pete, what have you got for me >> i'm going to give you citi. i talk about the financials all the time i love this name it's made a nice move to the upside it continues to go to the upside i thought about taking it off, but i'll hold on to it and sell calls against it quick >>sy sirott, quick, a name >> i like jpmorgan >> josh? >> still long store. >> kelly, it's always yours. >> scott, thank you very much. welcome, everybody here's what's ahead this hour. you think with all the chaos this year, the markets would be deep in the red, but they're not. in fact, the nasdaq is up 8% since january 1st. we'll look at who else is up, who's down, and who you should bet on plus, the rent is due for many retailers and it turns out many aren't paying and now the lawsuits are starting. we'll look at the chain reaction this could have. and buckling up and rolling the dice airlines are seeing some bullish signs and gambling is back in las vegas. we have full details of both of those ahead. we begin with today's markets

and a new record for the nasdaq 100. >> it is a new record, indeed, for the nasdaq 100 the biggest of the nasdaq composite stocks we hit it earlier, but we've since pulled back and all the major industrials have as well the dow industrials swinging to a modest loss right now, down 87 points the s&p 500, off one-half of 1%, roughly 18 points to the downside this is an area of slowing momentum possibly, so we'll watch for that and the nasdaq composite off about three quarters of 1% as well for that nasdaq 100, check out these three names on a quarter-to-date basis, since the end of march, we have seen apple rise 27% a big move there microsoft, up 16%. and amazon, 26%. why do i mention these these three stocks make up about a third of the nasdaq 100 weighting. so these things have been driving the real gains and the ipo stock of the day so far, zoom info, not to be confused with zoom communications, zoom video it's up 76% right now. it actually hit $42, right now

in the opening minute. remember, priced at 21 so for a very brief moment, kelly, it was doubling its ipo value in the opening minutes, but you can see some slowing and me momentum there i'll send things back over to you. >> they're getting some zoom momentum dom, thanks very much. you would have no idea we've been through crisis after crisis this year if you look at the stock market the nasdaq is up over 7% since january 1st. the s&p is down only about 3 to 4%, but can the rally keep going? joining me to tackle that are rich weiss, the chief investment over at american century investments and steven niccolo is with federated her meme se. the year-to-date performance is almost mind boggling you would almost think it was any good old year. >> the market is really remarkable when you looked, you mentioned year-to-date but let's look over the last 12 months the s&p 500 is actually up over

10% over the last 52 weeks if you look on an equal-weighted basis, it's still up over 2% over the last 52 weeks tremendous resilience. we don't think we're going to retest those march lows. and really the entire market is trading almost like a big cyclical stock and in cyclical investing, you buy the bad news on the idea that tomorrow looks better than today. and this june quarter numbers aren't going to look great, but the market is looking past that. and we're looking at the market in three specific buckets. number one, you have the long-term secular winners. of amazon, facebook, a company like that who are going to continue to take market share. and number two, you have the losers companies where those business models are not going dto come back think about companies like retail, restaurants, hertz, jcpenney, companies that you have already seen bankrupt and most importantly, you have companies that i'm calling survivors that will turn into thrivers where their business is currently knocked down a little bit due to the pandemic, but

should come back stronger when things normalize >> interesting so rich, when you look at the market, i know you've been much more cautious on the prospects over the back half of the year when do you think the relief phase ends and the disappointment phase begins anew >> yeah, over the next several months, there's bound to be some disappointment you know, kelly, the three big -- or the three tough questions right now, number one, will there be a second wave? number two, are stocks overvalued number three, do i look fat in these pants. but i'll just take the first two. as far as a second wave is concerned, even with a second wave of coronavirus, it's likely most state and local economies will remain open, at least partially. that's not a worry for stocks right now. in terms of valuation, however, how would you even know if stocks were overvalued in the near-term? even corporate managements have given up giving guidance longer term is where the problems are a major wall street firm came

out with a report showing that maybe upwards of 10 or 20% of the job losses may be permanent or longer term, rather than just temporary. right, the so-called labor market scarring effects of this whole disaster and secondly, the cbo of the congressional budget office themselves forecast that it may take up to ten years to get back to the level of gdp that we had in 2019. so if stocks aren't disappointed, there's certainly a ceiling to equities over the longer term. >> rich, i wonder, though, you know, not to mean any kind of disrespect to cbo forecasts or those other research studies, but isn't the market just as legitimate a source of information? you know, what if the stock market is telling you that those folks are being overly cautious? >> sure. i'm sorry, your sound is going out here, i'm not sure -- >> okay, rich, i'll come back to you in just a moment steve, i'll give you a chance to

