that let's go to your base case which is this. if you were to put a probably on that base case, wa would it be

and by contrast what would the probability be that we go the other way and we do not just have a little recession but we have a full blown depression because the unemployment rate goes high, goes above 20%, spending falls, defaults happen and spending just falls right off a cliff. >> i think this is great question let's be clear about a couple of things first of all, even if this, if we're going to call it a recession, this will be deeper than anyone has seen in our lifetime we'll see a massive contraction annualized somewhere pick a number, 20, 25% per year. unemployment is heading toward the mid teens f not 20%. the question we have is not that that won't occur it will in q2. you start to see some healing in

q3 and q4. i think it will depend on the ability of states to pull back on restrictions and let businesses open. your question about why don't you see wave of bankruptcies, i think we're going to all the stiffs taking it by the fed should hopefully prevent a liquidity crisis from turning into a solvency crisis >> thank you for being with us always good to hear your perspectives melis melissa. >> three million more jobless claims in the latest weeks and the april employment report is due out tomorrow steve is looking at how we can come back from them. >> thank you, melissa.

tomorrow we are expecting a very, very difficult report. today no less difficult but maybe a touch better the numbers 3.619 million. the numbers to the right of the decimal point was normal for jobless claims and now we have to add three million to it you can see in the next chart the decline of the -- the weekly decline down from 6.6 million a few weeks ago. the trend is in the right direction. the numbers still from a level stand point are unbelievable some of the hardest hit states, michigan, pennsylvania some of the lower states, florida, example they may not be processing claims

wle we look at three separate gauges store closings, they are down. the percentage changed on a weekly basis is down we are still closing stores according to yelp data the infection rate is down as well it had been up near about 98% a week ago compared to the aver raj in the month of april. now it's down to 78% that's pretty good but it's still high again traffic not coming back almost at all just about 32% of what it normally is at rush hour yesterday in ten open cities we're trying to follow this stuff. trying to get a gauge or different ways the economy might be coming back one thing it seems right now is while some states have partial reopenings, customers, consumers and businesses haven't really made the transition yet. melissa. >> thank you >> federal borrowing may force the fed to consider rates.

with us now is ken rogoff. professor, great to have you with us. >> thank you >> deeply negative meani ining u 3% walk us through the scenario in which this makes sense >> first of all, you can't do it the fed did not prepare for it in 2018 and 2019 you need to be prevent people from hoarding cash, make changes to tax, legal, other things. none of these are huge obstacles that can be done look at what the fed is doing. basically, buying huge swaths of corporate debt, junk bonds ford motor might be paying 8 or 9% on markets but borrowing from

the fed. boeing is able to stay afloat without having to have any conditions yet if we get out of this quickly and the v shape recovery that feels like it's built into the market at this point takes place, no problem. if, for example, we have a second wave of infections in the fall, maybe even greater than this one or many further smaller waves and this goes on for a long time. a lot of restructuring needs to be done. you can't just guarantee every credit in the economy. you can't go to sort of a form of socialism that we're tiptoeing towards. you need at least an instrument as part of this that's market base i think if we're able to do deeply negative interest rate policy would keep a lot of companies afloat there are others that would still need to be restructured in some way

the fact that we have taken off the table really unfortunate and your forced to treat every one the same i think it's a mistake it works pretty much the same. you need fiscal policy and all these asset things we're doing the fact it's not in tool kit is a big problem. >> let's be clear, basically you're saying what the fed is doing in terms of blanket debt guarantees at this point may not, in the long run, be what is best because the recovery that you see is not going to be a bounce back recovery even though the stock market is back to levels we have seen a year ago you think a better bet is wealth will be -- these are your words. destroyed on catastrophic scale. what does that look like in the economy in terms of the metrics we all know.

>> it's like nothing we have seen since the great depression. the question is how fast do we come back. i'm very skeptical of the view we're mostly that in a year. i think it's going to be five years. that would be my point estimate of how long it is until we get back to where we were in 2019. took us three years after the natural crisis of 2008 i think this is worse. we're maybe near the end of the beginning of this. nowhere near the end >> we may have flattened the

curve but we haven't bent it down in terms of national case counts i like you, i'm very concerned that this is a longer sort of healing period than a lot of people are saying. it will take people's 401(k)s and carve them by half we're really failing to discount with a possibility that you describe which is depression level unemployment that persists, that doesn't turn around in a year even that may last and the recovery may last five years >> the ones going out of business are the smaller ones. there's going to be a consolidation. there will be more profits for the firms that are left so this

