i appreciate that. i appreciate both of your time today. joining us, tyler, on a 1,700 point drop for the dow >> what i did do to stocks by coming back here in the studio >> i need to go back to the kitchen, ladies and gentlemen. it's nice to be in the same room with you, kelly. and with your next co-host "closing bell" starts right now. >> welcome to the closing bell, everyone the selloff accelerates. the s&p 500 is down over 5%. the dow was at 1700 points or so over 6%. the worst day since march with 59 minutes left in the session let's have a look at what is driving the action a surge in the u.s., dampening hopes for a reopen rally travel and retail stocks like american airlines and simon property there all cratering

treasury secretary digging in his heels on the topic of reopening saying, we can't shut down the economy again, sarah. gary he cou gary cohn joins us and last month there were more bubbles to come he'll join us to weigh in on today's down turn. and the black swan of 020, that's what sequoia labelled the pandemic in march. we'll talk to partner roelof botha about how he views the start-up landscape right now let's get to the selloff and our team of reporters to break it down mike santoli tracking the plunge brian sullivan on energy stocks. meg terrell covering one big area of the market for the market, the rise in covid-19 cases in some states mike, start us off with the

broader ugly action that you're seeing in the final hour of trade. there was an easy way to deal with that and hard way we took the hard way a sharp and violent flush, maybe the start of something deeper. i want to point out stops along the way. the easy way is to flatten out the rally and go side ways we're below a 5% pullback. this runup, we had had three 5% pull backs but only 5% that didn't give you resistance on the way up. it's unclear if it will break things if we continue lower. other points to look at. 2980 p that brings the dividend back to 2%. it's over several years and then

2950 maybe it will be tested you can kind of stage it down there. until you get to that 2900 area, you're still in that zone. it does seem as though this market tends to overshoot. it seemed to overshoot and be persistent we'll see how things go. around 2900 too. i think this is a key area we spent a lot of time in the zone in bull markets, pays to buy pullbacks the 50 day average we'll see if that's what we're, guys >> obviously, mike this is broad based all 11 sectors are lower what can you glean from where the pain is this most severe right now? the energy, financials what other stocks are bearing the brunt of it? what does it tell us about the

why? it is giving people hope that market was positioning for an acceleration in the economy. so we're having a lot of money drain away from there. it's a very defensive move altogether you have big tech holding up slightly better than rest of the market it's familiar when bonds rally and go down. that is the direction of movement it's a rethink of the reopening is going to be smooth and strong but it also could be those sectors which were in deep down trends had just bounced way too far in a hurry >> mike, thank you for that defensive the operativeword. the dollar is higher gold is higher oil though moving in the opposite direction down about 9.5%. energy, the worst performing sector, brian sullivan hag a look at what is driving that move hey, brian >> what is not driving that move is us driving. i guess. the recovery maybe a little slower than people think that's one of the factors. all right. let's go through the four things that are going on with oil and oil stocks number one, many people you talk

to say, listen, the recovery is already priced in. how much more do we want here? we're not going to get back to 100% normal any time soon. this is come far fast. jet fuel, it remains weak. it is 30% of total global demand for the use of refined products. guess what yeah, the tsa numbers, they're coming up. they're still down 90, 95% from this time last year. inventories, don't lose sight of that they are still high. are they topping over the tanks? no but they're still very close to that more oil by the way continues to be imported into the united states and from if an equity point, guys, you have some stocks, not all, but some that are not only at or well above the analyst targets. you have exxonmobil sitting at the average target look at the indices and etfs getting hit die. the xop is down 8% of the oih that, is much worse the oih is smaller etf

mostly composed of smaller services companies so if you don't believe there is going to be a production recovery, avoid that etf they get paid when the chevrons and exxons spend more. capital spending, guys, as we know, has come down. that's almost all services companies. that's why that is down there. but again, we have come back pretty quickly the average big cap stock in energy is up 38% this quarter despite the fact that a few days ago the eia cut the demand for 2021 forecast for the second time soft we look out we look at demand. yeah, it's getting better. but we got a long way to go. supplies are still high. it's spooking the energy market today. >> brian -- >> if you tuned into our cnbc pro event, an oil investor, i guess he's done well >> indeed. great timing on that particular call brian, my quick followup question as you mentioned the smaller ames back in march a big question mark about whether they survive

or not has that risk itself gone up over the course of the last couple days? are we really tracking the equities and the oil prices which as we say already is down 10% soor so today. >> that's a great question we talked about it again the risk of bankruptcies has not slowed at all. because the way oil companies work, i'll be quick here, is that twice a year, banks come in and they look at the value of their reserve assets the value of the oil under the ground we literally just got through that first cycle wh this covid-19 hit and oil prices collapsed p companies were able to sort of maintain that six month reserve value on their books if oil stays low, guys, then in the fall when the banks come back in, they're going to say oh, you know, frost and oil and exploration are valued 50% too much the value of your reserves just dropped by 50% and now you broke all the could have enants and, by the way, give us our money.

so we're going to have to wait when that reserve thing kicks in and look and revalue the oil assets under the ground. >> that's the key. the problems are not solved. >> brian, thank you very much. the second worst is financials banks getting slammed today. down over 7% 18.5%. down some 16% since monday's intraday high. this does come off a terrific one month rally. up about 25% from the middle of may. >> clearly that impacts ability for banks to earn. here are some names most exposed to net interest income the exposures do match up year to date with share price

performance, morgue an stanley, outperforming citi and wells fargo. on top of that, banks very much part of the bucket of cyclical value stocks that all year have been punished when fears over the economy and the virus spike as they have in the last few days the s&p 500 is down 5.5%, you koshgs framers, why isn't it even worse you could also frame it the other way. the why isn't it better when you consider this week the tone from most management teams was constructive the morgue an stanley conference consumer quality looks stable and deferrals continue to decline. all card issues spending off the march and april lows and, three, expecting most banks to maintain their dividends. that said, wells fargo is less constructive and expected to cut the dividends. they suggest that reserves will continue to need to rise in the second quarter it will be to varying levels

but certainly a very big rotation today, sarah. they continue and banks very much in the eye of that storm. was that really the big weight here >> as we discussed yesterday with mike, the kind of fed futures and whether we're going to have rate hikes didn't really change p no one's expecting rate hike as you aptly ay. the clearly, there is always the potential for the fed to decide to start hiking if things improve. jay powell can change his tune look at what the ten year has done we nearly got up to 1% just five or six days ago. we're now down to 0.66%. and so whether you're saying you're tracking the expectations of rate hikes or rate cuts or not, they do always track what

the ten year and 30 years bond does there is the ten year. that is just today >> there is also not a v shape recovery talk today. it's a economic softness and what is this recovery going to look like? we'll take a look at the banks one factor weigh on the market is an uptick in coronavirus cases in some cases. we have details on the hot spots to watch meg? >> hey, sayer yachlt trah. they're in the south and the west florida, texas and arizona in particular we're also seeing trends up in california and nevada, utah. looking here at texas, you can see the cases are starting to increase that initial reopen at the end of april they're only ticking up from there. red line is test positive rate that is also increasing in texas. so the increase in cases can't

just be described by increases in testing you're also seeing infection spreading there as well. looking at florida, you're seeing a similar trend after the stay at home order expired on may 4th, you're seeing cases increase. the test positive rate, it is under 5%, it is also ticking upward and in arizona, the trends are really the most pronounced st icu availability is down below 30% there. the test positive rates approaching 14%. of course, you are seeing those cases tick up as well. and now as we're looking at these data, a very high profile model is updated today it it's been cited by the white house. the it received the fair share of criticism but this model does show that second wave of deaths could start to happen in september this is all based on what we do from here, guys, in terms of our social distancing, our gatherings, and they say they hope to see the model proven wrong by swift actions of governments and individuals to

