one of the best ipos of the year >> yeah, that's right. and technology is the place to be throughout this pandemic. and at any rate, that's what it looks like today another down day for the equities, kelly. >> we'll be watching to see how sloppy this close is we'll see you monday "closing bell" starts right now. >> tlk welcome to "closing bell" stocks are sinking to end this week the s&p 500 down over 2% the dow down closer to 3%. let's have a look at what is driving this red action. texas and florida rolling back parts of their reopening plans as coronavirus cases surge in certain states in the u.s. bank stocks are getting crushed. regional banks, wells fargo and goldman sachs getting hit. goldman sachs down by more than 7% and as advertisers boycott the

platform, facebook shares are plunges as the cash cow of an advertising machine takes a public hit >> dow is down 750 coming up on today's show, a recession unlike any we've seen before the imf shocking the investment community with a huge negative revision to the forecast we have an exclusive interview with the managing director of the imf. you do not want to miss that let's focus in on the big stories with 59 minutes left of trading. mike santoli following the plunge phil lebeau tracking the fall in airline stocks the ceos meet at the white house today. and meg terrell has the surge in coronavirus cases and rethinking of the reopenings happening across the country let's start with you, mike, on the selloff. what are you seeing? >> well, sarah remember back in february, march, almost every friday it

seems like the market backed off. a little nervous what might come over the weekend it feels familiar with that today. in the context of what june is, a corrective phase it's been training in a range slouching to the low end of the range. the 200 hf day moving average for those who watch these things is right about there as well it's not really telling you up trend, down trend. it is neutral. we can certainly scissor around that a while before there is any resolution it seems as if right now people are looking also just a little below the current levels around 2950 or so that also gets us back into a very sloppy range where we were in most of last summer as well take a look at this utility stocks are quite weak they're down again today so this is the long term treasury etf along with the utilities. in white, you see the weakness here in utilities.

even as bonds went up in price as you can see, normally they move more or less in sync and utilities led the bond market a little bit which suggests that bond prices should weaken up if you want to look at another period like this you go back a couple years like that when you see the similar type of resolution it doesn't seem like bond market wants to sell off right now. >> where is the angst coming i know the banks are under particular pressure after the stress test results zblichlt think it's more of the same in terms environment of the renewed attention on the rise case loads. but also piled on top of that is you have the nervousness around the social media stocks and therefore the big faang stocks are not providing an answer.

they're not holding things together just like big growth stocks. they were not there to keep things afloat. naturally you say the banks as well a little too much across the board right now. mrs. we're seeing rebalancing activity out of equities and into fixed income. very difficult to say if this is what that is about but that has been the expectation for a while now. >> mike, to what extent is nike throwing in as a factor not that stock's move on its own but just i guess a reminder that earnings are looming and they might not be helpful for equity markets. >> yeah. certainly not necessarily a welcome reminder of that i would say also, one of the reasons that is the dow is underperforming is the 6% drop in nike as well. a bigger weight than it would there in the s&p 500 it does seem to raise that question of what exactly are we pinning current valuations on right now. aside from, of course, very accommodative stimulus and monetary policy. and then very kind of generous

credit markets have also been a help as well so all those things thrown into the mix. you know, i always find -- when you have a significant down day, you never lack for reasons why you might be down. and so whether they're the motivation for the selling or not, they're always out there. >> that's very true, mike. very true. of course, goldman sachs and j.p. morgan also not helping the dow which is the relative underperformer >> as far as we know, the meeting is still going on between airlines ceos and mike pence. they went to the white house earlier this afternoon ed bastian from delta was one of the ceos we saw getting out of a car. no comment before the meeting. they're discussing passenger screening. who should do temperature checks on passengers? the airlines the tsa? the airports that's been pushed around quite a bit over the last several weeks. will i'm not sure we're going to get any defin tich answers from this meeting as you take a look at shares of

the airline stocks which again, they're under pressure anywhere between 4% and 6% today. one reason why is because they continue to lose money at an stunding clip. that's what they're burning through. it's closer to about 115, $120 million a day. the passenger levels, they're slowly improving they're still down 77% tachlt a look at sharsz of american earlier today they said that they will be selling all of the seats on all of the flights starting july 1st. they're no longer going to cap it at 85%. they previously were look, if you're on a flight and don't like being in a middle seat, they're going to let you know, you can rebook through them finally, keep an eye on boeing we could get word later today or this weekend that the 737 max recertification flight, one of them, at least the beginning of it, could happen next week and we'll be watching that closely. guys, back to you. >> phil, the meeting at the white house today, to what extent do we think the airlines

will see pressure even though the terms of their bailout allow them to significantly lay off workers from the fall period on wards? are they getting pressure not to do so? >> i don't think so. i think it's very clear -- i'm sure the white house would say they don't want to see any more people laid off. they're not going to sit there and say, sure, lay off the people on the other hand, they're burning through tens of millions of dollars every day it was known, wilf, when they went for that white house aid back in april and march that even though this was going to extend them into the end of september, they were still going to be losing a lot money would need to be smaller if things didn't rebound. >> you brought up this issue who have is going to take temperatures where is the tsa staff on this how thorny of an issue is this for who's going to take on the added responsibilities

>> cost and logistically how do you do this? are you going to add that on to the plate for the tsa people who are already running screening procedures now you're going to say you're also going to take the temperature of passengers or in charge of contact tracing? it's going to cost tens of millions of dollars for this to happen that's why many are saying let the airlines do it the airlines are saying if you already let somebody through security and then checking temperatures at the gate, which some airlines are doing, frontier does that you are already going too far? are you already saying, look, we should have done this before they came through security there is no goodance here. whether or not you want the tsa or airport to do it, none of the answers are good answers >> really hard to figure out okay, thank you. >> the white house also holding the first coronavirus task force briefing in two months >> sarah, at that task force

briefing, vice president mike pence talked about the progress the country made he did acknowledge that there are 16 states where they're watching trends of risingcase that's are concerning. meanwhile, i also interviewed dr. anthony fauci earlier in the day at the summer series conference, a taped interview that ran at 1:00 and they differed when they talked about what it means that more people in the younger categories are making up a bigger proportion of those testing positive take a listen to how they discussed this >> roughly half of the new cases are americans under the age of 35 which is at a certain level, very encouraging news. as we know so far in this pandemic, younger americans are less susceptible to serious outcomes of the coronavirus. the fact that we're finding more younger americans who contracted the coronavirus is a good thing.

>> right now it's dominated by young people that means they themselves may not necessarily get hospitalized as much as if an older person is someone with an underlying condition. but sooner or later if if the chain is not interrupted, they will, in fact, individuals who are vulnerable who will require hospitalization and there will be a lag and may take a few weeks. but we'll see that and that's my concern. >> so guys, dr. fauci concerned about the turn around that we're seeing in the country right now. back to you. >> what are we seeing in terms of states putting the reopenings on pause, meg? and what is the next step? is anybody talking about rolling back reopening >> yeah, texas surprising folks by saying they're closing bars and rolling back the occupancy that is allowed in restaurants back to 50%.

shutting down tubing and rafting enterprises. and, you know, in florida also, shutting bars. people are contributing to spread when i talked to dr. fauci about what might need to happen, he emphasized that it is a spectrum it should not be binary either closed or open it's that, there should be step wise actions taken between the two steps. both going forward and going back so he said we could see the shelter in place orders again. but he hopes that we can take smaller actions in between to curb the spread first. >> i guess with restaurants and bars, we should have guessed this could have been a factor. it's a pastime based on human interaction and hard to wear a mass physical you're having a drink and talking to people. are we still in the time period of the protest of the spikes or would that have had to come a week or two earlier?