isn't an every one loses situation. i think the tech industry, the big ones will lose they will gain the start ups are going under. it's not every one loses i mean, there are obviously tens of trillions of dollars in the stock market saying that the combination of fed being so supportive and the virus maybe not being so bad it's saying that things will be better when i listen to macro econom t economists around the world, i don't quite see it i hope it's right. i wouldn't advise people to pull out of the stock market. i'm not saying that. as far as what i'm looking at in the economy, i think it's problematic and i think going back to fed, i think this plan can work for a while but it can't work for ever. we can go to europe too. there's plan of keeping every

worker and every firm there. that's why their unemployment rate hasn't spiked they can do it for a few months, for a year, two years. they may well end up with unemployment rates greater than ours >> the fed, as we understand, has not actually embarked on buying any corporate debt all though they have indicated they are willing to do so just by job owning they have accomplished a lot when it comes to the recovery we have seen in the junk markets what's a longer term implication here the fed is it in for the long run even though it thinks it will be the short run. it's left holding the bag, so to speak. what is the implication of that? >> well, eventually, we're going to see a lot of bankruptcies

there's going to be a lot of businesses that don't work there's going to be corporateses that have a lot of problem i don't criticize what the fed has done given the tools it has. i think it's done what needs to be done. i couldn't have done better. where i think the mistakes were made was back, say, last year, when they were rethinking what should their instrument be what should they do if something really bad happens they prepared for a one sigma or a 1.5 sigma. not a four like we're seeing >> thank you for your time we preeappreciate it. be sure to tune in to closing bell they'll be talking to jack lew let's get to rick in chicago for a check on the bond market might be interesting to hear

what he thinks of what professor rogoff just said >> absolutely. i've had the professor on many times. he's absolutely correct about so many things. fed fund futures are backing up what the professor said. notice what the high is today. the high in the contract is 100.005. even though it's dipped below there, everything today from october of 20 on has traded 100 in its range and right now everything, including december on, december 20, 21, all the contracts are currently trading over 100 some of them as high as 100.04 for the mid 21 contract. what does that mean in english when you go over 100, you're

discounting, meaning going into negative territory for fed fund futures. this is what investors think it doesn't mean the fed has to do it. i think they need to push back on the contract. real quickly, look at intraday of tens. you can see they lost a little ground look at intraday of uao. united airlines are trying to do 2.25 billion they are having a hard time moving the paper on the street it's never closed below 15.5 back to you, tyler thank you very much. coming up, two big ceo interviews the head of pen national gaming. the casino company had been making a big push into sports betting and then sports got shut down the path forward for this company. the future of the office

your office. my office. bob sulentic a wreath that's big in the commercial office space. how the company is reaecting as moreamericans work from home we'll talk about that next

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shares of cbre popping on a first quarter earnings beat. the company said it has more than $3 billion in total liquidity including some credit lines but it's also withdrawing guidance for 2020 in light of the uncertainty caused by the coronavirus pandemic nice to have you here. the rest of the year must look murky. >> we had a very good start to year through mid march and we did see the affects of covid-19 coming caused sales to slow down. we were running ahead of where we thought we would be when we

got to mid march and we were quiet happy with the way the first quarter tirn eer turned o. there's a lot of uncertainty until we get to the other side of this covid-19 circumstance. >> let's take your various segments of business one at a time starting with offense space. is the use of offense space going to ever be what it was before covid-19? you see some companies like barclays and other big employers saying we don't expect to have the same number of people in our offices going forward. what do you say? >> we're in touch very closely with a high percentage of the large office occupiers around the u.s. and the world they are going to look for ways in future beyond covid-19 to work more from home.

they also expect to go back to the office for some degree what we'll see is following. we'll see mechanisms that allow employees to work from home effectively. there's a lot of that going on now. then we'll see an ability to go into the office, to collaborate and so forth. people will be more spread out and the space will be more densely used there's going to be a lot of change i will say when there's change in the use of space, it's generally been very good for our company because it creates opportunities to advise our clients in project worth so forth. the use of office space will continue to be an important role >> bob, i know you don't have a crystal ball none of us do. in terms of your best guess as to when you'll get a good sense to when tenants are renegotiating their leases if they're asking for lower terms when will you start seeing that.

