Harrington is the ceo and Portfolio Management at Gilman Hill Asset management, rob sechman is one of forbes top 100 Financial Advisers and rich sapperstein is back. He, as well, a top Financial Adviser, barrons, in the top 100 there. Lets get to the board, show you where we were currently trading. Pretty much highs of the day 550 for the dow, 2. 25 , 24,646 s p 500 trying to push towards 3,000, a gain of 2. 5 today, a gain of 73 points. Nasdaq, the outperformer of the majors at 3 , and theres the russell, which is having a good day as well, with a nearly 5 gain some 61 points there dow going for its best month since 87. The question is what all of this means for the coming days, weeks, and months ahead. Joe, im going to go to you first. You look at the drivers today, i mentioned the gilead news, and that is clearly overshadowing what was a dreadful gdp number fauci now is talking about the clearcut positive effects of this remdesivir trial. Boeings calhoun, the ceo saying the thaw is beginning. Youve got starbucks talking about reopening stores, when theyll try to get to even greater capacity by early june i mentioned small caps the Home Builders going for six days in a row. All of that is overshadowing that gdp number. So where does it take us well, scott, i think it takes us to a position where youre reacting to the messaging from the market and the messaging from the market is very difficult to digest relative to the Economic News that were going to be receiving. So thats where you have to have the discipline to stay focused on the investments obviously, as weve been talking about the last couple of days, it is the cyclical component of the market, which is moving higher in anticipation that some of the economy will be reopening here domestically. So financials, industrials, energy, that is where the leadership has been in the last couple of days the russell, which you mentioned, thats up about 10 in the last five days. Its now trading at its highest level since monday, march 9th. Remember, that was the monday we came in with the opec lack of communication, the market came in much lower. So what youre doing here as an investor, a trader, a steward of capital, youre listening to the message of the market and trying to mine for opportunities. Unfortunately, those opportunities for me are coming in sectors that i dont have a high degree of confidence in, with a longerterm fundamental perspective. But i am looking for opportunities and finding them all right, so bear with me just one second, gang. I want to go back to our meg terrell, who has some updated material regarding dr. Faucis comments on this gilead study. Meg, what can you tell us . Scott, this is just coming out of a pool report on some comments that dr. Fauci just made and he actually seems to be detailing some of the results from that niaid trial of remdesivir he says, quote, its quite good news he says that so the primary end point of the trial was the time to improvement. And we know that the study met that goal. Dr. Fauci, according to the pool report, said the time to improvement was 11 days compared with 15 days on placebo, saying that 31 improvement is, quote, very important hes saying that this is a drug that can block this virus. He also, according to this pool report, notes the mortality rate trended better, 8 in the Treatment Group versus 11 in the Placebo Group. Hes saying, when you know a drug works, you have to let people in the Placebo Group know so they can take it. That comment explains why we got these results earlier than expected from the niah we werent expecting this trial to play out until the end of may. And fauci has compared this to when they first found hiv drugs. Hes saying, this will be the standard of care so this is the announcement that nih had planned to make later today. The president , i guess, told dr. Fauci to describe this just now and well bring you, of course, anymore news that we get, but this is the first read of that positive nih study on Gileads Remdesivir and guys, this dr. Gottlieb saying this drug could get fda emergency use authorization immediately based on these results. So very encouraging news scott . No doubt. Meg, thank you very much very much for that. All right, steve weiss, you know, im wondering if these comments from calhoun today at boeing are more of a metaphor for where we are in terms of where the narrative has gone and that is that the thaw is beginning. You can see a thaw, perhaps, in the way that some of these cyclical stocks have traded. Who knows if its longlasting, but at least you seem to be putting together something here. The narrative appears to be Getting Better youve got the fauci comments on gilead and remdesivir. What now you have some more comments, so i would say the earnings season has been better mastercard said that spending has begun to stabilize they put up a very good couquar, which lifted visa as well. So its often said, and ive said in the past, hope isnt an Investment Strategy, but clearly hope is an Investment Strategy here and its being rewarded because you cant justify the move on valuation. You look at stocks, you say, hey, nothings really exceptionally cheap. Maybe google is, but the hope is that this is a quarter, two quarters, its definitely going to be two quarters, since were in that Second Quarter and then its back to growing our economy. So the gilead added fire to a mark that was already higher, and i think well get some more good