Going to have to deal with and maybe today were finding out. Is that what this is yeah, but ill tell you whats so interesting. There are very few people, i believe, who really thought that the rosy scenario was going to occur. I know we had that press conference this weekend that was a little disorganized, but the sudden recognition of a number that i think, unfortunately, a lot of people really kind of hoping wasnt going to happen is jarring the market but and i by the way, jeffrey gundlach, hes right this is one of the easier rollovers to predict but i want people to like look into their own brains and hearts and really, really answer, did you really think it was only going to be a couple thousand people did you really think that . When they finally announced that number, if that should cause the selloff, then youve got to rethink whether you want to be in stocks. Because i think that theyre just making up numbers, as dr. Fauci says hey, thats the input so dont sell on that. Sell because the company is doing badly, because its not a good thing to sell off a press conference never a good thing i hear you. You know, i dont know what, frankly, you expect people to believe or not you know, they were told early on that the numbers by some were not going to be that big and i dont know what you make of that. I dont want to really get into that i do think it comes down to, at least, for us today, a question of, the numbers are going to get worse. We know that how are the markets going to deal with that and its either, you think were going back to the lows or lower, or you think were going to be in this maybe tighter range. You mentioned gundlach, and just to bring everybody up to date on why you referenced him, hes saying the selloff is not over. That the march lows will be surpassed in april so how are we supposed to deal with all of that well, before we get to the rest of the Investment Committee, what i would say is, the, the indices themselves are really your enemy. Look at the way the indices are actively managed off really good company like carrier, its just an oddity but another thing, i would love to kick it around with the group. Look, if the Balance Sheet is back, you cant own the stock. And if youre in the index, youre owning that bad Balance Sheet stock. Im looking at carnival raising money and im thinking, well, wow, the gullibility of everybody. Carnivals a real stock. You get it in the index, but i would say, i would rather be in the companies that have a really good Balance Sheets like j j, and not be in a company that just paid 13 for money. And that the index just doesnt intrigue me as much as individual stocks here and that we should go back to owning companies, because, boy, the index has got a lot of crumby companies in it im glad you went there, too, jim. And ill put that to steve weiss first. Because i do find on twitter, at least today, people do want ideas, still, in this kind of environment. They do want names to at least take a look at and if today is not the day, necessarily to buy them and tomorrow isnt either, maybe there is a day down the road to take a look at some of the names. And well do that in a minute with jim, because he does have a barbell approach and many names on his list. But weiss, how do you view the markets today, in light of those numbers we got yesterday evening from the task force and from the president . It was, you know, its jarring to here that we could be facing numbers the likes of 100,000, 200,000. God, we hope that theyre not like that. But thats what the market is grappling with so my game plan has been to take [ inaudible ] well get back to you in a second were obviously having some issues with steve weiss. Joe, are you there and can you why dont you answer that same question that i asked steve and well see how you. So, scott, unfortunately, for all of us, the Health Care Numbers are what is going to be driving the tape but i agree with what jim is saying i think that passive investing, thats the end of passive investing, its over you need to be active in this market once again, and its about defining quality and quality in this environment is about cash on hand and the ability to quickly restore your earnings visibility. So youre selecting companies in that environment as far as the tape today, i would view this more as that we are in a range you had a very extreme move to the upside the catalyst behind that was the endofmonth rebalancing thats now gone on april 1st we knew that was going to remove itself now youre in a little bit of this range, 2,300 to 2344 is incredibly important in maintaining and protecting the 2191 low i will say this, though, the Financial Sector right now is the point of the most concern. The u. S. Tenyear treasury right now is trading 60 basis points scott, thats the lowest level its traded at since march 10th. I dont want to have a conversation about negative rates introduced once again. The banks are the issue right now. Thats the challenge thats where the weakness is and if the market is going to be falling further, its going to be on oil and on the financials. And carrie, firestone, why dont you give us your thoughts . Joe says were in a range, gundlach says were going back to the lows, if not lower. And you know, whatever makes a market, brian belski, our friend, is sticking to his 3,400 target on the s p over the next 12 months. And does think that youre going to get a rather swift snapback on the other side of this. Well, scott and jim i would like to say hi to jim. I can hear you, but i cant see you. Nice to hear you, classmate. Ive known carrie for what, i dont know, 45 years a long time well share when this is all over, well go somewhere with a couple of cold ones in the old days, i used to say, you look better than ever youre not allowed to say that anymore, so i take it back so, last thank you, jim. So last week, we had talked about how the market was oversold so, remember, at a certain point, we thought, when it hit, you know, 23 2260, 14 1 2 times some normalized earnings, wherever that begins, that there were opportunities there were selective opportunities to buy stock and in fact, we retraced 