>> some of them could be in california and citing the protests as contributing to the spread whereas, massachusetts did some testing among protesters who identified themselves as being there and said that they didn't find higher rates among those that protested dr. fauci said he didn't see how protests couldn't contribute to some spread if people were pulling their masks down, you know, chanting, sharing droplets, he said he thinks it would contribute >> the dow is down 724 points. we're saiding south again. goldman sachs and nike the two biggest losers another company pulling its ads from facebook. julia with the details >> sara, honda is announcing that for the month of july they're going to withhold the advertising on facebook saying they're choosing to stand with the people united against hate and racism saying this is an alignment with our company's values which are grounded in human respect. just to put this in context,

they spent over $1.1 million on facebook advertising over the last month more from various dealers associations but it is a meaningful advertiser on facebook they have not had any specific response to ulileaver joining facebook we'll continue to follow this but certainly a very important advertiser and we'll see if other automakers follow >> the unilever news is stunning the share price reaction reflects that. it's such a major consumer advertiser the you've been doing reporting on this as well. they're, what, number one if not in the top five of advertisers on all of these platforms. they're going to do a full review of the broadcast

properties looking whether there is hate speech or anything they don't approve of they're prepared to pull ads from places if they find them. they're not joining the one month sort of make a stand they see -- they're sort of going about it in a different way. but there is that risk out there that as more companies wake up to this and put pressure on other companies to do this, it's going cascade. >> certainly just to put that in context, they spent $25.5 million on facebook in the past no. so that is the same data that meg gave us the information about forward spending but you're right it is really interesting to see what they do they're drawing lines in the sand they didn't say that they were planning on pulling spending from facebook currently. >> yeah. not sure they would even announce it. >> on going story, facebook down

8% right now yep. up next, financials are the wor worst performing sectors the entire index is down after the fed's decision to freeze buybacks you're watching "closing bell. just getting started here. a big selloff on wall street on cnbc ♪

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banks lower today. they were down about 2% following the reaction to the stress test results at the open. that was before the broader market selloff and nangmade thi lot worse. the standout point from last night's stress test that also by the way took the banks by surprise is that they're going to be retested in the fall markets, therefore, don't get that 12 month forward looking certainty on capital levels and capital return plans that they like and that they normally get.

but it's the limits to dividends that is grabbing most of the headlines. banks can not pay out more than the last four quarters of their earnings put another way, they can't have over 100% payout ratio they're down in the 30% ranges a few like wells fargo don't look so good they're widely expected now to have to cut their dividend citizens and huntington are above 75%. but all of these banks could have issues in the near future if they have multiple quarters of low or no earnings. the quarters will replace the good quarters from 2019 in the 12-month trailing earnings calculation. and suddenly the low 30% numbers could rise if the denominator is

falling. it looks like they sit below the retired one. so they've got some work to do by the first of october to rectify that but it should be very achievable work none the less the stock is down 8.6%today. the bottom line, things are fine for now despite the worrying looking share price moves. but another big round of tests will come in if the fall and the fed looks like it's prepared to be fairly tough on the banks then if the economy hasn't improved in the intermittent

months for more, let's bring in it u.s. banks analyst at autonomous research thanks for joining us. my first question is really the scale of the share price decline. if the only factor out there today was the stress test results, would these 6%, 7% declines be too much >> no, i think it's evenly split. and it's half, look, banks are complicated. but at the simplest level, they're cyclical stocks. and so we're blaming it on the stress test. the fact that the market is down and the recovery gets pushed out, on the stress test itself this he did a good job summarizing the three key points the lack of certainty, dividend risk and that dividend risk getting tougher each quarterer that goes high and then the stress capital bufrz, if they come in good, they're not going to take down your capital in this environment. but p your stress capital comes in bad, then you have to take up

the management targets the overarching thing on the stress test from investors, you know, they thought this was going to be the final exam we debated dividends and bank capital for three or four months now. at this point i don't care if i get an a, b, c i'd rather get an a than a c i just want the grade. the fed said this is only the midterm. we have another test this summer we have this new trailing dividend you have to deal with all this stuff may or may not get extended so you lost that hope for certainty in the near term >> on the point about dividends, which banks are most at risk of having to cut their dividends and should that actually be a key factor we discussed this so often on the show yes, dividend yields are pretty high for the banks at the moment but share price moves on an individual day can far outweigh the yield. so are we focusing too much on this dividend risk factor? >> on who's at risk, you know, you hit the nail on the head

the longer it's in place, the more banks are at risk wells fargo and capital one are at risk in the near term there is a little difference between the two of them. wells' dividend is just high relative to the normalized hour. dividend was set years ago when the earnings were higher they're now lower. they were due for a reset. capital one is just getting more snagged by the design of this test i mean almost the shrapnel in this whole thing they only paid $100 million in the quarter. the idea that the dividend is going to make a difference, its a nonstarter there i think it is more of a temporary cut. two or three quarters until earnings bounce back you know, you roll forward if this rule is still in place in 4 q and 1 q, then the list starts growing. on our math, it grows from two stocks to six stocks that we cover. and names like citizens, huntington, ali, they get dragged into this thing too.

it is all based on forecast if the earnings come in better. they may avoid the fate. really with, the exception of wells, most of the diffident cuts are temporary, two to three quarters until you get an earnings recovery and start passing this test where the earnings have to be higher they trade up to two times the book when times are great. there is this great quote, real life goes from pretty good to not so hot investing goes from the best ever to terrible right now we're in terrible. if if you're investing in bank stocks, you should believe the economy is going to get back on track and they're going to trade at 1.5 times growth. you shouldn't be happening for a 5% dividend and just praying

that the stock doesn't go down >> to that point, brian, about investing in bank stocks, doesn't this make it harder to invest in bank stocks just not knowing the rules of the game? they have another round in the fall what do investors do with that >> i steal a quote with clients. you're raising a real issue. it it's just complicated, hard this isn't a sector that is like investing in it apple and facebook to begin with it's not like, you know, hey, these are the great growth stories. when you do change the rule of the road and introduce some uncertainty, it's going to be tougher for people is it a permanent issue? i don't think so i think the fed is in a tough spot they don't know where this is

going. for the next six months, yeah, it's a ding to bank stocks because as you point out, i do all the modelling i want, if i change the way the model works, the model is out of date >> brian, thank you for joining us every group is getting hit hard in the market. we just showed the dow it's at session lows h decline of about 3%. we're now headed for a weekly loss for stocks. the second in the last three weeks. i lot of the social media names getting hit. the nasdaq down 2.3% why are gap shares up 18%? they're the best performer in the s&p 500 right now. a new deal with kanye west s it overhyped? a look at the past emps xaleon these economics next stock slices.