i imagine you've seen some of that already when do you think the brunt of that will happen >> i think it will happen in a way that provides real insight once we feel pretty comfonfiden we're to the other side of covid-19 and people start going back to work and figuring out with the clear eye view of now we're also backing the office space and we have some people working from home. what does it mean? how does it work spread between the two. i think you'll see people extend their leases i think in the interim you'll see people use some co-working facilities but oriented toward suites, not open space we're going to have to get to the other side where people feel comfortable making real long term commit ms and decisions about how space will be used >> i'm not sure we're going to get to industrial and apartment

buildings but i want to get to retail and what's going on there. retailers run on a fine marvin how have you been working with them what are you hearing what are you doing with the retailers who may be in distress >> i start by saying retail is not going away that's for sure. prior to covid-19, still something like 85% of retail was bricks and mortar. human beings want places to go they want restaurants, shops, places to get their haircut. places to work out, et cetera. grocery stores groes stroicery stores are one e

great places for people to go but it is going to change. we went from downtowns to malls to big box retail to ecommerce it's going to keep changing. there's going to be some losers because of covid-19. some difficult circumstances but there's going to be a return to physical retail and there's going to be some opportunity created as a result of that. >> thank you very much you got one thing right. for me, going to the grocery store is a big day these days. it's a happy making day. we wish you the best melissa. >> the laggards are leading the market higher. financials is the second worst group this year down 30% can you bank on a rebound? that's next on power lunch pl at&t is here providing support with advanced services for first responders

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oil giving up its gains fo the day. let's glet to dom. >> wti $23.72. that's 1% declines brent crude up about $29.61. that doesn't tell the whole story. earlier in the session wti has been up north of 11% yes, 11% gains on some of that continues near term optimism that global oil production cuts and gradually increasing global demand as various countries ease covid-19 lockdown restrictions we did learn yesterday that u.s. oil inventories this past week are starting to grow and earlier on in the day, saudi arabia had raised its official posted

selling price for oil which some analysts did say help propel gains. let's get to sue for the latest on the coronavirus. >> her's what's happening at this hour. the fda has revoked the approval of dozens of chinese manufacturers to export masks to the u.s. many of those masks did not meet the required standards in virginia, vice president mike pence delivering ppp to the front door of a nursing facility he did not wear mask or gloves and other officials with him did not wear face coverings either vice president pence made headlines last week for not wearing a mask when he visited the mayo clinic. tyson foods has reopened its largest pork processing plant but at reduced capacity.

new safety measures include social distancing and requiring all workers to wear face coverings. as always for more on the coronavirus coverage you can head to cnbc.com back to you. thank you very much. let's go to seema moda >> let's check in on the financials the group is the best performing sectors at 3% but still the second worst year to date. how should you trade these names? what would you attribute the rebound to the banks >> i would say there is some opportunity to make deposits and interesting stocks i look at this as a nice looking rebound so far but we're neutral

sector at this point in time i think it will take a bit more time before we start to see the banks start to work. there's still a lot of charge offs happening at this point and time and reserves being built. i like it. we're neutral at this point in time i think tech looks more constructive >> with a ten-year yield below 1%, how do you trade the banks here >> very, very carefully. i wish this wasn't the case by the financial action has me more concerned about the market than anything there's value here like at jpmorgan 1.2 times book. that looks atraifkts i think it's a value trap. >> got it. thanks for joining me today. follow us on twitter at trading nation back to you. still ahead, elon musk says that warren buffet's job is boring we'll explain, next. what's in the cards for

casinos? we'll speak to the ceo about the impact of this vi are you surus. remember you can watch our listen to us live or on the go on the cnbc app. our coverage will be right back.

we've got some breaking news out of washington, d.c >> we're just learning from the associated press that the justice department has decided to drop a criminal case against general michael flynn. the former national security

adviser to president trump who ster served in the role for less than a month. he lied to the vice president about his contacts with russian officials. the associated press in this exclus ifr repoive reporting oba court filing where they are dropping the case after a considered review of the facts and circumstances of the case including newly discovered and disclosed information which is sure to include recent e-mails that were unsealed between two of the fbi agents involved in this case. remember general flynn pled guilty for lying to fbi but says the department of justice concludesed that interview by flynn in which he was not telling the truth by the fbi was untethered and unjustified by the counter intelligence investigation into mr. flynn this will sit well with president trump who called for general flynn to be totally exonerated and said he had done nothing wrong. how this lands on capitol hill and whether an investigation