16 of that move down the 33 down, 16 up so now the market perhaps got ahead of itself. So weve got the next month, where were going to see the numbers start to move higher on the debts in the u. S. Around the world, were going to hit a peak, and were going to listen to ceos explain that they have terrible backend earnings theyre going to look at bad First Quarter earnings they wont be able to give guidance for Second Quarter or Third Quarter earnings and that clearly is uncertainty that the market doesnt like so it makes sense that we trade down for a while that doesnt mean we necessarily have to go below those lows or test the lows. Were definitely in pa range but as jim has pointed out and others, you have to Pay Attention to what the market is telling us in terms of valuation. We have to look at companies and say, gosh, if this is an opportunity, lets consider it here, and not just say, wow, we have to sell everything. We know theres bad news coming. And lets just see what the market presents us with opportunities, over the next few weeks. Because a month from now, were going to start to feel better, hopefully about the health of the nation, and certainly, about whats coming with opening the economy. So, we have steve weiss back with us now, whos phoned in for us so steve, why dont you weigh in and then were going to talk more individual names. I want to go through this list that jim has compiled. I think its good and i think our viewers will be into that. Go ahead so heres how i look at it. My plan has been the same plan its been for the last month and change, which is, take what the market gives you if youre able to trade, trade, but in terms of overall market, we had a nice bounce, as carrie points out, but my view had been and remains, were going lower in april you cant talk about valuation at all, because you dont know what valuation is. Its a moving target so the right place, the right point for the market was down 30 to erase 2019 games. The news is going to get worse, its going to get a lot worse. We keep talking about the covidrelated problems, which means what were all so saddened to see, the illness and the death, but were not talking about also the deficit companies, the upside down Balance Sheets jim referenced them, but youve got to play what you felt about companies before and how youre going to feel about them going forward. Jims right, you dont want only bad Balance Sheets the time to own those, youre coming out of this, but right now, ive i was pleasantly surprised on monday. I thought the market would be down it wasnt, so i took that opportunity. I sold some more yesterday and im selling some more today. No one rule is [ inaudible ] if you look at all of the people who have said once in a lifetime buying opportunities, you can havent three once in a lifetime buying opportunities you can only have one. And right now, this is not it. And by the way, if you go look over the records of those once in a lifetime buying opportunities, they underperformed the market. So do take those names and put them at zero i do think that those who were talking about once in a lifetime buying opportunities werent doing so at the same time they were trying to call the exact bottom i agree with you. I want to be careful on how question categorize what they were saying and the manner in which they were really doing that nobody was exactly picking a bottom right and let me say this, also. Their bias is honest because like jim leebbenthal, i not his job [ inaudible ]. So those biases are natural. If you invest with a longonly manager, you expect him to put it all in the market, period its got to be fully investable. I dont have to be i hear you. Let me go back to you, jim you have this list of this barbell approach and you know, we often hear people come on this show and talk barbells in the way that you own stocks, you know, on one side versus the other and try to weight them in some magnitude. You say you cant own i want to go through some of what you cant own, okay . You cant own the banks, you say. You cant own the retailers, you cant own travel and transport and most importantly, you cannot buy oil stocks right so that eliminates a group of trouble. What can you buy and why and lets make a caveat, too, as were saying this. And i dont want our viewers to get the wrong day when you say what you will. This doesnt necessarily buy today, this minute no. Yeah and i mean, i presented basically a recommended list, and the barbell is, just so people know, one of them is, this is probably going to work right now, and its because it has to do with office at home, because obviously, people cant go to a Central Office anymore, or it has to do with certain things that have to do with the data center. Because the huge explosion of data thats going all over the place, because people are at home and the other half of the bar bell is when we come out because when we come out, and i dont know when we come out, but i really like carries analysis, that at this time next month, its probably going to look a little better. Youll have to start buying the snee disneys and the boeings. Boeing is a tough one for me disney, my Charitable Trust owns, didnt, but wish to own it eventually i think amazon will do well, but right now, amazon is a little too high walmart is up today. This is part of the barbell i say you have to own coming out so i balance what you have to own coming out versus what you can own right now because i think the loanonly people should be intrigued by ring central, by cloud flare. I think that bristol and myers works. Johnson johnson. I like mondelez, theyre doing a pretty good job, except for the gum business i sure dont like most of the market and i want to make the point that the stocks that are up on the wall are stocks that are intriguing, not necessarily intriguing today, but theyre intriguing how long do you think you would have to wait, jim, before the notouchers start to enter back into the conversation weve had some people come on the show in the last couple of weeks and buy some of the notouchers on your list, whether theyre travelrelated or otherwise, suggesting that the prices