tv Closing Bell CNBC May 22, 2020 3:00pm-5:00pm EDT
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i have to pay taxes on it. let them keep it and grow those moneys this is safe and i think you want to be safe. >> michael, steve, thank you both >> and kelly -- >> finding some yield. got to go. appreciate it, guys. tyler, we have to go hope you have a wonderful memorial day weepkend >> see you next week everybody, you have a great weekend and remember why we celebrate memorial day and now to the closing bell. >> thank you so much welcome to the closing bell. 59 minutes to go to close out the trading week stocks edging into the green capping off of course been a strong week of gains overall let's have a look at what's driving the action optimism over a potentia coronavirus vaccine and dr. fauci and his support for the reopening of the economy the white house supports additional fiscal stimulus and u.s. china tensions continue to simmer and hang over the
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market as china moves forward with new security laws in hong kong ahead on today's show, public pension funds are coming off of their worse quarter on record we'll speak with the chief investment officer of calstrs. plus, would you volunteer to get infected with coronavirus for the greater good we're going to talk to the cofounder of a group that has signed up tens of thousands of volunteers already for so-called human challenge trials but first, 59 minutes left of the trading. let's focus in on the big stories we are watching. mike is tracking today's market action and as tensions rise with china, we have a look at alibaba and ian bremmer is with us u but mike, let's start with you on the market. looks like we could end here on a positive note for what's overall been a pretty president obamative week >> it has. kind of quietly holding it ground
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we're below the highs that were made for this move back in wednesday for the s&p 500. but right in that zone, hovering below this area that has a lot of eyes on it as we've been saying 3,000 for the s&p 500. kind of holding form right now also in the sense of the big growth stocks are pretty much holding the market together right now. again, going back to levels we traded at for a lot of last summer as we enter the post memorial day period. will we up in a range bound summer moment. did want to point out, it remains the beneficiaries of the lockdown environment that have done more to keep the market at these levels than it has been reopening type portfolio even though the latter has come back a little bit, we've seen a movement into the more cyclical stocks, consumer orient. this from bank of america shows the assets that really do well when we're in this lockdown or restricted period. have definitely continued to hold their value you have seen a little bit of a closure of that gap, but not that much right now, it remains
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mostly the big growth stocks as well as corporate bonds which are also in that shutdown portfolio. that really are keeping the market where it is as we wait for greater evidence that we have traction on a reopening >> yeah, mike, i guess only a very slight catch up as you suggest. put iting aside what it is underlying that's been moving this week, i guess the weekly gains which are impressive, 3% on the s&p 500 that we've seen really came on one day this week, which i guess slightly takes the gloss off what looks like a positive week that it was kind of one day then we've chopped around and pulled back a bit since. >> yeah and not even one day in a sips the gap higher on monday morning you know pretty much did what the week was going to do in term of the upside. so that's not necessarily very unusual. there has been a very jumpy market that's been grabbed for exposure in different areas, but you're right there's nothing that's going on this week that would change the
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idea that the market is still kind of churning sideways and waiting for maybe a little bit more evidence that things are getting better or whether in fact you still have a lot of impatient investors and feel underexposed to stocks or just moved because of the market refuses to pull in much. >> thanks for that now to china we'll begin with alibaba moving lower today. diedra has that story for us hi, d. >> hey, wilf well mixed quarter, but political overhang is key here and i'll get to that in a moment first, better than expected ref revenue shows that chinese con supgs is recovering and that's seen as a good signal for retailers. their profit however fell nearly 90% due to its own investments amid the pandemic. political risks fropt and center when it comes to the share price, doynearly 6% and in hong kong the cfo address iing the senate
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bill that could delist some chinese companies from u.s. exchanges on the earnings call this morning she pointed out that alibaba's financial statements are done in accord dance with u.cory dance u.s. gap saying that shares have tripled since the 2014 map of ipo. and of course there's another overhang of shares china's new proposed security law for hong kong could see rising tensions m ba >> thank you and tepgss between the u.s. and china are certainly ramping up at the annual national people's conference meeting, china's top leaders laying out plans for reviving its economy and proing controversial laws for hong kong on the flip side, officials vowed to implement phase one of the u.s. trade deal even after the u.s. move to cut chip exports to huawei, but het let's talk more about hong kong because that stock market closed down more than 5%.
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worst day since july of 2015 ian bremmer, the national security law that china's proposing in, what are going to be the koconsequences of it >> it comes on the back of a will the of arrests that the chinese have made. in hong kong of democracy pro democracy protestors and this is for all of them, this is the end of hong kong autonomy. the end of one state, two systems it's been sharply responded to particularly by secretary of state mike pompeo and you would expect to see certainly some u.s. sanctions against the chinese for those banks and others that are involved in implementation of this law. and the potential for the united states to even withdraw special trade status for hong kong is real before that happens, wrour going to see an awful u lot of companies that have their regional businesses out of hong kong recognizing that long-term,
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this is not really a sustainable play we're getting all sorts of inbound on the back of that. >> this clearly plays well to nationalistic tend encies back o the mainland in china. did president xi have a need the find something that supporters celebrated him for or is it just coincidental >> i don't think it's coincidental he's under a lot of pressure it's the worst economic period of his tenure. he's getting into more of fight with the merps largely pushed by president trump. that's not popular dmoe midwestically and he's been criticized for mishandling and koring up the initial outbreak to begin with. so xi is looking for ways to rally his own population no, he doesn't have a democratic election coming u. but he has looking for a third term in 2022 and a lot of senior chinese officials are are saying that's not certain so i think that plays into it. also in the last day, you've seen the premier lee has said
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there's going to be reunify kags of taiwan. peaceful every time they've made that statement to these players bf, they've had peaceful reunify kags, but this time after the elections, pompeo congratulates the president. united states signs a new arms deal with taiwan the chinese are given back pretty hard. >> so where does all this leave the u.s. and china ultimately? i mean do you expect continued heated rhetoric or significant policy action from the administration before the election >> i do think it's going to get worse but the interest thing is just in the last few hours, you had sunny purdue, our secretary of agriculture, as well as robert lighthizer, u.s. trade rep, talk about how much progress is being made on th phase one trade deal, so as you and i are sitting here talking about how the united states and china are heading towards a quold war footing on everything from the world health organization and blame for
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coronavirus and technology in hong kong and south china sea and east china sea and taiwan, the list is as long as my warm you have the one notable deal that trump has put together with the chinese that everyone in the trump administration including trump himself is saying how important so he doesn't really doesn't want to break that unless he has to as we get closer to the election but let's be very mass politicized. they're going to try to beat on b joe biden. joe and the democrats aren't soft on china so i expect this is going to be a lot worse >> what are the implications for the region's capital market centers? i guess on two levels, will the likes of singapore benefit and are the likes of shanghai ready for this are the capital markets op mainland china ready for the possibility of losing hong kong
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as an alternative? >> i think singapore clearically benefits and the sipg por government has been very careful to say they don't want these restrictions on hong kong. they don't want to be b seen as profiting from it because they don't want to rise the eyre of the chinese against singapore, but quietly, they understand that this is increasingly where you go if you need a small, well run place for financial markets, investment in the region the chinese just don't care as much about hong kong keep in mind in 1997 during the handover from the uk, hong kong represented about 18% of total chinese gdp. today, it's about 2.5% so even though they're still relevant in terms of the financial markets, the impact of hong kong has for china is much more an integration in the broader bay area with shinzen,
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guangzhou and to make them more politically aligned with beijing. and certainly that's going to line hong kong on the wrong side of being a channel for western investment going forward >> ian, great to speak with you. thanks for joining us. >> after the break, joe biden taking a dig at the trump administration's handling of the coronavirus crisis and also making comments on corporate taxes. >> the president's talking about a greater tax cut for corporations you tell me what you think how many jobs that will create in the next six months. >> we'll break down his tax plan and what it means for companies and individuals, next. these days, it's anything but business as usual.