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one stock bucking the trend is gap it's up 18%. this after yan west announced a partnership with the retailer tweeting, west day ever. kanye along with the easy design studio which is his, will develop a new line made up of modern elevated basics at accessible price points for men, women, and kids to be sold in stores and online. it is due out next year. the new partnership is injecting much needed clout into gap's brand which struggled to resonate with customers for years. stocks falling 43% in the first year if his partnership with adidas is any indication, gap may come back into fashion. the stock is up more than 200% since ez's launch in february 2015 adidas u.s. business was struggling

they came in and it really did create a turn around in the business in the u.s. and really created a halo infect across adidas' business and the shoe lines a lot of analysts do gret it with a big rebound we saw in adidas in terms of style i did a little digging my receive. it is yeezy gap. the price point is going to be along the lines of gap so hoodies from 6 to $100. normally yeezy hoodies are hundreds to thousands of dollars. >> we agree with new terms of yeezy being very customer relevant brand why is that casualization sportswear and versatility that's a nice positive for gap brand. the stock went up a lot

yeezy represents the future in terms of having a lifestyle brand relevance and thinking about music, foot ware, fashion, and architecture gap really needs to get this younger customer a lot of the stores are too big. mall traffic is a problem. this is a step in the right direction. it it's all about execution. >> that was my next question can they lift is self up as adidas did in many ways in terms of creating relevant styles for consumers? >> what is great about kanye and his speshgtive on this, he likes a lot of control he likes tothink about brands and birth integration and the

whole brand experience is creative control will be up to yeezy that partnership is something to mondayter as far as how this develops over time it's designed to be a long multiyear partnership. we'll see. there is too much space in a lot of the gap stores. they need to close a lot they're negotiating with landlords. there is plenty of space to go for this you need the younger customer that loves fashion and this is a luxury brand getting more accessible with a lot of market demand >> would you buy it here, $12 after this surge already >> you have a market perform here we did the discounted cash flow analysis so it's -- the assumptions are pretty aggressive about what needs to happen. yeezy has to reach $1 billion. there are a lot of things we're looking at valuation jump was substantial

the store base of gap as many know is too large. poor mall traffic. promotions in apparel. there are a lot of things happening. we like ulta we love beauty we laugh real real and peloton as we continue to see this at home revolution change clothing is a tough place to be. the department stores are in a tough place. health is the new wealth we think the value is off price as well as investing in yourself and self care. those are structural trends. we're more favorable on those right now. >> oliver chen, thank you for joining us >> thanks for having me. happy friday >> you too time now to get a cnbc update with melissa lee hi >> hi. there here's what's happening at this hour. democrats in the house approving a bill to make the district of colombia the 51st u.s. state the measure faces virtually certain defeat in the gop controlled senate as they would add two senators from an area with a big majority of democratic voters. gun manufacturer recommendington arms is preparing to file for

chapter 11 bankruptcy for the second time since 2018 this is according to a "wall street journal" report the firearms company is trying to sell assets to the navajo nation 16 basketball players, nba basketball players have tested positive for the coronavirus and they'll be self isolating until they are cleared by a fogs just over 300 players have been tested in preparation for this season's planned resumption at the end of the month and rockefeller center showing the pride today. the area that houses the iconic skating rink is surrounded by more than 100 rainbow flags to celebrate lgbtq pride ahead of sunday's anniversary of the 1969 stonewall uprising and that is the cnbc update at this hour. back over to you, sarah. >> all right thank you. we've got just under 30 minutes left of trading. we're seeing a big slide for stocks dow down 758 here are three things driving that selling right now in the action texas and florida rolling back parse of their reopening plans

as coronavirus cases surge bank stocks getting crushed as the fed signals caution around the capital plans. regional banks hit hardest goldman sachs down more than 7%. as advertisers boycott facebook, shares are plunging as the infamous cash cow takes a public hit. >> i got more news as well on that, sara sorry i missed the segment on gap. i was just on the phone with a senior member of one of the nation's biggest banks and i can report that they are very close to boycotting facebook when it come to their own spending as well this is how they sort of framed their thinking to me clients and ploemployees are passionate about their position. the breaking point as it were for this bank came in the last day or so. they just felt that facebook is not showing any sensibility to their advertisers.

even used the word arrogant with the statement that facebook put out. and so they've been considering it for a while they're very close to making that decision. it feel the reason they have not done so yet is they don't just want to suspend temporarily without any criteria and they're kind of coming up with what they would need to see change in order to go back on. so i think they're very close to making the decision to pull their spending p as i said, they used the word air ganlt. clearly facebook stocks is under pressure all day, mike it's down 7.8% and one of the big factors that is leading to the market pressure today >> yeah. for sure you know, the company has weathered storms of a similar type before. of but probably nothing that was seemingly, i guess, as concerted that's when it comes to large advertisers and seeming a little bit more like a genuine movement

coming from companies as opposed to just public outcry or political pressure so you can certainly see why facebook which typically gets valued for the utter predictability of the earnings and cash flow. you know, having a little bit of a step back today. in the context of a market where a lot of things are taking a step back. >> yeah. i think the interesting thing, sar yashgs y sara, you reached out to p & g i'm certainly going to reach out to the big banks over the weekend. we have not got even one of the major banks making this decision formally and certainly not on the record and naming themselves but you do kind of start to wonder when it rains it pours. pt is this a slippery slope snt doors opened and whether this really ends up being the turning point where the money leaves and forces a big change in decision. >> well, there is power in numbers. it puts pressure on other companies to do the same

paul pullman implemented, you know, esg strategies before esg was even popular and as companies do step up on this to appease their employees, i think to stand for something, to have values, i think there is going to be more pressure on them to do things like this. you mentioned that in your conversation with the bank executive. this is partly a reflection of what the employees want. i would also just note though mike santoli that twitter is down 8%. wouldn't twitter be a beneficiary as it is seen as taking a moore pro active stance ons this the ad dollars would go somewhere, won't they? >> yeah. you would think. although, i also think people are trying to interpret this in the context of companies in general just reassessing their digital ad spread. do they not want them to interact with the contentious back and forth not just the company's policies

but what the platform features right now in terms of rhetoric and everything else. the stock does not have that same rock solid core of believers in the business model. but i'm not sure if that's -- if it's being necessarily in a careful way. a lot of companies are figuring out where they want the brands to be. >> unilever also pulled ads. >> stepping away from this specific issue, noting the fact that one of the big cap tech stocks has helped prop up the broader markets for so long is down quite so much as it is

today. you were not having to worry about daily covid-19 counts. frankly, the if is call support was going to have been enough. you know, still seems likely the case and really just a general corrective process that went up in historic fashion offer the lows will all that stuff is i think playing out as investors try to reany what th rethink what they want to pay. yes, it's true the growth stocks seem bullet proof for many bouts of this rally. but right now, a little more vulnerable software still outperforming the stocks are not down a ton from the open. if you look at what really suffered over the course of the trading day, it has been banks, energy, materials, things like that that are more cyclical. >> broader markets near the

session lows dow down 3%. all sectors are under pressure travel stocks are certainly one of them we have the details. >> less than o 20 minutes in trade. and travel booking sites that have that exposure to airlines to hotels are faring the worst there is also a new survey from morning consult that finds only 18% of americans have traveled since march and a majority do not have plans to travel in 2020 pivoting to the cruise lines, now on track to close the week with double digit declines that's the worst week since early april. much names like carnival, royal, and norwegian cruise line. one counter point i would mention when talking about travel, the weekly data from str that shows hotel occupancy is in fact improving for the tenth consecutive week to around 44% but still well below the precovid-19 levels but, of course, the prospect of any further delays in reopening, sarah, that could dent confidence and also result in more shutdowns of hotels