reduce tra reduce transmission. the states with the earliest upticks in death are florida, arizona, georgia, and colorado guys >> i wonder how important the mask wearing culture is in some of these places. and also social distancing you know, when we look at europe and china and japan and see that they have been able to reopen so far without any major surge. we also see pictures and hear anecdotes that they're following the rules, especially on masks what are you seeing out west >> yeah. i think there are definite cultural differences between countries. what is really fascinating to me is that places in the united states, you and i were talking earlier about georgia and florida. we're not seeing, you know, you wouldn't imagine major cultural differences. but you're seeing a uptiblg ck florida. you're right cultural differences, adherence to wearing masks and social

distancing guidelines may describe why different countries are seeing such different rates:the who just updating the guidance on mask wearing saying we should be wearing masks if we're wearing cloth masks with three layers to them. i think most of us are not doing that so a lot we can learn about that >> meg, thanks so much for that. quick check in on the market you can see down 6.3% on the dow. 1700 points. by the way, not inconceivable we could see the circuit breakers kick in. that would have to happen before 3:25 p.m after that, no circuit breakers no matter the level of the trade. still ahead, navigating the selloff. we have a big lineup to help you make sense of the market down turn including jeff sherman, national former counsel director and goldman sachs coo gary cohen. you're watching "closing bell"

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joining us for more on the selloff, jeffrey sherman, chief investment officer and dan suzuki good to have you here. jeff, how do you see the why for the magnitude of the selling are you pinning it on the fed, on the cases, on just a need to pull back after an extreme run what is it >> yeah. it's an extreme run across all risk assets. if you look earlier in the week, we had the rsi, technical indicator looking at the last 14 days roughly half of the s&p 500 getting north of 70 -- north of 70 and the relative strength indicator. what that means is that they're overbought and so all it took was a little trepidation in the market to really get things going. you can see how it really

exacerbated as the days went on. and i think what you see here is that this is -- the fed did what they could they said, look, we have given you low interest rates we're telling you we'regoing t be low for a while we don't have negative interest rates on the table right now maybe we do some form of yield curve control. at this stage, what they want to do is communicate we're going to commit to low rates for long period of time and that's our way of saying we're here to support the market they're still doing $120 billion a month in quaun take theive easing what the fed said themselves is they've done all they k but there is too much optimism in the market i was listening to the report before listening to the energy side you don't see the gasoline demand you don't see tsa traffic. there is a lot of parts of the economy not showing the v shape. the but they priced that in. they're going to be susceptible to economic volatility as we get more data through. as you mentioned too, the virus case is accelerating in certain

parts of the country is reason for concern here and so it's something the tone out there has been very, very bullish. it's been ignoring that economic d data he is not looking at market performance. he is looking at the economic data and it doesn't corroborate the information we've seen. >> in terms of what is priced in this, yields closed to 1% to now down to 0.6% or so what you would say is more likely a rate hike again by the fed, by the end of 2022 or the fed going negative >> we dug our heels in we hope the fed doesn't go negative we have seen that experiment just not work in other parts of the world. and so i think that's the old quote, definition of insanity is doing the same thing over and over again and expecting better results. so i'm going to say the rate hike is more likely.

jay powell told you yesterday, regardless, they're not thinking about hiking, he's trying to nail that to investor's heads. i don't blame the said for the selloff. i blame the virus and the optimism out there we see the desk studies that talk about a second wave this is not a second wave. we're not through the first wave yet. when we look at the table reservations, you look at the gasoline demand that they put out, what you're finding is we're on the cusp p of turning it looks like a lot of the worst is behind us it doesn't look like we're out of the woods yet still, i he don't think the fed wants to go negative they know that it would really cause problems in the bank willing system here in the u.s. and give them the largest banking system in the world and the reserve currency is challenging for us to weather that globally. >> so, dan, what are you doing what is your investment advice is this the time to take profits? >> i don't think this is the time to be swinging for the

fences here. i think there is a tremendous amount of uncertainty on both sides. i agree with what jeffrey said at the same time, you know, there is a lot of positive things going on right now in terms of the magnitude and stimulus and also, you know, the fact that jeffrey mentioned that we're sort of hopefully finding a bottom here. i think the reality is as bad as things are on an absolute basis, they're getting better i mean all the data you're seeing that. you're seeing is telling that you the data we got out this morning is telling that you. so my guess is that six months from now things are going to be better than they are today, not worse. it is still bad levels i think it's hard to be very -- take an extreme bearish position when things are getting better remember, the market cares less about the absolutes of good and bad. and more about better than worse. so, yes, there are risks to the recovery there could be second and third order effects that start to weigh on the recovery. i think here while things are

getting better, you have to be nimble and rent this with an option to buy this rally later the i don't think it makes sense to be extremely bullish or bearish here in this situation. >> if you had to pick one sector to buy today, what it would be >> from the sector perspective, the main focus is about balance. if you want to play to the up side, energy is the most leverage to the upside i think you want to hedge that with high quality or defensive positioning on the bearish side. >> that's a bold call on energy. thank you both very much >> we have a little less than 40 minutes to go before the closing bell the dow is down almost 7%. the s&p 500 down 5.6%. only two stocks are green in the s&p 500. still ahead, scott minerd warne

there were more bubbles to come. we'll see if this is the start of a larger down turn. a quick check on bonds as we've been talking about, bonds are in demand. the safe haven trade is in demand ten year yield, .65% we're seeing the lowest levels there since early june two year note yield though remains bate higher. we'll be right back on "closing bell."

let's have a check on the markets. the s&p 500 is down 8% this is set to be the fourth worse points decline ever. that stands at 6.8% now.

nasdaq down 5% all of the sectors are lower the best performer, staples, down 3.6%. energy, financials, materials, all down 8% or more. let's have a look at individual market movers. starbucks is sliding the current sales trend remain challenge and believe near term upside is limited. grub hub bucking the broader trend. that stock rising on merger plans with just eat. the deal valued grub hub at $7.3 billion in equity it's up 4.6% or so uber suffering today because of missing out on that deal yeah and the overall market, too. after the break, we'll talk exclusively with director gary cohn his thought on the debate in washington next.

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welcome back 30 minutes left until the close. we're looking for the worst day for stocks since back in march it shows pain in all corners of the market today the hardest hit groups, energy stock there down 9%. financial down 8%. materials down 8% as well. consumer staples and utilities, defensive plays holding up the best but each are down almost or more than 4%. here are three things driving the action air surge in new coronavirus

cases is dampening hopes for a swift economic recovery. that is causing a sharp reversal of the reopening rally travel stocks, retail stocks, united airlines, simon property both of those names cratering. after a forecast from the fed, treasury secretary digging in heels on reopening saying we cannot shut down the economy again. >> the debate about more stimulus rage onz in washington. there is a surprising amount of funding left in the programs that already passed congress we have that story for you >> more stimulus is a when not if type of question. but as to the when of those talks fo talks formally getting under way, they're not expected to hold discussions until late july after congress returns from a two-week recess. the reasoning is that existing

programs are working they're not expired. haen they're far from fully spent. out of $2.8 trillion in the last three packs, $1.5 trillion has been dispersed as of this week, programs like expanded unemployment insurance, fema disaster relief loans and reimbursements for hospitals two-thirds of allocated money left earlier today on cnbc, the treasury secretary said as that money starts to get into the economy over the next month, that should help until new aid is authorized. >> there is only $1.6 trillion of that money actually in the economy. over the next month, you're going to see over another trillion dollars pumps into the economy. much that's going to have a big impact we have the fed program. we have main street which is going to be now up and running and we're prepared to go back to congress for more money to support the american worker.