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capital gains tax, just one of many tax policies joe biden plans to enact if president. he appeared on squawk box this morning and said it's time for the wealthy to pay up. >> we should stop rewarding wealth and start rewarding work a little bit let's raise capital gains tax for people making over a million bucks a year to ordinary income. let's reverse the trump tax cut.
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nobody making under 400,000 bucks would have their taxes raised period. >> joining us to discuss, edwin mills along with robert frank. let's start on the point of capital gains taxes. for the wealthy. i mean ed, it's always hard politically enact a tax increase, but for the wealthy themselves, is that more reasonable to expect that that's possible >> yeah, i think what we've seen over the last several years especially in the democratic party is that there is a strong desire to tax wealth because they don't believe that the current income taxes are providing income tax rate high enough to kind of capture what they want from that segment as well as kind of fill in any of the budget holes that exist. so from a democratic talking point, he's right on target.
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and you know, what we've seen here, too, is that center warren, senator sanders, really led with the wealth tax. one of ways in which you can do a wealth tax without a tax on assets is an a inkrecrease in investment taxes but i think that's going to be core to the democratic platform. going forward. >> so robert frank, president trump has talked about looking at cuts for these taxes. what is the truth here when it comes to capital gains taxes and what each has said and what their policies look like and how much would it bmatter >> well the truth is that joe biden even though he's portrayed as a moderate is offering the most expensive democratic tax plan we've seen from any democratic candidate in recent history. hillary clinton's plan was 1.5 trillion biden's is 4 trillion and basically it's because he's raising the ordinary income tax rate on those who make more than $400,000 he's raising the capital gains rate to be 39.6 from 20%
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that is by far the biggest c capital gains tax increase ever. and then he's raising the corporate income tax rate from 21% to 28% add that together, it's $4 trillion in spending 1.5% of o gdp, that would be a 1 1.5% in decline over ten years the question is not so much is this what the democratic party wants because of course it is, but is this the right time to do it i was surprised that biden basically said yes, no matter what's happening in the economy, we want to raise taxes on the wealthy and corporations and at least keep the middle on the bottom flat if not have some of these gains helping those programs >> let's hit the corporate tax rate because biden did weigh in on this as well. whether he would repeal them, president trump's corporate tax cut if electeded here's what he said. >> the corporate tax rate, i would move back to what i had
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proposed at 28%. we'd propose add 28% because i want to make sure that we see that these corporations, that's not going to take them under what jobs have they created? if we give them more the president's talking about a greater tax cut. you tell me what you think, how many jobs that will create in the next six months. >> what is the research say, robert, about whether those tax cuts which trump put down to 21% in terms of job creation >> well, look, the experience we had a great job market the last three years after that tax cut we also had a lot of that money going to buybacks and dividends. what's interesting about his plan, he talks about the corporate plan going up. what's interesting that people are fot talking about part of the plan, the biggest revenue raiser, getting rid of the qualified business income
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deduction. that hit small business, any small business owner who makes more than $400,000 a year is hit with a huge tax increase if biden is elected and he passes this m i don't know that right now or at least in the fall, is the time when you want to hit small business and small business owners with the biggest tax increase they've seen in years. >> ed mills, corporate taxes, we have this debate a couple of years ago when it came to the enacting it in the first plarks but they don't make up a huge amount of the total tax haul, so an increase doesn't necessarily generate a huge amount of money and with corporate tax, weigh out the international comparis n comparison, where the u.s., even at 21 is above european corporate tax rates and you risk them having a separate debate, which is do we risk companies that want to move abroad because of that. >> those are all great questions. when ever i hear the debate about what the corporate tax
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rate is, i always remind folks that as a small percentage of the overall conversation are we going to tax things like we used to worldwide or are awe going to keep the territorial system that was established as part of the trurp tax cuts we see in the aftermath of kind of coronavirus a real desire to have more of the supply chain here in the united states and so that will be a debate for congress ahead as to how much do you want to continue that onshoring that we think we need for national security, health and other reasons. or as you mention, as you raise the rate, how that works internationally as part of the u.s. competitiveness, so the tax code is much more complex than the tax rate >> ed, i'm sure you also saw his comments around amazon how much pushback are you expecting for big companies like amazon specifically big tech companies if the democrats in
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particular vice president biden win the election >> yeah, i mean so when i saw those comments b about amazon, my knee jerk reaction was this is part of bigger concern that i'm hearing more and more about here in washington, d.c. that what you see right now is a consolidation of market share among the largest corporations in a real concern about the aid not getting to small and medium sized businesses so the conversation about amazon in a biden administration, there will be a continuation and probably an acceleration of some of these antitrust concerns, but this goes to the heart of how are we helping main street >> ed, doesn't this also just happen to be b a conversation? what can either president trump who's also railed against amazon a number of times and jeff bezos and "the washington post" and biden here as well telling them that they have to pay taxes. they haven't done anything
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illegal. in other words, isn't this all just sort of talk and rhetoric and political scapegoating in a way? can these governments do you expect them to do anything to hurt amazon? >> i think that when you look at kind of some of the key positions that a biden administration would fill, who is is the head of the federal trade commission who is the head of antitrade division at the justice department what type of tax codes are we going to implement it would take time, but the priorities matter. and you know kind of from a stock market perspective, what we continue to get is questions from clients is if the investigation happens, is this going to be a repeat of what we saw in the '90s as microsoft was always under the microscope and couldn't really grow and it took years before they were able to return to their market dominance and so kind of d.c. scrutiny matters, even if it's just part of rhetoric or a conversation. >> all right
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ed mills, robert frank, thank you both for joining us. still ahead, americans across the country are taking extraordinary measures to avoid any exposure to the coronavirus. but teps of thousands have signed up to get infected on purpose in the name of science e intoaltohe t cofounder of one group that is leading that effort. straight ahead this is decision tech. find a stock based on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.
