looking more v shaped in the short term >> all right good to hear, jan. thank you very much. always good to have you on a jobs day chief economist at goldman sachs. carl >> all right sara, we'll see you this afternoon. good friday morning, everybody welcome to "squawk alley." i'm carl quintanilla with michael bloomberg and jon fortt coming to you live from separate locations. a remarkable morning for the economy and markets as the jobs number comes in much better than expected, a gain of 2.5 million, a gain of 2.5 million and the unemployment rate nowhere near estimates at 13.3. 27 k on the dow, all-time highs for apple, for the nasdaq 100, the 10-year near 1%. just a huge pivot, a potential moment here, jon, for the market and hopefully the economy at large. >> yeah, carl. when many thought a v-shaped recovery was off the table, more sign not just in the market but the economy itself that the recovery might be taking more of

that shape which would be very good news. taking a look at some stocks, apple as you mentioned all-time highs, adobe, amazon, microsoft, all close within 3% of all-time highs. that's a range of different kinds of stocks. apple and microsoft are the two most valuable stocks that i track, two of the most valuable companies in existence right now. adobe had been more of a kind of growth momentum play type stock despite fat k despite fact it's big and strong and has strong growth. for that to be as close to high as it is and up nicely this morning as well, serge sacertais something morgan. >> we've been talking about it all week, the rotation into the stocks and sectors that are tied to this reopening narrative that we're seeing play out across the country and really across the world in general perhaps unsurprising to see

airlines, leisure and hospitality, banks and financials, the type of stocks leading the market higher today, even though from a sector standpoint in the s&p every sector is in the green going back to that jobs report now, let's bring in steve liesman for a closer look at today's numbers which really did blow wall street away. steve? >> yeah, morgan. i am kind of recovering here my neck is from the massive double take i did this morning when the number comes out. it was like you're cruising along and see, wait, was that sasquatch on the side of the road there i saw the word rise in it, and i said the word rise, and said what did i just say? did i say rise it was pretty amazing to see that number come in beyond any of the expectations i saw. i had some inkling there could be an upside surprise but the only idea was that it was going to be way less negative. let's go through the numbers here that came out in the morning. 2.5 million up on the non-farm

payrolls, unemployment rate 13.3%. supposed to go to 19.5%. suspicion it's much higher jan was talking about that because of worker classification average hourly earnings declining. that is a good thing, showed low wage workers came off the payrolls they seem to have come back on it's a start a good thing. labor participation doing better worried about people dropping out of the workforce morgan was talking about this. i want to show you two things. first in one column is the huge rise we saw in some of the hardest hit industries and the next column shows the percent of the job losses in march and april. tells you how much we got back and how far there is to go a couple samples here, food services and drinking establishments were up 1.3 million, that's 23% of the losses leisure and hospitality up 1.2 million, 14 prsz a% and construn coming back, 464,000, 44% of the

losses retail and manufacturing coming back a couple comments i want to share, from bmo capital says, as abruptly as the economy was pushed into recession the reopening is helping to claw back jobs. a lot of positive commentary on the impact of ppp. our economic adviser says you don't shut down an economy for two months and think there will be no long-term impacts. let's enjoy the fact that we're starting to recover and the short term looks good but the long-term path remains uncertain. 11% of what we have lost we got back in may. i think that's a month earlier than many expected let's hope we're off to the races here jon? >> yeah. let's not get in the trap of some people thinking they know everything and what's going to happen next. bob pisani has more on today's rally. bob? >> and jon, this today and this week in general has been just about perfect for the reopening story which is the primary narrative moving the markets take a look the at sectors today. it's the reopening story

energy has had another good day, up 14% for the week, banks have been terrific, up almost 20%, some of the big regional banks industrials are strong, retail has been strong and this week defensive stock and technology, strange mix have take an back seat look at the market, the laggards this week. health care is essentially flat, a leader earlier consumer staples up 1%, lagging. tech is lagging. mega caps are under performing this week and utilities lagging. we've had a move up in the bond yields here. i mentioned the sort of perfect week for the market. remember the three buckets that have really moved the markets in the last few months. the first one is the reopening stories and we've seen the economic statistics this week, very supportive. the adp, ism, today the jobs report the stimulus there's been more discussion this week on stimulus from the ecb, u.s., and japan that story continues the treatment and vaccine story reports of progress continuing there. the three buckets that moves the markets and all three have been