there will ensue is too be termed still >> thank you let's bring you up to date with where the market stands be they are higher across the board. the nasdaq back in positive territory for the year up 1.5% now. industrials up a little more than 1% and s&p also higher by more than 1% there's dirks ana. let's get a quick market flash on one of the day's big movers hi, diana. >> reporter: shares of peleton are up around 14% after the company reported better than expected covid-19 stay at home orders benefitting peleton streaming fitness model. the ceo said we believe it's the future of fitness independent of

when we get gback to normal digital subscribers were up 64%. back to you. >> thank you e lon musk talking about warren buffet. let's bring in phil to tell us exactly what he said he wasn't smoking pot or drinking whiskey at this time around he's still making headlines. >> any time he talks, he makes headlines. this was a two hour podcast with joe roggin i think they taped it in the last couple of days ar last night. it was dropped this morning. over the course of two hours they talked about a lot of stuff. we'll talk about the buffet stuff in a bit he thinks they are going way too far. here he is during the podcast. >> civil liberties in this picture. what can the government make you do

what can make you not do and what's okay. >> right >> i think we went too far >> this podcast comes just a couple of days after elon musk reached a plateau that should unlock a big payday. it could pay him more than $700 million on paper and he's already a billionaire. we know how he feels about wealth high pressure he's tacked about the fact he thinks billionaires are targets he had this to say about warren buffet and the type of billionaire he is. >> so, take warren buffet for kpampl example. i'm not his biggest fan. he does a lot of capital allocation and reads a lot of an mull repo yul accounts of companies. it's pretty boring

does coke or pepsi deserve more capital. it's kind of a boring job if you is ask me. >> that answer was in regards to question from joe about what kind of a billionaire are you and he said i believe the world needs people who are doers, makers, manufacturers. that's the kind of way that he has built his wealth over the course of the last five to ten years as tesla, spacex and his other investments have paid off. tesla being the most prominent it began at the very start it was about becoming a father again, which i think happened two days ago less tame than the last time he was on joe's show. >> i still want to know,000 pronounce his son's name >> that was not asked. that was not asked >> that's like the elephant in the room how do you pronounce x-ae, whatever it is and why a-12 over

a-10 i don't know he may be against shelter in place but from a business stand point, he's saying he needs the places to be lifted in order to start manufacturing again. >> you could make that argument. on the other extreme he believes there are people who are saying we should not be reopening at all in this country. his point to the people who made that argument is you're doing more damage to the economy and to other people by going to the extreme of saying we shouldn't go out we shouldn't restart businesses. we shouldn't restart manufacturing plants, restaurants the, et cetera joe even said, there's valid arguments on both side offense this elon agreed but he believers some of these people are going over the edge when it comes to shelter in place >> phil, thanks. all right. shares of penn national gaming climbing today despite disappointing quarterlies as the company stays positive for the

long term and expects a rebound in the regional gaming market. jay snowden will join us after weluh tus break. por ncrernright after this

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welcome back shares of penn national gaming rising today the company's long term outlook remains positive as it expects a rebound and the regional gaming market to come sooner for some of the more destination other

yents -- oriented casinos let's bring in penn national gaming ceo jason snowden along with contessa >> take a look at other stocks mgm up 6%. you have redrock resorts and boyd up 10%. that's because nevada gaming commission announced guidelines to reopen that have patrons wearing masks, distance between the slot machines. no date for reopening. the ceo was hoping for the end of may jay snowden leet's talk to you about penn national. what are going to be the first casinos that you have reopening? >> good to see you lets me start by saying that we have been profoundly impacted by covid-19 we have lost three of our team members and our hearts and

thoughts go out to our team members family and friends anyone who has been impacted by this terrible pandemic, i also won wanted to provide a big thank. there's so many working on the front lines, those that are essential team members it's something that none of us would have imagined two months ago. i can't thank those enough that are on the front lines i wanted to start by saying that look, you said it right. there's some positive news out there in terms of potential reopenings in the industry we have been in conversations with governors and regulators and a number of states where we operate in the midwest and down south and west we operate 41 properties in 19 states. it's looking like most states are targeting late may into june for a potential phased reopening. what exactly that looks like state by state will depend on

what those state requirements and the health experts in those states are looking for i think generally speaking you can expect along the line offense what you heard in nevada that it would be every other slot machine and every other seat at a table game restaurants limited capacity we're looking forward to bringing the to bringing back the crew members and guests >> you saw u your stock skyrocket after the bar stool announcement u about your investment in that particular sports brand and then sports got shut down during covid what's been the impact on your digital business on i gaming and your sports betting business and what do you think is going to happen as you resume to reopen operations? >> sure. the impact has been i guess cant in that there is really no sport betting business to be had right now with no live sports. we do operate real money games, i casino in the state of pennsylvania that business has grown