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33 minutes left to go. here are three thing driving the action optimism around a potential vaccine and dr. fauci. the white house saying it supports additional fiscal stimulus setting up a conflict and u.s. china tensions continue to simmer hanging over the market as china moves forward with the new security law in hong kong. we've got soft little change real estate, utilities and communication services are in the green. energy, financials and materials are bringing up the rear >> time for a coronavirus update >> here's the latest the world health organization
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says south america is the new epicenter of the covid-19 pandemic and brazil is the hardest hit country in the region with almost 300,000 confirmed cases and 19,000 deaths go to b cnbc.com for more on the situation there. google's ceo tells wired he's excited that having remote employees has worked out well so far. he wants to see what happens after a few months when teams that don't formally work together have to brainstorm new ideas and there will not be a 2020 new york auto show originally scheduled for april then postponed to august, it has now been canceled and a super bowl championship ring auctioned off by robert kraft has sold for over is 1-million. it goes to the all in challenge that's raising money to feed those affected by the pandemic it's raised over $45 million so far. back to you. >> frank, thank you. although all 50 states have begun some form of reopening,
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their economies we're seeing an uptick of cases in some areas with experts warning of a second wave and saying reopening may come at a cost dr. fauci weighed in earlier on cnbc >> depending upon the dynamics of the infection in the particular state, city, region, that you're in, we certainly want to in a cautious way reopening. we can't stay locked down forsuchfor such a period of time that you might do damage and have unintended koconsequences including consequences for health i don't want people to think that a any of us feel that staying locked down for a prolonged period of time is the way to go. we had to do that when we had the explosion of cases but now is the time depending upon where you are and what your situation is, is to begin to seriously looking at reopening the economy
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again, we expected that and this in part how much an uptick, social -- i think one of f the now is will we do in in gradual. >> the second wave or a second spike in cases later this year that he does plan. and presume if there was a crazily big second wave, that view would change, but that aside, do you kind of agree with that point of view >> i agree that what we should have in place.
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there's an epidemic, on the first wave when we have cases that fall, there's probably outbreaks in select cities we want to be able to target the action in that part of the country. >> the cdc this week and fda around surfaces and how easily trans missable this covid-19 is is happening and the upshot is according to the cdc, is virus is thought the to spread mainly from person to person, not spreading easily from touching services or objects, so dr. gottlieb, can we stop pipe wooiping down our xwoesryes? >> i'm not sure a change in cdc recommendations. they base it on day that ta that
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shows most of the outbreaks have been in respiratory spread we've known that it's from direct and sustained contact with people. that's why people who work in a sustained fashion like in meat processing plants and grocery stores are at risk because they're working without protective equipment with other people for long periods of time. so those are risky settings. but that doesn't exclude the possibility there's some spread from contaminated shared surfaces and there is, we just don't know what component. so it makes sense to clean things like subways end up being sources so i think cities implementing cleanings, airlines doing that, others that where you have a lot of people trafficking through sites with their shared surfaces, it's prudent to clean those whether r or not you need to wipe down your groceries as aggressive as some have been, i think that's another question. there's much less risk >> do you do it? >> i do it within reason i don't know i'm careful with my hand hygiene when i go out no and i have been for some time
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now. i think everyone taking simple precautions trying to limit activity where they can, being careful about hygiene is going to have a big impact when you distribute that over the population there was the study that sort of identify ied that if everyone just cuts down their activity a bit, that can have a big impact but the ckcd really didn't change their guidance they're saying the data is tip ng the when you look at the clusters of infection is from rest pra torre droplets and from groupsof people that have been together r for long periods of time >> dr. gottlieb, early this week, we got the news from moderna about their vaccine and some people since then have criticized a lack of hard data released and it was more just pointing to news rather than hard data. dr. fauci has been more positive perhaps than some of the analysts have been where do you stand on that has sheen more of the data to lead to that president obaview t
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has been released he welcomed more than the critics? >> well, i don't know what tony has seen, but it's hard data just early it's 45 patients all the pashlts developed antibodies to the virus and then eight of the patients they were neutralizing so not only bound the virus, but destroyed the virus. the other 37 patients we don't know yet whether they developed neutralize l antibodies because they weren't tested yet. the nih, tony's group, does that testing. they have to do it in a secure lab because they're exposed the blood to the virus they're doing that and we should have that data soon. most assume they probably produced it in some additional patients what it suggests is that this is a virus that we should be able to develop a vaccine against whether it's going fob moderna or another company, the company item on the board of, it's not clear which vaccine is going to be first to market and hopefully more than one gets to the market in a reasonable time frame, but
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lack looks like we'll be able to develop a vaccine against this virus. this seems like a druggable target based on the data we're seeing out of china, the moderna data and the other animal studies. >> thanks for joining us >> thanks a lot. >> have a great weekend. after the break, is trading the new sports betting a number of factors a, we'll discuss coming up. [squeaky shopping cart] [sniffing] is the salmon wild-caught? she only eats wild caught. [cash register beeps] uh, i need a price check on honey. don't get mad. get e*trade and get more than just trading. investing. banking. guidance.
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kate >> there are a few theorys about what's fuelling the trading. some are saying there's a lack of casinos and more time at home and more stimulus money in people's pockets data track telling clients they see people turning to stocks instead of betting for a ruch of dope mean. the firm used google's search trends searches for buy stock began to rise the most stocks on robin hood have been low priced followed by ge, gopro and airlines e*trade telling mae me they're saying find the rumor trends on vaccine hopes in biotech back to you. >> thanks for that and mike is with us as well. the early data we've seen released out of the likes of
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schaub and e trade have seen some impressive account opening data as well i guess volatile times particularly with the big pullback, you might expect that any way. the absence of sport to bet on i guess may be a small kicker. >> several things came tokt. i remember in a previous era of stay at home day trading, you'd see a spike in certain stocks on days like the day after thanksgiving when you had the markets open but most people were home. so there was a little bit of a precedent for this i buy on some level that sports betting is appealing to certain people and does it mean the market is getting frosty and speculative? it's earl to say that because it
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remains a fringed activity but something to watch as you try to figure out what the sentiment and aggressiveness of investors is are we going to see retail activity drop? >> i sort of doubt that. maybe at the margins it might drain away a little at that low level type you know flipping of stocks if in fact some of these use of you know betting on basketball or something like that, but i can't imagine it's going be a swing factor in how the market or how the brokerage firms have their business goes >> the other point with this comparison, even in a market where we've 10% moves in a single day on a stock, the sort of pay off that you get relative
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to a typical sports bet or typical spin at the wheel or deck of the hand in cards in the casino, is clearly much, much smaller. so again, that comparison doesn't really, really work unless people are coming in and leveraging up their positions aggressively or buying complicated options which doesn't seem the case. the direct comparison. >> well believe it or not, options trading is off the charts right now so that is the kind of you know low kind of defined risk and lots of upside, but really bad odds that you might get. there was a piece and there was f a quote from somebody who said stock trading is great because if i'm wrong, i don't lose my whole thousand dollars at once so i guess it depends on how you mental accounting works in this. >> interest iing debate with markets by the way at the moment 16 minutes left essentially flat on the s&p 500. after the break, an update on retail expedia's ceo sees hopes in a travel market. a top pick in the payment space.