positive this week there's a couple of concerns out there. first is this bond yield rally we've been talking about a lot of debate, what is this? is this a reflation, inflation, stagflation? i think we've seen the big move up in the 10-year treasury yields 30 basis points. some of the vigilantes are out for the moment the market is calling this reflation if we go towards 1% on the 10-year, there will be a lot of calls for the fed to intervene the other the valuation story. prices are up, but earnings system still keep coming down. that means the multiple is expand drag matically. what does that mean for the market when are the earnings estimates going to move higher s the big question, remember that -- ceos, 40% declined to give guidance this year. what does that mean? it means they better start having better clarity now that economic stats are getting better and better start making comments and giving us earnings guidance in the next month or two to support the kind of rally that we have been seeing

carl, back to you. >> we'll see what barry dillard has to say about that, bob, after dillard came on this morning and said -- >> i saw that. >> wasteful time yeah pretty interesting bob, thanks -- >> they haven't been wanting to do that for years. >> yeah. mike santoli has a lot to chew on today the president can make fun of economists and consensus and they clearly got nis number wrong, mike, but as we said at 9:00 a.m., be markets got it right, the dollar suggested it it seems like it's bonds that gave up the fight. >> that's right. bonds, the dollar, global markets. they all were pulling in the same direction and now those kind of laggard areas have been clicking into place for this move i think the big question right now, this seems like a big recognition moment that, in fact, perhaps the disconnect perceived disconnect between what the markets were doing and what happened in the economy wasn't quite as why. maybe the problem now is you can overshu

overshoot and get to a moment where people think it's the all clear and the traditional playbook is fully in effect and you can continue to kind of bid up the early cyclicals and all the rest of it i think that works for a while if i look at the credit markets, the spreads are coming in very hard it's all supportive of the idea the market did get it right. what's interesting it's been an almost entirely painless rotation into those cyclical areas. in other words, the really big tech stocks have take an break here and there and come off the boil, but it's not as if you saw outright wholesale hershavy selling. if microsoft goes down 1%, jpmorgan has to up 6% to offset the market cap of that that is arguably what the index could get into a trap of just being stuck, but for now that has not been happening >> the vix is back below 25, at least dipping theres last couple days for the first time i think

since late february. what does that mean in terms of the swings that investors maybe don't expect over the next couple months. >> yeah. jon, it's another measure of some of the anxiety and the residual caution draining out of the market it's not happening very fast by the way, on a day when the s&p 500 is up more than 2%, you know, the volatility is based on the display jumpness of the index, can't fully go into free fall mode but does tell you there was a reluctance to believe in the reality of the market bottom and did the rally come too far each stage we got to these logical points where the rally could stall and it didn't except for a week or two at a time, shows you there's a little bit of capitulation going on by people who were fighting it. i don't, again, want to say there's anything decisive that happened here. we pulled forward date when you had more people go back to work than you thought it was going to be several weeks the flows in and out of the

labor force in this period are so massive that i just don't think you can expect anybody to nail the number. but without a doubt, it shows you that incrementally, risk appetites are increasing and people are more receptive to the idea that at least over the summer, the direction of the rate of change in the economy is going to be positive, we're going to reopen, you know, right or wrong, better or worse, we're going tore it, and it's going to be a while potentially before any outcomes are decisively out there to push back against that idea >> yeah, such a key point, mike. when you talk about how big the flows have been and how hard it's been to basically nail the number, it speaks from a market standpoint how important the technicals have been in all of this, given the over arching uncertainty. i wonder what you think when you see the dow, the russell 2,000 and dow transports crossing above their 200 day moving averages and joining the s&p and nasdaq that were already above those levels how key is that for this market

to continue sustaining this momentum >> the 200 day moving average on the s&p didn't even put up the slightest bit of a fight on the upside when this rally went through at around 3,000. i do think the other indicators are kind of confirming that move it shows you the markets broadening out and doesn't necessarily insulate the market from some kind of a switch back because, in fact, often the indexes will kind of chop around the 200 day averages on the way up even if they're going to go higher still eventually. i do think it's still all fits within this mode of, you know, risk appetites rising, people who felt under invested getting more invested. if i look at the russell 2,000 a lot of talk about how it's running really hot and starting to stretch the upper end of a recent kind of trend line move the technicals are supportive longer term but in the interim looks like things could start to get a little bit stretched here. also, gaps higher on jobs day, maybe this is a weird moment, it's not really a typical cycle