had come down so much and there is going to be another side to this, we sure all hope ive got a business in italy and a daughter in madrid and and these are probably two of the places that you would not necessarily like to have a business or a daughter madrid is not done i dont know what my daughter just says, listen, its one of the greatest nightlife cities and they were very late to come to grips to it she loves the city northern italy, again, same thing. Gripped, didnt really change, and yet, italy has been good for the last six days. You had a month, a month and a half of just terror. And italy got better we have a Better Health care system, obviously, we had a mayor in new york that was, until about four weeks ago, was saying we didnt have a great time thats very much like what it was in northern italy. I guess what im saying is, you take the two worst areas which are spain and italy, and there is light at the end of the tunnel in italy. And theres what youve got. I mean, youve got six, seven weeks. And i would say, i dont know how i think ours started the night that adam silver pulled the plug on the nba. President adams im sorry, now hes commissioner. Commissioner of nba. He kind of started it. And rita wilson and tom hanks. It was that one night where we realized, you know what, its here and ever since then, its all down hill. And i think that it was all downhill in italy when fashion week and you can count the days from milan fashion week, and it means that weve got some real bad days ahead, but they do run out. Yeah. Lets hope, because, you know, as we sort of spring forward here and we enter april, its the time where we expect the numbers to get bad and hard to bear and every day, its every day is horrible Governor Cuomo, hes way too honest his brother not way too honest, you know what i mean you guys watch Governor Cuomo . Any of you guys . Hes hes been giving us updates every day, andhes the one who is, you know, the one where the market is perhaps paying the most attention to right now, beyond fauci and dr. Birx and some of the medical experts like dr. Gottlieb, because new york is such an epicenter in this hot spot that when Governor Cuomo speaks, everyone stops and listens and says, okay, this is the reality of where we are. And hes set to speak, by the way, shortly were going to dip into that when he goes through the numbers, as we always do in boston, its okay right now, carrie, right its just not so bad i dont know okay we have had a lot of social distancing, i think, here, longer than in new york most businesses, retail, like my husbands business, the restaurants, bars, all closed before new york. There are some essential people that can come its not great, but its not like new york city. Its not nearly as dense as new york city. Can i just ask, scott, can we put a chart up we pulled together a chart i think that youve got it there. Its the ten worst quarters in recent history were showing it right now. And i think that would go back to 87 so what you see is that six months in advance you know, ahead, you have five quarters that have nice returns six months later there are three that are bad and two that are sort of, you know, flattish im not saying that these other quarters where the market was going to replicate this. This is clearly unique but six months for the market can be a long time, and just having the perspective of what were going to be seeing in the economy, in the health care system, and the state of the world in six months, its a long time from now. If you think back six months, no one had ever heard the word coronavirus. For sure. But in other recessions or recessionary periods where you may have had those declines, carrie, you do, you know, you do tend to come out on the other side with some level of certainty and dare i say, a return to normalcy this is clouded by the definition of what normalcy is may very well change on the other side of this and were all going to have to get come to grips with that when we actually get to the other side thats a good point, scott. And heres how i look at it. When i short a strong, for example, or go long a stock, i say, where can i be wrong . Wheres my error going to be whats my downside, whats my upside here, i cant imagine where im going to be wrong. The only place i could be wrong is that the virus is that we conquer the virus in a shorter period of time, which would be a weak not twoweeks, not three weeks, not a month. And the numbers that carrie put up, theyre interesting, but frankly, they just dont give me any when i go down another 20 in the market, another 10 , and im looking at Single Digits or even 11 upside, number one, i dont know when that six months is going to begin and number two, thats not a great risk reward scenario in a situation where this is not going to be cured like in 08 by fiscal policy. Its just not. I want to go back to the list and i didnt mean to jump away from it so quickly and joe, as you look at the names that we can put them back on the wall, as well, that jim has put together for people to take a look in his barbell portfolio of what you maybe can think about now and what you can think about on the other side of this, why dont you weigh in on some of these, whether you own them or not, things youre looking at or may end up looking at yeah, and if you listen to doing this television from a remote location, if you dont mind, ill look to my left to look at that list. Were not looking at you, anyway were looking at the wall, so dont worry about it i have amazon i think thats a great call on jims part i like jims assertion in just defining what not to own, i think thats so incredibly important in this environment, define wing where the ultimate s is going to be and i think technology, looking at this list, obviously stands out for the cashrich Balance Sheets, the visibility of earnings i think real estate will do well, low, private sector borrowing costs and a return to that suburban lifestyle. And i think the consumer will do well the one name that i dont see on that list, jim, is microsoft and i view microsoft really as the shining star in technology in this circumstances. Think