kind of answer that. how good a track record does the stock market have and what happens if, you know, in a couple of weeks' time, we're down another 20% and all of a sudden it's giving us some information that looks very different? >> sure. really it all depends on the part of the market that you're focusing on. at the federated coffman fund over 30 years, we've been looking at these long-term secular winners and we focus on picking stocks regardless of what the economic backdrop is. i have a couple of names that i can talk to you. for example, a company like cerence, they're focused on voice recognition in the automobile market. they have a dominant market share of 90% now, have you tried to buy a car lately auto sales are down tremendously their business is going to come off plan but we believe that if you can actually take a breath and think longer term and say to yourself, will the car continue to get smarter? will cerence's content per vehicle continue to go up? will you be able to one day say,

car, please tell me about a mexican restaurant that's open right now, three stars or above, that has good burritos you know, we think the answer to that is going to be "yes." and so a company like cerence, if you can look through the near-term noise, you're never sure what a stock is discounting in the very short-term, but if you can take a two to three-year track record on these survivors that will turn to thrivers, you can be very, very successful >> all right so there's a good example of what that trend would look like. and rich, i'll come back to you and same question. what if the stock market is telling you that all of those forecasters and researchers are much too bearish on prospects for the economy? >> it's very possible, right and the stock market is a good forecaster of the economy, as opposed to the other way around. and there's definitely some encouraging signs in terms of the breadth of this stock market rally. you know, basically feeding into value stocks, financials, industrials, et cetera that's all very encouraging, but the stock market has a tendency to overvalue and undervalue to

extremes so maybe we went down too far a month or two ago, but there's a very real possibility that we're overreaching here in the near-term. >> dretrue, we have definitely e that before. thank you both for joining me today talking about these markets, rich weiss and steven niccolo. thank you very much. meantime, a big move for your 401(k) plan the move gives the industry access to more than $6 trillion. for more on this, let's bring in sharon epperson who's looking what it means for retirement savings and mike santoli who's looking at why this is happening now. welcome to you both. mike, let's start with you >> well, the primary reason, kelly, why it's happening now, it seems as if the private equity industry has been looking for this change to happen, pressing for it. they would like a new distribution channel right now, pension funds and very wealthy individuals have very heavy allocations and have for years in private equity, and the smaller retailer investor, long-term retirement saver is not a market that they had access to. so clearly, it's a growth area

now, the question being, is it something that individual investors have been craving, asking for arguably, yes. private equity has become more mainstream for a few reasons you still have vanguard actually partner up and try to get into this business just a couple of months ago part of it is because all of these companies that have now stayed private private equity is a larger share of the corporate value that's out there in the world and of course, outside the public market. so those are the main reasons i would say it's happening now, as to whether it's a great time to kind of grab for private equity returns, that's not really clear they've had great record over the very long-term, but there's so much capital now devoted to it, it's unclear if future returns will match those >> what, roughly speaking, are the returns for private equity this is generally a high-fee type of asset as well. it's like, you can have access to the bond market, well, which q sip? >> these funds raise their funds and then invest it and harvest those gains. i'm not sure how it's going to work with 401(k) plans

but the returns have been quite good as they are reported. but there aren't any public reporting standards. so they've been better than public equities as reported, but also, they're skewed to the long-ago historical period where private equity returns seemed as if they were evaluated because it was a relatively immature part of the market >> it does seem like they would need better public reporting standards if this is now going to be widely available interesting. mike, thanks so much mike santoli so sharon, we turn to you, looking at how this can change retirement funds and the way that people invest their money >> well, it's important to know, kelly, that the department of labor has said that this can be used, private equity investments can be used as an option in target date funds, in target risk funds, and in balance funds within a 401(k). this is not a statement that you can use private equity as a stand-alone investment option. and while the exposure to the private equity markets could further diversify your portfolio, financial advisers and consumer, consumer advocates say, it's really important to