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and lindsey bell to join the conversation as well we'll kick it off with the broader market stocks are fade iing into the ce today. actually we got the s&p little change there's the dow. down about 37 points despite some negative action today. thanks to monday's major surge we are still on track for the best weekly performance for the dow in six weeks looking at pretty solid gains, lindsey and now we've got a market, an s&p that's almost 35% off the march bottom where does that leave us >> yeah, it's been an impressive rebound off that bottom for certain. going into the summer months, which are usually slower months for the market in general. what we've seen from memorial day to labor day is we've seen the market be about flat over that period of time on average some summers are better than
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others but i think when you look at the market overall right now, it's very technically driven the 20 day moving average had been a key and now we're bumping into the 200 day moving average. that's about where the market is today, so we might need to take a little breather here that's a strong level of resistance >> mike, to that point, we mentioned earlier how most of this week's gains came on monday is one of the reasons we haven't managed to bid on that because of the resistance levels that we're pushing up against >> at least for now the perception of resistance and the idea that the market probably does have to gather itself after this run if i look though at the array of indicators that would make me think that somehow the rally has to stop here or has to back off very hard, the leadership stocks are still in decent shapes if you lack at the big growth stocks and have participation elsewhe elsewhere. credit markets are sturdy.
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option traders are looking a bit complacent but that's it it's not like it gives you an edge in terms of the direction of the next 3%, but that looming round unusual level that coincides with the 200 day average, it makes for a logical place for the market to sort of stop and wait for a bit. >> retailers by the way getting hit regard by the way. the likes of foot locker both reporting their results. courtney has check in on those names and sector for us. >> what a week, wilf so foot lorer cloized out the reports, like others, comparable sales fell off a cliff down 43% global stores were closed. it led to a bigger than expected than loss.
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but no one's going to have any guidance they're all cautioning the sales surge we saw from the stimulus, it might be temporary. by the way, this environment is pretty unpredictable b.j.'s wholesale wins for the strongest comps up 27% shares hitting all time highs today and we're seeing green chutes, too. tjx says it's seeing very strong sales i sales as its stores reopen macy's says sales are better than anticipated they're getting better, even though they're still about 50% of what they had seen before with the crisis. back to you. >> thanks so much for that mike, interestingly, if we look at the week to date performance, it's consumer staples that is suffering relative to consumer discretiona discretionary, which is up 4%. might not be what you would expect from these earnings this week >> right i mean based on the numbers we
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got reported, that's for sure, but it does reflect more of a kind of cyclical bent to the market i mean at least around the margin that's been the direction that the flows have been and you know i look at tjx against burlington, ross stores, you know somewhat different stories but in the same general category on a year to date basis both on the way down and up, they've really tracked one another so it's clear investor's view of these chains and prospects hasn't really been altered in a dramatic way over the longer term a mountainer matter of how sooe a normal shopping volume they remain a fair bit off their highs so it's not as if the market assumes things go back to the way they were. and the net losers have also kind of only seen their positions get worse. >> lindsey, what's your advice on how to invest in in retail.
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>> continue to be losers and the losers continue to reign the reason is consumers -- it's coming from folks who have a strong online presence and good experience online. it's also coming from -- always seen those guys do well. >> you had experience trading higher after the new ceo expressed optimism about the state of travel on cnbc earlier. >> we have very good signal across the globe on what's happening and because we participate in virtually every part of the travel market, we
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can see it quickly what we've seen is as governments, local or federal, et cetera, across the world have opened up countries or said they're going to open up countries, we see a surge in search activity as people start to think about the opportunity that they will be able to travel and then typically following that as people get closer or county are tri or place opens up, we'll see them start to book and we see those booking trends continue >> lind is sy, how do you think about a recovery and shares like expedia, airlines, hotels, anything in the travel sector given the kumpbt valuation, just how much of the drop has been priced in. >> these, all of those stocks have been really beaten up and it's encouraging to hear what we heard from the ceo of expedia, but these are all bets on a vaccine. not only being developed, but also being able to be distributed significantly throughout the country so that's number one and number
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two, the biggest wild card here for all these companies is the consumer how comfort wbl the consumer going to feel staying at a hotel that somebody else just stayed in the night before? how comfort babable with flying even if there is a vaccine going ton a cruise these are all things we have to take into consideration and we don't know how people are going to react even if they're dying to get out of their homes. >> how's the stock of something loick expedia or bookings or those types of f companies performed rell ty to the underlying industry players, whether it's airlines or hotels? >> they've been pretty hard hit and i'd have to remember when it comes to the bookings site, they were having a rough time even before this hit because the industry seemed to be full of overcapacity so the it's not as if they were coming off their highs in february, b but there isn't a risk as there is with some airlines of actual you know failure and not being able to continue to operate because of
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debt loads and things like that, so it's more about when it cops back not sure if this cycle is going to adhere to the wisdom of prior ones, but it seems the bookings sites were countercyclical because you had a tremendous number of vacancies. they had more power and leverage with their actual hotel customers so it seems as if you start to get people getting out and feeling like the first time was o they can start to get up to some relatively typical level of travel they might do fine, but it's a long way until we get there and the stocks reflect a lot of uncertainty >> e commerce spending has been up huge amount as more people avoid brick and mortar stores. thinks this trend might be here the stay and that paypal stand to gain more says that paypal tends to grow hasn't been prisd into the stock yet and exs revenue to grow 14%
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in 2020. contrast that with mastercard which the firm thinks will see a 12% decline in revenues this year mike,ed mike, paypal's been on a tear already in recent years and one can certainly understand the nation rationale there. the question i guess is to what level the bottom line margin is is for them, it's always been a case of struggling to make a huge bottom line profit. the bigger it gets, the easier it will be >> this is the kind of stock that's going to trade because there's a scarcity of any company with mid teens percentage top line growth so you can sort of squint and say wow, 45 times forward earnings it looks rich and then they are at least to some degree the customer is cyclical, but because they don't have this
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overwhelming market share like a mastercard does, it's not strictly tie d to overall transaction volumes, it makes sense. the question is how much is the market going to continue to pay a higher premium for those top line growth dynamics, but it fits in with the whole idea this crisis has just accelerated all these various trends on mobility and digital transactions >> are you a buyer of these stocks with or without a vaccine? it seems like paypal goes up on the reopenings story and the stay at home stories >> yeah, i mean i think when you think about it like a paypal, that's a huge trend going into the coronavirus trend came along. cash and cars. say that that -- these
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technologies for quickly like mike said, this is a very expensive stock. there are other smaller players in the space square reported earnings right after paypal did and that stock popped as well they have more exposure to smaller merchants which adds more risk, but it's something this is is a long-term trend we see taking hold over longer term >> sara, very quickly, the final point i'd like make is certainly the leader fintech players are always going to be winners here and paypal looks likely to be one of those but the banks are seeing fwraeter takeout of their tech a new player of course but i think there's some interesting things going on for the traditional banks going on particularly the big ones that have f strong tech offerings the guys that probably faced the biggest threat of the smaller
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banks that have the money to invest in tech over the last couple of years. >> it's interesting. the banks may be benefitting but don't get the benefit of the doubt in the market. >> certainly not >> like a paypal in their growth of online banking services mike, just about two minutes left of trade. what are you see ng the market internals? >> little softness under the surface. volume to the negative side over the course of the day. strength holding up the s&p 500. i mentioned earlier the credit markets have held up well. look at the chart of the high yield etf. then the p 500 that actually is still supportive of what stocks are doing. huge inflows into corporate funds making etfs trade reach to their underlying value then the vix being stubborn and not really getting through the 30 level decisively, but a little erosion ahead of a three-day weekend. i think it remains on gourd