>> the strategy of late july relies on another upbeat jobs report coming out for june that report is due out on july 2nd. >> we have 27 minutes left of the session. we're down 7% on the dow we're going to be commercial free now right up until the close. you don't want to turn away. joining us to discuss the crazy markets, we got on our hands today, national economic director gary cohn joining us, thank you for joining us >> thanks for having me. >> what a turn around in sentiment from friday's jobs report which was much better than expected to what we're seeing today part of that coming i think because the fed chair struck a fairly down beat outlook yesterday. where do you stand in that particular debate on the economy? >> look, i don't know if chairman powell is really down beat i think chairman powell is

trying to be realistic to what the fed is seeing in the economy. remember, we're still in a recovery period from an unprus dented ti unprecedented time in our history. this is bifurcated you have the large companies in america which is the dow or s&p 500. and they're seeing one set of circumstances. they're seeing a fairly robust business environment which aim to operate customers are being forced to them because they're local main street competitors on the flip side, you're seeing small businesses in america. small fally owned businesses, minority owned businesses. they're still not open even to the extent they're open, at least where i've been recently, they're open in a i have small scale they're open for curb side only. with very limited amount of availability st so we are really seeing a bifurcated economy i thought that the chairman of the federal reserve yesterday

tried to portray a realistic picture of what we're living through. >> do you think they overshot? >> we probably overshot on the down side and up side. we've come back down around 8% or so from the highs the we're still up over 35 for the lows we're in the period where we're trying to find a relative fair value for equity that doesn't mean they can't go lower. it doesn't mean they can't go higher we're trying to digest right now what value should be >> i want to play another clip quickly, gary. >> we can't shut down the economy again. i think we learned that if you shut down the economy, you're going to create more damage. and not just economic damage

but there are other areas and we've talked about this medical problems and everything else that get put on hold do you think it would take an extraordinarily big spike in cases in deaths to see the economy shut down again. >> i think what the secretary said today is what the vast majority of people are thinking. we did what we thought was completely wright wi completely right with the knowledge we have back in march. now that it's june and going forward, we have different set of information facts and as we see new outbursts of covid-19 or we see new spread, we're going to treat it

differently. we're going to do different things in the economy. i do think the market is understanding that >> i'm not sure we're past the first wave though, gary. one of the concerns out there is that, you know, these cases are spiking in texas and arizona and in air ashrizona, the hospi are getting full we're not even in fall so i think the question is do we have to recalibrate the expectations for the economic recovery if consumer behavior starts to change as some of these states still deal with the surge? >> sayer yashgs i donrah, i don declared the first wave over we're in a continuation of the first wave it is taking longer to go away look, we're diverse fifying the virus. it's no the concentrated in the northeast. it's now in the southeast or

southwest. so it is moving geographically around the country i think we're all trying to guess what's going to happen in the fall it just may be one long continuation with spikes and then subsiding and then spiking again. but the question is what's the amplitude and magnitude of the moves? have we seen the highest spike hopefully we've seen the highest spikes future spikes will be lower than what we've seen in the initial wave >> gary, i want to switch focus and talk about the banks in you're old shop, goldman sachs in particular. earlier this week on monday or tuesday it was, nearly went positive for the year. does that make sense to you? i mean we're selling off today but does it make sense that goldman sachs and morgue an stanley could be flat roughly year to date are they going to have very profitable years despite the turmoil? >> look, i'm just going to speak about the banks in general

that's all i know is the banks in general look, there has been a lot of lending activity going on in the corporate rorld. banks in the debt capital markets, they have been pretty active in spite of what's going on there's been enormous amount of capital raised so banks are quite busy in their corporate business on the consumer side, we're seeing more activity activity has come off the recent lows and i think you saw most of the banks' ceos say, look, based on where they think the economy is now and what they hope the economic data is going to look like and unemployment data is going to look like, they think they're close to properly reserve. if they're properly reserved or close to properly reserved, banks could continue to do fairly well going forward. remember, we're in a different economic environment than we ever been in before. so no one knows for sure what

the future holds banks are serving the clients every day. they're lending money where they see appropriate. and they're serving their clients and there is activity going on >> a lot of that activity, gary, isn't it due to the fact that the government, you know, to their credit, moved really quickly to disperse relief in the form of the stimulus checks and the ppp, small business program. i mean these programs do run out. the extra bump in unemployment benefits the we're looking to the next few months some of the programs have expiration dates then what's the economy going to look like if they don't get extended >> sarah, absolutely look, the government stimulus program that they put in was completely necessary and we should all applaud the ability for the government to move quickly and get involved in the economy and send the stimulus out. you're right many of the programs have relatively short duration. the original ppp money was eight weeks. and so if you were a company that got original ppp money, you

could be at the end of that money. you could literally be running out. they may not be able to keep the employees on without future monday or expanse in the economy. i don't see that happening that quickly in the smaller businesses that were able to take the ppp money i believe, like i think everyone else, the government has to come back with another round of stimulus we're going to learn from the first couple rounds of stimulus what worked, what was necessary and hopefully the government will follow up on those programs that work with additional funding. >> finally, gary, when you were in the administration, there was plenty of reports about how you were upset over the way that the president handled charlottesville, both sides comments in particular as it related to white nationalist

protesters we're living this a little bit on some of the race issues when atlanta mayor said that president trump's lafayette park cleaning is like charlottesville all over again, did that resonate with you? do you expect resignations from the administration >> i don't know what to expect from the administration. i think each individual working in the administration has to make a decision for themselves if they want to be there, why they want to be there, can they do more good-bye being in this the administration than not being in the administration? and these are very personal decisions. many people go to work in administrations to serve their country and serve the citizens and try to make america a better place for everyone and these are tough decisions to go into the administrations and leave your current role and they're tougher decisions to leave. >> gary, thank you for joining us >> i guess what i'm wondering is what were you thinking when you saw that lafayette park episode?

>> it was tough to watch manufacture t many of the things we've been forced to watch. and look, i'm glad that we were forced to watch these things in the last couple weeks. we as a country are going to come out better for having gone through this but now we have to make the changes. we cannot let this just be an isolated moment. we have to use this as a leveraging moment for the history of the country >> we will leave it there this time, gary we appreciate it thank you. >> my pleasure >> thanks. >> dow down 1700 points. worst day for stocks since march. let's get more on the big movers and the final minutes of trade 17 minutes left. payment companies selling november a big way today the kate rooney has the details. the they've been such big winners, kate. >> that's right. sarah, the payment stocks taking a hit today on fears of another consumer spending slowdown

the steepest losses, down 7% heading into the close today mastercard taking a hit. visa slightly outperforming. but still a 5% loss. payment volumes had been improving in recent weeks but cross boarder payments could take another hit if the global economy doesn't reopen, at the pace that analysts were expecting. square also underperforming markets. and paypal, faring slightly better that stock is more tied to e- commerce than brick & mortar it's still down 4% >> thank you for that. the. >> meantime, the nasdaq is pulling back sharply from the record highs as are the names that drove it there. josh lipton has a closer look at the tech sector. over to you, josh. >> so let's break it down by sector start with the semis the smh is in the red. you remember this is aa sector that rallied hard, surging 50% off the march lows notable laggers in today's