carefully consider the risks there is a lack of transparency here information on private equity funds that invest in private companies is not as readily available as mutual funds that are investing in public companies. and therefore, it can be difficult to consistently pick the winners. also, keep in mind, that target date funds are often a default option for many workers and some less-sophisticated investors so consumer advocates are concerned that including a private equity option and a 401(k) is providing an option to workers who can least afford to take that kind of risk, kelly. >> that's absolutely right i'm not even sure i know what's in my target-dated fund. very few people are going to go through. if you ever wanted a bonanza, you would say, just stick it in the target-dated fund. and i don't even know if you can opt out. i looked at mine once and it was in international equities, i didn't want that exposure, but i didn't think i could do anything about it it would make a lot more sense to me to make people proactively decide they wanted to put their money in there, instead of,

would i even know it was in my target-dated fund if i didn't go through the trouble of checking? >> you make a good point and i just got off the phone with fidelity who is the largest 401(k) provider out there. and they said, this may be an option that would be appealing to the mass affluent investors and sophisticated investors, but the fact that they're saying now that it has to be in a target date or a balance fund, these are generally not the most sophisticated investors who are going to opt for these in their 401(k) so you're kind of offering it to the people who are less likely to understand it and let alone be able to use it effectively for their long-term goals. the key here is that investors need to make sure that whatever they're investing in in their 401(k) is something that's really going to help them achieve their goals to be able to retire, to be able to work differently down the road. and what this is doing is not something that's transparent for the investor it's actually something that now the employer has to decide on and taking that extra step, making sure that the employer

has the fiduciary responsibility to really investigate that this is a private equity option that is lower risk, that is cost-effective i cost-effective, those are two words that don't normally go with private equity. >> and if they put up great results, that will be great for everyone holding it. but it's interesting at a time when private equity's reputation isn't that great people rail against carried interest and yet might have exposure to the very benefit -- not in that they're fund managers themselves, but that they're supporting the industry through those target-dated funds. it seems like a little bit of a strange move to me >> well, it seems like a strange move, because you're thinking of it as a 401(k) investor, not as someone who wants to get a chunk of that $6 trillion that you mentioned and is seeing the assets that they have that are in defined benefit plans and pension plans dwindle and now they're looking at the robust 401(k) market. >> absolutely.

>> wouldn't you want to be part of it? >> yep, $6 trillion. >> and investors should be part of it, right every consumer and regular investor should definitely be part of it if they have access to it, but be careful. make sure you understand the options. >> very, very well said. really interesting sharon, thanks so much appreciate it. sharon eppersontalking us through some of these big changes. coming up, it will be a long flight back to normal, but we're starting to see a small glimmer of hope in the airline industry. the latest figures and what it's telling us about how the rest of the year will play out and the famous fountains at the bellagio hotel do we have pictures? they are flowing again, apparently four more casinos are set to open this hour we're going to bring you all the very latest as those fountains reopen and here's the inside of the bellagio, which just opened its doors moments ago. we'll take a look at what we can expect for the whole industry. stay with us as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers... and deliver our products.

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welcome back to "the exchange." look at the airline stocks today, they are soaring. american's up 25%, delta up 10%, this on the news that they're beginning to add more flights as states lift lockdown restrictions and things start to reopen phil lebeau has more >> when you take a look at what's happening with flight schedules in june, it is clear that at least domestically, the big four airlines, they are adding more flights. how many more? on average, 27.7% more flights in june than they had in may here are the percentages

you see the biggest increases from american, delta, and southwest. when you take a look at american and united and you look at their july schedules, they continue to add even more flights. and that's one reason why the stocks are moving higher american's july schedule, it's down 60% compared to a year ago. it was down 80% in the early parts of may united's schedule will be down a 75%. it was down 90% back in april and in may all of this brings up the question, are people ready to fly again? our states of play survey asked that question and it basically was a simple question. is it safe to fly if you are a traveler look at this just 24% believe that it is safe to get on a flight, given the coronavirus that is still hitting the country right now. 60% believe it is unsafe and as you mentioned, kelly, earlier today, we did have a chance to talk with american ceo, doug parker now, we talked about the state of the business, but the primary point of the conversation was about his reaction and emotional interaction with an african-american flight