news. And there are anomalies in the market so i would stay invested i actually a little bit, not today, but added yesterday its still a great trading mark, but still in an uptrend. I think weve moved the higher end of the trading range up, but were still not completely out of the woods in terms of some pullback, although it wont be significant in my view rich sapperstein, were fortunate to have a couple of top 100 Financial Advisers with us today and people do want advice. Theyre afraid that we may be going back to the lows at some point, or even break through that, as gundlach suggested to me the other day, but you do have this kind of price action in the market, based on certainly better than expected headlines. So what would you tell clients today, rich . Well, look, clearly the feds Balance Sheet has distorted market valuations, which are now divorced from the economic carnage were going to experience over the next year. In fact, if you take unemployment right now, 26 million, going likely to 30 million out of an eligible pool of 160 million workers, companies are quick to lay people off, but very slow to bring people on. And thats going to impact eps the s p next year, if you take this years original estimate of 165, and just drop it by a generous 15 , youre going to be at 140 next year so on the s p right now, were going to be were trading roughly at 20 times next years earnings so the market today has really reflected a lot of the good news now, investors should remain fully invested, but at the same time, theyve got to be cautious and starting to trim on the edges. Well, im just wondering, then, jenny, is it counting on the market, that is, too much good news . I mean, its interesting, okay i get weiss point that you dont, you know, necessarily trade on hope. However, this time is different. And this is a binary market, it would seem that it is either a market thats going to trade on hope or its a market thats going to trade on despair and what was despair has now decidedly turned at least from a market narrative into hope the question is, how far that can take you at a time where its undeniable what rich sapperstein suggested today about earnings earnings are going to be bad and theyre going to be really bad. And theyre going to be really bad for a while. And theres no denying that. Right so i dont like framing it as a market thats going to trade on hope i like to frame it, rather, as a market thats trading on an increase in clarity. And i think that the increase in clarity that were having right now is legitimate. And thats coming from things, like the gilead trial, where were getting a little bit of clarity. Now we know how many days it might take now we know it might get a faster track approval. Were also seeing these earnings and at least we have clarity so when we hear things from starbucks and other companies, at least its clarity. And when we see that starbucks might start to open more stores, thats clarity for me, i am fully investor y d i have been doing a ton of transitions. I think theres a ton of stuff out there thats still cheap but im not trading on hope. I am trading very specifically on the fact that over the past three to four weeks, i have had significantly increased clarity versus the prior three weeks rob, youre our other top Financial Adviser on the program today. Youve had an opportunity now to go around the table with the Investment Committee and jon najarian, well get to you in a second, because i want to talk to you about volatility and what all of this means for how you look at the market, but rob, what would you tell clients today . Scott, as i said on your markets in crisis show last week, i dont love being in the consensus, because the consensus is usually wrong i do think weve seen the lows for the year theres more volatility to come, unquestionably, but the markets discounting a lot of good news without validation and while in the short run, i think were going to focus on some of the narrative as it relates to earnings and Economic News, but most of what were going to focus on is what happens in 2021. And so, these pieces of positive news have the ability to draw investors that have been on the sidelines, have this fear of missing out into markets, and its that delta that matters and clearly why Price Performance has been so strong now, im really happy that markets are moving higher. Obviously, thats good for everybody that sits around this table, but i am a little concerned that weve come too far, too fast. You have the good signs on the news flow front. You have good signs just from a technical perspective in the broadening out, the breadth of the market, into small caps, into some of the more cyclicals. But somehow, i just do not believe that earnings are not going to be impacted in 2021 and if you just look at flat, year over year over year, meeting 19 to 21, even if you had flat earnings of 165, which was the peak, you would be trading at nearly 18 times and given everything that all the uncertainty that still exists out there, i think you have to Pay Attention to it. Yeah. Weiss, i dont know if that was you trying to get in, but its not look, david cassen of Goldman Sachs today has a note which headlines, from fear to fomo, and this is what rob was talking about, this intense fear we were all talking about from a market standpoint. Lets just say, you know, were still fearful of what people are going through as it relates to this virus and how we think