trade, and, micron, applied terldz the more broadly, if you look at the tech sector of the s&p 500, notable laggers today, ibm, hpe and xerox. the names have lagged this quarter. and finally, a relative bright spot to mention, video game publishers ea activevision they hit a fresh 52-week high given the pandemic investors betting people are still going to look for entertainment at home back to you. >> josh lipton, thank you. shares of boeing getting slammed today. gif giving up a big chunk of the recent gains >> sayer yashgs shares of boeing have gone down 25% since monday. since monday they lost a quarter of the value. under pressure again today along with the rest of the market one piece of news that is getting some attention, boeing suppliers spirit arrow systems out with a note late last night saying that they were asked by boeing to suspend current work

on 737 max fuselages they're working on 16 of these they have 100 of them have that have been built and paid for by boeing as they get rid of that backlog, they said let's slow down the work on these future fuselages so that's about three weeks worth of layoffs for some of the workers there in wichita that is the only new news relative to boeing that might be moving the stock lower it's getting hammered like the rest of the market today >> thanks very much, for that. the market getting hammers we have 14 minutes left in the session. we're now in the "closing bell" commercial free action we have our cnbc contributor joining us as well the broader markets plunging today as economic concerns and rising koen cases take center stage. the declines have steadily grown throughout the day with the dow now on track for the worst day

since march 18 march 16, excuse me, we're down 6.4 piers. 1700 points. lo the low is down 1800 points. so those all came in march all 11 sectors sharply lower we opened down 700 points or so and steadily sliding throughout the session. >> it has. bounced in the last 10 or 15 minutes. modestly anyway. we toggled below and now we're above it i don't know if that is significant. a lot of the recent winnings are handed back to the house market was slightly overextended as everybody was saying. that was not a novel observation. instead of just flat ening oten we pulled back the rally has really broke stride doesn't mean you have to go that much pdeeper

just for context, the s&p 500 is back to where it was memorial day. you skimmed away that final june side move during the month of june, guys >> yeah. it happened very quickly though. what are you doing on a day like today? >> i'm watching. i think we were very much due for a pullback and just to put it into context, from the lows in march to the most recent peak before this recent correction, the s&p 500 was up 44% but the industries, they actually were much different some were up a lot more. like energy was up 100% from the trough to the recent peak. the industrials are up 58% even technology up 48% financials up 52%. so auflt sectors did better than the market overall from trough

to peak. so we were looking probably, looking for a pullback on -- or an excuse for a pullback rather on -- i do think the powell commentary, there was nothing new yesterday. but, of course, it was definitely cold water on the macro. the covid-19 cases on the rise probably more important, more concerning to me but just back on powell for a minute he has been saying since they announced unlimited qe that they would do whatever it takes they were going to be accommodative. they're going to keep zero interest rates for a while and do whatever they want on qe. until they hit their mandate with the mandate being full employment and core inflation, we're nowhere near those numbers now. it's going to continue the important thing though, sarah, is that liquidity will continue and up 25% in the last month and a half so this is really big news it is positive for risk assets doesn't feel like it today maybe we stall out a little bit.

let's not forget, they're making progress on the vaccines i think that we are to keep it into context we could make pause here i'm just going to wait and let the dust settle. and see where we are on these vaccines and testing and that sort of thing. i think that is the thing that could put a wrench in the markets and the economy and the recovery more so than whatever powell said yesterday. >> airline stocks taking a beating after massive runup over the past few weeks joining us now, senior airline analyst, hunter kay. you made a good call tend of may upgrading the airlines from underweight to neutral they had a nice run here what are you doing now they're really in the eye of the storm. >> yeah. i think you wait

there is a classic late cycle behavior that is excessive supply growth, negative incrementals and coronavirus. of course the call worked by luck because of that and then we just felt this sort of tide train. we felt the same thing, we saw the same data you saw. and we want to know when you have this sort of momentum, even if it is just sort of like first derivative thoughtless type volume being thrown into space, you know, we've seen that work before airlines are not taking permanent action it's going to take a few months. >> the are there long term implications from this work from home phase for things like business travel?

>> yeah. that's a good question we're wondering the same thing how much are you going to travel that's as good a test as any i think the recovery for business travel is going to certainly be slower. we have usair lines adding capacity back getting back to 2019 capacity levels by 2022 but we don't have revenue back so probably 2024 the reason there is that lag is because we expect business travel to recover more slowly than leisure travel. there is a pricing mix i imagine some business travel being destroyed will probably occur for a very long haul travel, particularly the trips that are multidays and a real grind. those may not happen anymore maybe it's down 10% to 15% nobody really knows. >> are there dislocations, hunter, when it comes to the valuations in the different stocks in other words, it feels like one big trade now. but you are distinguishing between the airlines based on

their debt or exposure to certain types of travel and seeing any opportunities for investors there? >> we're very balanced right now. i would say i really -- i really reject this sort of overly simplistic narrative of you want to be long low cost carriers or domestic carriers. you have to think past that. that's not that smart. it's not going to make you money in the long run. if it does, it's by luck or a short term basis the stocks that we rate outperform have one common characteristic and that's an established track record of cost control, good execution, strong and aggressive management teams to take cost out in the event this recovery is a little slower people might think it may be so you know, we like our canada and we like alaska, we like southwest. there is nothing similar with the four airlines other than the long track record of cost.

in some case there's is significant equity value for the airlines but for those four that we rate, we do see some modest upside from valuation perspective once you get through 2021 which will be a transition year surely. >> hunter, thank you for joining us. >> all right thank you. >> the retail sector getting hit hard today as well courtney reagan has those details for us hey, court >> hi had, wilf. consumer 70% of u.s.-gdp, any recovery is very dependent on the consumer employment and their ability and desire to spend. take a look at the department store space today. even though macy's ceo said right here the early reopening is better than expected and improving. it's still well below prepandemic levels department stores are already down trending. and many predict that in closed mall based foremats are going to be the slowest to recover here

nordstrom shares down 12%. macy's off 15% then you've got other mall based add peril players. they're really selling off today, too gap down more than 8% along with tapestry a lot of those selling discretionary items that are not high on priority lists right now. athletic retail stocks are down too. it is still hot but lower demand with youth sports canceled, adult exercise classes side lined and not going to the gyms regularly like perhaps we used to back to you. >> thank you so much for that. >> yeah, everything down today apart from kroger. they're still positive >> you know why? >> no, go for it, sarah. >> food inflation is rising. the only pocket of the economy we're seeing higher prices right now. kroger comes out with earnings in a week. and analysts are expecting

double digit sales big turn around in kroger's business as a result of, you know, all the people that are out there that are cooking and eating from home because they have to >> there we go kroger is high today the one stock on the s&p 500 and staples, the best performing sector but still down nearly 4% which kind of really speaks to the level of selling today >> it does and it really -- the comprehensive nature of the selling. so it's very much a purge of just general indices with the stuff that is up the most. they really did run mostly on hopes and just the spirit that we were going to be playing this reopening trade. and that included those more traditional retailers, absolutely as well as the airlines. >> one other part of the market that i want to bring up with you is the transports. they're getting hit really hard. you might think, yeah, because the airlines are part of this, but the railroads and trucking

