>> pete? >> i'll give you skechers. it's a very interesting name i think there's definitely some upside based upon some of the options we're seeing right now, scott. >> it's good seeing everybody. it's been a fun hour stocks just off the highs of the day. keep your eye right there. kelly will right now >> thank you, scott. larry kudlow joins us exclusively. we'll talk job losses, the state of reopenings, ppe changes and potential up in sanctions against china. it's all on the agenda today speaking of china, the country tightening its grip on hong kong at what point should u.s. companies begin to worry about doing business there and believe it or not, more shoppers are going to stores than expected. well tell you the names where the traffic has surprised the analysts to the upside but we begin with today's markets. some interesting rotation underway, shall we say, dom? >> we can talk about rotation. i'm also noticing, we're about

12 feet away from each other, appropriately socially distanced. take a look at the markets, near their session highs of the day the s&p 500 up about 1%. and the nasdaq up about a percent, as well so just about in line with the all three major averages i'm not going to touch this, just so you know, because it's our new world order. however, take a look at some of that lowation that kelly was talking about before growth/value, value/growth, which will be the predominant momentum part of the market in the coming months? right now, it sure looks like the white line growth on a year-to-date basis continues to outperform value we'll see whether or not that trend continues. that's a big theme for a lot of traders as we trade to the second half of this year and to top it all off, the best-performing stock in the s&p 500 today, discount retail dollar tree, specifically. that company owns both dollar tree stores and family dollar, up 11% all of that covid-19 stockpiling has bumped their sales up big. they also got a big same-store

sales boost. so those dollar stores getting a bit of a pickup. >> that is big move. thanks so much, dominic chu. the nasdaq is back to outperforming today while the airlines are lower after a sharp rebound of late. is the opening trade fizzling out a little bit for more on that, i'm joined by chris and jeff one day we have the kind of back to normal trade working really well the next day, we're taking a step back. how would you kind of describe the landscape here and what would your advice be in this environment? >> sure. you know, from where we sit, there's been an incredible recovery in the stock market from the lows in march and we think a lot of the good news is priced in. so at this point, we're getting a little more cautious we think there are about three things that the market is going to really focus on for the rest of the year, and that will probably help determine the presidential election, as well the first thing is, u.s./china

relations. second will be how technology companies face regulatory threats. and finally, how the pandemic coronavirus situation shanld is handled by the administration. if they can handle those three things well, they'll be looking at another four years. you'll see people in independent and swing states vote to keep the current leadership in charge however, if either of those things go wrong, it could be a toss-up and we could see a change election. those will both move the markets and determine the outcome in november >> it's an interesting point, especially on tech regulation. and i'm curious how big of a risk factor you think that might be, when you think some of the other things, like rising interest rates when you get that trend to continue i know that's a big if does that pose a threat to the nasdaq and by the way, i've even heard people say, look, if there is more of a hiccup in u.s./china, that also puts some of the nasdaq companies at more risk. do any of those factors concern you? >> well, i think what you

touched on -- >> yeah, i would say all of those factors are a concern. i think the interest rate situation is a little more impactful frn fuful for financi positive way and for utilities and other rate-sensitive sectors in a negative way. but absolutely, tech regulation is going to be a big issue that's going to be with us for the rest of this year. and that attacks the leadership of the market. at this point, the market is really off to the races. however, we could be susceptible for some ullbacks due to those factors. >> yeah, noah blackstein, what about you? >> so i think the original question that you sort of had asked this rally as sort of the beaten down sectors versus some of the things that have been benefiting more recently from this digital transformation. i think some of these trends were in place before this pandemic and have been accelerated because of it. i do think that if you look at the leadership from the bottom around march 23rd, it hasn't been technology that's been the best-performing sector in fact, on a year-to-date basis

it has, but on the lows, things like energy stocks are in the leadership and followed by health care and consumer discretionary and tech have been sort of battling between third and fourth and so there's been a big move in something more distressed sectors more recently. i think some of that has to do with the fed buying and tightening up the yield curve -- excuse me, tightening up spreads. part of that also has to do with green shoots we're clearly hearing that customers are coming back in many ways. in fact, some retailers are saying sales are up year over year so there certainly are green shoots as this economy is reopening. i do think, though, that last couple of days, there's been talking going around that the federal reserve might be targeting the yield curve, the shape or the slope of the yield curve, and i think that's sent a whole bunch of quantitative funds into a massive rotation. you see things like nordstrom's up 33% in a couple of days i'm not sure that's