about main street and then also, from a Health Crisis standpoint, and how people are dealing with that for themselves and their families but from a market standpoint, weve gone from this fear now to fear of missing out, according to costen. And he says his baseline case, steve, is epps decline, growth decline of 33 this year, but a rebound of 55 in 2021 now, you tell me do you think that is an accurate view of how the world may look in what is a decidedly different new normal in 2021 well, it wasnt me, somebody else may have Something Else to say, as well guidance has been pulled even by companies that are beating consensus this quarter, theyre still guiding for the second half if you look at his numbers and take them as the base case, up 50 next year from a down 33 this year still puts you down 15 , because youre not recovering all of it hang on to that thought, weiss, i apologize forgive me for interrupting you. Let me go to Steve Liesman right now, who has breaking news regarding the treasury secretary, Steve Mnuchin talking to reporters just moments ago. Steve, what can you talk to us about . Scott, thanks very much Steve Mnuchin, treasury secretary, holding a zoom Conference Call with reporters, talking again about those large loans taken by some companies. Heres a direct quote, he said, i like the lakers and i like shake shack, but i was shocked that both of them took loans, talked about them giving back those loans. Further, he said, if things turn out where the economy doesnt bounce back as planned and reopens, we have done a lot of Contingency Planning there was a lot of talk about what comes next on this call he said the direct ppp payments investing in a base case scenario, we expect to get that money back but unallocated money is some money they expect to lose and some taxpayer money they expect to get back. Some place where they may end up making money, others not of the unallocated, 250 billion, remember, the treasury has now made arrangements with the fed for about 190 of the Money Congress gave. He said, that money, they could give additional money to existing programs or start new ones mnuchin said he purposefully kept money back to use in the event that its needed in different places or in different areas. He was just talking about the airlines he said, there should be no bailouts for the airlines. Hes happy with the way these loans have been structured to the airlines and also said no additional money, scott. Weiss, im going to come back to you in just a second. I want to jump from jon najarian i havent heard from him yet and i apologize, jon, for that youve heard collectively now from the committee on where they view the markets here and where they think we may be going what do you think it means for volatility in the way you look at things . Well, scott, as soon as we started hearing what we all heard or what anybody that was reading newspapers or checking out what was going on in states across the country, as they stopped, oh, well be shut down for two years, like northam was saying in virginia, and we started hearing more measured comments about maybe well start dribbling out a little bit of the businesses opening up in may and so forth thats the kind of optimism that had turned the market. Obviously, gilead further optimism, especially, if its endorsed by fauci. So volatility, scott, dropping dramatically its not going to break hard its not going to go into the teens, i dont believe here, scott. But it has dropped all the way back down to the march 4th lows, maybe even touching march 3rd right now, as far as ill tell you what, doc 30 is the new 15, compared to where we were. Yeah if you you know, if you were at like, 80, and now youre at 30, thats Pretty Amazing well, ill quote you on that one, scott 30 is the new 15 and i think youre right i think instead of bouncing back and forth from 12 to 18 and saying 15s right around the middle of that, i think were going to be more like 24 to 36 and the 36, of course, is if when people start going back, we do see what we all expect, and that is that the graph lifts a little bit on the amount of folks that end up with covid, but hopefully, especially with either not a vaccine, im not saying that yet, scott but some sort of treatment and if its remdesivir, all the more power and gilead, certainly, really has been working this one hard that is going to be, like i say, the new normal will be 24 to 36, with that 30, as you say, being the new 15 so, rich sapperstein, the question becomes if you and look, i know youre you sound to me to be a bit more negative on the market, you know, questioning how it could possibly be where it is, relative to your own earnings outlook. But if purr positive on the market, and youre inclined to put some kind of money to work, because you do have a fear of missing out at this point, where would it be . Would it be, as tom lee suggests, in the epicenter, the socalled epicenter stocks the discretionary names . And thats what he is recommending and he continues to recommend . Or would it be in the highconcentrated tech names that have, in large part, brought us to even where we are. When you have names like facebook up 31 from the 23rd of march low, microsoft, 28, and apple and apple and amazon all with sizable gains since then, whats the right place to be in . I think theres a lot of different sectors to look at right now. I would definitely have a component of assets in the technology sector. Thats whats led