tremendousliment i mentioned this morning on our earnings call, we saw 60% growth from march to april and our real money gaming business in pennsylvania what this means longer term is very exciting. because sports are likely to go live later in the summer, potentially in the fall from everything we're hearing and reading. we have been developing our bar stool sports book app that is going to be launched in the third quarter and we think if there's any silver lining here at least in terms of delays for live sports, it puts us on a more level live playing field when sports go live again and we think the legalization process happening at the state level assistant stands to accelerate and we think we'll benefit from that because we operate in more states than any gaming company in the world >> how critical is reopening your properties? >> i ask that in the context of liquidity. inv investors are concerned about

leverage and liquidity how should we think about how many days of liquidity you have to operate if you can't open when you plan to >> sure. what we've shared publicly is that we have as of march 31st, 730 million of cash on hand in a zero are revenue environment which we don't believe is realistic given that we now see light at the end of the tunnel in terms of reopenings in some limited way over the course of f the next couple of months. we have enough liquidity with an $83 million a month cash burn to get us through the remainder of the year again, that's in a zero revenue environment. so with the now that we are going to be reopening our properties, we also shared this morning on our earnings call that between 25 and 30% of prior year revenue levs will get us to a break even at the property level so you can assume once our parties ramp beyond 30% of r

revenue we're burning less cash in our liquidity and moves well into 2021. >> jay, thank you very much. busy day r for you appreciate the time you've spent with us. it's interesting because these casinos think that the states need for tax revenue may also lead to more liberalization of gambling laws, allows for more b mobile gaming and they may be a good thing for these casinos in the long run >> thanks so much. 33.5 million americans have apply ied for unemployment benefits in the past two months. they may get hit with a tax bill they aren't expecting. we've got that story, next dolph lundgren, you've got a one-sixty i.q., a master's in chemical engineering and you're technically a genius... and it appears you're quite the investor. i like to trade.

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levels and what millions of americans filing for unemployment may not realize is that those benefits are taxed. sharon, i didn't know this either >> neither did it until i started reporting it out and it's fascinating to find out that even though you may have seen a drop in your income for this year because you've lost your job, if you're receiving unemployment benefits, you could potentially face a tax bill next year your state unemployment benefits as well as the extra $600 you get per week in coronavirus relief from the cares act is taxed by the federal government as ordinary income just like wages. so while you don't have to pay social security taxes or medicare taxes on these unemployment benefits, you will be taxed be i the federal government and possibly your state and if you don't pay enough tax throughout the year, you could wind up paying penalties and interest as well so here's what you need to do to

avoid this ask to have 10% of the unemployment benefit withheld and that will cover your federal income taxes you could also ask to have estimated taxes that you'll pay quarterly or you could just save 10% of every payment in your own savings account and we talked to credit karma ceo and they have an online free tax preparation service and he advised saving that money in your own account to give you the flexibility to manage whatever you need the over the course of the year then also still have a cushion and have that money saved up to pay a potential task bill if you have to next april >> melissa >> sharon, i'll take it from there. thank you very much. a nachk tt fil econhe markets right after this ♪i'm always walking to the same old place♪

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- i did this for my children. i am very proud of myself. - [narrator] finish your degree at snhu.edu. because they're here working day in, day out at&t is here providing support with advanced services for first responders and connecting temporary hospitals, mobile testing sites and emergency management centers because until their job is done it is essential we all have their backs it's what we've always done. it's what we'll always do. all right. it is a match for the ages game on. the pga announce iing that tiger woods and peyton manning are going to take on phil mickelson and tom brady in a golf match. it is all for good cause the players and warner immedime

will collectively make a charitable donation of $10 million to benefit covid-19 relief the event will take place on the 24th of may at the medalist club in florida and melissa, if they were looking to something to bet on, i bet you this will be the most highly wagered golf match of all time! this will be watched see you tomorrow and breaking news coverage continues with the closing bell >> thank you, melissa and tyler and welcome, everyone. i'm sara along with wilfred. stocks surging with 59 minutes left in trading. another week of millions of americans filing for jobless benefits as productivity measures plumet but stocks once again shrugging off the bad data better chinese data as that economy shows signs of recovery. autos and exports coming in better than exing pecht ed and the nasdaq once again outperforming the broader indices on track to post