fundamentally justified. >> connect those dots real quickly. could that result in funds rotating into something like nordstrom? >> you know, no matter how different they all tell you that they are, they all seem to be triggering off the shape and slope of the yield curve so the steeper the yield curve, to an extent, they believe, is a sign to get more cyclical. there is another part of that, a big chunk of these value indexes. and i've been a growth manager for 25 years a group of people at 55 water street aren't going to define what a value and growth stock is for me of course, i look at valuation as a growth manager. but what i'm saying is a lot of these value indexes are terrible and contain a tremendous amount of financials. and a positive sloping yield curve is actually very good for the banks. so that could have been triggered, an anticipatory change to get this huge move in the banking index. i don't think we've seen the kre

move this much in a few days since the end of the global financial crisis we don't even know if the fed will target the yield curve. so it's all anticipatory >> which tells you if we get some headlines saying maybe they won't to watch out below i'll give you the final word on where you would be placing your mone money. >> so right now, i think we have to take a look at the situation that the market's doing well we could see this recovery continue and you want to be positioned for that. within the cyclical, they're both inexpensive at a price of book around 1.1 times book and for that reason, we think there's a margin of safety if things get a lot better, you'll continue to see the banks outperform and they'll have a great rest of the year however, if things do pull back and the economy does run into some hiccups, we think that margin of safety will protect you on the downside. so we like the financials the most >> chris zacarelli, thank you both

let's turn to rick santelli. we had that terrible auction of five-year treasury notes yesterday followed by a auction of seven-year notes today. rick, how did the auction go off? >> it wasn't so bad. it wasn't as bad as yesterday's five, but a bit below average. i gave it a c-minus. this is the last 127 billion in supply it's seven-year, $38 billion the yield, it's a dutch auction, 0 0.553. it is not the lowest auction yield ever that was last auction, when it was 0.525. it's still the largest at $38 billion. why it was at a c-minus, it was trading at 54.5. if you look at the bid to cover, it was better than expected. so that's a little above average, as indirects were at 36.6 dealers took dplt ten-auction average. so c minus there's been a tell the last couple of days look at the dollar index whether it's an intraday or the fact it's at two-month lows, both intraday and on a closing basis, going back to march 27th.

it's down two-thirds of a cent and the long maturities have the highest yield in ten weeks put all of that together, they're starting to move away from safety. they're going back into that most unloved space, stocks all the big experts six weeks ago said it wasn't a buy but it's been nothing but go straight up and that is reflected in the dollar and the auctions >> a great point, rick more and more people are mentioning the weakness of the dollar here. and when there's less demand for dollars, there's less demand for treasuries >> absolutely. sometimes things can be kind of simple exactly. >> it's nice when that happens rick, thank you so much. rick santelli watching that in chicago for us president trump is expected to sign an executive order targeting social media today this follows his fight with twitter after the company added fact-checking flags to his tweets for the first time facebook ceo mark zuckerberg weighed in on all of this in an interview with our andrew ross sorkin today

>> we're different companies, but we've been pretty clear on what i think the right approach is, which is that i don't think that facebook or internet platforms in general should be ash trers of truth in general, we've tried to distinguish ourselves as probably being one of the tech companies that is the most protective of giving people a voice and free expression overall. >> and let's bring in kayla tausche for the latest and when we might expect that captured. and we know what's in it at this point, right >> kelly, the white house would only say that it's expected to be signed today, but they will not provide any formal details on this final copy of the eo or exactly when the president would sign it. a draft obtained by cnbc outlines a policy process for social media dictated by the white house that would see the fcc write new rules for how these platforms can remove content. the ftc take the lead on enforcing any violations and the justice department to convene a