back to you. >> seema, thank you. the surging number of new covid-19 infections weighing on the markets. texas rolls back reopening florida reports nearly 9,000 more daily new cases joining us is former fda commissioner and cnbc commissioner scott gottlieb. dr. gottlieb, thank you for being here the discussion today centers around these cases and who is getting sick and particularly the young people get sick. if you looshg at the hospitalization numbers like texas and florida, they do skew younger. why is that? why are more people getting hontized younger there than they did here in new york during the height of our outbreak zblfr it's probably a function of behavior. it's probably not something innate to the virus itself the virus has not changed in any form the older people are doing a better job protecting themselves and younger people are being less cautious and more likely to get infected

the place that's were open are the places that younger people are going to congregate. so it's a function of behavior the concern is though that you had so much infection at a community level in the states now that it's going to eventually seep back into older populations that are more susceptible to the virus you're going to see death rates go back up we probably will see the death rates go back up or the total number of deaths go up over the next two to three weeks. >> so what exactly happened here everyone is saying that some of the states opened back up too early. opens too aggressively could it be they shut down too early? >> yeah, it's a fair point i think that we did a national shutdown at a point in time and it was equally effective the states that shut down against the backdrop of what they felt was in a lot of infection were a little more anxious about opening up and they opened up against the

backdrop of a fair degree of infection. you look at georgia, florida, texas, even california, south carolina, alabama, states that are having large outbreaks right now reopened against the backdrop of a good amount of infection as opposed to states like new york and new jersey and connecticut which really crushed their infection and reopened against the backdrop of very little relative infection. massachusetts is in that bucket as well. same with maryland michigan, those are states that have very big epidemics but drove it down to low levels before they reopened so there was some inevitability that there was going to be an upswing in infection you have people now interacting more socially against the backdrop of an already high level of persistent infection. i think the velocity of the spread and the level of infection right now surprised many of us but it is what it is right now it's going to be hard to put out. the trends that are in motion right now are going to continue in motion for a couple weeks anything we do right now from a policy standpoint isn't going to have the intended effect for two

or three weeks there are trends under way in terms of spread that are going to continue into next week and the week after and then you have to ask yourself whether or not the policy steps that have been taken this week are robust enough really to reverse the trends they might not be. we might have to end up doing more one last point i make is that new york city announced the effective lockdown, the stay at home order on march 20th they didn't peak in terms of the number of infections until april 7th. so three weeks later and so takes a while for the policy action to have its intended effect at reversing an epidemic spread. >> should there be a nationwide rule requiring masks to be worn in public? >> we need more synchronized action nationally. we can't deal with this on a state by state basis if we really want to drive the infection rates down we're just going to continue to reinfect ourselves across the country. that said, it's going to be very hard to implement a nationwide rule around public health measures like that there is reasons why a lot of

these decisions are delegated to states there's good reasons why they historically have been delegated to states. there are different customs, laws, public health inst infrastructure but the federal government can issue a national quarantine. they can lead by example and encourage governors to take more uniform action that could work. the federal authority in this regard is actually limited >> dr. gottlieb, always a pleasure thank you for joining us >> thanks a lot. >> 14 minutes left in the trading day. we're now in the "market zone," commercial free coverage of all the action heading into the close. mike santoli is here to break down the crucial moments of the trading day. we have keith bliss with us. hi, keith. great to have you with us. let's kick things off with the broader markets. stocks getting crushed today capping off a volatile week with all three major averages contract to finish the week in the red.

mike, with the doom and gloom so far, we're down 2% off the lows by the way only down 2.5% for theweek the market was overbought. it was overloved it was very much overheated on the technical basis and stretched in a lot of different ways people assuming the reopening trade is going to be very smooth since then, so it's almost three weeks we've been in this reassessment process it's a correction within that bigger rally right now the average stock in the market is down some 12% or 13% since that point the overall index is not down that much. we were a little lower a week ago monday insttraday this is a very choppy piece of

the range when we're really just not sure exactly whether the market front loaded too much good news in the way of an economic recovery. we're not going to have great sign posts on that we get the jobs number next thursday we'll see if that gives us any information right now. but i think that's the process we're in at the moment we get into quarter end as we talked about how there might have been a little bit of a pullback from stocks for that reason just purely from flows >> keith you buying this dip? >> you know, i've always wanted to say long equities and certainly if you're looking at the longer return and believe that we'll have some sort of recovery, and you know me, i'm never one that bought into the v shape recovery that we're going have as we come out of this pandemic this little dip here i think we stay on the sidelines and evaluate what is happening if you go back to end of may this market is churning side ways the rally up in the first week of june and then bringing back down to earth a little bit

notwithstanding we essentially moved side ways. there is clearly indecision in the market there is just enough things combatting market participants to change their calculus seemingly on a daily if not hourly basis so i think we need to really sit back and evaluate what is happening. the texas and florida news clearly spooked people today >> is that what is moving the market today reshutting down of the economy and if we see more of that, would that justify a lot more selling? >> yeah. it's the number one item on my case right now, wilf you take a look at how the market does react, as we're a little short on any kind of market moving news, now we start head longing into earnings season in a couple weeks while we're already figuring that second quarter earnings will be poor, it's going to be the earnings call that's are going to be the most important probl probably more important than they ever have been. it is really around the

pandemic we saw georgia and florida and texas and some of the sunbelt states, you know, start to open up with robustness almost and great vigor and confidence and now we see essentially an admission from texas and florida that maybe they opened up too early. maybe they got too aggressive. this is spooking the markets we're not going to have that v shape recovery and therefore, how we're discounting the equity markets 12 months forward may be a little overpriced at this point in time. that's why you're seeing the selling pressure >> there are also corporate stories weighing on sentment nike under big pressure today. one of the biggest drives on the dow after an ugly quarter. nike reporting a net loss of 51 cents for first quarter. consensus estimates were for gain of seven cents. the miss was especially unexpected revenue plunged 38%. this morning cnbc was able to confirm that layoffs are coming

at nike. the company saying the reductions though are not related to the quarter or to the business they're seeing. they're not -- they're a result of restructuring that had already been in the works at nike a few bright spots though in this report. one was the digital sales. they accounted for 30% of overall revenues nike is on track to make that 50% of overall revenues. a few years earlier than expected but the forward review that nike gave is actually pretty bullish. if you listen to that call between the digital growth, the fact they returned to growth in china and have a playbook for thafrment the fact they have brondz now killing it like jordan brand which got a huge lift off of the last documentary. this is, you know, positioned as one of the companies that is going to weather this storm and come out strong. much it's got a great brand. and i just wonder if this is all just a recalibration of the analysts which are just kind of shooting in the dark when it

comes to earnings estimates on the quarter and on the rest of retail. >> sure. i think one of the issues is everything you said about the long term strategy, i don't think can you find anybody who didn't already believe that. the stock is an ultimate winner in this environment. so really just a matter of a little too much too soon on the bounceback from the march lows and we'll weight and see if the consumer gets traction, if sports comes back. all these other things you kind of gave nike credit for navigating up front. they just become a little more contingent right now i don't think it's guy change of the story at all i don't think is anybody that doesn't think that nike is best positioned in the segment. and to actually keep that share. it is really a matter of how soon is it going to show >> we have 7 1/2 minutes left. we're down 700 facebook plunging. the ceo announced some changes

he's making. julia has the details. >> mark zuckerberg announcing that facebook will pro hiblt a wider category of hateful content in ads prohibiting claims from a specific group is a threat to safety he also announced that they'll be labelling newsworthy content that is otherwise violate the policies if they decide that public interest outweighs harm zuckerberg did not address the growing ad boycott calling for a crackdown on racist content and hate speech in posts on facebook as well as those ads that organized by the naacp and the anti-defamation league now the trump administration also taking aim at zuckerburg, sending him a letter asking facebook to crack down on the use of social media to coordinate violence and vandalism. the trump administration says they sent the same letter to apple, google, twitter and snap.