but often were not necessarily the start of a move. often more kind of a place to pause. >> all right mike santoli, thank you very much and just watching these markets, we're going to have a lot more on today's rally coming up the dow at up 890 plus points at this hour. walmart, the only stock negative there. boeing and raytheon leading the dow. s&p up 2.7%. nasdaq up nearly 2, near session highs on allf os 'lbeight back. a grandfather o. a newlywed... a guy who just got into college... that's why behind these masks, johnson & johnson scientists are working to accelerate development of a covid-19 vaccine, drawing on decades of experience responding to public health emergencies like ebola and hiv. for the life behind every mask, the clock never stops and neither do we.

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protesters are in the streets for an 11th day of demonstrations which have taken place in 50 states and several countries around the world joining us to discuss, david thomas, president of morehouse college, the only historically black college for men. thank you for being with us. >> well, thank you for having me great to have you. i want to start, you have a doctorate in organizational behavior master of philosophy degree in organizational behavior to take a step back more broadly for all kinds of organizations, whether they are educational institutions or companies trying to figure out how to improve ou of this they might be reacting now, but what are the ways to cement lasting change, if that is what organizations are trying

to do? >> it's a great question and the answer is a hard one for many organizations and leaders to actually digest and that answer is, what we are seeing is the remnants of institutional lies, racism, that is rooted in beliefs and assumptions about white superiority. what we've done in our organizations, whether they're police organizations or academic organizations, is in many ways created a set of rules that amplify the effects of institutionalized racism and attitudes of white superiority what organizations have to do is

use that lens to look at all the aspects of how they engage with communities and their employees and begin to root that out the other -- i think the biggest -- one of the biggest challenges for us in this moment is that the leaders of most organizations in our country are not prepared to lead the kind of conversation that needs to be taking place and part of that, quite frankly, is -- and i've done in this in my research before i became president of morehouse college when i was on the faculty at the harvard business school, where we should ask executives to literally draw their networks of close relationships that they rely on when they're looking at issues

of human capital and career and most white male executives only have white men in their networks >> right. >> and therefore they don't have relationships with people of color that they can turn to get counselled about how to move this conversation forward. >> i think something -- i think something today that in a way draws that out is right now, that the dow is up nearly 900 points at this hour, the s&p up more than 2.5% that does not reflect the experience of everyone in the country, certainly economically and in other ways as well. as the president of morehouse, historically black college, the only one specifically for men, the 90 plus percent i believe

black men at morehouse at this point, the mission is to produce academically superiorly, morally conscious leaders for the conditions and issues of today, how morehouse states it. today means something different, certainly, than it did a year ago. what kind of adjustments do you expect to make this year in your education, in the preparation for the students, giving all that they're facing? what are your thoughts as an educator and what might you be hearing from faculty on how this year is different. >> yeah. i think the only adjustment really is that our students are now fully engaged and they see the moment and feel like, you know, they need to rise to that moment and we need to engage them the great thing about morehouse college, everything about our

education, without there being a crisis, has been preparing our students for this moment and you just take, for example, on sunday, i was three blocks from my house where my students were leading a march that turned in by -- by the time they got to their destination turned into 5,000 people at centennial park in atlanta unlike many places, i think morehouse won't need to adjust what we do, but it will just be intensified by this moment and our faculty are already engaging our student and staff and helping our students stay focused on, you know, this is -- this -- this news cycle will pass and we have to be thinking about how we move beyond it and

create real change and not be reactive, which is a production of this moment >> yeah. it's -- and certainly you're talking about how you can be more supportive of your students and the change in the shift that's going to be taking place and, of course, it comes in a year where there is already change in shift afoot because of covid-19 i'm wondering what that is going to mean for the college not only in terms of summer classes but in terms of the fall will you be bringing students back to campus and what will that look like >> great question. we are still in the process of deciding whether we can safely bring our students back in the fall we're also preparing to have all of our faculty certified to

teach online this spring in march, we took our entire curriculum online, but we realize realize that what we were really doing was remote instruction rather than informed online education. by the time we start up in the fall all of our faculty will be certified as online teach sorero we can create an online experience by july 1 i will announce whether we will be residential, virtual, or some hybrid format but first and foremost, is the health and welfare of our students and faculty >> all right david thomas, thank you so much for being with us. president of morehouse college >> okay. i appreciate it.