working group of attorneys general across states toisolat any incidents that are happening at the state level this is an captured that has been in the works for nearly a year at this point a senior administration official tells me that the interagency process had recently broken down, but that the president wanted to resurface this effort in the wake of an effort by twitter to begin fact checking his tweets when he was talking about mail-in ballots earlier this week. jack dorsey, the ceo of twitter said our intention is to connect the dots of conflicting statements and show the information in dispute, so people can judge for themselves. more transparency from us is critical so folks can clearly see the why beyond our actions the house speaker, nancy pelosi, said that she does not support the way that the president is going about policing these platforms, but says the platforms themselves are not innocent >> they don't want to be regulated. so they pander to the white

house. you see what facebook zuckerberg is saying today about all of this just panders tax cuts, no regulation, what the president is doing is silly. but let's say this it's a distraction >> the draft order also calls for all government agencies to review their own spending on these platforms, kelly, which could add up to a big chunk of revenue. back to you. >> so many thoughts on this one, kayla. we'll have larry kudlow on in a little bit and run this by him i know it's not his specialty, but facebook and twitter are taking completely different approaches here. and mark zuckerberg is definitely emphasizing that. nancy pelosi calls it pandering, but zuckerberg was very clear about this in that big georgetown speech back in october, saying, we're going to give political speech a wide berth. and now when's the next time we're going to have to watch twitter slap a fact check on the president's tweets or anyone on the democratic side. they've set themselves up for a pretty difficult task.

and even so, they are fairly subjective in what they choose to police in their fact checking effort jack dorsey saying that the platforms are not meant to be an arbitrator of truth, and yet, in putting those fact checking flags on some of these tweets, they are doing just that, which mark zuckerberg has stressed, facebook does not want to be in the business of doing. >> yeah, it's going to be super interesting. we'll look for that executive order maybe a little bit later on kayla, thanks so much. kayla tausche in washington for us today coming up, secretary of state mike pompeo says the u.s. no longer considers hong kong autonomous from china. it's an historic move. we're going to look at what it could mean for u.s. businesses and investors. and as u.s./china tensions rise, the white house considering a plan to pay companies to bring their supply chains home? we're going to ask national loonomic adviser larry kudw about that coming up the exchange is back in a couple ." and it's definitely not "close enough or nothing." mercedes-benz suvs were engineered

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with back to the exchange. china's government approving controversial new laws the focus now shifting to what the u.s. will do in response to this move. eunice yoon joins us now live from beijing with the very latest eunice >> reporter: thanks so much, kelly. the state department released a joint statement with the uk, canada, and australia criticizing china's actions, but people here are waiting to see if the u.s. will follow up with sanctions. so today in defiance of

washington, beijing's lawmakers unanimously or almost unanimously approved a national security legislation, which paves the way for the leadership here to clamp down on activities in hong kong that china believes is subversive to the chinese state. and to set up intelligence agencies there now, many fear that the laws are going to be spelling an end to freedoms in the city president trump had said that this week, the u.s. would respond on the hong kong issue and secretary of state mike pompeo had also said that hong kong is no longer autonomous from mainland china, and that's really seen as the first step for the u.s., potentially, to withdraw its special trading status with hong kong. a lot of people within the business community in hong kong, kelly, are saying, please do not do that, because they are anticipating that this is going to be a very negative -- have a very negative impact on the city >> yeah, it's such a difficult

one. eunice, thanks very much we'll talk more about it right now. that's our eunice yoon with the latest from china. how will the crackdown on hong kong impact u.s. companies doing business there and if the u.s. retaliates with sanctions, could it hurt our own recovery from the pandemic joining me now, john rutledge is chief investment officer of sofonad. thanks for joining us, myron so what is the chamber's position on this issue >> well, kelly, in 1995, i first got involved in the u.s./hong kong business council. and 1997 was a seminole moment this is another seminole moment potentially in hong kong's future and of course a strain in the u.s./china relationship at a time where the relationship is already very complex with a set of challenges that are not going to be resolved in short-term i think it's a huge issue for us i mean, we represent the 1300

companies that are doing business already, american companies doing business in hong kong the 85,000 americans that live there. and so we're very concerned about hong kong's future hong kong has been a financial hub, it's been a model on the international scene. and we wouldn't want to see anything erode the one-country, two-systems approach that has served hong kong, china, and the u.s. as well as the global community. this is a significant potential erosion of that one-country, two-system approach. and it not only strains u.s./china relations, which it certainly will do, but it also makes it much more complex for the people of hong kong and for our commercial interests directly in hong kong. >> so john, it seems to me, i'm curious what you think about this, that it's beginning to be a done deal that hong kong is more or less just another chinese city and of course, it might take a long time for the ramifications of that to fully play out, but