attendant last weekend who approached him and discussed race relations with him. and began the conversation it left an impression on doug parker and he said today, we need to do better. meaning, american and all corporations need to do better here's parker talking about what america needs to do. >> i have a voice. and those of us that are privileged with leadership have, i believe, a responsibility to use that privilege, that gift to break down barriers for those that are less privileged and that's what jacques ray taught me and that's what we'll continue to try to do. >> candid comments from doug parker you should watch the whole interview. it is posted on cnbc.com the thing that stands out to me, kelly, american has instituted a lot of initiatives in the last couple of years to deal with diversity, inclusiveness, and to become a better company, and he says, i thought we were doing a lot, we clearly need to do even

more >> interesting phil, stay right there we'll talk more about the airlines right now with the editor of skift airline weekly medu, it's great to have you here, as well. the thing i keep thinking about is american's future they are going to have a tremendous debt load, so when we see their stock make a comeback like this, it maybe suggests they have some more time to figure things out. but what kind of solutions do you think they have in order to stay afloat here >> well, first of all, thanks for having me. >> these are very encouraging numbers that phil just reported out of the airline industry. but they're coming from such a low base the recovery will be slow and painful, and i think all of the ceos have said, it will take two to three years at least before we start to see airlines come back to the levels they had in december or even january of this year >> phil, i was struck by when we spoke about this earlier and you said, look, there can't really be consolidation there's only a couple of major

airlines now, the path in that direction is not entirely clear. so does that mean there's no chance we get consolidation or how else -- will they continue to raise money the debt loads continue to be a huge factor. not in everybody's case, but certainly for some like american >> you can never say there won't be any consolidation at all. all of the airlines, the major ones, have enough liquidity to make it at least through the end of the year. the real challenging period, kelly, will be the first quarter of next year, for a couple of reasons. one, it's the slowest period of year for the airlines. that's when your revenue slows down the most. and if your debt load is still fairly high at that point and the return of passengers is still not that great at that point, that's where you will see the stress for some airlines, especially those who have taken on a lot of debt >> it's also striking that american is ramping up its flights more quickly they'll fly 55% of their schedule in july compared to united who will just fly 25% of their schedule

does that reflect the desperation that american has? and in general for the safety standards, are these going to kind of move all in the same way? should people expect the same flying experience, plane to plane, airline to airline? what do you think the deal is there and as phil said, people are still pretty skeptical about getting back in the skies. >> right, for the first part of your question, american has a large domestic network and that's through the benefit of its merger several years ago with us airways, which is primarily a domestic airline domestic as doug parker said in his interview earlier today, domestic travel will come back faster and that's to the detriment of carriers like delta and united, which have large intercontinental networks. so america is better positioned, like southwest, it's better positioned to take advantage of the trends and the return of travel as for the cleaning standards, you know, the flying experience is going to vary from carrier to carrier. you have some like jetblue is saying it will block off middle

seats until fourth of july, delta is saying until september 30th and others saying, you know, it's impossible to block off middle seats and that trend will just not continue. so until there is sort of a national standard from the department of transportation, i think the flying experience will vary between carriers that are blocking off middle seats and taking sort of more aggressive steps for social distancing and those that are ot. >> and are we getting any sense, phil, that those that are taking more aggressive steps are getting more benefit in sales as a result >> no. i have not seen any concrete data that says that somebody is booking a particular earliairli, whether it's jetblue or delta, because there's a guarantee that the middle seat will not be filled versus flying on united, who has said, look, we'll try not to fill that middle seat, but if a particular flight has a strong demand, we may have to put people in some of the middle seats. itch not seen any data that shows that people are staying away from flights that may have

somebody sitting in the middle seat >> right we'll see how it goes over the summer, i guess. madhu unnikrishna, thank you very much. coming up, the rent is coming due for many businesses and many aren't paying the potentiallily dangerous chain reaction and one market watchers says there's a conflict between liquidity and fundamentals in the market and that could spell trouble for the rally. he'll explain. remember, you can always watch or listen to us live on e chgeppn the cnbc a thexan is back in two.

welcome back to "the exchange." let's take a look at markets right now. we're moving well off the lows, not quite into positive territory, but in the dow's case, only about a third of a way away from that once again, the nasdaq is the laggard, about a two thirds of a percent decline. the declines aren't large, but pretty broad on the two sectors are in the green.