thank you, guys for having me. take care. be safe. >> you too >> we're going to take a quick break with the markets rallying dramatically today the dow crossing back above 2700 27220 right now. we're up 3.5%. the s&p at 3200 on the nose with energy, industrials and financials leading as every sector is in the green we're back in two minutes. st wh ayitus

welcome back, everybody. i'm sue herrera here's your cnbc news update at this hour just east of los angeles, a large warehouse fire is burning in the town of redlands. some amazon trailers are seen on fire, but it's not yet clear if it is actually an amazon facility part of interstate 10 has been closed there are no immediate reports of injuries. the aircraft carrier that suffered a coronavirus outbreak is back on patrol in the pacific. it picked up the rest of its crew in guam and set sail after being sidelined more than ten weeks. nike says it will spend $40 million to support the black community in the u.s ceo john donahoe is telling employees in a memo that nike needs to bebetter than society as a whole on the issue of diversity and inclusion. you can get more on that story at cnbc.com. you are up to date that's the news update this

"sawaly"ho quk le continues in just two minutes.

it's remarkable to think that this jobs report today was actually from a survey in mid-may when roughly 50% of small businesses around america were starting to reopen. the u.s. chamber just did a survey where they think 80% are reopening and in all of our discussions with governors our focus in the month of may at the coronavirus task force has been to safely reopen america and this jobs report today shows you the american people are stepping up, standing on that strong foundation that president trump laid, the strong resilient economy, the resilience of the american people and this recovery begins today. >> that was vice president mike pence today on "squawk on the street" on the heels of the blowout jobs report. meghan shoe head of investment strategy at wilmington trust and

brian join us now to break it all down and there is so much to break down thanks for being with us meghan, i will start with you, i mean as we speak, the nasdaq currently trading above its record close going back to february what do you think of the markets at these levels and given what we did see in the may report this morning, how supportive is that >> well, the may jobs report was a huge positive and positive surprise for us as well as the rest of wall street and on net that's definitely a very good thing for the market i would be more excited about the jobs report if we were still in the range of 2800 to 3,000 for the s&p 500. i think we needed that jobs report to justify the levels that we're trading at right now. there's a lot of optimism priced into the market as we see it and not a lot of room for things to go wrong i think there is still a long road ahead of us as it relates to the labor market. we're still expecting the

jobless -- for it to take a long time to get back to the levels of job growth that we saw prior to covid-19. >> brian, i'll put the same question to you, especially given the rotation we have seen this week into some of the hardest hit, most beaten down names that have been now associated with reopening, whether it is the airlines, leisure, hospitality, financials, energy does it make sense and does it continue >> i think in the short term it does make sense. i don't think we're buying this rotation, at least not aggressively we're still pretty cautious about what the economy is going to look like over the next few months i think we could see another job report or two that looks like this one before we start to be able to determine what kind of trajectory we're going to be at coming out of it at what point does hiring plateau because people are not bringing back 100% of the workers who are laid off only a third to a half in some cases. so the initial part of this rally that we're still in, which really dominated by some of the

growthier sectors which admittedly look pricey but under performing the last couple weeks those are still the sectors a year from now we think will be leaders of earnings growth and dominant parts of the u.s. economy. we're leaning towards height quality growth as opposed to buying into this rotation and cyclicals wholesale. >> meghan, it's jon fortt. the dow up more than 1,000 points right now it was up, ticked up over 4% just moments ago the s&p over 3200. how should investors strategy be different perhaps than it was in february the last time we saw levels like this should they just pretend it's february again how do you position yourself with today's conditions despite the fact that today's prices are about the same as they were back then >> well, the prices today compared to where they were in

february, the situation is clearly very different and there's a whole lot more uncertainty in the economy today and back then. we are still cautious. we're slightly under weight equities, hold slightly levels of cash and fixed income, but it's important for investors to not get too defensive. we're advising clients to stay in the market. if you have a lot of cash on the sidelines you might not want to be putting it all to work at these levels, but to get too defensive i think would be a mistake as well. the market looks over bought to us, but long term, if you have a 3 to 5-year investment horizon we think stocks will out perform bonds. you need to have that healthy allocation and diversification the other thing that's a little different today is that where growth was early in the year we are seeing that rotation

i am not 100% sold on how long we will be seeing this value in cyclical rotation, but it's important to have exposure to both those high growth, mega cap tech type of companies as well as some of the cyclicals in the industrial, financial, and more cyclical sectors >> yeah. of course as we're having this conversation stocks are hitting session highs. the dow up more than 1,000 points right now brian, what is the bond market telling us we've seen significant moves in treasury yields too and with the 10-year now at 0.937%, how supportive of that is that to equities what happens if we start to hit 1% here in the near term does that continue this reflation trade or become a weight >> i think in general it's good news that bond yields are moving up, not good news when moving up 10 or 20%, but we're in the opposite scenario of that, a move from 67 basis points to 95 doesn't bother me that much.