about the amount of people that need to utilize the cloud and think about how much usage remotely is going to be conducted for Microsoft Office and skype. So i think microsoft in this environment, obviously, its a position i own, belongs on that list the other name i would add to that, possibly, jim, would be home depot tv is a funny thing i did a whole piece about microsoft and why you should own it last night, so i kind of referenced why i also like microsoft. Youre dead right. Theres a peace about, if you want to know the one stock that you should own, its microsoft in the interest of not just making it sound like i didnt it was in the piece. So dont worry home depot was one that i really wanted to talk about its down badly. There was a firm that raised numbers today raised price targets, one that lowered. Youve got lower coming down that should be good. Youve gotthe spring season. But heres my problem. They have a huge planting business and some of us arent going to plant this year. I say some of us, maybe its like millions of us. Im worried about the year over year compare but in terms of Balance Sheet, wow home depot is so right so i just think theres got to be a level that all of us can agree, its the right way to go. I had Marvin Ellison from lowes they raised a lot of money, too. Another one. Big box stores that are going to be on the other side, triumphant, home depot is definitely one of them jim, dont you think that go ahead. Im sorry, go ahead. Jim, dont you think that home depot and lowes will embrace the type of delivery strategy thats working so well right now for the amazontype companies . Well, it could be look, home depot has got a pretty good dotcom, but lowes doesnt and why do i say that . Marvin said it to me hes got to spend much more money, and the previous management didnt really understand the value of the dotcom, so marvins behind but marvin is such a good manager, i like lowes very much i had them on last week and they raised the capital whoever raised the capital or has got the Balance Sheet, home depot has a great Balance Sheet. On the other side, is going to win. And i think theres room for lowes and home depot. I hope everybody agrees with me. If you dont, tell me, because its an interesting question i was going to come back at you on that, because what about the contractor business that these companies do, that these stores get, that theyre not getting now, because, you know, i dont i dont know. People who dont seem to be legislate a lot of workers into their house. I was just talking to my wife we bought a beach house, ill timed. And i said, are you working on it and she said, dont you know, theres a nowork rule so i got the nowork rule at the beach house. Ingot the nowork at the bar and the nowork at the restaurant. I am like supporting everyone and getting nothing what that great situation look at me, im the treasury secretary here i think that youre absolutely right. If you cant build, what is that guy the only plus, they cant even get a mask, anyway but when does that normalize . I dont know look, i dont follow these companies on such a granular ground level as you, jim i dont know what their percentage business is, a home depot, for example, for what they do for professional contractors versus the average joe. Its huge they went over the contractor, thats why lowes went down. One of the reasons why any Charitable Trust doesnt own home depot is because when i hear that there are places in the country where youre not allowed to do any work, that is just dreadful. And i think that thats its not just the area that we bought the house. Does that become prohibitive, then suboptimal suboptimal, ill advised beautiful house. We had someone someone you know, i did it so diana olick has some house behind her, so that she can use does it become prohibitive, though, to owning the stock . I think so. I own the stock, scott, so im going to forgive me for no. Forgive me for taking the optimistic on view on this, but i think home depot in the next couple of months will be a very valuable franchise to all of us as consumers were going to have the pentup demand and spending at home depot, whether theyre delivering to us or we have the ability to go pick up with the social distancing restrictions its a timing issue, though, i think it could be at 160 and it would be a different company. I dont know whether you feel this way, but i think were one of those moments where 150, 160, i really want home depot, and at 180, i dont so price activity along with owning individual stocks and the end of those single stock risk commitments that people make, make it so that home depot, theres a price where i really want to own it, but theres also a date, joe, when were further along. When the curve is bending, i think home depot is terrific and i should have put it up there, but i picked costco, because, holy cow, costco has got it down its like costco has been waiting for this moment. Its an incredible juggernaut right now. Its such a joy to go through. And they have everything lets just break away for just a minute. Why none of the shows are breaking away youll want to hear this, its the governor of new york, andrew cuomo is updating us on the latest numbers, just moments ago. Lets take a listen now. Were still on our way up the mountain the number of testing has increased. Im very proud of this the more you test, the more negative the more positives, i understand, but the more you test, the more good youre doing. The number of tested is up 15,000, 220,000 total people now tested positive cases are up to 7,900 total cases, 83,712, down to one county now that doesnt have a covid case thats what youre going to see going all across the nation. Well, were a rural area, were not going to get it. Oh, really go visit upstate new york if you want to talk about rural areas we have rural areas, and just the way its gone through rural new york, it will go through rural america. Total numbers, 83,000 tested positive, 12,000 people currently hospitalized thats up 1,200 people, 3,000 people in icu. 6,000 patients discharged. Thats up 1,167. People going to the hospital, make it better, they leave the hospital most impacted states, new york is at 83,000, new jersey is at 18,000 thats Governor Phil Murphy whos been a great partner to me, great partner to the people of this state. Governor ned lamont also in connecticut has been a great partner. Weve done a lot of great work as region, which is very unusual. You know those lines between states often become walls. Not with governor murphy and not with governor lamont were working together and were going to work cooperatively with new jersey, because they have a real problem californias ticking up. Michigan is ticking up florida is even ticking up massachusetts. But no one is anywhere near where we are, right . 