companies are getting hit even harder than they did before. in other words, there is an economic worry story here. it's no the just the airlines getting clobbered. >> well, it's the airlines it's boeing, that's a big one too. i think that, look, they actually had a nice rally. the industrials as a whole have rallied almost 58% from trough to peak, most recent peak. they really did do quite well as the cyclicaltrade did -- that did get -- people got excited about. myself included, by the way. i would say this about rails different than trucking. i'm not crazy about capacity on trucks but on rails, i think there is a story where the companies can actually do a better job on cutting costs and being more productive i own union pacific. i've been adding to it in march, april, may i actually also think it's very important to watch the auto

production restart that is actually going to help the rails in a big way i don't think a lot of people are talking about that:so they have kind of -- they have self help if you will some of them not all of them. some of them have self help. and they also have the reopen part of the economy and that kind of exposure by the way, some of them like, again, union pacific, very good balance sheet. that dividend is covered the i would be inclined to add to that one on pullbacks >> two minutes to go in the trading day. mike santoli, bedth looks bad. >> it is really bad. 95% of all new york stock exchange volume is to the down side for most of the day that's really reversal of what we've seen, you know, the past couple of weeks. we had the very strong up days the equal weighted russell 1,000 is down 12% in three days. the average stock has had a good flush here this is the high yield

market:you can smarket you can see the high yield coming back in price that is also a flight away from some risk right there. this is an uptrend 40 is a juiced number. if you see that decline tomorrow, let's say we get a bounce tomorrow that comes down by at least three or four points, that's will be a tactical buy signal. just keep an eye on that relationship as the rest of the week goes on. >> we got 45 seconds left in the session. marketedly low 1855 points on the dow 6.9% we were down 1907 at the low so we're there abouts as we stand. s&p 500 as you see down 5.8% nasdaq down 5.2% russell index of small caps down the most, 7.5%

financials are down 8.2% citigroup down 13.5% the we have a stronger dollar today. a weaker oil price, stronger gold price and sharply lower stocks at the close, down 1854 points 6.9% on the dow. s&p 500 down 5.9%. the nasdaq down 5.3% the sarah? >> just brutal day for the bulls. an ugly close to boot. welcome back to "closing bell. if you're just joining us, i'm sarah eisen along with wilfred frost. take a look at how we finished up the day on wall street. the dow falling 1861 points. a drop of almost 7%. that is the worst day for the dow since march 16th s&p 500 also falling hard. every sector getting slammed nat s&p 500. closed out the day down 5.9%

just about at the lows of the session. as for its tech heavy nasdaq which had been outperforming all year, it did hold up a little better than the rest but still a sharp drop of 5.25%. the russell 2,000 index of small caps, slammed. down 7.6%. we have not seen a day like this for stocks in months it comes after a dramatic runup from the march lows. >> coming up, he called coronavirus the black swan of 2020 back in march we're going to ask roelof botha if he thinks they could retest the market and what means for his venture capital world. plus, we'll ask scott minerd whether this three day selloff is an opportunity to buy back into the market. but first, let's talk about what just happened. joining uz senior markets kpen take thor mike santoli

stephanie link and black rock strategist mike pile joining the conversation mike santoli first to you. you know, it had been a steady and slow grind higher. and then, bam. what happened? >> not a single thing happened except we can say the conditions were in place for some kind of a pullback i don't think anything said it was going to be 6% in one day. but this market has been prone to these extreme one way moves in any given day the s&p 500 was up 1,000 points, almost exactly from the march 23rd low to the high on monday, 3232 so up 1,000 points it's now down a little more than 200 of those points. you know, in that context, we gave back 20% of a massive rally. we might be bracing for a little more storminess as the summer gets going

maybe it's just going to be a volatile range we wiped away a lot of the froth in a single day. really three days, two of stealth selling and one of outright liquidation today >> steph, you said you were doing a lot of watching today to kind of mayhem it unfolded. the it is very hard to step in and buy today when you're seeing the selling even though the stocks that you've been wanting to buy at higher prices, did you manage to do that, pull the trigger and top off on anything? >> not today i do have a list we talked about union pacific. i mentioned wynn resorts the that stock got hammered today. i don't think anything in that ak is anything new in terms of that i still love target as you guys know costco by the way, costco, target, walmart outperformed today this he did what they're supposed to do we go back and we talk about this barbell all the time. you do want to have some

quality, some growth, some defensives the on a day like today, you have to stay in the game on the flip side, when i mentioned earlier, energy, industrials, financials, all outperforms meaningfully the s&p 500 from the lows. you want to have exposure there too. that's where you're going to get your alpha if you see a recovery i'm in the camp that we'll see a recover rishgs especially if we get vaccines in the fourth quarter. that sets up a nice 2021 scenario in terms of growth and profitability. >> i think what we've seen in terms of the outperformance of the u.s. versus the rest of the world and the outperformance of quality and growth versus the cheaper value oriented names, that's kind of most of what we've seen through this period of the coronavirus shock and in so far as we continue to think uncertainty is high on a fundamental basis as we look through the remainder of 2020.

that's what the data around the coronavirus instead the last couple days and what he is weigh yesterday. we think the themes in some ways reannounce themselves today after this period of very significant cyclical outperformance the past couple of weeks >> let's pause the discussion and recap what was a roller coaster crazy day for the markets. bob pisani has a summary >> this is a re-evaluation of the cyclical value reopening story. can you see that and what is down the most today. just take a look at the sectors. banks, energy stocks, airline stocks, retail stocks. leisure and hospitality. the travel and leisure stocks, we scratched our heads for a long time debating what goes on with united airlines going from 30 to $50 in three days and now all the way back down. it's aninverted v for united and most of the other travel and leisure names that were popular with the retail crowd here

frothy well, you tell me if this is frothy airlines went up 80% in less than a three week period oil service stocks, up 70% banks 50%. leisure and entertainment stocks 50% in less than a three week period a lot of people said, i don't quite get it now we're seeing the market trying to correct itself defensive names, the only kroger is one of only two stocks that went up in the s&p 500 you can see the others are down still. curiously the utilities didn't do well. that helps but utilities had their own rally the last month or so up 14% so maybe a little even here. so let's evaluate what is moving stocks here. remember the four buckets we always talk about. valuation, is it overvalued? obviously the market said it's overvalued reopening? the fed said it's not really a v. we don't know what it is yet and the market is having a

problem with it. these are the two problems the other two, stimulus is neutral. and treatment of vaccine, there is definitely progress there the only other issue is china issue and, again, neutral. not a lot of news on that. so two of the whole pillars that were in this rally, evaluation and, of course, the rollout very much in question right now and whether or not this is going to take a lot longer to get that recovery going guys, back to you. >> thank you for that in terms the balance we have between growth and value, it is either/or now for the next couple of months >> we very much think given the uncertainty we see in the period ahead that sort of orientation towards quality, towards growth is, you know, against the fullback drop of things that could occur over the next month or two the better place to be positioned that isn't to say that there are

not going to be periods where value does outperform. that isn't to say there are not periods when there is a good deal of optimism given the range on balance, quality, growth, those are going to be better bets. >> mike santoli, we saw some sharp moves across assets really impacting stocks will oil prices plunging it was a brutal day. 8% lower bonds surging. yields under pressure. what stood out to you? what was the discussion as far as impacting stocks? >> the bond rally started with the fed meeting yesterday. that is one of the moves that was pronounced and decisive after the fed. and it tund today with bond yields below .7% on the ten year the flattening action. and that seemed to just set the tone as people were prompted to rethink this kind of idea of an accelerating economy and all that he involves in terms of oil.