it may not please the fed, though the fed i think probably felt for a few months there that they were doing a really good job on keeping a lid on rates we talked about yield curve control. i don't think it's going to be announced at the next meeting. if they want to buy in a more targeted way, i don't think they can do much more to communicate to keep rates low. they will continue to buy bonds until rates stay low and you don't get as much. the challenge for investors, if they're thinking about rebalancing, they will have to be selling out of stocks which have done very well and thinking about what types of bonds they want to buy. even at 95 or 93 basis points, the 10-year treasury is not all that attractive, maybe slightly more than holding cash because at least it's giving you some income, but figuring where that is going to come from and what a fixed income portfolio should look like will be a challenge for the foreseeable future, whether talking about a six month or six-year time rise. >> meghan, i wanted to ask you about that too because conventional way for kind of

mainstream investors thinking about things you have to have the balance between stocks and bonds. i'm not sure bonds have the same function in this market that they used to and the bonds that might give you certain effects that you would have beenlookin for in the past might not be available to the mainstream investors in the way they think they are. >> it's a great point. this is something we've been talking to our clients about for a while, particularly those who are looking at a total return approach to their portfolio. and i think it becomes more concerning when you're talking about an equity market sell-off and what protection you can get from bonds at these levels over the long term, your total return is likely to be lower because of the low level of interest rates, but one area where we do continue to see opportunity is in municipal bonds this is one part of the market that was basically thrown out with the bath water in february and march and we're still in that cycle of getting back to appropriate pricing for some

very high quality municipal bonds that have high revenue streams and solid credit profiles this is one area of the market active management and doing your research is important but we are seeing opportunities in that part of the market >> interesting to hear you talk about that just to wrap all this up, brian. biggest risk to the market right now? >> i think we have a new one today, which is was the job report so good, you've seen rumblings on capitol hill, the momentum behind another dose of fiscal stimulus, starts to flag, especially in the senate where i think you had some skeptics with the initial c.a.r.e.s. act maybe some of the reups of the ppp, but i think the danger we know that the $1200 checks are not going out anymore. they did more in the month of april and helping balance sheets stay intact, the supplemental insurance is really important because there's still tens of

millions who were unemployed who were not in january and february but if that expires in july it will take a big hit out of potential spending, how secure people feel again in terms of their household balance sheets and that could lead to before we had a recovery, another dip. if there's a risk in the near term it's the political imperative behind continuing to back this recovery may be not as strong as it was at 8:29 this morning. >> and meghan, just a quick question on u.s. versus europe, for a while before the jobs number this morning, the thinking was that their response to labor strife had been maybe more efficient and kept the unemployment rate from falling quite as much as the u.s., what's the calculus now, especially after what lagarde announced yesterday? >> well, what we tend to see from europe is that their labor market does get a little more support and cushion during

downturns and then you have to pay for that in -- at some point and we tend to think of them as being a little bit less prone to a productivity boost we focus a lot on productivity, particularly as it relates to the tech sector and while we might be seeing in the u.s. an elevated unemployment rate for some time, the beneficiary of that could be technology companies, chip makers, cloud providers, because those companies are going to probably be forced to become more efficient. the way you do that is through technology so it's a tradeoff between perhaps a higher unemployment rate, but maybe companies that are based in the u.s. predominantly being more efficient and having maybe more margin growth on the other side of this. we do tend to see productivity surge outside or on the other side of recessions and so i think that is one thing that we are looking for the u.s. to be more productive on the other side of this than europe and other parts of the world