would you disagree with that would you say, no, it's going to retain some kind of more western, you know, more demo democratized feel? it's hard to say that given the events of the last couple of years. >> well, kelly, i love hong kong and i love the hong kong people. and this is a heartbreaking situation, as myron said you know, there are many angles here one angle is that china has been on the road or hong kong has been on the road to being a chinese city since 1997. that that was a move to get the uk out of town before the damage really happened. the fact is inside china, hong kong has always been talk to the children as something that wasta taken away during the opium wars in a very, very negative situation for the western powers more importantly, today, xi jinping is under great internal

pressure, inside his own party, to look tough. he was criticized for how hep handled the trade war. which is why last may, the trade war backed up and the chinese changed their position he was criticized for the early cover-up of the coronavirus in the january 14th memo that was then erased. and so he is not in a position to do anything other than look like a strong man right now. and if you add that together with an election here, president trump that's gone from a booming economy to a softening economy to the coronavirus and all of that and current weakness in the polls, this is a situation where u.s. politicians of both parties are going to take aim at china and blame them for everything. and china is going to do everything to suppress the riots

or demonstration in hong kong, because they fear that finding its way on to the mainland so it's almost watching a slow train wreck. i've been there 20 years, a hundred times. i've lived in beijing and much time in hong kong. and it's just a terrible tragedy. i hope they keep as much of hong kong's freedom as possible i don't think that will happen politically. it might happen practically. in the low that's been passed today that will be drawn up by the standing committee, it really just changes in a minor way the text of a law that will then be written up between now and september. so it isn't the paper that's the issue. >> right, absolutely >> it's the fact that china is now taking control, visibly, to the outside world. >> so what you've both described. john, to you, describing this as basically a tragedy for those who are interested in hong kong's freedoms, and myron, for you, saying you don't want

anything that's going to disrupt kind of the status quo here with the u.s. and china we well, i take away from that the likelihood that the u.s. is kind of just going to let this play out, right it sounds to me like they're going to talk really tough it goes back to what arthur brooks said, we're going to talk really tough about it, but not really going to do anything. >> well, i'm not going to speak to what the administration will do i know that there is conversations going on in the interagency process and obviously the president is involved and the administration has a range of policy choices that they're considering, you know, from visas to export controls to tariffs. what we really want is, first off, president xi jinping and president trump to have a regular dialogue two, what we want is for there to be some kind of strategic framework in these discussions between the two governments. we need china and the united states to have a functional relationship the world needs it if we're going to address the economic hardships and of course

the public health hardships coming from the pandemic, then the two countries, the most powerful nations in the world, the two largest economies in the world need to figure out where they can cooperate we're going to have some differences on trade issues, on technology issues, obviously, related to hong kong and other issues like that but we've got to figure out a way to manage this hoirelationsp after all, the united states will continue to want to invest in our own economy, strengthen our own economy, but we need to work with our allies in europe, with our trading partners around the world, but we also need to be able to engage china. and this is a complicate iing tm in our relationship with china and this decision by the chinese government adds another layer of complexity at a time we didn't need it. >> to the public, it's going to be a question of, is it cooperation or capitulation? and we'll leave it there for now. but i think that's going to be the question on everybody's minds. myron brilliant, john rutledge, a couple of experts on this

issue. thank you so much for joining me today. >> thank you >> good to speak with you. coming up, we have another big jump in new jobless claims it has some warning that this is disincentivizing people to go back to work a new proposal says what we need are back-to-work cash bonuses, instead. the man behind it, senator rob portman, is behind it. and as retailers have reopened their doors, more consumers are showing up than anticipated. there are some clear winners and we've got the names. you can always watch or listen live on the go on cnbc.com - [narrator] at southern new hampshire university,