this ability for us to conduct business the cloud, Online Shopping, software, but i would also look for Industry Groups that the business has been deferred, such as med tech, devices, so, stryker or med trtronic, these elective surgery procedures that will pick up once we get back to normal i would also considering some long shots, whether its a disney or boeing or even the oil sector right now if you wanted to take a longer one to three outlook at the same time, we should always have staples, whether its johnson johnson, clorox, kimberlyclark, or, of course, have health care big pharma is a very important part of every portfolio, and every Pharma Company now is sort of a moon shot, whether theyre going to come out with some kind of a drug to help fight the crisis interesting keowns talking about disney being a safe haven, which, joe, sounds to me like a contrarian play, right . Using a consumerfacing company as a safe haven, so to speak, when youredealing with theme parks and all sorts of other issues, as well. Where do you put the money, joe . Do you go beatendown siblings, or tried and true big tech names that have already showed you why they are where they are and will likely be the winners on the other side of this its interesting that you mentioned disney, because thats a name that youre looking its up to 110 right now, so im going to probably wait on that but, you know, you mentioned before, hope and despair in an hour and about 44 minutes, lets not forget the Federal Reserve is going to release a statement and have a press conference. I dont know whether the markets trading on hope, despair, or liquidity. And liquidity happens to be the most relevant word right now for me in the investments. The Corporate Bond market in march was down 7 . Scott, its basically gotten it all back in the month of april so im trying to find opportunities in the equities market with companies that have very strong Liquidity Positions. If you do not have a strong Liquidity Position, i cant have you in my portfolio. Lets be clear. We wouldnt be where we are without the fed and the lword, as joe uses, liquidity we all agree with that, right . Everybody is nodding we wouldnt be where we are. So well be paying attention to the statement. And i dont think anybody is expecting any if youre long the market, upsetting news coming out of the fed today. What are we buying steve weiss, what are you buying yeah, well, first of all, i would say the fed is sort of an afterstatement. Its the first day on fed day when the economy is in such trouble, we really havent led with that. To me, whats going to be more important is what happens after the close, with the companies that are going to report, facebook, microsoft. Im staying with the ones youve got to look and say and assess what companies are going to do are going to not only survive this environment, but are going to do better and you come back with the same names. You come back to microsoft you come back to facebook. The decline in advertising is temporary. You go to an akamai, which reported, which i thought was a good quarter they beat this quarter they guided higher next quarter. But what people were paying attention to and what the markets ignoring is that they spoke about 20 of their verticals, which are in hospitality, transportation, and retail and reserved against that. 5 million, not a big deal. Thats a great buying opportunity below its midpoint multiple historically. So im buying those names. Im buying lulus, as i mentioned. I own it, im not buying anymore. The hsb is something you have to buy. Look at how depressed that is. When we talk about where the market is in terms of the multiple, we dont often accompany that with free money, low Interest Rates so were at a premium to where the market was trading before this started, which is about 18 times. Now were 20 times forward is that unreasonable considering that the thought the fed was done cutting, and they cut like we could never, ever imagine jenny, how should a dividend hunter be treating this environment . If the environment feels like its getting somewhat incrementally, lets use that word, incrementally better, in some respects, are we less, now, worried about Companies Cutting their dividends . Or is that just going to be on the table now, until it isnt . I think its already on the table and its been there. So we know whos going to cut. Like gm cutting last week was the most obviously thing ever. This week, rather. There was no way that that wasnt going to happen so we know those things. But then what weve also seen is Companies Come out more strongly than theyve ever been, protecting the dividend. And we saw that on the ibm earnings call, on the at t earnings call. In fact, Kinder Morgan was out so when youre saying, where are you buying, im buying some of these Pipeline CompaniesKinder Morgan was out and they increased their distribution so whats happening now is theres again, increase in clarity. We know whos going to cut for the most part, we know whos going to and we also are getting much more comfort and clarity with whos going to keep it and they are the obvious players, the ones who are mint in cash. So i think that the pool of Dividend Companies are narrowing, but the quality of those who are continuing to pay is increasing. And the confidence you can buy those with is much higher than it was, even six weeks ago richard sapperstein, i want to be clear, too and i want to make it awfully clear