83,000 compared to 18. Number of deaths, 1,900. Up from 1,550. That number will continue to go up that is people who have been on ventilators for a period of time if you go on a ventilator, theres roughly only a 20 chance that you will come off the ventilator the longer youre on the ventilator, the lower the chance you come off were still looking for a curve. Were still looking to see where we hit the plateau. Total number of new hospitalized, the overall trajectory of the number is up change in icu admissions, bounce here, bounce there but the overall number is still u up change in intubations, same thing. The line basically a line that is going up. Change in number discharged is going up why . More people going in, more people treated, more people coming out everyone asks the same questions. And theyre all good questions when is this going to be over . What happens how does it end . And people want answers. I understand people want answers. I want answers but the answer is, nobody knows for sure anyone who goes on cable tv and says or network tv and says, this is what is going to happen, thats not, thats not true. Thats the governor of new york, andrew cuomo there giving an update on the case numbers for new york state and in the city 83,000 cases now in new york state. More than 47,000 cases in new york city. The death toll in new york state is now at 1941, with the governor saying, quote, were still on our way up the mountain and jim, i come back to you, because its this, this idea of where we are on this mountain and whether stocks can get any sort of legitimate footing, as long as youre talking about going up a mountain and not about either flattening a curve or coming down the other side. But lets be realistic about that, too, based on what dr. Fauci said last evening. That even when you start to peak and start to go down, youre going to go down at a much slower pace than you did on the way that you went up youre right. Did you know that only 20 get off the ventilator thats i have resmitt on tonight to talk about how they can make cpap machines into ventilators. I had thought the record was much better. I guess that is terrible. I agree with you, scott. Every time i hear Something Like 400 more people died, it takes my breath away and i think, well, i dont know, should i really be thib stocks it takes the psyche and makes it so your orientation is not to buy, but to sell and a lot of us agree that you should just be selling everything here. But a lot of us also feel like, wow. This is one of the worst times the country has ever faced for a great number of our viewers, though, jim, i reckon that you would tell them either, sitting here now or if they stopped you on the street and said, what should i do, the majority of your answers right now would probably be, do nothing. Am i right or am i wrong youre right. Look, i do think if you own individual stocks, there are some moves that you have to make if youre just if youre a person who has a 401 k , i dont want you going in and out, flitting out of your 401 k . I think if you havent put your contribution in, as we get closer to when we climb and we finish climbing the mountain, maybe commit half. But i agree, its very hard to be able to say, you know, what, this is the moment, because i just heard cuomo say really terrible things, because tomorrow youve got that same, this is the moment was it steve that was saying, you know, that there are three great bottoms of this bottom i mean, that was that press conference is just like, get me out of here and what you have to do is you try to have to just hold your breath and own stocks. And you can only hold your breath for so long but im urging people not to bolt but i would not put new money in this market yet. Because the sad reality, jim, is that the governor is likely going to be repeating that phrase for a couple of weeks i know. Still on our way up the mountain i just hope that the rest of the country sees whats going on in new york and really takes it seriously not to get there was a big group of people greeting the navy ship when you get together, you get covid. Thats what happens. I havent seen my wife in three weeks. Why . Well, i dont know i dont want covid the state of florida, jim, still does not have a statewide stayathome order how is that possible . It just does not, despite what the medical experts have recommended, including dr. Gottlieb himself on our special last night at 7 00, when i asked him directly about that, he said that was a mistake and now im wondering if until we see that, and until we start seeing a mountain become a curve, whether stocks have any realistic chance of getting a footing. Ive said, not until you get the National Lockdown do i feel good about the market. I said that the other night. Number one thing is we need to see the National Lockdown. I take my cue from dr. Gottlieb. Dr. Gottlieb and dr. Fauci both know how bad this is, okay and i think both of them just want to say, listen, this is it. This is the pandemic, this is the spanish flu. I mean, this is going to be like that unless you take it seriously. Meaning, dont have crowds, dont go anywhere. A National Lockdown would make it so that we would save so many more lives and i think that should be the goal lets step away well take a quick break, come backta w, lkith jim, the rest of our Investment Committee when we come back. Shouldnt you pay less when you use less data . Now you can. Because Xfinity Mobile gives you more flexible