they're financials and industrials. there again you can see that kind of value, you know, rotation underway, so to speak financials are up half a percent. every other sector other than that is in the red real estate is the deepest with nearly a 2% decline. health care and utilities are also lower let's check in on some of the individual movers. right now, we're seeing after a big opening day for warner music which ipo'd yesterday, they're continuing to add about 8% today with another rally there and we'll also check in on shares of boeing, which is leading the dow again today. the stock is up 40% in a month boeing shares are up nearly 7% again today. we were just speaking about airlines seeing more passenger travel and ebay shares are jumping to hit a 52-week high after they raised second quarter guidance on stronger volume growth. nice session for ebay, which is up more than 7%, so some strong winners in the market despite these overall declines today now to sue herrera for a cnbc news update. hi, sue. >> hello, kelly, hello, everyone here's what's happening at this hour attorney general william barr

says it is undeniable that many african-americans lack confident in the justice system. he says federal law enforcement is now focused on violent protests, which are designed to terrify fellow citizens. in new york, crowds have gathered for a memorial to george floyd this ahead of larger events scheduled for 2:00 p.m. eastern time in minneapolis and in other areas around the country and in missouri, health officials say there have been no additional infections from the crowded pool parties at the lakes of the ozarks over memorial day weekend pictures of those parties were shown at a congressional hearing with cdc director robert redfield he says calls to wear masks and practice social distancing are not being heard. >> we're very concerned that our public health message isn't resonating we continue to try to figure out how to penetrate the message with different groups. the pictures that the chairwoman showed me are great examples of serious problems

>> you are up to date, kelly i'll see you next hour back to you. >> sue, thanks very much sue herrera. casinos on the famed las vegas strip are reopen for business after being shuttered since mid-march. are you out in vegas, contessa, with a look at the path forward there? >> oh, no, i'm in the opposite of vegas i wish i was in vegas. >> pretty forested for vegas >> i'm in the woods of upstate new york if i can't be there, i'll go the opposite direction, kelly. but look, reopening can't happen soon enough for workers in las vegas, with a unemployment rate of 33% in april, the highest of any major american city. so the bellagio fountains restarting last hour this is a real symbol of hope for tense of thousands of laid off casino workers and those on the job are wearing masks, both front and back of house. there's been a massive intense effort to screen and to test employees. wynn las vegas opened its own on-site testing center, and i want to show you a live shot

inside the bellagio as we speak. this is what it looks like and i just want to tell you, these guests are undergoing temperature checks when they go in, additional scrutiny, screening by health professionals, if it looks like that's necessary and they're encouraged, though not required, to wear masks. >> wouldn't be here if we didn't feel safe and comfortable. >> we come all the time, normally >> and she's been watching the openings for at least a month, two months >> it probably feels crowded to those in las vegas who have seen the empty streets for two and a half months, but the city's only at 20% capacity right now. building occupancy, kelly, is capped at 50%. >> i'm -- did you say you don't need a mask inside that seems surprising? >> reporter: i mean, this is what they've come up with, to make sure that the workers are protecting the guests and they're handing out free masks

they've got them there so that if people are willing to wear them inside the casinos, they've got them available and they're enforcing social distancing going in but is it required not mandatory. >> wow >> besides that, as a lot of people point out, kelly, it's hard to smoke and drink if you're wearing and a mask. >> yeah, well, it's hard to get coronavirus and spread it if you're not wearing a mask. contessa, appreciate it. contessa brewer in new york for us coming up, nearly 90% of u.s. cities expect revenue shof shortfalls this year should investors be worried or will the fed be the ultimate backstop plus, simon property is suing the gap over skipped rent payments and it could just the beginning of a wave of bills ed by retailers. who's missing payments and how will it impact narcotthe market? that's coming up (upbeat music)

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back a new spotlight has been placed on the lack of diversity among many industries, including wall street people are looking to corporate leadership for solutions and my next guest is head of the largest minority and women hoecwomen-owne investment bank in the company i'm joined by michelle shanks. for a firm with such an interesting history and so many great people involved, suzanne, it's great to have you welcome. >> thank you so much for having me today >> and what you guys focus on is also near and dear to our hearts right now, and we'll get into that, some of the issues with the municipal bond markets right now, but first, if you could, just kind of speak to this moment in the culture and how you've communicating with your company. >> yes, as an african-american woman on wall street, i really take all of this very much to heart. for us, diversity and inclusion is not just, you know, a chapter in our company manual.