to our viewers, your cash position right now is the highest its been all year its 15 to 18 thats right, yeah yeah, our clients typically have 50 in equity that consists of around 10 or 12 different active and passive strategies so in one of the strategies, were running it right now with a 15 cash position, which weve been building over the last month. At the same time, though, you have and youve mentioned some names, but lets be clear. You have put new money to work, right, in medtronic and stryker and pfizer, so its not like youve got this overweight position in cash, unlike you have had in an awfully long time and youve stashed it under the mattress or that couch behind you. Youre looking for opportunities. Yeah, all the time, were looking. And, you know, one of the things that were checking, also, are credit spreads in the bond markets. Because a lot of companies, what happened in march, there was a dislocation in the fixed income markets and credit spreads gapped out so theyve since come down, and there are those that are trading now with much narrower credit spreads. And those are the companies with high levels of Free Cash Flow, good coverage on the dividends, and they obviously will have more growth characteristics. So when you ask about, how do we want to allocate new capital into the stock market, i think the companies that are going to be continually rewarded are those with high Free Cash Flow rates of return, and those with the lowest credit spreads. So rob seechen, its interesting to me, as i look at your notes, youre reducing your exposure to cyclical stocks and going into what you call strength, the areas that have already had a nice run you have a more Glass Half Full view of the market, i think, but your positioning seems interesting to me. Well, as i said, i think, longterm, were optimistic, shortterm, were cautious i think going back to what steve said, were not talking about the fed today, and thats because of the recommemdesivir , the fact well, the feds spoken, right . Thats why were not talking about the fed. But my point in saying that is because its because facebook, microsoft today, amazon, apple, tomorrow, the earnings narrative, but really, the feds the most Important Institution in the room. Typically, low rates mean low p\es, because growth is uncertain. This time, that is artificial, so growth may be actually higher than rates imply that is why we have that longerterm optimism the shortterm caution comes from the fact that weve moved very far, very fast, and were discounting good news without verification when we talk about positioning and the cyclicality of selling the cyclicals in a week where the cyclicals have really outperformed this week, were tweaking that a little bit i wouldnt say were selling it. Were keeping some of that cyclical optionality in client portfolios but we are hiding, and i think its really important to know that the new defensives of communication services, health care, and technology, even though its not an overweight of our firm, represent the beneficiaries of the stayathome economy and a really defensive way to place staying invested in this market. When we sit here in the consensus and everybody is negative and i would say were overbought versus negative, and im cautiously optimistic. I hope that clears the view. Yeah, i hear you. Rich sapperstein, so microsoft after the bell, if were talking about these big glamour stocks and where theyve been, thats your biggest position . Correct and theres no you have no desire in any way to maybe cash in some of the gains that youve realized and ruse teduce the si that position relative to where it was well, weve held microsoft for probably six or eight years. And weve had to trim it over the years to keep it within boundaries of a prudent position so, at this point, were not we think its a great holder here we love the cloud. We think there should be cloud exposure in everyones portfolio. In addition, softwares very important, and Online Shopping theres a lot of technology, which i believe everyone should hold, because of the high levels of Free Cash Flow. We talk about growth versus value. A lot of value stocks are going to be impaired, because theyve got to cut the dividend and they dont throw up enough Free Cash Flow so if we look for Free Cash Flow, its clearly in a lot of the techrelated names joe terranova, youve got some new moves youve been making i want to know the names youve bought sure. So, again, i mentioned at the top of the show, its very difficult for me to have confidence fundamentally to step and add further to industrials, financials, energy, or consumer discretionary. But i was able to find a couple of names in financials, i went back to an old favorite pgr. Thats progress live Insurance Consumer discretionary, i bought nike and i bought starbucks this morning. I was tempted to buy chipotle and i possibly will step into chipotle in the near term here but i would have to raise some funds to do that in the industrial space, a name i used to talk about, scott, copart trading around 80, 85 in that range. Got back into copart i havent done anything about energy keep in mind, the spot price of oil is down about 30 . Energy equities are actually up 20 in the month so thinking about energy, i was going to buy chevron i didnt buy chevron but look at the energy banks whether its collin and frost, texas capital, or whether its independent, i think thats your first step in a very small