data. You can choose to share data between lines, mix with unlimited, or switch it up at any time. All on the most reliable wireless network. Which means you can save money without compromising on coverage. Get more flexible data, the most reliable network, and more savings. Plus, get 300 off when you buy a new Samsung Galaxy s20 ultra. Thats simple. Easy. Awesome. Go to xfinitymobile. Com today. Welcome back im Julia Boorstin in los angeles with breaking news at any time is appointing jason kyler as ceo of warner media effective may 1st. Kyler was founding ceo of hulu back in 2007 and hep ran hulu until 2013 after that, he founded a Digital Video Service called vessel, which he later sold to verizon now, this then upon may 1st, john stankey, who is current both ceo of warner media and coo of at any time wi t will focus s the coo of at t. This all comes amid the launch of hbo max warner media includes traditional hbo as well as warner brothers, turner, and effectively all of the assets from at ts acquisition of time warner kylers job is a big one which includes dealing with hollywood talent and navigating cord cutting and the shift to going direct to consumer with this hbo max launch it will be sitting, talking to both john stankey and jason kyler coming up in power lunch at 2 30 p. M. Eastern guys, back over you. Well look forward to that, julia. Thank you so much, thats Julia Boorstin, out on the west coast for us the unprecedented dislocation in the economy has seen a number of Companies Race to raise cash from the credit markets or secure loans from banks. And such is the subject of a new story in the new york times, and one of the authors is kate kelly who joins us once again. Kate, good to have you back on scott, thanks so much for having me. Great to be hearing you guys, as well what should we be thinking about your report in the bigger picture. These companies that are clearly racing to get their liquidity in order, in one way or the other, and what the ramifications of it will be. Well, i guess two things. One is some kind of Silver Lining here, so far, at least, seems to be that the Banking System is holding up pretty well they are lending, despite the fact that the numbers have been somewhat astronomical. Just for context, and we cite this in our story, fed numbers that were compiled by Autonomous Research in a single recent week, the week ending march 18th, which is the most recent for which we had it available, the new loans in the system from banks amounted to 343 billion and that is normally twice what you would see in a standard year over the last 20 years so the activity is enormous, but the banks seem to be lending and holding up fairly well whats striking, though, is it just quantifies for you what we feel anecdotally to be true, is that companies, a range of them, companies with junk bond ratings like yum brands the other day, in a deal that was actually oversubscribed, even though it was the first junk bond offering since march 4th, as well as Investment Grade companies, companies that arguably shouldnt need the capital or could hold off are going to the public markets, and theyre also tapping bank lines of credit or tapping into revolvers, which revolvers were long regarded as the ultimate rainy day emergency measure. And to be sure, some of these companies are in emergency times, but others are not quite there yet. And theyre just trying to shore up their Balance Sheet so, i think, although thats an additional drain on the system, that could give investors some comfort. I wonder, also, though, that the other side of it, though, the amount of money, kate, that the banks are lending to these companies who are trying to get cash, were not just talking about accessing the credit markets, obviously, if that can come back and haunt the banks in the long run, if this crisis gets even worse than we already worry about. Sure, if this continues, it obviously could start to be much more of a drain. And although the banks have been through stress testing, ever since financialcrisis, under much kind of stricter auspices to catch their leverage ratios and to check their Capital Buffers and their overall health, it was said to me by a number of people, nobody ever expected to see these company revolvers drawn maunmasked in a given situation. I think were not there yet, but i think over time, if this situation continues, it could start to be an issue and you saw in the commercial paper markets and other shortterm financing markets recently that there was a lot of dislocation and spreads were extremely why and thats because banks were dealing with these credit revolvers as opposed to being able to put money into these other shorter term markets. Herhandez, hes been telling people that he wouldnt be surprised if they went through shortterm funding, like commercial paper, which has a duration of a year or less, although it can be on the longer side and trying to look to longer term liquidity services. Jim cramer is with us today, kate, fortuitously, since were having this conversation jim, why dont you weigh in on kates reporting from the corporate perspective, but also the banking side we know that the banks have gone through, you know, umpteen thousand stress tests. And you talked to the ceo of city earlier today how are you thinking about all of this . Well, first, also, i want to congratulate kate, and my old friend, peter evis, who works with me on the street. Peter doesnt get enough credit, hes one of the greatest reporters in the world when i read this piece, it was a downer, downer, downer theres a lot of risk. When we get to the third to last paragraph, and youve got this associate professor from wharton, peter conti brown, dont know him the fed has to violate its own regulations to turn down the very businesses that are most in need of its interventions. I think that the fed reads you, kate this is a different fed from the previous days, where they were like, hey, listen, the journalists, what do they know i think the fed, i think that this time, youve got jay powell by the way, youve got steve mnuchin. These are people who read the journal. They read the times. They