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a thousand covid-19 testing sites in 30 states and washington, d.c. up and running by the end of the week cnbc.com has details on what people need to get a test. and with major league baseball idle, dodgers stadium is drawing a different kind of crowd. its massive parking lot will now serve as california's largest coronavirus testing site, with the capacity to do 6,000 test days you're up to date, kel back to you. >>wrigley field is a food bank, we learned the other days, as well. signs of the times sue herrera with the latest there. coming up, back-to-work bonuses, paying for companies to come home, national economic director larry cud kudlow joins to talk about all of that. and brian moynihan says he's seeing positive science. >> you're seeing us come out of the -- you know, how far the depths of where we were in april and that's good news and that's due to two things one is people are starting to

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welcome back dow is up 187 points nasdaq outperforming again let's get a check on the markets. >> stocks are higher, near their best levels of the day so far. the s&p 500 and nasdaq both working on four-day winning streaks. that area is a yan area traders are watching in the charts to so whether it will act as a floor

now, some stocks to watch include u.p.s. staging a mid-day reversal after announcing it will start charging large merchandise shippers more given the surge in ecommerce demand due to the covid-19 pandemic toll brothers also up, but off session highs after it reported better than expected quarterly financial results. and we'll end on six flags, which is taking a hit due in part to analysts at goldman sachs starting coverage of the stock with a sell rating, citing in part headwinds it will face from reduced attendance and social distancing measures, so those shares off by about 9% so far. back over to you >> you would think we would already know that. but still, the shares down big >> it's been a good run, though, in the last couple of months >> absolutely, absolutely. maybe a reality check, so to speak. >> there you go. >> dom, thank you very much. meanwhile, as house democrats look to extend the enhanced unemployment benefit through january, critics say that the payment incentivizes americans not to return to work. one senator he has a different

plan which he hopes can bridge the two sides. i'm now joined by senator rob portman of ohio. senator, welcome >> hey, kelly, thanks for having me on. >> so your proposal would give people an extra $460 a week if they go back to work >> yeah, the idea is to have a bonus. right now, as we just saw with your stock market report, the economy is starting to reopen and that's good. but to have a robust economic recovery that we all want, we've got to encourage people to go back to work >> so how -- right now, the $600 a week extra goes through, i believe the end of july. >> that's correct. >> how would your proposal work and how would -- you know, explain if this were rolled out what it would mean practically speaking to every american who transfers from being on jobless benefits to maybe accepting a job or going back to work. >> well, first, let me first be sure that people understand that under the current system, according to a recent study by the university of chicago, 60 to 70% of the people on

unemployment today are making more than they did in their prior job. for the bottom 20% of wage earners, they're making on average double what they made in the workforce. so what i'm hearing from small business folks all around the state of ohio is, we're getting ready to start to hire people and we would like to reopen, but we're having a tough time getting our employees to come back and to find new employees. so the idea here is not to say that people shouldn't be getting help if they lost their job through no fault of their own, a lot of people did. but instead to say, hey, if you're on unemployment insurance and you want to go back to work, you can get a bonus to do that so our bonus at $450 comes out of the $600 per week and the idea is that that $450 is enough to make it, you know, fair for people who are on minimum wage, as an example. the $450 is based on the average minimum wage to make sure that you're even, that you'renot making more or less if you go back to work so others have said that it should be $200, some have said

it should be $600. but the point is to have a bonus to go back to work, which helps everybody, helps the worker, the small business, and the taxpayer, because you're saving probably $40 billion a year just at the federal and state level, just between now and the end of july >> meanwhile, there's a discussion about potentially the -- a different way so as i understand it, democrats say they might consider keeping the sunset of the extra benefits if in exchange they can do a wage subsidy, an employee tax credit to keep people on payrolls would you sign up for a plan like that if that is what's offered in exchange. if it's like, hey, we're not going to do the extra $450/week bonus for going back to work, but we'll do some kind of wage subsidy. >> i think we need to provide incentives for work. and again, what i'm hearing from small businesses here in ohio is they're starting to get moving again, but they're having a tough time getting workers and the unemployment situation