>> brian, you like tech or where are you suggesting or advising your clients to be putting their money right now given everything we're seeing in all of these different currents mixing around >> i would say if you looked across all of our portfolios we still have the overweight to tech coming into the year as well as health care and we've added consumer discretionary, betting on a recovery in the second half of the year in which the consumer is a large participant. 33% household savings rates in the month of april provided we continue to support those households where one or more workers may have lost jobs the consumer can be a big participant in the second half of the year. that's another place we've been adding to positions. >> and meghan, what is your take on the meaning of big tech in this market, given that it's become such a big weight say in the s&p, given that you've got apple hitting all-time highs,

touching them within the past few hours, is that something that investors should celebrate or diversify away from >> well, we still like tech, but we would not necessarily be buyers at these levels there's a lot of really optimistic growth rates priced into areas of tech right now that are getting increasingly harder to rationalize. it's hard to compare the current environment to 1999/2000 because these companies are vastly different. they're an integral part of the economy and the new economy as we go forward. but still, valuations do matter and it gets us a little nervous to hear investors dismissing valuations altogether. some areas of tech that we get a little bit more excited about are within semiconductors and the chip space because this is an area that does have legs in terms of growth, whether it's thinking about industrial automation or autos where you have a structural story and a

structural shift toward electric vehicles there's something like six to ten times the chip content in an electric vehicle than there is in a traditional combustible engine, so we do find opportunities there, but some areas like software we're probably going to have to take a pause there and trade side ways because at those valuations do price in what is perhaps unsustainable growth rates the other thing to think about too, have we pulled forward demand for certain things like personal computers, cloud growth i think if the labor market does continue to improve at this pace, it is a very good thing for phone demand this is supposed to be a big year for trading and it's an upcycle for phones, so that is one area where it's more exposed to the consumer, but generally we are looking for those areas that have perhaps a little bit more growth professional we think semiconductors is one of those. >> we covered a lot of ground there. thank you both for breaking it

all down meghan and brian, as today's stocks surge takes the s&p to less than 1% from the flat line for 2020 >> we're going to take a quick commercial break with the markets taking a little bit of a breather the dow ran up about 500 points in the past hour it is now up a little less than 1,000 points at 950. the s&p up nearly 3% the nasdaq up almost 2%. stay with us

we're getting a bit of change in heart from the department of transportation on u.s. flights to china. for that we turn to phil lebeau. >> carl, there is going to be a new order posted by the d.o.t. any minute now essentially changing the position which was to suspend all chinese flights coming into the united states. there's been an ongoing negotiation over when u.s. carriers delta, american and united could resume flights into

mainland china they couldn't get that worked out so earlier this week the d.o.t. said stop it on june 16th no flights from china. yesterday, china's equivalent of the d.o.t., their d.o.t., said we'll allow one flight a week from each of the u.s. major carriers, so the d.o.t. has revised its order for chinese flights and will now allow four per week from china. keep in mind they were averaging about 34 per week up until this order was announced. so a little bit of a thaw between the d.o.t. and china allowing four flights from china and, of course, u.s. airlines will be allowed to do one per week starting next week. >> all right phil, we'll watch that air r aerospace has been the name of the game and today check out the gainers for the week on the dow aloene, boeing at th head of that list followed by

exxonmobil, raytheon and caterpillar and chevron. we're back in a numite make banking easier. deposit checks, check balances, pay bills, and more. explore all you can do with our digital tools from almost anywhere. pnc bank.

take a look at the top stocks on the nasdaq 100 for the week united up more than 60%, marriott up nearly 25% and xp semiconductors, expedia and 'lotochip up a l wel be right back. stay with us i see all the amazing things you have been doing.

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welcome back to "squawk alley" let's bring back mike with the rally. mike, i mean, this jobs report from this morning spurring the action we're seeing today, but we've been seeing strong results in general the week over >> absolutely. for a couple of weeks the market has been moving in this direction of suggesting maybe we have to accelerate our time line for when activity can restart and get rolling again. i also think the market, the parts of market most exposed to this economic restart and the comeback are still so depressed

there's a lot of room for them to operate if you look at the airline etf, jet, it's up tremendously this week it's still down by a third from the peak you look at a basket of entertainment and leisure type stocks and restaurants and movie theaters and hotels, it's still down 25% from its high after a huge run the market is operating in this zone where all we really have to do is adjust our assessment of exactly the pace of whatever kind of comeback and that creates tremendous changes in those types of stocks. obviously, what you're seeing here is a little bit of an urgency to participate by people who are feeling too defensive. it -- i think that in itself has the makings of a short term overshoot to the up side you just can't know where that threshold lies between a smart