>> julia, thankses very much for that >> facebook stocks down 8% as we stand. how important is it for the broader markets that faang continues to hold up and over any rolling one month period i think facebook has a real issue aun wednesday they take an aggressive stance on what they're going to do around the messaging or the ads that are hateful. they had to re-examine the models over the last six months and four months since we've been locked in this pandemic. we have political uncertainty quite frankly here in the united states and what's going to happen therefore, the messaging is going to be pretty intense unless they were to smooth that out or massage that what comes

on deck. facebook has become very important to the market. not just faang stocks but nasdaq and bellwether overall because of the advertising dollar, the spend of companies it really calculate as cross many different secretaryors. so if they're showing weakness, then we could be moving side ways for some time to come how about albertson's, pricing the ipo below expectations leslie pick we are the details. >> pretty much everyone in this deal is disappointed here. the investors who bought shares in the ipo, well, they're in the red today. other private investors cashed out but with about 15% less proceeds than they were expecting. albertson itself was marketed as an $18 billion company including debt but investors were only willing to value at $16 billion. the good news is albertson's got

the deal done after two ill-fated attempts >> how has ipos in general and secondaries contributed to the drag on the market, leslie >> this quarter, they have already been over $170 billion worth of offering both primary and secondary. which a lot of people, a lot of investors in the market are seeing as a supply glut. it's a record quarter already. you combine that with the fact that we're seeing very little in the way of buybacks. and so you got this excess supply in the market st not as much demand to soak it up and then on top of that, you have the concerning headlines. all of that combined as partially why you're seeing declines today >> leslie picker, thank you. we talked about how this was going to be a tough sell albertson's had a lot of debt. it's in the grocery business which having a moment right now but is not seen as a permanent

phenomenon is this a reflection of the broader market sara, grocery stores overall have -- am i back? transmission difficulty there. grocery chains overall, you know, operate on such thin margins. it's an interesting investment for anybody that wants to play you have a very limited scope of investors that want to come in there. the ipo is clearly been trying to get launched for the last five years from the private equity shop that owned it. that is an upward trending market you never want to launch the ipo on a day you're trading down a couple percent and that's what happened here. that's certainly impacting it. as you point out, grocery chains are having their day in the sun right now because of the pandemic and the shutins that

we've been subjected to. very few will be survivors >> crowinger is holding up in today's selloff. mike, two minutes left in the trading day. take us inside the market internals and what you're seeing >> the decisively negative, sara not quite as bad as wednesday's lob sided washout. if you look in the volume up and down, down val volume there is down 6% or 7%. so it's decisive to the down side on a weekly basis, look at the kind of aggressiveness or relative aggressiveness of the different sectors. the high beta etf badly lagged so a retreat from risk here. that high beta etf is a cyclical play and one on financial leverage so pulling in right there. it had a bad month so far.

the vichx is reluctant to go do. they see continued storminess and chop and headline risk in the summer and beyond. i do think that is still going to be priced into the options market and the vix isshowing i right there: >> mike, thanks for that we have one minute left. we did see a little bit of a bounce about five or ten minutes ago now. softening a little bit into the close. the low on the session is down 770. we're down 730 or 2.8% as we stand. the nasdaq is down 2.5%. the big moves themselves don't really tell the scale of some of the selling. all 11 sectors are lower towards the bottom of the list including consumer discretionary energy is down 3.5%. it is banks and communication services that are suffering comfortably the most goldman sachs down 8.6%. wells fargo down 7.5%. facebook as we discussed a lot on this last hour is down 8.3%

and, of course, a lot of the companies fairly big weightings as well. and thoepg drhelping to drag th lower. the we're down 2.8% or 730 points on the dow. down 2.4% on the s&p 500 nasdaq composite so often excluding itself from the selling is not today it's down 2.6% ugly close ugly session during the week down close to 3%, sara >> and welcome back to "closing bell." that will do it for a friday close. the pretty ugly. i'm sara eisen here with wilfred frost and mike santoli take a look at how we finished not too far from association lows 2.8% the only dow stock to finish higher is cisco. hardest hit, goldman sachs off the stress test results. and nike off that quarter.

s&p 500 closed lower 2.4% a loss of almost 3%. today it was financials. it was social media stocks technology also contributed to the losses all sectors ended the day lower. the nasdaq down 2.5% down only 2% for the week. so still the outperformer. but a down week for all the major averages the russell 2,000 index of small caps down 2.44%. pretty much in line with the s&p 500. coming up, we'll get much more on the selloff we're joined by aliance chief economic advisors. he is cautious on the market recently plus, we'll ask the head of the imf about the impact coronavirus is having on the global economy. and whether governments need to pass more stimulus it's going to be a key topic of debate here especially if the markets continue to show weakness joining us to talk about the market today, iq capital usa keith blitz still with us and david zervis join the

conversation welcome to everyone. i give you the comment, mike on the nooshmarket today, what it tell us going forward >> yeah. continued down side leadership from those core reopening areas that had a tremendous run into the early part of the month and have given a fair bit of that rally back the s&p 500 down 7% from the rally high on june 8th i think almost everybody, june 8th might have said market probably needs to give back a little bit it's getting a little bit ahead of itself. here we are down the big question is what would cause it to get a little more dislocated on the down side? and it's not really obvious what that would be. it's not as if a lot of investors have really gotten head long and leverage up and extremely exposed to stocks. you are don't have those people with flight risk and, you know, that might strand the market here in a range for a little while the upside looks like it is

remote from this moment. i do think it is part of the general rethink, you know, dr. gottlieb pointed o thought new york city, new york state closed march 20th three days later, the market low. phase one new york opening june 8th that, was the day the market peaked. the market runs ahead of what is going on in the reopening phase. >> david, down 8% i think mike said from june 8th high. is that a buying opportunity >> i don't know if it's a buying opportunity. i would take eight days before that, wilf and just say on june 1st we were here at 3,000 on the s&p 500. for the month of june, we're basically unchanged. we have a heck of a runup in the first eight or nine trading days eight or nine days of june about six trading days and i think it was a breakneck pace i think people got very excited about the reopening, about the news being much better and the reality is it's going to be a bit of a slower start i look at the month of june as really kind of not that exciting

in the end you go oh, my god, thats a big selloff. but if we never went up there and just traded around 3,000 back and forth all day, 1% or 2%, we wouldn't be having this conversation we would be sitting around for the last month just largely what we did why is this not a dip buyer's opportunity? isn't the story that powell will be in, liquidity will keep flowing? that's been one of your messages it's what we hear all day on cnbc >> i'm a big fan of that i'm certainly interested in owning the upside and we have been since april 3rd, we jumped into a new version. and that's done really well. we're not fully 100% of the trade. we're about 50% of the trade it's been an extremely good run. i'm looking for material

pullbacks. i would like to add more to that trade in particular. but, you know, i don't think you need to be that hasty f you've been participating in it and you didn't have a lot of negative thoughts going into the march period, you sort of weathered that storm either in an insured bets the i think you can be patient here if you're having a good year so i'm not negative. i'm certainly not as negative as a lot of people have become on the virus and the reopenings and what is happening in florida and texas. i think what is happening on the young folks is a positive more than a negative. that it's not hitting the elderly and the death rates are not up but i understand the markets the markets want to churn a little bit i will say, sara, one other thing. you have been talking about this all day. the bank stocks. there was a big battle between brainer and governor quarrels. and he is someone who will probably be in the next