position into Energy Equity type of names i might consider doing that. Havent done it yet, though. You dont think that theres going to be Energy Company blowups and exposure to those little banks that youve just talked about is going to be severe i do think theres going to be muchneeded consolidation in the energy space as a result of major issues. Well, keep in mind, though, scott. As it relates to debt maturity, its a 2021 story. So the Energy Sector is actually getting a break here its not a 2020 story. The fiveyear cliff goes back to 2016, the last time oil was below 35 so youve got about a year before that wall of maturity comes. I think the real challenge for the Energy Sector is a labor condition, where youre going to see a significant loss of labor. But again, i said, i havent stepped into those banks just yet. Thats a very tepid and judicious way to play it for a trade if youre going to no, i hear you. But if youre talking about them as, you know, recommendations of things to look at, people may take that as a sales pitch to buy those banks now, when i just want to be clear about small topositions sort of what were talking about. I agree with that but small positions. And im not stepping away from saying, thats the way the play it you can take a small position there and an understanding that the debt maturities are coming in 2021. Theyre not 2020 stories yeah. No, i hear you all right, were going to take a quick break. Coming up, ge posting mixed results. Shares down more than 35 in two months we have the number one industrials analyst on wall street he is with us next thats sveten tusa from jpmorgan were back in two minutes. Michael vasquez come over here. Ive heard such good things about you, your company. Well, i wouldnt have done any of it without you. Without this place. This is for you. Michael, you didnt have to. And, were going to need some help with the rest. Youve worked so hard to achieve so much. Perhaps its time to partner with someone who knows you and your business well enough to understand what your wealth is really for. Welcome back strong session for stocks. Lets get to sue herrera now with the headlines hi, sue. Hello, scott. Hello, everybody heres what we know at this hour britain now has europes secondhighest death toll from the pandemic government officials released new figures that include fatalities in all locations including nursing homes. The total deaths above 26,000. Here at home, new yorks Governor Andrew Cuomo is warning against trying to reopen the economy too quickly, pointing out that in germany, the infection rate is up sharply in the ten days since that country relaxed its restrictions and take a look at this. If you are wondering what yesterdays flyover of new jersey, new york, and pennsylvania looked like from the cockpit, here you go 12 jets from the navys blue angels and the air force thunderbirds flew in formation to salute those on the front lines of the fight against the pandemic and it was so aweinspiring. As always, you can get more on our coronavirus coverage by going to cnbc. Com. They went right past the building it was fantastic yeah, it sure was sue, thank you thats sue herrera ge shares in focus today the company reporting earnings with not surprisingly a big decline in its Aviation Unit steven tusa joins us now on the phone as he says today, the worst is yet to come from the company. Steven, welcome back hope youre well yeah, you, too. Thank you the worst is yet to come why . Anesthesso these are longcy businesses aviation is definitely one of the longest cycle businesses and so when you have, you know, kind of a crisis that will, you know, play out to a greater degree coming here in the Second Quarter as airline customers, you know, really turn off the spigot from a cash perspective, you know, just by definition, First Quarter should not have been this bad of a reflection. You know, the company was out guiding in early march, and while they had talked a bit about the headwinds from this, you know, to kind of have this kind of thing happen over the period of a month, it clearly, things happened very late in this quarter, yet had a pretty greater, substantial impact than we had been expecting. So, yeah, this First Quarter is bad, but Second Quarter is going to be i cant find words to describe how bad the Second Quarter is going to be so lets talk in terms of what the company is doing now to deal with it and what may need to happen over the medium to longer term, as we think about what the impacts of this crisis are going to be. Will you listen to what larry culp said on our Network Earlier about ges Liquidity Position, and we can respond and react to that on the other side heres culp from squawk on the street just a short time ago. Were well positioned from a liquidity perspective for what we see in front of us. Were pleased to have that Liquidity Position again, the cost in cash actions will help us a great deal here in the short to medium term. And we will well play it forward from here, mindful that we want to make sure that we continue to bring those leverage levels down. So, steven, does culps description of ges Liquidity Position match your own . Yeah. Ive never made this call about liquidity. And i think as ive said many times on this show, its not bankruptcy or buy. You know, we arent Bond Investors here were Equity Investors and ultimately, theres a big difference between a company that can survive and one that, you know, doesnt