is going to be key to getting this economic recovery going the workplace needs to be safe that's for sure. and our program would be opti optional it's not something people would be required to take. it's something a lot of people would take advantage of. but we can't have what the democrats are proposing, which is in the nancy pelosi past heroes act, a $3 trillion plus bill it says that the additional $600 per week at the federal level, which again, means that 60 to 70% of people are making more than they did in their prior job, that that would continue into next year i think that's not in the interest of our economic growth we all want to see and getting this recovery going again. it's not in the interest of workers. if you want to get people back to work, everyone should want that that's where people generally get their health care and their retirement and that's where people get the meaning and dignity and self-respect they get from work. so we should all be working toward that end. >> one final question, which is about the uncertainty in the back half of this year and into

next year about the economy. i can see the case for there being some kind of enhanced unemployment benefits, if some restaurants that are open right now maybe due in part to some government aid end up shutting their doors and all of a sudden it's september or october. or even 2021 is there a case to be made for saying, we will provide some enhanced unemployment benefits if you end up losing your job, basically because of the pandemic, but it happens because the shoe drops a little bit later than, you know, right during the shutdowns the first time around. >> yeah, that's certainly something for congress to take a look at. and for the administration to watch carefully. but i think the more likely scenario is, you know, the economy starts to take off and there's a lot of pent-up demand right now. there's a lot of opportunity for growth, obviously, we're in a tough situation, worse probably than our history, except the great depression in terms of unemployment numbers so i think the more likely scenario is, there will be opportunities for people to go back to work and i think with the increased testing and with more anti-viral medication and

with more ppe available, the protective gear, i think it's going to be safer and better as we move along. we could have another outbreak, but i think this time we'll be much better prepared for the virus should there will be in the fall or into the water, as some have suggested the possibility of this virus raising its ugly head again, we'll have the ability to respond quickly. i think that's the more likely scenario and let's be sure we have the workforce to make that happen. >> senator rob portman, thank you for your time this afternoon. zl thank you, kelly. >> detailing his plan for back-to-work bonuses coming up, stores opened their doors and shoppers showed up in bigger numbers than was anticipated. one analyst tells us why the retail recovery could be a v-shape after all. and 40 million people have lost their jobs since the pandemic began. big names bike boeing and american airlines announcing even more layoffs this week. does the administration have further plans to stem these losses we will ask nec director larry kudlow right after this. for business as usual.

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welcome back one in four american workers have filed for unemployment benefits since the coronavirus pandemic forced the u.s. economy to shut down about ten weeks an additional 2 million people filed just last week for more on this and how the federal government can restart the economy, i'm joined by larry kudlow, director of the national economic council larry, good to see you again how are you? >> hey, kelly. how are you? >> better than most, i would say. and maybe that's the right place to start the 40 million number is terrible we've been talking all hour about different proposals, like the one you just heard from senator portman, about cash bonuses for people to get back to work. what are your thoughts at this point about kind of the line between helping and hurting the recovery >> well, i think, if you're referring to the cash bonuses and senator portman's idea, it's something we're looking at very

closely. and, you know, we may go with something like that. i don't want to button it down right now. i don't want to get ahead of the policy curve but we are looking at it, because the plus up to 600 above the state levels, everyone, all sides of the spectrum have acknowledged that that is a disincentive to go back to work. so we want to promote work we don't want to obstruct work and, you know, we're seeing the economy gradually, in phases, reopen in may and june these are the transition months. we're actually seeing some glimmers of hope amidst all the hardship and heartbreak. we're seeing some glimmers o hope on the economy. the states are opening up. the businesses are opening up. we're going to get a lot more of it in june and we just want to make sure that we do what we can to have healthy businesses and to have a healthy workforce and get people back to work you know, kelly, one side point here on this, as you know, with these unemployment claims and

with the jobs numbers monthly, a lot of it, maybe as much as 75% of it, looked like temporary layoffs. now, you can't be sure, but that's the way it was reported in the bls surveys if that is true, or if that is nearly true, then we may see folks coming back to work faster than we might have thought, let's say, a month or six weeks ago. >> the only thing i wonder, i asked this to the senator, as well what happens, larry, there are people who are able to use the relief money now, maybe stay in business, but if it comes october or early next year and it's a restaurant that no longer viable and has to lay people off, do we use the regular jobless benefits system, or does there still need to be a little bit of extra, whatever you call it because after all, these closings are still related to the pandemic >> well, that's all true and i suppose i would best answer that by saying, we'll take a look at it. but it's a -- look, we've never