administration if biden wins i think stocks are looking a little forward to what might be the regulatory outlook for them in a world that doesn't involve a trump presidency it may not than good the so i think part of today was maybe some of that as well so i don't want to get too hung up on the virus. i think there is some financial weakness that is what the fed did and what the inner battles are at the fed on regulation and deregulation and there is still pretty fierce they're pretty interested in backstopping the economy we no he that. they're all onboard. when it comes to bank regulation, they're definitely not all on the same page >> liz young, for a long term investor that can try and look past the short term volatility, are equities in the u.s. still the place to be? >> if we're comparing them to emerging markets and parts of europe, i think for the long term, yes. equities in the u.s. do better coming out of this crisis. we came into this in a much stronger place than a lot of other regions around the world one of the things i think is

important to note about this june period is that i don't think it's a scientific surprise that we had an uptick in cases as we started to reopen and we gathered in bigger groups and we sent people back out into the economy. and the markets seems to be comfortable with an uptick in cases. when it stopped being comfortable with is an uptick in restrictions that sent a signal that maybe the reopening process is not going to be uninterrupted. i do think that we'll get our arms around this and we won't end up in this broad kind of shutdown again but we're going to chop through summer this is the definition of a choppy market. so you ask the question before about is this a time to enter. is this when you buy the dip i imagine people watching the market on a daily basis have already entered the market over the last few months. say day like today is an opportunity to add to the positions that over the long term you think are going to do well in a reopening and in a recovery but i don't know that this is something that i think you would

throw all your new money into because republicans see more chop from here >> let's get to bob pisani now bob? >> lousy close no two ways about it close at the lows for the week down 2.4%. but once again, there is a very wide dispersion in the returns we keep talking about mega cap outperforming. apple and microsoft, one of the only two names on the upside they got another gain. boeing, rough week american express was down almost 8% and frthe banks, all of them do. my key concern is that a number of big sectors are in down trends now i'm talking about industrials in particular and a lot of consumer names. look at raytheon they went from 60 to 75 and then

essentially back down to 60:a weekly here. exxonmobil, same situation exxon was 44 a month ago went to 56 now up to 44 mcdonald's, 180 to 200 back to $180 thats a problem with these stocks in down trends. back to you. >> bob pisani, thank you >> thank you >> go ahead, sara. >> i was going to ask which kind of stocks you want to be in if you want to be in the market right now based on what we've seen, the reopening trades versus the stay at home trades where do you want to be in that area >> you want to stay in the reopening trade right now. listen, i hear all the commentary back and forth. i'm a guy that would love nothing better than to have everything reopened. i just don't see that happening.

i mean, i live in new jersey where we're one of the hardest hit areas and we have reopened i think smartly much to the consternation of a bunch of the businesses here. that takes some time i think the reopening or rather the stay at home trade, pardon me, the stay at home trade is one you want to stay a little longer i don't see an end to this at any point. broadly speaking, you want to stay in equities they're still the best game in town you mentioned it before. you have a backstop of the fed you have massive liquidity waiting on the sidelines to come in and to david's point earlier is that besides the massive momentum that built into the market internals is really done nothing for the month of june. i wouldn't even call this a buy the dip scenario we have not had a dip in the month of june. of course, we monitor the health news so i think you just stay where

you are at this point in time and add to the position smartly. >> david, what factor would worry you about the broader index it's it happened that could lead to them to kind of break lower in a more meaningful way? >> you know, that's a tough question i think, look, i am pretty committed to the fact that the fed backstop i think they've done an incredible job of keeping the financial markets and the nonfinancial corporates, the investment grade corporate markets intact with incredible funding rates. i think if there is a bifurcation in views, something with the data that is getting some group concerned, whether it's inflation which i highly doubt. but its very hard for me to see

what takes us down materially and holds us down. there is a lot of angst. we have come a long way from the lows set in march and early april. and so there is a reason to think that, you know, i think previous guest said it it wasn't really a dip, right? we had this big runup. we came down we had protests and a lot of crazy stuff going on and unchanged. if anything, i think the month of june is kind of a good sign that we can withstand this second wave, the surge that's we're getting, what is going on with the protests which is very upsetting on many levels here we are going in as an unchanged month. i don't look at -- i'm trying to see the glass halffulwith this

i think opportunities will abound and maybe we'll get weak dat yachlt maybe we'll get some mistake from the fed in terms of the way they speak us to and say something off the beaten path and that will be an opportunity. from the beginning of june, you're probably pretty happy >> you need a hair cut, david. are you waiting for another fed action >> you know, we'll have to discuss what that is it's been almost -- it's actually almost 11 months, sarah, since we did it so this is 11 months of growth i don't know i'll have to decide -- i'm not sure what i can sort of lay out there for the fed to do more, to do the hair cut and the charitable giving. i'll be thinking about it. maybe it's negative rates. we'll have to see. >> you may be waiting a while. the. >> i can't believe that was 11 months ago >> i know. shocking it feels like it was yesterday i was on that. that is the first -- that was

july 31st. yeah >> oh, that was good times cutting your hair on the floor of the new york stock exchange that was ages ago. thank you. liz young, good to see you as well keith bliss, thank you all v a great weekend. >> same here >> when we come back, much more on the selloff we'll ask the chief economic adviser from allianz whether the market will continue to feel pressure until states get rising coronavirus cases under control. plus, is a v shaped recovery off the table? >> we cannot project anything but uneven and partial recovery until such time when they can be a radical ending of the pandemic and that time is not yet

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>> stock market is reacting to what has been good news in our report as well very strong action by the fed central banks and elsewhere and also very significant fiscal measures they have put the floor under the world economy. and it is a great source of optimism that we will go over this crisis once there is -- we also have some parts of the market that are reacting to the winners of this crisis we have seen tech companies doing particularly well. we all know that the pandemic has accelerated digital transformation let's not be complaisant this is a disbetween the real economy and the optimism of

markets. and what it requires from us is to be watchful and actually the fed has demonstrated yesterday exactly that by taking the stress test as an input of what they would like to see banks, very important part of the financial system to do more specifically, also what not to do like giving buy backs. the. >> they could have gone further and totally scrapped dividends which we saw in the last financial crisis it's something that is advocated by janet yellen and others as way for banks to be prudent. do you think they should have done that? >> i think that it is important to be prudent but also to be agile in this crisis

agility should affect the steps. you take data and information and then you make adjustments. but also be careful not to go too far too fast >> how often do you think the disexpect between the markets and economy resolves itself? are infestors vestors in for a pain >> let's first take a look at what we project. what we're seeing in our asisment is that we have a deeper recession than we anticipated in april and we are for a partial and uneven recovery. and, therefore, what we all have to be mindful of is that we're just not out of the woods. there has to be a degree of caution. we're also saying that there is

a expectation for medical breakthrough and so let's remember the economy is not destroyed it is just putting a stand still. as growth resumes, provided that policymakers continue to be prudent, we can expect finally this alignment between markets and the real economy to shrink and what markets are saying is they believe this time will come our only out of caution to everyone is we are not there yet. the uncertainty still hanging over our heads >> you did take down some numbers this year. if the head to growth this year is deeper, we would see a stronger rebound next year you also took down the numbers for next year as well. why are you not in the v shape recovery camp? >> we're not there because what