read your piece and they say, you know what . We are not going to let what they write about happen. We can head this off Michael Corbett this morning talking about how hes in constant contact, that they can head this off. And the difference between this one and 2007, 2009, is that in 2007 and 2009 happened so its entirely possible that this mess of the revolvers that you chronicle so well, it may not be the mess, because maybe we see, suddenly, that the ten worst loans are taken by the fed. Because they read you. And thats the great thing about the about the government and the fed this time, they are not academics. They are not saying that kate kelly and peter evis dont know anything what theyre saying is i read that piece and you know what, i got to be ready to buy those bad loans as much as i dont want to heck, baby, ive got to take a stake in Carnival Cruise i dont know but that is the virtue keep writing these pieces. They take action they refuse to know nothing. They insist on knowing something. What a pleasure and as much as we might say that bernanke in the end got us out of it, he was tone deaf for two years. Not these guys theyre reading your piece and theyre saying, weve got to get that so its under control and thats the difference between now and 2007 and i, your writing. Kate, ill give you the last word and ive got to go. Thanks so much, and peter is a jim, my cowriter on this. This is the second financial crisis weve covered together, if one would call it that. But jim, thats a great point, and i think youre referring to one of the fed rules, which is that a company has to be current on its socalled undisputed debts in the 90 days before an Emergency Loan Program and as we understand it, the government is debating whether they can find some leeway here and bring aid to some of the companies that most need it, even if theyre violating some of the strictures of that policy and it does seem that the government has been relatively nimble and open to solutions here, as we saw through the cares act. So i think there is a recognition of the suddenness and the shocking and profound impact of the crisis and it seems that the banks are doing their part so far, but, yeah, there are going to be many more legs to this stool. Kate, we appreciate your reporting. And certainly coming on to discuss it with us well talk to you soon, im sure thank you, scott. All right thats kate kelly from the new york times. Thankfully, the banks apparently are in a better place today than they were in a good many years one bank analyst, though, is cutting his estimates and price targets for the third time in just two months. His name is mike mayo. Hes the Senior Analyst at wells fargo and joins us now on the newsline mike, welcome back thanks for having me. So you heard kates reporting, and we can address that in a minute, as it relates to the banks and lending, et cetera, and risks that may be out there. But the third time in two months, now, that youve cut estimates. Tell me about it well, look, these are sobering times for banks its shortterm earnings hell. This morning, we reduced our bank estimates for the third time in two months, as you said. We have Bank Credit Losses going up two to three times over two years, note interest margins down at least a fourth a recession is likely. Were now assuming a ushaped recovery, not a vshaped recovery and our estimates are one third, thats one third below consensus. So i dont think its a spoiler alert to say, expect banks to guide earnings lower by a lot in two weeks when they report results. And so, its these are tough times in the shortterm. You still have overweight rating on citigroup . Yeah, look you still have overweight rating on bank of america . Absolutely you still have an overweight rating on jpmorgan and gulf coast Goldman Sachs . Absolutely. This is an earnings recession, not a Balance Sheet recession. Its night and day versus the Global Financial crisis. Were in this period, 13day period where banks are in whats called a blackout period they cant talk to investors until jpmorgan reports results in a couple of weeks, youre in this information void what do you mean . I was going to bring cramer in right now. He doesnt like wells fargo . cramer had mike corbat on a couple of hours ago. Wells fargo is not on his buy li list scott . Its a joke. Mayo cant talk wells fargo since he works for them. No wonder jim your silence said a lot by the way, i agree with jim cramer, like, raising awareness of the issue helps prevent from the issue playing out. And versus 2009, the Banking Industry has 1 trillion more in capital, 2 trillion more in cash 3 trilli 3 trillion more in zpodeposits and the growth rate in loans in one week is a record 250 billion, wow and thats why the article was written. But first, the growth in deposits is even more. So banks are doing what they are supposed to do you take a deposit, you make loans. A lot of this is cautioned by borrowers who take out the loan and put it right into the deposit. And this does not go on forever. And heres the big number here the response to the article is the level of cash or near cash from the Banking Industry is ten times the level of unfunded corporate commitments. In other words, u. S. Banks have cash and your cash of 4 trillion, unfunded corporate commitments are 4 trillion. But you know what those drawdowns were in the Global Financial crisis, 110 its like the Global Financial crisis, you have 4 trillion of cash for 400 billion of drawdown corporate commitments or ten times the level so banks have the capital, banks have the liquidity, they can support the economy, and you know what else is really underappreciated and this came through in jim cramers interview with the ceo of citigroup earlier. The operational resiliency of the Banking Industry 160,000 people working remotely at citigroup 150,000 people working remotely at bank of america 98 of Goldman Sachs employees working remotely, using secondary and just the Balance Sheet resiliency but the operational resiliency when you get results in a couple weeks you will say, yes, there are drawdowns, yes taking big charges. We have 20 billion of extra reserves for loan losses just in the first group. Thats a big increase and thats partly due to the accounting change known as cecil and to the extent that the biggest banks to take much of their reserve builds for an entire recession in one quarter and still should grow book value for this year . Thats a sign of resiliency. So not only will the banks weather this situation but coming out on the other side we think theyll be rerated higher once investors realize banks are now a pillar of strength and stability which they were the exact opposite of for the Global Financial crisis. Appreciate it very much. I didnt mean to joke theres a guy i know whos much smarter than i am. I spent a weekend with him charlie sharp, ceo of wells fargo. I think hes the smartest banker in the world there are a lot of smart guys. Charlie sharp. Most intimidating guy, too bought 173 shares of wells fargo at 28. 