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about how the outlook looks from here >> 20 seconds left higher on all three of the major indices as we stand. two points higher on the dow but a third of percent higher. russell 2000 up 0.6% 3% of gains. 8% of gains for the russell. but at the close, the dow just lore s&p and nasdaq slight gaines for the day. >> got a little tough there boot close for stocks if you're just joining us, i'm sara take a look at how we finished up the dow about nine points. pretty much a flattish trading day. for the dow overall and for the week, we got 3.3% gain for the s&p 500 today, we clocked into the close and finished up about a quarter of 1% the strength today was in the defensive groups real estate, utilities
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health care. also did well. but you also had technologies, communication services up into the green. energy, the biggest lag financials right behind it the nasdaq closing higher for the day by about .4% thanks to the strength in communications services and technology. the big cap stocks and the russell, the winner on the week not just on the day. it was for a gain of more than almost double what the market did which had a good 3% week russell had a more than 7% week. close d. still the big loser ton week but small caps showing strength. coming up, thousands of people are volunteering to be infected with the coronavirus for the sake of science. we're going to speak to the cofounder of one group leading that charge in just a bit. but first, joining us to talk about the markets today and the week, market strategist at heritage capital and lindsey bell at ally invest. first to you, mike, on what we
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saw. technology and some big tech spots. what's the market telling us here and repeat the stat 35% off of that march 23rd low it's been extraordinary. >> we're pretty much at a level where it's the borderline what you can still call a bear market rally and if it goes much higher than here, i guess we're going to have to call it something a little bit different just sort of reassess what the bach drop is the market held near the highs that's the why i would characterize this week we opened at 2940. finished at 2955 not a lot of net progress, but it was a matter of not backsliding much underinvested institutions seemed to support this market. i do see some technical signs of exhaustion indicators that suggest maybe the rally is cull min nating around these levels but nothing that says it happens op a dime
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or it's going to be anything nasty if we pull back from here, so it's status quo then with earnings, you have to wonder what is going to take in terms of catalyst, what's going to catch the market's attention besides the reopening. >> it was a big week for the bulls on wall street particularly on monday but i guess held throughout the rest of the week just about. bob has a look at the stocks that led that charge >> s&p up 3% on the week and i keep emphasizing the broadening. it's no lopger just the faang names. they all generally outperformed this week and and that's what you're looking for energy, neighbors is a good example. this is one of the big trilers we're talking about a 50% move up for the week and yeah, it's only a $20 stock, but you can see the rebouthis is had in ene. banks have had a terrible time recently, but many are up double digits
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ret retail had a good week up 20% this is not a great example, a dollar stock, but the retail index, that was up nicely and highest levels since march industrials, ge was at a 2009 low a few days ago it moved up about 17% off of those lows during the week and finally, the builders had a great week just pick any. all up double digits up 30% broadening of the market we'll see that trend continues next week. guys, have a good weekend. >> you, too, bob thanks for that. paul i'll come to you. clearly, we did see that broadening of the market as bod pointed out, but it's all relative from drastic underperformanunderwhen you consider the lead nasdaq has had year to date relative to the russell. do you expect further closing of the gap from here?
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>>. >> good afternoon, wilf. i do so a couple of things, this whole week was about if he came in lopg monday morning, almost on the gap from nid to friday to monday from monday's open until today, we're up a bit, but it's been a nice week, the bulls in that they didn't give monday's big gain back. in a new bull market, you change and rotate out of what initially led out of the bottom to the march 23rd bottom. the nasdaq 100 has been off like a rocket ship and as the bull market continues to evolve, sure, small caps and mid caps and heaven forbid, value finally gets a day in the sun, but yes, i expect it. but i also think to mike's point, there's a few cracks beheath nieto the surface that probably lead to a more mean l
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lful comeback. stocks look a little higher. one more pop next week to new highs then a more pronounced decline. >> joe biden joining cnbc today and how they differ today from president trump's. listen >> we should stop rewarding wealth and start rewarding work a little bit let's revise the capital gains tax for people making over a million bucks a year let's reverse the trump tax cut. nobody making under 400,000 bucks would have their taxes raised period, bingo >> mike, what do you think the investor take away is from that interview and from the election in a few months now that we are starting to talk b about different visions of reopening the economy, of the tax code of various policies that matter for
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investors. >> yeah, if things trend in a direction where it looks as if it could be a democratic sweep, i think corporate tax levels are probably the area the markts fixuates on. that means the opposite of what we saw in 2017 which was a bifurcation of the market and those that wouldn't be affected as much. i don't know that it's going to be as big a market mover necessarily. it's unclear how much appetite it's going to be for bold sort of fiscal experiments after what we've seen happen. and you know biden has said he's not interested in medicare for all. i think it's going to be a little while but i think it's mostly along the lines of corp. cat tax increases potentially and high-end increases in an economy that's probably going to be kind of fragile >> lindsey, what about big tech? because those two interesting themes that conflicted each
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other came out one was clear pointed comments toward amazon. separately on broad antitrust and m and a seeming to say well i'm only against it if it breaks existing laws. what was your conclusion for some of those? >> yeah, i mean that the big tech companies they'll be listening closely as the presidential debate heats up and we go into november, but i think the take away right now is basically, congress is shut down for the near term. there's not going to be any new regular lations comeing around p related to any type of stimulus that the economy needs to make sure we keep chugging along. the focus here will be move toward it is end of the year i don't think you're going to see a lot of movement in the big tech stocks. i think we're going to have a bet get closer to november to get deeper color into what these guys are think iing in regards
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big tech >> tensions continue to rise between china and the u.s. as china makes a move to assert more control of hong kong amid growing unrest joibing us now to discuss, d.j., president of long view global advise ers good the see you again it didn't spook the u.s. markets and hasn't done so each week is it fair to assume that the u.s. and china particularly with an election coming up in november here are not going to aggressively attack each other economically or worse in the next six months or so? >> wilfred, i think that the new cold war with china gained speed. if you think about the u.s. election coming up, the trump administration has lost its economic argument it was going to be running on so it was pivoting to the china argument
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this just feeds into a growing battle that's been rising for five years and actually breaks through u the headlines in the united states in the coming weeks >> you run a global advisory firm where you are paid to give advice to corporations what would you be advising them now as it relates to their business in hong kong, which so many do, especially in the financial sector >> i think they have to be prepare d if r more unrest and disruptions in the near term clearly, this effort by beijing is to shut down the protests a last ditch effort by democracy voices in hong kong. likely to see more efforts to shut down. business disruption is one of
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them >> over the longer term, you're going to see the flight over human capital. you are going to see companies leave the region it's centrality as a major hub for transactions in asia is going to be diminished this makes me think of berlin in 1961 after the wall came down. berlin after that, became much more of a back water >> d.j., how ready is china for the cold war as you referred to it to get more severe? have they had enough time and warning over the last couple of year to repair themselves for future more isolated >> you hear different voices in china. some are saying we need ten more years. china needs ten more years to gain technology and economic independence from the united states but clearly, the developments in hong kong are moving too fast and the lesson they learned from the soviet union is you cannot
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have any dissension. you can't have any succession as to independent voices inside your country what beijing is saying, this is one country we don't have two systems. >> thank you very much for joining us our thanks to lind sey and paul up next, would you u volunteer to be infected with coronavirus? turns out one group has thousands of people ready and willing to participate in so-called human challenge trials we're going to speak to the cofounder right after this break. back in just 90 seconds. anks for savage moves, and especially your awkward ones. thanks for sharing your cute kids. and your adorable pets. now it's our turn to share... with the geico giveback. a 15% credit on car and motorcycle policies for both current and new customers. and because we're committed for the long haul, the credit lasts your full policy term. so thanks again.