now oil was also one of those, you know, asset classes that really had this wild ramp. you go from negative $40 a bare toll positive $40 a barrel in the course of, you know, a month and a half, something like that. that is obviously a little bit removed from the underlying reality. but i do think that was all of a piece. and also credit spreads wud eni widening out >> as long as they don't want me to dance >> stephanie, i want to come to you in terms of one other sector in stock which you didn't mention is clearly i think in your earlier list for potential buys in the banks, citigroup down 14% today bank of america down double digits down 10% today would you want to buy those or was the fed chair yesterday so dovish that you think it's going to be impossible to make any money the next couple years? >> i think you can be selective in the financials. you know why i like the wells fargo story. the you have a turn around

story. you have a new ceo you have a well capitalized kmchlt i also said even if they cut the dividend, i'd be fine with that. you cut it in half, you're still at 3.5%. i like bank of america they have done such a good job on executing their responsible growth strategy. they have always lagged on the dividend front now they're quite competitive. i think it's very well covered they're very well capitalized. i still like american express. that's getting back and going on the economy kind of stock. but it's trading at 13 times forward. it has a great balance sheet and it has an amazing global brand. and a good management team and good balance sheet again, to cover that dividend. so there are places where i absolutely will look if if we're down again tomorrow, i'll be nibbling but i'm in the camp that 2021 is a better growth year than this year you throw away this year you normalize earnings you look at capital levels and dividend yields and that's how's

i buy the stocks at this point in time. >> stephy and mike, thank you for joining us >> appreciate your time. thanks >> sequoia capital, let's talk about silicon valley they invested in nearly 150 companies since march. this after issuing a warning to the portfolio companies calling coronavirus the black swan of 2020 joining us now is sequoia capital partner rohlov boja. so back in march you called it the black swan of 2020 the market is still 37% off the march lows a day like today where we saw such a sharp plunge in the stock market makes you really wonder what the outlook is. how you are seeing it? zblfr we're very optimistic about young startups and open for business we invested in 15 series a companies since march 1st. we're listening to 500 new

companies every month. so there is a groundswell of innovation as people try to make sense of what the future may look like in a post-covid-19 world. >> what sort of companies you are investing in >> we're looking for an enduring piece. we're not looking at companies that are momentarily taking advantage of trends. so two of the recent series investments, one is vize another company called moss which is helping students with financial aid. we think they'll benefit from covid-19 but they're meant to be long term investments we partner with a company for a decade or more >> you have seen private market valuations track the direction the public market valuations did it provide a lot of opportunities given that some

companies, of course, aren't publicly listed. the premiums stayed high the. >> yeah. pricing in at least this stage of the investment business is more of an art than a science, i found. the latest stage companies are the ones where we've seen activities slow down significantly. and as you are seeing with the swings in the public stock market, people have a hard time forecasting the financials of these companies. that area slowed down. but in the series a stage, the very companies building and trying to figure out how will the market fit and beginning to figure out going to mark >> back to the black swan message that resonated with a lot of people. especially because you did something similar back before

the financial crisis you told companies to look at doing more with less, potential layoffs, cash conservation what have you seen across your portfolio companies in terms of how they're dealing with the economic fallout and what the expectation is of recovery >> by and large, our customers weathered the storm. it's incredible to think it was just three months ago when the black swan memo and some people were wondering why we were doing this unfortunately, many of our fears turned out to be tree. some of the companies have seen the businesses accelerate. one thing we talked about is that vud is accelerating the future that silicon valley is building now some companies have had temporary setbacks, especially those that are exposed to travel or the events industry they took the advice they right sized the cost structures and all have shored up the balance sheets to make sure they can survive and

weather the storm. >> i had a question about tech more broadly, not necessarily some of those smaller tech companies that we just showed that you are invested in do you fear given the huge gains over the last decade but also just over last few months in big tech that there is going to be a big regulatory pushback and if s so, which subsectors are you worried about? >> that's an interesting question in general, by nature i'm an optimist i'm very optimistic about all the young companies that are able to move nimbly in this period of uncertainty and change the regulatory winds that were blowing pre-covid, i think they're abating right now. the tech industry has been so instrumental in helping the country cope with impact of covid-19 the you know, one of our portfolio companies, zoom, has obviously enabled so many schools and businesses, continue to operate and so technology has

played a huge role in our ability to deal with vcovid-19 if you imagine ten years ago this happened and didn't have the broadband infrastructure, i think the economic impact is much more severe this say balance of appreciating all the benefits that come from the tech industry. >>. >> instacart, another one of your companies that you invested early in pt today got a valuation of almost $14 billion $13.7 billion. i think another big fund-raising round. the how much of an anomaly is that because of just in stacart being in the right business here at the right time in terms of grocery delivery >> well, there are few of them there is instacart, dor daor caa few companies that benefited we think of them accelerating the future one of our jokes is for instacart, christmas -- if it wasn't christmas 2020, it was

christmas 2025 the company was enabling consumers to benefit from grocery delivery many people are using the service and covid-19 exposed the capabilities to many more people that are able to benefit it from growth has been very, very strong >> in terms of your point earlier that covid-19 is sped up the adoption of various things that silicon valley is building for people for the future, are they going to be big cap beneficiaries of that and company beneficiaries or do you think is all a rush to private market companies like those that sequoia has in the portfolio >> i think many companies can benefit. st startups, because they can move so nimbly can find pockets of opportunity that are new. by definition they move more quickly. so, you know, amazon obviously has a grocery delivery service themselves i think instacart outexecuted them that's the only thing they focus on every day when they wake up

but at the same time -- by the same token, cloud infrastructure is a huge beneficiary of covid-19 and people realizing that it's very difficult for them to continue to stand up their own ent prenterprise and data centers maybe amazon didn't fared with will in the delivery space but our business is on a terror. >> thank you very much for joining us >> thank you thank you for having me on the show >> adobe earnings are out. josh has them for us hey, josh. >> so a reporting q-2 of $2.45 the street was at $2.33. revenue clocks in at $3.13 billion. street at $3.16 billion. as for guide abs, q-3, they're looking for eps of $2,000.40 the street was at 3.26 if you look at the segments here, digit alameda up 18% to

$2.3 billion that includes adobe, subscription service allowing customers to access photo shop and illustrator. that is cloud offerings like advertising, analytics, marketing and commerce interesting comment from the ceo here, he is saying the shift he calls it towards all things digital across all customer segments will serve as a tail wind to our growth initiatives as we emerge from this crisis. back to you. >> josh, thank you for that by the way, this evening, don't miss jim cramer's interview with adobe's ceo on "mad money" tonight. we've got some retail earnings out lulu lemon and pbh a rare miss here for lulu. >> yeah. the it is a rare miss. putting up a first quarter earnings per share by 22 cents it counts as a miss here that marks a down trend of 70%

year over year and the first earnings miss in more than three years for lulu lemon. same thing for revenue the first miss in more than three years with the first quarter revenue coming in at $652 million street was looking for $688 million and that is 17% year over year. no comparable store sales. of course with the stores closed, majority of the quarter, the company does note that the direct to consumer net revenue the that will be your online sales increased 6 # 8% the they made up 54% of total sales that's up from just under 27% of total sales in the same first quarter for fiscal 2019. gross margins also decreased there. that is something that is fairly rare for lulu lemon, especiallily to this degree. they have 60% of the stores open right now. they believe they have sufficient cash and cash equivalent to meet the liquidity needs. they're not giving any guidance

at this point either if we move on to pbh, you can check out the pbh earnings a very wide miss a loss of $3.03. the street was looking for a loss of $1.67. revenue also slightly light at $1.34 billion. the street was looking for $1.36 billion. tommy hilfiger revenue down 34%. calvin klein revenue down 46%. the company does say by mid june over 85% of the stores are expected to be reopened. sales for reopen stores for the second quarter to date, so where we are right now, are running down approximately 25% globally compared to the prior year period the company does expect that the second quarter impact in the full year results will continue to be weighed down your pretty substantially and do also note they have ended the quarter with $1.8 billion in

liquidity. shares of pbh down 1%. back to you. >> yeah. and maybe helping cushion the blow for the lulu miss the direct to consumer number up 70%. maybe that will help stem the tide there, courtney checking on lulu, down 6% after hours. by the way, courtney, thank you. don't miss jim cramer's interview pbh's ceo tonight. >> still to come, mike will have a look at apple's huge rally this year and how that compares to various street expectations and there are more bubbles to come just last month. we'll get his take on the massi massiveoff straight ahead here on "closing bell."