this is the third major disruption, i think, in my 30-plus year career on wall street i started with black monday about two months after i started in the financial crisis, as head of a firm, and now this situation today. and this is really unique, because it is a financial crisis, a health crisis, and a social crisis, all rolled up into one i grew up in the south and saw the systemic racism my parents faced. the events of late and in recent years has been really, really troubling. my birth certificate still identifies my father as a negro laborer, as many african-americans were characterized at that time so i understand well the frustration that everyone is feeling today and as covid-19 continues to devastate communities of color disproportionately, and police brutality impacting so many lives needlessly, i've really had to tune in to our employees

to make sure that physically and mentally, you know, they're feeling supported. >> sure. and what practical impact has it had on your business, as you have emphasized, the first minority women-owned businesses to be in the top ten of all muni debt underwriters. it's one thing to be minority women owned, it's another thing to kind of continue that leadership, i guess you would call it, across all levels of the organization so what's the practical impact been at your firm? >> well, you know, the effects of the pandemic, you know, with tackling social distancing and dislocation married with the impact of recent events on the staff personally means that the health of the company and our people are bound together even tighter. our firm, as you noted, is majority women-owned, 60% majority african-american owned, over 72% but we also work really, really hard to improve our numbers. we have 36% black employees, 30%

women employees. those numbers are higher than probably most other firms on the street, as you can well imagine. but i continue to try to improve them to be inclues passisincluse >> absolutely. and i want to ask a little bit about your bread and butter business here. in the municipal market lately, talk about lollapalooza effects. we've had the coming together of so many challenges, low interest rates, you've had the pandemic, now you have the protests. these budgets have just been decimated.municipalalties are relying on borrowing to fill those gaps and the fed's backstops. what can you tell us about how this is playing out on the front lines? >> despite the chaos in the stock markets and the stunning, stunning unemployment data that we're seeing, the bond market has remarkably stabilized dramatically since the pandemic began. we saw significant dislocation at the beginning of the pandemic, at the announcement in mid-march to early april, with

rates spiking and large bond fund outflows. and numerous transactions. so issuers who were trying to access the markets really had to postpone transactions and go day-to-day but in recent weeks, we've really seen great improvement. and i think that's both a testament to the support of the, you know, federal support, the municipal liquidity facility program being instituted as a backstop to local municipalities to take advantage of cash flow borrowings, with notes out to -- up to 36 months. but it's also because investors have so much money they need to put somewhere. and june is a huge redemption month and a big maturity month for lots of bonds. and so we see a lot of money that's available right now so we did just this week a $700 plus million were new york water

transaction. that's viewed to be an essential service. and that deal had maturities from 2025 to 25050 and we achieved the 2.87% tic. >> wow >> we did state of connecticut last week, 500 million taxable it was a ten-year deal and the tic was below 2.5, actually, 2.4% so interest rates are still very low. and i think high-grade issuers who need to borrow are obviously taking advantage of those attractive rates and investors still need to place money where they feel they have money to deploy >> final quick question, suzanne. what do you say to those who have typically invested in muni bonds, especially because they offer such great tax-efficient yields, but are worried about where these state and local budgets are headed over the next two to five and ten years? what would you say to them >> well, municipalities have

shored up since the financial crisis and obviously, what we're facing today is even worse than what we faced during the financial crisis i think the hope is that there's going to be a fourth stimulus package that is more specifically focused on state and local governments. so i would tell any taxpayer that now is the time to dial up your favorite senator in your localities across the country. and it doesn't matter if it's a red state or a blue state. every state and city is going to be impacted by covid and prior to pandemic, your municipality had probably balanced budgets and well-funded pensions that's in jeopardy now we really need another stimulus package to provide funding to offset these covid-related losses and expenditures. >> interesting yeah, maybe even dial up your least-favorite senator, if it's that pressing. >> right absolutely >> suzanne, it's a pleasure speaking with you. thank you so much for your time today. please keep us posted.

>> thank you, take care. >> appreciate it, suzanne shank. still ahead, stocks are trying to rally with a fourth straight day with the s&p up 39% in less than three months. but one trader says he's seeing signs this is all overbought we'll dig into that next plus, from the gap to planet fitness, some rifretailers are t paying their rents and that could spell doom for the commercial real estate market. we'll dig into those numbers coming up on "the exchange." woman: my reputation was trashed online. i felt completely helpless. my entire career and business were in jeopardy. i called reputation defender.