had anything like this a hundred years, very hard to do any kind of economic, and we're doing what we can outside the government i kind of want to see what happens in the next four weeks, because as we come into july, i mean, we might be very happily surprised at the economic improvement as the virus flattens and adjusts down. we're seeing some early returns and i acknowledge they're early returns, but some of the states that are opening are showing, "a," lots of businesses opening, "b," folks are returning to work, and "c," just as importantly, the virus continues to flatten and adjust downward in those data. because you can't do this -- it's not one or the other. we want to open up and we want the economy to recovery, but it's got to be done safely it's got to be done safely i can't emphasize that enough. but with all of that, kelly, i

remain optimistic. our own view is, you're going to have a very, very, very strong bounceback in the second half of the year >> you know, one thing that is kind of all of a sudden coming into view. and i wonder if it's not a coincidence. you know, we're talking about glimmers of a recovery we have the big election coming up in november, obviously. the economy is a really important component of that. and here you have china making an aggressive move on to hong kong, maybe gambling that the u.s. isn't going to do anything about it that would harm our own economy as a result. so on the one -- you want people that want the u.s. to be tough on china, but also want a strong economy. is there any way to get both of those things >> let me say that china in my judgment is making a very big mistake in their national security move to take over hong kong secretary of state pompeo has been outspoken on this president trump is also. essentially, they have robbed hong kong of their freedom they have broken the 50 or

60-year treaty that was signed in the mid- to late 1990s. we can't let this go unnoticed and they will be held accountable for that if need be, hong kong now may have to be treated the same way that china is treated. and that has implications for tariffs and that has implications for financial transparency and stock market listings and related matters i think china has made a huge mistake. just as we have long said that china concealing information without any transparency, without any outside inspection with respect to the virus, which clearly originated in china, that was another big mistake so we're very unhappy with those issues it's a complex relationship. the china phase i trade deal does continue to go on for the moment and we may be making progress there. but i think their moves on hong kong are a very, very big

mistake. >> there are people who have said that they're not really honoring the terms of the trade deal, mitigating factors, there's a pandemic and so forth. but that being said, any of the moves we make, i hear senator toomey calling for things that could involve the banking system, again, these are kind of short-term/long-term traufs, but how much is the u.s. willing to risk, because the last time we kind of went through the tariff and trade wars, we remember how volatile the market was and how it slowed the economy coming out of the jobs act. what happens if just as we're coming out of the pandemic, the u.s. slrve china thing pulls the brake on this all over again >> well, i must say that china's behavior regarding the pandemic, as i said, their concealment, their lack of transparency, their lack of information, possible conspiracy with the world health organization, that cannot be ignored. and they will be held accountable for that it's not about the stock market. it's about this pandemic impact

around the world second point, with respect to hong kong, you know, we've seen these battles before and china pulled back. hong kong is clearly losing its freedom. china is now breaking long-standing rules and laws and treaties that means hong kong will be treated differently and again, china itself will be held accountable. i don't want to be specific. the president will be speaking at some length about these and related matters, but of course, secretary pompeo has made it very clear and i echo his views. >> one final question on this, larry, i think you mentioned the other day, you're looking at paying u.s. companies to relocate their supply chains to the u.s. what kind of financial incentive are we talking about >> well, i think that's an important point, because i think a lot of these firms realize they've been too dependent on china or any single country or perhaps these complex supply chains just don't work the way they thought they worked 10 or 20 years ago, when it was all the rage

now, insofar as helping companies move, we are looking at 100% expensing for all equipment, structures, and related matters. that law, which was put in place in 2017, phases out in 2022. we do not want to phase out. we want to strengthen 100% expensing. also, for various moving expenses related to a shift back to the u.s., we have a number of areas, the old opec dfs or dfc rather may be quite helpful in bringing them back home. we encourage people to take a hard look and come back to america. i think folks will learn, you operate in china like this, it is not reliable. it is simply not reliable. we're taking a whole new look at it and we will do whatever we can to aid the move back to america. >> interesting that kind of goes back to the state of the economy in the months ahead and possibly years what are the current plans -- i forget what phase we're in now,

four or five or four and a half pip me i mean, there's state and local government aid that clearly needs to be doled out. i'm not even sure the fed's main street program has lent out any funds yet. so, you know, again, that's potentially a $6 trillion there may be some slight technical changes in legislation. i think it worked very, very well as far as the fed is concerned, i think they have done a terrific job you're right they have more bullets, so does the treasury for that matter that's very important to stand by some of this is very uncertain every one has to knowledge that. it's out there as far as 4.5 or phase 5 or whatever it's called, we're looking at a lot of options.