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would you volunteer to help speed up vaccine trials? it's bebeing discussed. meg here with the story. meg. >> there's quite a lot of debate around this one. on the advocate side for potentially considering human challenge trials, people argue it would speed up vaccine development because you can find out faster if a vaccine actually protects you from the virusment there's also an argument this could help in case the incidents of the disease goes down over the summer when they're starting, talking about starting these trials if that happens, this would be a way to still be able to test for efficacy they also argue this would be done in young, healthy, low risk volunteers where there's less of a risk for severe outcome.
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on the con side, there's still the risk of severe disease or death with this very dangerous virus. there is no rescue therapy remdesivir of course not being a silver bullet. people also point out these challenge trials may not predict ef kficacy in more vulnerable groups, but still even congress is urging the fda and hhs to think about potentially doing this arguing that this is like a war and in that tradition, volunteers have always risked their lives and put their health on the line if they're willing to help others we talk wd a doctor who helped develop the rue bella vaccine who said quote if it takes until january to get results of a phase two trial, i think the investment in challenge trials is worth it because we could be vaccinating people before january and we got news from reuters talking about starting the first phase three trials in july so potentially, this won't be needed, but advocates argue b
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they should be thinking about this now in case it could speed up getting the add voesy >> absolutely fascinating. hopefully we'll be able to continue this discussion despite the risks, our next guests says sign him up. josh morrison, one of the founders of one day sooner, an organization that hopes volunteers to human challenge trials thanks for joining us. explain what you guys are doing as it relates to covid >> yeah, thank you for having me so basically, what our group one day sooner is doing is advocating on behalf of the challenge volunteers people interested in doing these trials and our goal is to make sure that these trials are prepared and ready and available for use as soon as possible in case they're going to be useful >> do people get paid for doing it
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>> so, we think the question of compensation and pay, that's something to be figured out for the future it's kind of a secondary question pretty clearly, there's going to be reimbursement for expenses, lost wages, travel, things like that and you know insurance for if you know something bad does happen or any long-term harms and follow up care, things like that those are going to be part of any arrangement for challenge trial volunteers but beyond that, we think the important question is should these challenge trials go forward at all and then as long as volunteers are treated fairly, that's when we can answer the question about compensation >> so josh, what do you think motivates about these volunteers >> i think it changes from a number of different people and reasons, but i think that a lot of people, a lot of volunteers talk about the desire to feel empowered and to feel like they're doing an active role in fighting this disease and virus
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rather than instead being pennsylvan passive and demoralized. i think people who have had family members they want to protect that they often mention, older relatives and kids and people mention it's something they can do. they're young and healthy and able to do this so the it's a way they want to be helping. >> josh, are you signing up children and ultimately, don't you have to recruit children to do it because they are carriers and they transmit and so therefore, they would likely be candidates to get the vaccine once we have one >> yes, so the answer to that is no we wouldn't anticipate people younger an 18 being part of the challenge trial and they usually involve young, healthy people. in this case, it might be 18 to 30 or 40 and healthy people to keep the risk as low as b possible the reason you wouldn't test children obviously one issue is people's ability to consent.
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but also it's very common and even conventional vaccine studies for that kind of traditional quote phase three of efficacy study, you wouldn't necessarily include children or elderly people in that instead, you'd be figuring out is this going to be effective for most of the population then you can have a license where physicians can still prescribe it to children you might do a later study once you know it's safe in adults on vulnerable populations in children or the elderly. >> what about different races, et necessities, are you making sure you have different samples from different populations does there continue b to be questions about who's vulnerable, whether our genetics make us susceptible to symptoms or not that sort of thing >> yeah, so one thing i should mention is we are not the ones who would be run ining this stu. instead, it would be run somewhere like a university or national institute of health and they would decide the
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eligibility criteria and goals and recruiting process that said, we definitely want to have a very large and immerse pool of eligible volunteers which we have right now. we have more than 24,000 people signed up in more than 100 countries around the world so we think that in so far as diversity is going to be important from a clinical perspective, that's something we think our volunteer population can supply >> josh morrison, best of luck to you it's an important thing you're doing. still ahead, michael is back with us taking a look at whether stocks are cheap or expensive then public pension fund losses setting records. we'll discuss the implications with chris ail man who runs the nation's second largest with more than $200 billion in assets under management you can also watch r or listen to us live on the gon othe are cnbc app we'll be right back. he places you're looking forward to
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maybe not cheap, but less expensive. obviously on earnings, they're collapsing this year the market looks like it's well over 20 times forward earnings that's expensive by historical status there's a broad kind of slower moving gauge of value which compares the equity market cap of the s&p 500 to the gdp in the united states and this got to be known as the buffett indicator when in the late '90s, he suggested stocks were ahead of themselves it has been trending higher through this bull market but it has pulled back sharply at this point. it's around 2015 levels say so it's high in an historical range and yes, gdp is going to come down, but not terribly much. so i would say there's a reason it's been trending higher over the years. big american companies get more earnings from overseas and they
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have higher profit margins but i think it shows you there's been some moderation in the long-term equity market field position at this point compared to the economy of course not a market timing tool but does provide a little context >> and mike hasn't the number of listed xaeb companies i guess therefore the percentage of listed companies also come down a little bit >> the number has been trending down for a lot of years now. that's something we should keep p mind so perhaps if you consider private market value, this would look higher. but i'm not sure that really changes the overall picture because even the public markets are so dominated by a small handful of these numbers >> mike, thanks so much for t t that up next, chris ail man says
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there's more risk to the downside from the upside why he's caution in keeping money in cash and real estate. that discussion coming up after the break and also tonight, don't forget 7:00 p.m., how will we know what a second wave of the virus looks like one health expert will give insight on that. plus, some medical students graduating early to help during the outbreak ghanthpa fwangwho's join ed thi fit d e thorrd for your business. all of f that coming up on the special at 7:00 p.m.