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on march 23rd is when we put in the lows in the stock market that was the same exact day that the fed announced reduced qe i think the market said, yes, this was going to be extremely tough shrledding from a microeconomic standpoint but the fed and federal government have our backs. and not just that, other central banks have opened the spigots as well, and that's what's been flooding in. the whole time i've thought, this is great and this can take us back up to a reasonable level, but the 3130 levels, the highs we put in the beginning of march, i thought the fundamentals of the economy has to put up or shut up for us to eclipse that and that's where we're at now >> you think the next move is lower because of which factor winning out? >> because just now we're in no man's land we know the fed and the government is there and we hope the recovery is coming but to this point, we haven't seen any economic data to support that and it's going to be too soon. we need probably another month for that my thinking is, i'm not talking about testing the lows again,

because i do know that the fed ultimately has their back. i'm talking about a move back down to about 2,800. and i'm fine with that but at the end of the day, when we get to july and august and hopefully the pandemic is behind us and we're seeing what looks like a real recovery, the thing that i worry the most about is the fed sticking around, the government launching a stimulus package and then inflation might become a worry it's interesting you mentioned that today, because the dollar is broken low. the curve is steepening a little bit. i know we don't like to mention that word inflation, because we haven't seen it in 30 years, but i think there are some people worried about it >> no, it's interesting. especially, we have been watching the dollar and that weakness and trying to kind of go through that there. and more people lately are starting to recommend tips and so forth i wanted to ask you, when we talk about whether stocks are kind of overstretched or not, you can look to other asset classes and oil, for instance, has gone from minus 30-something a barrel to now fighting to go

to the mid-30s or higher wouldn't that tell you that there's also some, i don't know if optimism is the right word, but the kind of point of view that that's expressing is a recovering economy >> no, i think optimism is the right word it's just being used in a small dose right now i think the move higher in crude, from those unbelievably depressed lows from, i think it was about six weeks ago when we had that ridiculous print in the futures contract, we priced in literally global financial armageddon now, we weren't that far off i mean, this has been -- i was going to say the word "unprecedented," so ring the bell everybody drinks, unprecedented. but it clearly is the right word to say so pricing in that in that amount of time, so then we're coming back with a short squeeze and we get the dollar weakness, a belief that that's going to help the emerging markets, that's probably pushing oil a little bit, too. but i think it's mostly probably just squeezing out shorts, the pendulum swinging to pricing in too bad to pricing in too good up to about 40 bucks is my

target there >> jim, thanks so much jim iuorio why is round two so different and what will the path forward for small business look like we'll have that next and take a look at shares of the cruise lines today it's not just the airlines that are outperforming. nor woonwegian up 8%, carnival % and even royal caribbean eking out a rebound. [ sigh ] not gonna happen.

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around as we look at the path forward for small businesses kate >> hey, kelly. that's right, as of may 30th, the sba had made 2.8 million loans, totaling about $120unalle funds remaining. that's a big departure from round one when funding ran out in two weeks advocates say there's a few reasons why the money remains. chapgi ing changing guides from the sba or treasury they issued about a dozen new rules since the program laun launched there's fear of audits there's been call for mass forgiveness of all loans under $150,000 as written right now, nfib research shows small businesses had kmconcerns about being ableo comply with the law. those may be eased now the the senate's passing of the ppp act

which can has been sent to the president for his signature. that also extends time frame to spend the aid among other things but it still remains to be seen if the changes will entice small businesses to get into the program if they hadn't already applied to take on those loans and use them to get back on their feet kelly. back over to you >> what are we hearing in terms of the landscape of small businesses overall they just extended the deadline for people to use the money but what would you say the mood is >> i mean, looking at nfib data, month to month in this current time frame, it hasn't been good. one of the bright spots we saw last month was looking out to the next six months was one the only things small businesses stwarting to feel positive about. as we march toward reopening things get into the new normal i think there's some optimism of getting back to business but running a hair salon at 50 or 75% capacity is major change

it remains to be seen how that impacts their bottom line and confidence moving forward. >> thanks so much. mall owner simon property group is suing the gap over unpaid rent. this is the first big public battle but won't be last one a look at the real estate market that is next st wh ayitus i'm kent coloma, it's my job to make sure all the packages that go out today get delivered. there are people who can only get food from amazon. when you come into work, that's what drives you. my little one, i would say he's definitely proud of me. every time he sees the blue prime trucks, he says, "daddy, there's your people!" i know every single one of us is here busting as hard as we can go every day to make sure these packages get delivered.