revaluation of where we are and everybody just fearing it's going to run away in them and over paying for today when we don't know what tomorrow brings. >> yeah. we have been talking about that very dynamic for a couple of weeks now. the degree to which people will want to show they own the market at the end of the quarter and then i know you and tom lee went back and forth on twitter about dry powder five trillion in money marks two trillion in private equity you get a june bid people will want to be part of it >> there's no doubt about that just to be clear, i don't deny in general investors are under exposed to stocks if we're going back to normal there is a lot of liquidity out there. there's a lot of liquidity in the places that can get deployed in mma, in investment, in hiring and in further raising of equity ownership. i don't deny that. there's a lot going on like the money market fund assets

companies sold a trillion tl dollars in investment grade debt this year. they put a lot of that back when they have no use for it. where is the trillion dollars by people who had cash. there's a lot of -- you get into a bit of a trap on the cash on the sidelines argument i think the sentiment and positioning data has been an incredible tail wind for this market and a diminishing one as people get involved and get more bullish but it's not gone away entirely >> right something to track the next few weeks. mike, thanks we had a lot to process in the last couple of hours we want to give david a chance to get back to the report he was about to give before we went to the president on lvmh. >> it's all the timing we have been following this story and whether or not it want to extricate itself from the tiffany deal or extract a price cut. there's been some reporting that

lvmh backed off from any sort of hope it might be able to extract. from people close to the situation, peopthat's not the c. the company still does remain focused on whether or not it will be able to somehow be able to engineer a price cut in the deer doesn't mean it will be able to do that, of course they did remain unhappy with the fact that tiffany made a decision to pay its dividend and it paid all its rent the latest focus for the company, lvmh seems to be on tiff tiffany's leverage ratio it has to keep its leverage ratio at 3.5% or below it's possible as the summer goes on given the performance of the business that that leverage ratio would exceed 3.5 i am told by sources again familiar with the situation that tiffany is in the process of trying to negotiate a waiver with itselves lenders that will allow it to move itself leverage

ratio up to 4.5 times. even if it's unable to do that, even if it's unable to actually get to that ratio, it's possible the company could may back some of a revolver it has right now and still be able to get below the leverage ratio what does it mean? it still remains unlikely given the tightness of the contract he will be able to figure out way to claim a breach or find some sort of wedge to get this price cut they may be focused on but doesn't mean they won't continue to try focus on that very thing. we did want to share that as people keep a eye on shares of tiffany which are up because of the strong market but also because of the growing hope they will have to stick with this $135 a share all cash deal that's expected to not close perhaps until september given the length of anti-trust reviews. carl, have a great weekend back to you.

>> david, before you go, while i still have you, the week you've had regarding this issue, td, schwab, do you think we'll start to see the gears loosen up >> i think it's possible sorry while turn phones off. people were not prepared for me to be on tv at this time the question carl was about mma overall, i'm sorry >> yeah. >> things are starting to heat up a bit they are particularly given the confidence you can see in terms of the market. that moves into the ceo realm. it loallows you to think about negotiating a transaction if and when you see joyour stock price lack the volatilitvolatility it doesn't mean, carl, we'll see the fruition of those but there's more hope now than there was a month or two months ago in terms of actually a resurgence

>> all right david, good weekend. i'll let you get that call see you monday morgan, things like elon musk tweet about jeff bezos yesterday kind of get lost in this news flow >> it totally does the whole debate where social media and big tech are concerned in terms of this idea of con tent policonten policing versus censorship the powe kus continues to be on these reopening efforts. you have comcast, which is our parent company opening their universal park today six flags reopening an new york city, which has been the epicenter of this outbreak in the u.s. starting phase one come monday john >> morgan, carl, you mention elon musk tweeting about breaking up amazon i can't help but think when elon

takes on bezos, they're competitors in space >> yes >> thaut's an interesting backdr backdrop it's not like he's completely impartial. >> it was a big week for space too. >> driverless. >> guys, have a great weekend. 3200 let's get to the judge carl, thanks so much welcome to "the halftime report." good to have everybody with us today. our top story, the jobs stunner. the stock surge, the dow toing 27,000 the nasdaq trading above its record close for back in february where is the next stop for your money? we'll debate that today with our investment committee today we have josh brown, steve weiss and brenda let's begin by going to actual like we always do. let's check where the number stands right now at this very moment we are having a great day on wall street. the do