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holding up >> well, if you look back at march, you know, you're picking the fastest bear market in history, but as we know that's 53 days ago. the market's recovered half of that move back and i think the market obviously always looks ahead. it recognized the economy was going to stop on a dime. which was amazing. now it thinks we're going the recover somewhat maybe 50% back but we're not all the way back it's been a challenging year no question. >> so, chris, where do you stand in terms of the hilikely directn of equity markets? you mentioned the economy has suffered significantly at the aim tisame time, a huge stimulus has been thrown at i. where do you stand >> i have to agree tyler earlier made the comments that you don't fight the fed
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the amount of money thrown at this economy is amazing, but we also have never stopped the economy on a dime before so i think it's going to be tough to e restart. you've seen images of people wanting to get out on this three day weekend and get out and about but i think we're still going to be resident to be in big crowds and going to sporting events people will go on vacations and maybe camp but it's going to be slow and ii think we're going to stumble. i think there are anumber of risks that appear on the horizon. i would be cautious. doesn't mean we have to go back to the march 23 lows that's when the economy was stopped. as scott gottlieb said earlier on your show, there are signs of improvement and opportunities but we're going to see resurgences of this virus in the fall and we're going to have to shut down certain cities or
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counties maybe even states. to preserve the health care system >> so have you switch ed the way you're positioned at least inside equities? i know you have these sort of standard measures that you send to stick to, but are you positioned more in defensive stocks, cyclicals, how does that look and have you made news? >> well, if you think of us like agiant 401(k) plan for a 33-year-old schoolteacher, very long-term horizon, we're going to be tilted towards equities. in our case, we're going to own the entire market. a little underweight in asset allocation we have been tilting towards defensive toward low volatility stocks i think now we're in a period where it's the stay at home stocks have been making all the moves you put on a graphic that the nasdaq is close to its
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previous high. but you're starting to see rotation this week where people see some bargains in other stocks and smaller stocks, but we still have a lot of pain. people, companies are really hurt by this shutdown and have to still finance through this time period and absorb these losses and revenue we're going to see horrible reports still as we get into the next quarterly earnings. we're halfway through this quarter. gdp is contracted dramatically but with the stimulus, it will rebound slowly i think we're a long away way of getting back to where we were. we're not going to return to the february highs just too many risks on the horizon. >> yield is hard to find at the moment and i'm sure so many of your clients are searching for some steady income there's been a lot of debate b about the banks and whether theshld cut their evidence
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well yeah, ten-year bond, 6% 0% rate for quite some yields can be hard to find there are going to be some losses to take from the companies we talk to you're not seeing tremendous losses yet in the mortgage area or in the credit card areament peop people are making those payments but there will be some pain. small businesses, we're starting to hear about a few that are going out of business. shutteris shuttering their doors for good. restaurants won't be able to turn a profit at 50% capacity. won't be able to hire many staff back i think this is a longer term, it's a health crisis we're not out of the health crisis yet so this is going to
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be a longer term problem that will drag on through the summer and resurge in fall. i think you're going to see cuts in dividends and yields because we're going to be at zero interest rates until well into '21. >> just a question on the pain being felt in state and local governments. we know that's a hot topic in governments as they debate on whether to give more aid do you worry about pension contributions as states try to preserve not cutting medicaid, not raising taxes, not cutting schools. being able to pay their police forces tapd list goes on and on. >> i think we're going to see and certainly in california, we've seen our governor propose reductions cuts to some of the important programs states have been b without really a big cut in income tax revenue and obviously no retail
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sales tax. so state s that are dependent o that are going to have to have cuts i would encourage on the pension payments, those are like mortgage payments. they're paying off their debt over 30 years. you want to keep making those payments and we're seeing states not raising rates. that's unbable because they can't afford it right now. but they certainly shouldn't do a contribution holiday if you don't pay your mortgage for a year, the bank can foreclose, but also look what happens to your prude interest it will go up dramatically i think we're going to see states as california did rightly so slow down not raise rates. we're on a schedule to be fully funded over the next roughly 30 years and i think we'll still get there. the average is around 68% funded that's accord tog cliff water, which is going to bring out a paper next week. that's not great we'd like to be closer to 80 to
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100% funded. t been a tough decade and 20 years. this is now the third severe recession we've had in the last 20 years b that have been historic, global recessions. it's tough to make a consistent return across that time period, but with this much federal stimulus as you know on the other side, stocks don't look cheap today, but it does portend for a good investment opportunities over the next five years. >> chris, thanks for joining us. >> always a pleasure your match up, your future with unemployment rates hitting highs, people are turning to their retirement savings to get through these times. five different strategies you could be using instead coming up next
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time for a coronavirus update with frank. >> white house press secretary expanding on president trump's call to open houses of worship this weekend by following guidelines from the cdc b even even if states aren't allowing it she said the cdc's guidelines are clear. >> it is safe to reopen your churches if you do so in accordance with the guidelines laid out very stringent detail here b about promotininining hy practices if social distancing is not b possible, it's recommended on intensifying cleanings, promoting social distance we lay them out meticulously >> and go to cnbc.com for more on the many facets of the debate over reopening and the minnesota state fair will not be held this august for the first time since 1946. it was canceled that year because of a polio especially
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deppic it's one of the biggest in the country, drawing more than 2 million visitorser year. back to you. >> frank, thank you. up next, a summer travel shift coronavirus hputting a major damper on the sharing economy but could car sharing be a boost as people travel ls?es we'll discuss with the president of zip car right after the break. this is decision tech. find a stock based on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.
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memorial day weekend generally kicks off the summer travel p season but this year will be different. the cdc warns that travel increases your chances of spreading the coronavirus, zip car says it is seeing its highest number of bookings since states began to lockdown in march. joining us now is the president of zip car
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are we goeing to have a travel season >> we're seeing good momentum leading up to memorial day we've seen improouchl since early march since the stay at home orders have been put in place. week on week improvements and this month, we've seen our strongest weekend yet. >> what are you doing to make sure your cars are safe and clean? the whole use of use, it's not going back to where there's cleaning done professionally >> that's right. our model car sharing so many users may be using the same car at any time. the first thing we've done is updated cleaning procedures using antiviral products we've changed our cleaning protocols and in addition to that, we've asked members to and
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we send reminders. >> so you rely on people to clean the cars themselves between each use >> we rely on members to clean the cars also have upgraded and increased cleaning throughout the last few b months >>. >> reports today is that hertz is on the verge of bankruptcy. the stock has gone from 48 to 16 since february is this a broken industry not a all. what i can say is that we're seeing signs of recovery, which is great as i mentioned early, we've also
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seen shifts in how our members are using our service. we have seen disruption in what we would consider leisure trips. we've done a survey to get a sense of how comfortable bs are. we're really encouraged. they said after walking and biking, zip car came in third. which kind of gels well with the trends we've seen across public transit. so overall, i think while yes, there's a short-term disruption, we are seeing emergence of new use cases in how members are using our service. the other interesting trend is that our members are asking us to hold on to the cars for longer so our typical business model is ooempb by the hour or day and our members have said can can i hold the cars if much longer because i feel more safe having the car to myself so we've launched a new program which allows someone to rent for five to seven days including al
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same features like parking and gas and maintenance. and cleaning as we mentioned >> i mean, i guess that final point is exactly what a couple offor sara and i's questions was getting at which is is that not threatening your original and dominant business model? >> we are really just respond ing to our membership base we have the flex bability. our goal is to offer al teternav to car ownership so we think about the car. it's expensive the tst a hassle it's a hassle n and if you live in the city, it's costly and ineffective. so we're offering an opportunity to rent a car by the hour or day r or seven days so we're really trying to not just offer a more flexible service in addition, i think we also launched our new instant access feature which not only is reporting more flexibility, but making it easier to join
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and the contact list, it's been a huge win for us. >> are you ramping up marketing or trying to build awareness in key markets, dense cities like new york where people do rely on public transportation and they might want to be shifting to driving their own car? >> we are. we're, i would say that we're shifting more to where the messages are helpful to our members. so for example, dedicated zip cars where we are focused on we're just getting lot of feedback from members to tell us we want to hold the cars for longer and we're feeling safer driving holding on and we don't want to buy a car, lease a car because it's not affordable can you expand the offering in response we have done just that >> thanks for join iing us >> thank you for having me still ahead, rating retirm fundses. millions of people -- it turns
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and right now, is a time for action. so, for a second time we're giving members a credit on their auto insurance. because it's the right thing to do. we're also giving payment relief options to eligible members so they can take care of things like groceries before they worry about their insurance or credit card bills. right now is the time to take care of what matters most. like we've done together, so many times before. discover all the ways we're helping members at usaa.com/coronavirus discover all the ways we're helping members you say that customers maklet's talk data.s. only xfinity mobile lets you switch up your wireless data whenever. i accept! 5g - everybody's talking about it. how do i get it? everyone gets 5g with our new data options at no extra cost. that's good. next item - corner offices for everyone.