here you have a company where 200 million iphones you can underwrite in a year where fg agetting launches service is going to grow wearables is going to grow

the visibility of that 50 or $60 billion in free cash flow they're going to deliver next year is a real number. people -- having that visibility is worth a lot to the investment community at this point given every other option you look out there, there is a tremendous amount of uncertainty with regard to how those cash flows are going to play out. >> bank of america's apple analyst earlier explaining why he bumped up the price target to $390 which is a new high on street let's go back to mike santoli for a closer look at that apple price. >> a closer look at the wall street sentiment towards apple you know, that's a plausible case that they enjoy a lot of visibility the big question is it already baked into the stock price and evaluation so here you see a rare situation where the share price of apple and it was down 4.8% today it is a little lower now

this is a very big premium to the aggregate consensus price target which is about 320 now. that is an unusual situation that means that analysts reassess if they don't want to downgrade the stock, they have to find a way to raise the price target and justify the call you're likely to see price target increases and upgrades as we get through this little period here. unless the overall market completely falls apart it will be interesting to see if the stock responds to that now valuations, we're at by multiyear highs for apple. now not quite relative to the market are we at an all time high that is because the overall market valuation has really expanded asser earnings for everything else have collapsed but i do think here, again, it's a test that we do get that quality premium for apple when times are tough. we get the growth premium. of course, the kind of balance street strength in turbulent times. all that stuff is out there in favor of apple question is, is all of it already reflected in what the

market recognized already, guys? >> yeah. has been quite the runup mike, thanks we are in an asset bubble. that is investor scott minerd's message. watoy e giins dathbenng of the bubble bursting? is we'll ask him next. because wt to create an entirely new feeling, the difference between excellence and mastery is all the difference in the world. the lexus es. a product of mastery. experience amazing at your lexus dealer. can i find an investment firm with a truly long-term view that's been through multiple market cycles for over 85 years? with capital group, i can. talk to your financial professional or consultant for investment risks and information.

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the s&p 500 closing down almost 6%. the worst day for the major averages since march 16th. here are three things driving the action in today's market a surge in this new coronavirus cases in parts of the u.s. dampening hopes for a swift economic recovery. we say a sharp reversal of the reopening trade as travel, cruises, retail and energy closed sharply lower the worst performers, boeing, norwegian cruise and united airlines the treasury secretary dug in

his heels in terms of the reopening saying "we cannot shut down the economy again." for more on today's selloff, let's bring in scott minerd who joins us now by phone. scott, very good afternoon thank you for joining us >> thank you for having me today. >> so clearly a crazy roller coaster in terms of today's market moves but all in speshperspective of a strong market bounce do you feel this is warranted? >> i think so. >> i think the runup we had since march 23 srd built off the back of the fed liquidity provideded to prop up the markets. when you consider that s&p 500 earnings, you know, estimates are ranging between 80 and $100 a share, a multiple of 30 times which is roughly where we're

sitting to day is a multiple you would get in the internet bubble so clear evaluation is high. now as i always tell people, valuation is a poor timing tool. but the other thing we have going for us is the seasonals. and that is that the old adage of sell and may go away. it has been proven to statistically work and so from a seasonal standpoint, we should be expecting downward pressure on markets. it's been a selling opportunity. i think we'll have a sufficient slug going here, especially with the increasing number of covid-19 cases >> are you kolg tcalling the

stock market a bubble? >> if the stocks are trading at 30, maybe 35 times earnings, yes, it's a bubble those evaluations are really historically extreme and in all likelihood, end in tears. so i think we're seeing that i did a call the other day on the leadership committee of the milken institute and mike milken made a comment that this would be a good time to sell some stock and delever your company the chances of disappointment are great. >> scott, clearly as you already talked about, there was enormous government support and rates are going to stay low for a long time how much more of a little pullback we had 7% just today on the dow. does that mike you then change your mind on that again and i

guess paired with that is to what extent do you think it was retail investors that pushed us the last leg higher and how much lower before that factor has been removed again >> it's interesting. institutional money, you know, by and large, fought this rally all the way up some of the smartest money in the world. and people i notice were starting to change their positions on the institutional side and buying into the rally and saying you can't fight this. but that to me sounds like the classic throw-in the towel i've been wrong i have to be long. we've been in the uptrend since march 23rd our next level of support, you

know, is not dramatically below where we are but it's not broad support p that support would be somewhere in the neighborhood of 2750 i think we go back and retest the lows and history shows us that it's very likely that we'll undercut the lows. and get to levels that, you know, i talked about before which are, you know, maybe as low as 1600 on the s&p 500 >> you may be right, scott clearly, you know, you got the case there my question is haven't you been bearish this whole time? you were on with us in may on cnbc also saying the darkest days are ahead for stocks. >> right >> if you felt that way the whole time, you would have missed a more than 40% runup in the market >> well, i mean, you know to be honest, the way that we played it was to buy high yield and

corporate credit. this is where i think the dilemma is coming for the federal reserve. the correlation between credit spreads and stocks is extremely tight. and so this selloff which is now also resulting in a selloff in the high yield market and the corporate bond market, clearly is not what the objective of fed policy is which is to push those spreads in so, you know, the difficult question in my mind is, you know, will the federal reserve try to intervene directly to prop up stocks if this continues and the corporate bond market continues just as it has today but in terms of fighting it, i

will tell you that, yes, we did buy stocks on the 23rd we didn't buy nearly enough. but we did go overweight dramatically in high yield and corporate credit and to be honest, the biggest challenge i face today is, you know, do i use this opportunity or strength that might come in the next day or two because markets seldom go go straight down as an opportunity to reduce exposure that's what i'll be thinking about for the next 24 to 48 hours. >> scott, you said s&p 500 could go to 1600 it could almost half from here if that's a possibility, i'm surprised that you don't already have zero weighting to equities and have 100% waiting to go. >> one thing that it's important in portfolio theory to maintain diverse fiction. that is that correlations between assets are not won

that is some assets go up, others go down i'm not indifferent. i can look at valuation and the economic environment and make judgements as to what i think the right price to securities are. so, you know, you could say i should be 100% out of equities >> it's a fair comment but the way we manage our clients' accounts, you know, we try to do is minimize the risk of drawdown which means you have to have negatively correlated assets along with your other investments. and we do have a substantial position in silver and gold. so you are right we have a lot more silver and gold than we do equities it's been a trade that worked at least to date.