69. 5 million bucks. I talked about him on a Conference Call for my Charitable Trust to maybe buy that stock at 8 yield just because i would finally have done something smarter than charlie sharp. Mike mayo, thank you very much thank you. I wonder if we see more ceos like him buy their own stock and not own plans but coming out in the open market and doing it. Michael he knows the book value is 70 bucks. We can just say, well, we read the excellent piece by peter and kate and say, okay, book value is really 60 all right. Stocks much lower see mike buy we want jamie to get healthy fast but i bet you see we brian buy, Brian Moynihan they listen, they read the articles we do michael mayo talked about the idea that everyone sees the articles it is a terrible time. A month from now if it is not a terrible time will we look back and say Warren BuffettsFavorite Bank traded with 58 yield . No, we didnt want to own it because the ventilator number. Let me im going to take a quick break and want to note we are at the lows of the day for the markets. Dows given up a lousy day given up 21,000. Did anyone think it would be anything but a lousy day 1,200 . Dont turn into an auctioneer. No . Sold for 1,200. 20,985 on the dow but we are at the lows athe t board final thoughts, maybe a trade or two on the other side of this break. Its a challenging market. Edward jones is well aware of that. Which is why were ready to listen. And ready to help you find opportunity. So. Lets talk. Edward jones. Its time for investing to feel individual. Just before 1 00 p. M. In the east theres the market picture dow bouncing around the 21,000 level. We are still looking at a loss of greater than 4 for the dow and the s p. Nasdaq not quite as bad but still bad. 7400 a loss of nearly 300 3. 3 for the nasdaq. Russell 2000 obliterated today down nearly 7 . Thats unbelievable. Just noticed that, too, jim. Financials. Financials, yep. Smaller financials. Energy, yeah. And energy. Petroleum. Ugly. We do have a big interview to tell you about for tomorrow. Jim chanos will be with us at noon talk about the markets, the short strategies and where he sees things going from here and the name that is all of you know that hes been invested in, maybe new ones, as well. Breaking News Coverage continues this evening, as well. Our special report markets in turmoil. Jim, you have a big show coming up tonight. Cisco and talking with Chuck Robbins about this era he has webx i put mick on because they can turn the cpap machines into ventilators. Governor cuomos seem too high of 80 die on a ventilator pvh, comes on good or bad and even though a lot of his product is sold in Department Stores i think of tommy hilfiger, calvin klein nestle, a huge company that may be a great safe haven. I love today and i wish ms. Firestone were in person because what i would do is say i want to place an order at your husbands great Small Business all right . I love that i love that, jim thank you. I bought something for lisa there. I love that store carrie, give us a final thought if you would i think that we should feel encouraged i know it is hard to be encouraged at all but the governor got on an talked about whats happening in new york the markets down 4. 5 two weeks ago the market would be down 8 hearing that because it would be new and were beginning to understand whats happening in this country and i think that the market has begun to absorb that and become conditioned to experiencing what we are going through and starting to think what we look like on the other side hows that, jim . I think thats right. I also think that there are people like gilead and regeneron saying, you know what . Wait until you see what we have. Let me show you what we have moderna. I dont want to bet against the people who you took science really smart at college. Everybody knew that. I dont want to same to you. The people in college took it seriously and then went to med school i mean, holy cat you want to bet against those guys had no fun quhafrs at college. Joe, a thought. Yeah. I would say unified acceptance is probably the biggest catalyst to have. It is important for investors to understand time is what they need and focus on risk i would not be buying the stocks that have fallen most significantly. Stick with the quality names. Okay. Appreciate that. Steve weiss, you got 20 seconds. If youre an individual investor, ride the wave. If you have cash, dont put it in yet two names i like out of this so all the restructuring and bought they cant fill the orders backlog is huge. Your third what what . Peloton. Peloton. Peloton youre breaking up a little bit. Wow. Three of them. My wife would have three nice to be you. Thank you, everybody. Well talk to you soon jim, thank you kelly picks it up now. Scott, thanks. Hi, everybody. New month, new quarter and same markets today. Check on all three major averages which are down for the third day in four now and pretty much near session lows here. The president saying the u. S. Should prepare for a quote very, very two weeks from the coronavirus. Italys death count improved today but officials are saying that the u. S. Should prepare for 100,000 to 240,000 deaths and continuing to weigh on sentiment here another decline in oil weighing on the markets