woi felt completely helpless.hed online. as hard as we can go every day my entire career and business were in jeopardy. i called reputation defender. vo: take control of your online reputation. get your free reputation report card at reputationdefender.com. find out your online reputation today and let the experts help you repair it. woman: they were able to restore my good name. vo: visit reputationdefender.com or call 1-877-866-8555. 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

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million for not paying rent. >> get people back to work at at the same time the operators. if you don't do something, we're going to cause a commercial real estate bust at some time we can't pay rent if we're not doing business sg joining me is the economic correspondent at the washington post she describes the extent of the problem that nearly half of commercial rents were not paid in april or may. i guess the best hope is you wait a few months and maybe that's it. the move by simon suggests it's not going be that easy >> yeah, xactly. i think you're right what we're seeing is landlords, a lot of times are trying to wait this out and what i've heard is i called around is basically have asked for some sort of forbearance from their

londs lo landlords. what they are trying to do is issues out who really needs the help and who is likely to survive this pandemic and be a good paying tenant later on. they might be willing to give them a break we're in this like black box phase where nobody wants to cave right now. nobody wants to give the gap that break or give starbucks which asked for some forbearance a break. >> absolutely. we have seen a lot of this turmoil play out near the lows when the mortgage reality investment trust and commercial property names were really hard hit. do you think investors will end up saying look, we would rather that investment work in the long run and if you have to give them forbearan forbearance, a break then say if you let one slide, you'll let all of them slide? >> from an economic stand point and i'm worried about small

businesses going belly up because of this stand off between landlords and tenants what i'm hearing is landlords are holding the line they are more concerned about giving up too much this early. in particular, what you have seen in a lot of major cities like washington, d.c. and new york city, there's a moratorium on commercial evictions. even if you wanted to get rid of some problematic tenant, you can't do it right now. towards the end of the summer, those moratoriums begin to go away and that starts to give more leverage back to the landlords and say, come on, you got to pay your rent now >> i'm surprised that as you describe it, the landlords are holing the line and seem to believe they do have a lot of leverage over the tenants. if the tenants leave, if the gap leaves now, who will jump in that space >> i agree with you.

that's the best comment i heard as i called around was this is going to be a bonanza for lawyers. all of this is already ending up in court whether it's large companies like the gap or my story, i profile musical pretty iconic music venue in washington, d.c. they are in court with smar small landlord over whether or not they should get a payment plan they haven't paid their rent for april, may or june either. very similar to the gap. you're seeing this across the board. the other thing that doesn't come into play enough as people aren'tthinking through i'm mor worried about than maybe turmoil among investors, i think there's going to be very few property rents paid by these commercial landlords, particularly in the retail space as we know, many cities are very cash strapped right now. i was taunging to some d.c.

council members who helped enact these moratoriums on commercial evictions and they are so surprised that this idea i was suggesting that some of these landlords won't pay their property taxes this summer if almost half of retail tenants aren't paying their rent, landlords don't have the money to turn around and pay their property taxes >> that's fascinating. that adds the theme of the show which is the challenges for local budgets. a final quick question is there anything congress can do >> the best news out of all of this happened yesterday which is ppp program you all were just talking about on show for small businesses, they finally made those corrections to that program so now instead of only 25% of the loan and grant money being able to go towards rent or overhead costs, up to 40% can go

towards rent and over head that helps a lit bit it's another reason landlords were saying can't you pay a little more now. >> interesting heather, you just tied so much together for us. appreciate you joining me. >> thank you that does it for us here thanks for joining me. i'll see you on power lunch. this is power lunch. the rebound rally taking bit of a breather but the s&p 500 is on track for third straight week of gains jumping a total of nearly 9% in that time. big tech is back hitting a an all time high for february as wall street rebounds, the rent is still too high for a lot of big retailers gap is the latest unable to make its payments power lunch starts right now