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and sharon joins us more on this particular theme of late. sharon >> most americans who lost their job b recently were already on financial ground that was pretty shaky with little r or no savings for retirement half of americans who have been recently laid off of or let go had less than $500 saved for retirement in the past year. that's according to a new survey by simply wise they also found that 73% of those who were laid off plan to now work longer and 20% now plan to tap their retirement savings. now another survey by magnify money found that americans are mainly dipping into their 401(k)s and ira because they need it for household expenses like groceries and more than a quarter are doing so because they recently lost a job financial advisers are concerned we could see the number of
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people who were drawing funds from their 401(k)s and iras increase ore over the next several months because under the cares act, you're able to take a withdrawal for a coronavirus related reason, up to $100,000 and you'll pay in penalty for an early withdrawal >> what does coronavirus related reasons mean exactly you've lost your job or something like that? >> you have to have a a ffamily member who's been impacted by the coronavirus or you yourself and you have to make sure that you are facing financial hardships because of something related to that. so it isn't just that someone in your household has lost a job and they're not sick you really need to look through all the details of the caressing act and talk to your 401(k) plan administrator to understand whether r or not you're able to take this withdrawal penalty free >> sharon, thank you
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up next, wi-fi, dining out or travel. if your income decreases over the next few months, what are you willing to cut out of your budget first a recent survey looked into that we'll share the results which may surprise you, next i love these fries. you know, the chef here trained in france. mmm, it shows! so good. oh hey, did you say you needed help with investing? because i know someone who's really great. and you trust him? totally. yeah. we went to school together. i'll check him out on investor.gov. so, what'll it be? i'll just have the burger. before you invest, get the full report. check out an investment professional's background for free on investor.gov. before you invest, investor.gov.
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truly transformative sleep. so, no more tossing and turning. because only tempur-pedic adapts and responds to your body... ...so you get deep, uninterrupted sleep. during the tempur-pedic summer of sleep, all tempur-pedic mattresses are on sale! the dow as you can see, just slightly lower essentially flat s&p was up by a quarter of a percent. nasdaq led up about 0.4% over 3% of gains for each of the major indices for the week as a
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whole. >> so how will more thanes spend money going forward in it's a key question for the economy and for many of your investments cowen has a new survey asking what you'd give up if your pay was cut in the next few months turns out people are most likely to reduce spending on dining out, clothes and shoes, travel and vacation and groceries and household goods and least like lie y to downsize home, reduce r payment and at thewoman bottom of the list, wi-fi only 3% of respondents would consider cutting their home wi-fi. it's very flavor of what people are going through right now. working from home. being at home. needing a space. a car. needing your internet. the one that surprised me the most was groceries we need that, too. >> well that's true. it's interesting it's obviously defines what people consider essential and discretionary.
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people are are not already eating out it probably seems easy to let that go and i wonder if groceries ended up being there because it's the next largest piece of the budget that seems like you could cut back on and obviously you're not going to eliminate it >> buy more than you should. >> things to change like a car payment or refinance your mortgage or something like that. >> it's interesting towards the bottom admitically it's not likely to see a spending cut but people are more likely to keep their wi-fi on they are to continue spending on their pets which is a sign of how much we've come to rely on our internet connections there were also things that aren't explained towards the top of the most likely item, dining out and travel, which i guess have other factors that apply to them not just how much we favor the health and safety benefits the overall survey i thought was interesting asking whether or not we're more likely to spend more or less next month regardless of f what the sub item was
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only 24% of people said they're likely to spend less next month than they have done this month which is quite encouraging in terms of where consumer sentiment is is versus some of the rhetoric we hear as to whether consumer spending is going to come back anytime soon. >> i would say that's somewhat ebb encourage although there's a large percentage of people who live paycheck to paycheck or basically a baseline level of spending and they're spending what they can every month and hard to cut back but overall, it fits with other surveys showing an incremental uptick in terms of the brighter outlook for consumers which means they think it's going to be less bad next month athan thi month. >> well i think it also speaks to as we look ahead to next week and to see whether this rally that it has another 3% gain at least more, this week, continue
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some of the themes that are shaping up around basket of stocks that are being redefined like the stay at home stocks, the reopening stocks everybody's tracking their own indexes. covid index that cramer has for instance and who goes into that based on how our spending patterns are changing now as a result of the pandemic and which ones are going to be more permanent and long lasting >> exactly and you know, i think one thing to keep in mind is the reopening fort folio or those going out stocks are still down so much that it's not as if a zero sum game and we're going out more, going to cut back on the other stuff. i think the direction of change is positive now. i do wonder once most states are reopened in some fashion, is the threshold going to be higher for investors to take comfort because then you have to see the spending happen as opposed to just seeing the restrictions being eased back >> just to go back to the broader markets in terms of what
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we saw very strong gains on monday kind of plateaued here. and a bit of rotation. underlying albeit not where those types of sectors are year to date. >> just enough to keep things broadening out we are out of time have a lovely extended weekend, everyone fast money picks up next >> fast money starts now i'm melissa lee. brian, jeff, pete and mike coming up on fast, the dow wrapping up its best five day stretch in six weeks as we head into the memorial day weekend. how should you position yourself ahead of what could be a summer that is drastically different from any other we've seen before plus, running out of stream. why one analyst thinks there's not much more upside left for roku and in a special bonus hour of fast money, we're bringing you the fast five from the reopening trade to the race for the cure, the stories that have the bies
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