prams rewarding people to go back to work the president is very keen on a payroll tax holiday for the work force that would give them a net increase of their take home pay of about 7.6%. that's a big deal. we may provide something of a bonus to forgo unemployment and go back into the labor force we're looking at deductions for restaurants. deductions for tourism, which has taken a tremendous hit you will be excluded from capital gains if you do it before the end of the year there's a number of options

here we're working on it every day. >> you think we'll be back to the 100% economy in terms of levels, larry? we can't stay down minus ten that would be travesty >> i think that from the cbo, congressional budget office and elsewhere, kevin and i agree we'll have tremendous growth in the second half. probably around 20%. maybestrongest quarter in history. we'll roll into 2021 cbo is at 4.1% for the year. those are really strong numbers. we started out with a solid economy. lower taxes and regulations and trade deals. don't forget usmca that will be a stimulant wuensconce w get back closer to normalcy. i'm optimistic we'll get through

this i think this will all pay off. the president rebuilt the economy. those pillars are still there. he'll stay on the supply side and market oriented economies and plans for individuals to help some of the hardships i think we can roll into 2021 and have a spectacular year also >> all right with a will the of ideas what potential relief remight see coming down the pike thanks so much >> my pleasure coming up, we've been have been wondering whether shoppers will venture into stores numbers and what it could mean for ta minfoar reilovg rwd.

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the coronavirus pandemic has taken its toll there's some reason for optimism the xrt is up double digits. mall volume at stores is exceeding exceed ing expectations here to talk about the path forward for the industry is the ceo of jay rogers. welcome. we don't have ton of time. i want to get as much of this in as possible. what jumped out to you and made you say this is stronger than i thought. >> i was surprised to see the malls opening up at 55% of last year's traffic i was more surprised to see the off mall guys opening up at 80%. the off mall is still winning like coming into the crisis and on mall is still losing but they

are both stronger they than thought they would be coming out of this. maybe that's the 1200 bucks everybody got in their pocket. maybe it's 500 bucks a kid maybe it's more than the people unemployed are making a little more than working. they are outspending it and going back to stores the stores open are doing better than they anticipated, better than i opened. everybody you had on has been physical therapily optimistic. i'm not raining on that parade it looks like a v shape recovery >> macy's and dillard's surprised you, didn't they >> they both opened up 55% last year i think we all thought if they were north of 30% of last year, we would be happen

there's no reason to think it's not going to get better from here if that's true, it will get stronger heading through the back end that's all we need to see. >> is there some spending from enhanced unemployment. other factors you mentioned that's creating a one time boost that could taper off a little bit as we head into the holiday season i'm trying to remember the executive who told us he was worried about the holiday season for that very reason >> i'm worried about the holiday season only in i don't think it will be as strong as last year what if it's 90 or 95% of last year we would all be happy. we're already looking like we could get there quickly. who thought people were going to

buy apparel first things when they got out of their houses we're seeing strength in apparel. target told us how bad apparel was when people were stocking up on their houses. now they are back buying apparel. i didn't think that was going to happen in the volumes that are happening. i think we should be fairly optimistic people are spending the money the government provided or things are just getting better i'm in the things are just getting better i think people are coming back faster than we thought they would. >> any final names you would recommend or tell people i'm still cautious on. >> burling ton has been strong, ross, tj the surprise things are dillard's and macy's being stronger they're all doing well

you saw tractor supply they got to stay open. most of those retailers that were deemed essential are doinge roping are opener faster and stronger than we thought it doesn't seem to be hurting the essential guys that are with open either. >> thanks so much. loved your note and your commentary thanks for joining me. that does it for the exchange. i'll catch you on power lunch with melissa this is "power lunch." stocks are near session highs now. this despite job losses pile up and weak housing data. a social distant connect as zuckerberg goes head to head while the white house works on an executive order