we now know is that recovery is starting on the basis of reopening while the pandemic is still with us. and while it is still with us, there has to be an expectation of spikes and actually we've seen that happening in many places so we cannot project anything but uneven and partial recovery until such time when there can be a radical ending of the pandemic and that time is not yet. >> what happens if congress cannot figure out a way to pass relief for state and local governments and more extend the

unemployment benefits and some of the other benefits that are set to run out >> we have been very clear on this issue if he with want to go through this pandemic, action by central banks and also by fiscal authorities is absolutely paramount. why? because when the economy is in a stand still, to retain a chance not to have nasty bankruptcies, not to have massive unemployment means a need for fiscal measures and for very active monetary actions. we want to see this continue until such time the pandemic is in the rearview mirror it is so critical that we see that continuation of fiscal

measures to put that sense of certainty that will prevent the worst of what this crisis can produce and it is long lasting damage on our economies. we know that structural unemployment is a risk it can be avoid we are to act smart for the months ahead >> a call for action there from the head of the imf. and just as a reminder, the imf is proving to be a lender of last resort to more than 100 countries. half the world in terms of offering emergency assistance to get through this crisis whether it is to fund the health systems or just help them out as we have seen this turmoil wreak havoc on economies. i did ask her with had a global view, who is doing the best job in the world right now when it comes to fighting the pandemic and her answer surprised me.

she said vietnam she said a country that could have been terrible there and yet, they got on top of it they implemented really strict contact tracing. and they were able to get a handle on it and germany and korea and did not mention the united states. >> i was going to say, the one thing i was certain she would not say the united kingdom i think our two nations -- >> she didn't mention that either >> really interesting as you brought the numbers earlier in it the week and her context there. i just also want to point out very quickly that the way in which european and asian markets played catchup in the month of june they still stand well ahead of u.s. markets so far for june hong kong up is 6% in june the euro stocks up 5%. and again, if she is right there and global growth and all

nations are going to suffer in terms of second lockdowns in this perhaps a little bit of an unwind in that trade to happen, though, year to date, clearly, the u.s. still ahead but they've had a strong month deposit have the same selloff today either great interview. >> the virus curves look a lot better than ours that could be part of the storty there in terms of how they were able to really crush the curves and keep them lower in reopening. i thought her answer was telling on why not a v shape recovery. goes for the world but we're seeing this it that in the u.s. right now which is because we're opening the pandemic is still with us. i think we're seeing how that plays out right now on a day like today and the questions that sort of provides about how fast we can really recover economically. >> absolutely. absolutely now stocks closing in the red for two of the last three weeks. and coming up next, we'll llriuss with mohammed he wi-ean of allianz.

welcome back despite the massive selloff in

stocks, the s&p 500 has still rallied 30% since the recent low which was in march let's get over to mike looking whether that bounce off the lows has been seen as a sign of a real recovery or a bear market rally mike >> yeah. believe it or not, there is still a debate about that. here's the s&p 500 this year in blue against the s&p 500 in 2009. as can you see, very similar shapes it's kind of perhaps coincidence. perhaps interesting. this is march 23rd this is before today so actually right now. down another 2%. but still a roughly similar shape. going into 2009, the market was massively weak one of the worst years in memory stocks have been declining for 15 months as opposed to here where we came in on a record high made new highs in february and then down. fwhut is very interesting. the cadence and strength of that rally is similar to this one very few rallies in history were

more similar than those. now, what if this is just a massive prolonged head fake and this was the start of something worse? some kind of a bear market well, if you did have some of the strongest bear market rallies in history play out, this is how it looks according to bank of america wherever you would go to right now you still had more upside and not time to get out for several more months at least but we don't have the lines. but it wasn't good to hang on once you got to those peaks. at this point, you give the market benefit of the doubt. we don't have to name it necessarily right now. but it is interesting to know that it is still in play how we're going to define this phase, the drop and rally. >> mike, the only follow up i got is to what extent in those past examples was the economy still looking as bad as it does today? >> pretty fair to say things were looking bad in 29 and 38.

you know, by no means an all clear. but perhaps this has been a very rapid compressed period of time. i think the one distinguishing feature is going from full employment and record stock values to down 35% and then close to 20% of employment massive fed response they snap back almost to even in some ways. the that is quite unusual based on almost any period in the past only 29, really compares to that in terms of going from a high down to a low. >> mike, thanks so much for that joining us for more on the selloff is the chief economic adviser at allianz your take ton the big selloff today. the key factor behind it and what you're looking at to judge whether it's a one day gut check or something else.

>> i think the big picture is that the market lost the driver. from march 23rd onward, it was first policies then it was healthy reopenings and when both of those evaporated we still had very strong bid coming from the regional sector. now we lost the fundamental driver because of what is happening on the virus and the economic response to what is happening on the virus and we don't have a new policy driver so you need technicals to tilt the markets. and the problem with that is as you noted in the last hour, we've done a ton of issuance on stocks and bonds we absorbed a lot of the new money coming to the market so that's why the market cannot gain traction. that's why we are flat in june except for the nasdaq. >> clearly the nasdaq held up.

there is some tech selling today. step ago way from th-- stepping that other factor, in terms of what you're looking at gold, vix, treasury yields, what are they pointing at >> so they're all flashing yellow but they lost some of their power to warn you or to make you feel good. take treasuries. the market has become so distorted that some really quite sophisticated asset managers don't think it's risk mitigated in the portfolio anymore so a lo problem that a lot of investors have is the different market signals is that the immediate resaction i may as well be in stocks. but when you had to sort of run up we had had, now they're becoming much more cautious. they don't know where to go.

>> i keep wondering what is going to happen when the unemployment benefits kicker runs out at the end of july after the ppp extension runs out. after the stimulus checks wear off. and people keep saying the reason the market is not worried about it is because they're expecting another trillion stimulus package to come from washington is that already bakes in the market or do we need to see more volatility and more days like this for that to actually happen >> so the market is certainly embracing the notion that the really awful quarter will be this quarter and next quarter will look a lot better on the health side, they're starting to put a dent in that narrative. if we don't get the renewal of the program you just mentioned, then it's a completely different outlook. and the economic data is starting already to flash yellow if you look it he very high

frequency measures that we are now following, you see that in an increasing number of states you've not just topped but they're coming down which tells you that the consumers are retreating from certain economic activity even before the governments and local and state governments move >> so what would that look like if they don't pass that stimulus state and local governments? are we just going to see massive job loss there's >> yeah, we will we'll see two things in your interview with the imf managing director is great and if anybody wants to see the most realistic set of projections for this year and next, have a look at the imf projection that's came out two days ago you risk long term problems. i'll give you two examples the longer a restaurant is shut, the less likely it is to come back then you have a permanent loss to the economy on the other side, the longer you're unemployed, the greater the possibility of you becoming

unployable long term unemployment then lower label participation. so it is important that this recovery proceeds smoothly and otherwise shorter problems become long term challenges. >> that's exactly what she said. thank you. always good to have you weigh in. >> thank you up next tashgs a look at how facebook closed. it got crushed verizon and honda pulling their ads. we'll ask an analyst what the long term impact could be here - [narrator] the shark vacmop combines powerful suction with spray mopping to lock away debris and absorb wet messes, all in one disposable pad. just vacuum, spray mop, and toss. the shark vacmop, a complete clean all in one pad.

the dow closing down more than 700 points as states walk back reopening plans coming up, we'll speak to the mayor of phoenix, a covid-19 shot spot in the u.s. about arizona's game plan in the wake of the pandemic. "closing bell" back right after this