>> scott, thank you for joining us. >> still to come, we'll dig into the reversal of the reopening trend. norwegian is plunging to damentd we look at a few stocks that outperformed after the break save hundreds on your wireless bill

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time now for a update. sue herrera has an update. >> i have it for you here's what's happening at this hour, everyone president trump is telling washington governor and seattle mayor to take back their city now or he will this in reference to the capitol hill autonomous zone set up by peaceful protesters in seattle police have largely withdrawn from the area.

responding to earlier trump tweets on the subject, he tweeted make us all safe the go back to your bunker >> democratic presidential candidate joe biden setting out an eight point economy restart plan it calls for improved testing, more than 100,000 contact tracers as well as new protections for workers and aid for schools and childcare centers. can you go to cnbc.com to read more on that plan. >> and another positive note to give you sea world's flag ship theme park reopened today visitors are required to wear face coverings and have their temperatures checked before entering busch gardens tampa bay also reopened for the first time since march. you are up to date that is the news update this hour sarah, back to you >> sue, thank you. still ahead, peering inside today's major market selloff the stocks and sectors minakg the most dramatic moves when "closing bell" comes right back.

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a huge selloff on wall street today the dow closing down nearly 1900 points, worst day for stocks since march 16th only one stock closed higher in the s&p 500 and that was kroger. of let's have a look at today's biggest movers we're looking at travel and casinos and digging in on the work from home trade first to you, seema? >> yeah, a major reversal in travel stocks. in some ways it reflects what marriott cfo told us just a couple weeks ago:th the rebound in travel would depend on the containment of the virus and the uptick in select states this travel trade is unwinding. i point to the latest data on hotel occupancy. yes, it is improving still well below the 60% average we were at prior to covid-19 on to the cruise lines big runup in recent weeks.

today, the biggest laggers on the s&p 500 led by norwegian cruise line down as much as 16%. the cruise line ceos met with the cdc today. yet still no guidelines as to whether the health officials will lift that no sale order that is still in place until the 2 fourth of july >> thank you for that. >> let's check in on casinos contessa brewer has that >> worries over rising he coronavirus cases and recession and unemployment and maybe the opportunity to take some profits here are weighing on casino stocks today eld rad y el dorado, down 16.5%. if we take a look at penn and boyd, the regional casinos got hit. boyd is is off by almost 10% mgm resorts down 13% and then wynn resort down more than 9%. as well. over one month he will tore add yoe and penn are still up though almost 80%

and the rest of them solidly in the green. sarah? >> con ttessa, thank you >> we're looking at the work from home trade. d? >> mixed picture among some of the darlings of this trade take a look at zoom. continued to just gain they were up in the session they were up about 7% the you're looking at the after hours now. year to date, gains more than 225% that comes even as it comes under more scrutiny over the last week over censorship issues docusign gaining to day. the shares doubleded this year but take a look at slack it has sat out the rally the work from home rally, now since reporting the earnings last week, they disappointed investors. so they're down to 20% over the last seven days. year to date gains though, still pretty strong. up about 35% back to you. >> thank you so much for that. we have breaking news on the ipo

front. we have it from leslie hi, leslie >> hey, that's right they keep coming i have several sources telling me that quicken loans is preparing an initial public offering for this year people familiar with the matter say the company has filed the ipo pro inspectous confidentially and may flip it to be public as soon as next month. the targetted valuation is still being decided but it is likely in the tens of billions of dollars. that implies a multibillion dollar ipo and i'm told it will be one of the largest if not the largest ipo in the u.s. this year now the company has worked with morgue an stanley, goldman sachs, credit suisse and j.p. morgan on this offering. they're the largest mortgage lender in america founded by dan gilbert. the company and all four banks declined to comment on the plans for an ipo our full story about the quicken loans is on kricnbc.com.

>> interesting to see a quum mo couple more of the ipo's sneak out. >> a surge in coronavirus in florida and texas and arizona. why it is happening and w hoit will affect the economic recovery that's coming up next on "closing bell. for as little as $5, now anyone can own companies in the s&p 500, even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership. schwab. own your tomorrow. deposit checks, check balances, pay bills, and more. explore all you can do with our digital tools from almost anywhere. pnc bank.

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up next, a surge in coronavirus cases was a big part of the big selloff in stocks today. we're going to dive into those state numbers and talk about what they mean. plus, take a look at the massive market cap moves today all shedding tens ofilons bliof dollars amid the selloff "closing bell" will be right back ♪ ♪ makes it beautiful. state of the art technology makes it brilliant. the lexus nx experience the crossover in its most visionary form.

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stocks like exxon, southwest, darden and simon property all getting hit hard today over concerns of a rise in new cases. joining us the president and ceo of 11 hospitals and 200 outpatient facilities in new york thank you for joining us you've had great experience with covid-19, treating it head on. why do you think we're seeing these cases and hospitalizations rise in certain parts of the country that have reopened but not in others as much, like georgia or even in other countries in europe and china and the rest of asia >> there's a lot that we don't know about the virus so we can't explain everything that's going on, but we do know that the virus has not gone

away so we will expect to see rises and surges as we reopen. that's to be expected. covid-19 is still there in the background and as people mingle more, we will see more infections georgia is particularly interest ing because it's not exactly clear why there hasn't been as much of a rise in cases there. it could be that there's more social distancing going on it could be that they're more adherent with masks and favor coverings, but we really don't know the answer at the moment. >> secretary mnuchin said this morning that we can't and we won't shut down the economy again. do you think that's a reasonable position to have are we much better prepared if there is a second spike than we were in january, february and

march? >> obviously the secretary and check policy and the treasury is above my pay grade but as a scientist, i think that i wouldn't speculate on absolutes without facts. and i believe that we should go where the numbers go, where the data are and so it's not simply if there is a surge it's also how much after a surge and what is the height of that wave can the health systems handle it and if the health systems can handle it, then that's not as much of a concern. however, i do believe that we've learned from our first experience and if there is going to be such interventions, rather than as a blunt instrument, it can be smarter, more targeted, swifter and shorter.

>> the optimists, both in the market and in general, are hoping that even if we do have a second wave in the fall, as many medical experts and doctors are warning, that at that point we will have better treatments and therapies. we're still getting some good news on that companies speeding up trials on the antibody cocktails and those sort of things that will help bridge us to a vaccine hopefully by next year is that a reasonable optimistic case to be made? >> yes, it is. yes, it is there is a ton of intellectual firepower and resources and attention focused that's being directed to finding a therapeutic and a cure even before there's a vaccine and not only that, actually, other modalities are also getting better we're learning more about how to

use oxygen, who should go on a ventilator versus not. we're learning about other modalities that could be helpful. so i believe there's reason to be optimistic that this much wor worldwide focus and intellectual firepower directed at one disease. the history of medicine shows that we usual lly get better an better at treating it incrementally. >> we appreciate your insight. thanks for helping us make sense of it. >> thank you very much today was a pretty ugly day in the markets the dow down almost 1900 points at the close a refreshing pullback, to use your own phrase, mike? >> it certainly remains to be seen some manner of pullback or rest

for this market was definitely called for this is a pretty destabilizing day, very heavy volumes on the downside it seems like it's going to cause people to assess how much far ahead of itself the market has gotten right now watch the bond market for clues of sentiments, very low bond yields at the moment ♪ live from the nasdaq market site in new york city's times square this is "fast money." a major selloff on wall street today, the dow plunging nearly 7%, the worst day since march 16th every single s&p sector finishing the day in the red we have full team coverage today. let's kick things off with bob