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welcome back time forea cnbc update >> here's what's happening at this hour. u.s. intelligence has found that russia's secret offered taliban linked afghany bounties to kill u.s. troops. that is according to "the new york times." the trump administration has been deliberating for months about what if anything they should do in response according to intelligence officials that spoke with the times san francisco's delaying business reopenings set for monday as they struggle with an increase in virus cases. hair salons, museums and bars were among the businesses slated to reopen. the white house says the president's decision to cancel his weekend trip to new jersey has nothing to do with the state's new 14-day quarantine requirement for those coming from virus hot spots and a newborn elephant took her first step todayat just nine

days old the zoo keepers at the german zoo say she is healthy and already weighs 220 pounds. that's a big baby. that's the cnbc update at this hour back over to you >> that means you're basically describing me as a big baby. that's my weight. >> no comment. going to let it go >> let it go thank you so much. up next, the bold case for amazon amid the coronavirus turmoil. the on line retailer has been a winner one firm on wall street says there me isorupside to come we're back in a couple of minutes. stock slices. 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.

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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. we want to head to big tech stocks here. facebook closing down more than 8% the more advertisers pull their ads from the platform and the second is amazon they surveyed customers concluded that not only has amazon grown the customer base in the last three months but those customers are likely to stick with the company even after the pandemic ends.

and the firm upped their price target on the stock to 3400. joining us now is the author of that report. he covers both stocks. he's on amazon and facebook. you said facebook turned into the big story of the afternoon as bigger, more powerful advertisers like unilever, honda, a bank is considering pulling the ads. is this a reason to change your view on the stock? i know you have a buy. >> we do have a buy. and i don't think it's a reason for us to change our rating or price target on the stock. clearly this is not a great -- it's not great when your customers are voting with their deciding to walk away temporarily. we think that's what it is i think mark zuckerberg has really tough decision to make. he said he is not the arbitor of truth for an extended period of time yet his advertisers are telling him we need you to step up we need you to try to minimize or remove hate speech and hate

content, et cetera so our review is facebook will do what youtube did a couple years ago. they'll tighten some of their oversight of the platform, a lot more than what they've done so far. and these advertisers are going to come back look, it is still one of the best advertisers have on any of the digital and nondigital platforms and the scale you find on facebook is unique. so i think this is a temporary setback, not a reason to panic a reason to buy back stock, to buy the stock. >> you don't think it has any longer term business implications, the fact that this is really coming to a head the question of whether facebook is the arbitor of truth, whether it's really a publisher, whether it's going to be looked at differently from the regulators and now from the advertisers >> well, i think it depends on how far facebook lets this go.

that's why in fact even today, they put a less press release o saying this is what we're going to do. they're going to do a lot more than what they're saying now this is an issue for them. in terms of them being a publisher, it's not a publisher. this is not a linked in or the cbs or cnbc where there are facebook employees that are volunteering their opinion it's still independent platform. but i think independent platform with 3 billion people around the world has responsibility to society and governments. that's what zuckerberg needs to tackle he already hired 30,000 people he may need to hire a lot more people it is possible that it will negatively continue to impact margins. the margins went from 50% down to 35% over the last probably 18, 24 months. we think there is a potential

risk to margin short term. but they'll do the right thing and we don't think there is a platform like this >> let's pivot quickly to amazon you're out with a new note and upgrade. what is the new price target and specifically why did you upgrade it >> sure. so the new price target is $3400. just to be clear this is an end of 2021 price target we have $2700 price target for 2020 we're already there. and so we had a decision to make either you downgrade the stock from valuation or we find a reason to upgrade. the so -- i'm sorry, not upgrade. much raise the estimates and potentially raise the price target: target so we ran a survey across the entire ecosystem of e-commerce and the findings were really

startling. one, 20% of all respondents that the first time they ever bought something online was between march and now. which is crazy you would have thought people 100%, everybody was already online that is not the case so 20% are new and second within that 20%, roughly half said they're going to keep spending online even more than they've been spending so far which to us means this idea that maybe covid-19 has just created a bump to benefit all the e-commerce guys and will go away is not true. we think this is sustainable this is new reality. in case of amazon, it is by far the highest and within those that have tried amazon, 96% are staying that they will come back they will be buying again from amazon so we think amazon is a winner continues to grow faster in this

industry >> and you now have the street high on the stock, $3400 thank you for joining us >> thanks. up next, arizona is a growing hot spot in the u.s. for coronavirus surging. the state seeing a drastic jump in new jump in new cases. we're going to talk to the phoenix mayor after the break.

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recently approved a face mask mandate in hopes of slowing down the spread thank you so much for joining us my first question really is, is whether you consider yourself in a big second wave of cases, or is this a delayed, extended first wave >> public health professionals tell us we are in the first wave i still have to worry about a second wave ahead, unfortunately. >> how full are the icu beds >> our medical professionals are very worried our icu beds are 88% full, which means we don't have the ability to absorb much of a surge. we are bringing in nurses from other states we have patients being treated in hallways. we have people driving hours to get tested we are in a very difficult situation. >> mayor, clearly i can sense from the tone of your voice there's a lot of concern about the recent uptick in cases who do you blame for the uptick, whether it's the people in

positions of power like yourself or above you or individuals? because clearly everyone is a lot better educated about the risks than they were back in february and march >> i'm concerned that arizona was one of the last states to go to stay-at-home and one of the first to reemerge. i believe we reopened too quickly and sent a message that we had defeated covid. that was irresponsible i believe that our residents will do the right thing as they get accurate information i am calling on every elected official from the president on down to send a message that wearing masks works and that staying at home can slow the spread >> what are you telling businesses should they be closing down at this point >> we are trying to at the city make sure we give our businesses aid with getting appropriate safety equipment and information. i would like to see the packed nightclubs and bars close down we have seen a lot of cases linked to young people, people

in my own demographic on the rise and transmission that occurred in crowded nightclubs we are not ready to have that kind of situation. >> can you make that decision yourself why don't you go ahead and do that >> early on mayors in arizona led the way. we implemented safety protections including closing bars and moving restaurants to takeout. then our governor preempted us and will now allow us to do so we had to implore him to allow us to put a face mask policy in place. these are common sense protections and we would like the ability to have cities lead. >> mayor, we wish you luck in this fight thank you for joining us. >> thanks for having me. >> in phoenix. there has also been a surge in retail investors we've been hitting this theme a lot during this coronavirus pandemic new data show exactly who has gotten in on the action. kate rooney is here with more. kate >> women are jumping into the

stock market this year according to new numbers from etrade, female trading activity doubled in march through may compared to q4 of last year. women on e-trade ended last year as net sellers this year they were strong net buyers of equities from march through may during some of the market's steepest declines women are on par with men when it comes to investing this year. women have been way underinvested comparedto their male counterparts. if you look at members from blackrock, 71% of women's assets on average tend to be in cash. men tend to hold about 60% guys, back to you. >> wow >> interesting >> either number is very high. kate, thank you very much for that sarah, i cut you off there what a crazy week, crazy

session. mike, ending down 2.8% today. >> yep 7% off the high is the way to think about it right now, just short of a correction but that corrective process has been underway for a few weeks. we are out of time here on "closing bell. in a special edition of "fast money" the ad backlash against facebook getting stronger today will this finally have a lasting impact on this stock we start with a major selloff on wall street to close out the week, the do