have much, you know, in the way of resources to grow or differentiate as, you know, a bit of a, you know, of a a bigtime overleveraged company into the next couple of years, and ultimately, when you see the types of ebitda they put up this year and where thats going to be at the end of the year, youre talking about a company that could be you know, their target was 21 1 2 times levered. Youre talking about a number that could very comfortably be above five times levered when all is said and done and the numbers shake out. I dont quite understand how the ratings agencies can kind of continue to, you know, extend this you know, this view on leverage but as an equity investor, just because the company is alive doesnt necessarily mean that, you know, the equity is worth, you know, more than our 5 price target ive always said, this is not bankruptcy or buy. And the same is true today so absolutely, they have very solid liquidity. But that doesnt mean theyre going to earn much over the next couple of years or have the resources beyond that to beabl to kind of effectively compete in these businesses. Culp did say he wants to bring the leverage levels down do you think the company can be successful in doing that at the same time, it appears to me that youre saying no. You dont think they can . No. I think whatever they just like with the ge bioprocess deal they sold, you know, 20 billion in assets, you know, 20 billion in proceeds, and leverage will be higher, likely, at year end 20 than it is at year end 19 and ultimately, what was interesting about this quarter is that the ge bioprocess operating income this quarter, okay, which is now gone after this quarter, was more than 100 of the companys earnings, if you include restructuring, which you absolutely should. So anything you do, any asset you sell, is going to be further dilutive to the future cash and earnings of this company so the answer is, they may be able to delever some, but right now, theyre not generating any cash we can get to that in a second i think Free Cash Flow is likely negative this year after seeing this print and so you have a negative Free Cash Flow company that has to sell something thats generating cash i dont really understand where the ultimate run rate of cash has left, as you sell, you know, your best ssets. How do you view culps move to theyre taking 2 billion off the cost side out and 3 billion on the cash side yeah, larry is an expert at running businesses and i have no doubt that he is, you know, operating with urgency you know, hes a fantastic operator i dont really know how you come up with 2 billion to 3 billion of pure, you know, solid, somewhat structural savings when you cut restructuring by 50 last year, and you basically spent 100 million of restructuring in the quarter in the businesses i dont i dont you look at other Companies Like emerson, for example, theyre getting 1 billion of cost saves structural in the next three years. Theyre spending hundreds of millions of dollars. Emerson is spending more than ge in their restructuring by multiples so far this year and ge is saying theyre going to get, you know, three times the savings. I just i struggle with that equation and what is actually structural and what is actually just a natural decline in costs, as revenues go down, which is a very which are two very Different Things its interesting, and lastly, i hear i hear i mean, are you intimating, you expect a downgrade of ges debt and is that that sounded to me like what you were suggesting and even though you say youre an Equity Analyst and not a credit analyst, are you viewing the equity, at this point, in any way through the prism of a possible debt downgrade . No, im not saying that, i would never speak for the ratings agencies hay do their own work. Im just saying that, you know, theyve provided targets, the company has, you know, provided their own targets, two and a half times net leverage, and they have successively missed these targets over the years, yet were still sitting at kind of the same rating so all im doing is kind of, you know, scratching my head around, you know, are there goalposts here or are there not . So im not making this about a debt rating. This is more about, you know, the construct of earnings and Free Cash FlowGoing Forward and after today, you know, i dont see them Generating PositiveFree Cash Flow this year and as they said on the Conference Call, or at least how i interrupt einterpreted the coe call comments, this will not be a snapback in the next two years, which is what all the sellside bulls who recently upgraded over the last year have embedded in their forecast and thats really, you know, key to the stock, is that forward consensus estimate curve is going to absolutely collapse from an expectations perspective and that is not reflected at 7 00 a share understood. Can you before you leave us, because you are the number oneranked industrials analyst on wall street, can you just leave with us a broad brush view at this point of how you view the industrials complex in the context of this virus and what the other side may look like yeah, iffirst of all, im no sure thats an audited ranking, just to be clear and second of all, i dont necessarily feel that way, because, you know, were definitely more cautious as we see this play out. You know, it is, it is our numbers, we cut by, you know, 20, 25 over the last month and a half, on the back of all the macro data and i guess, you know, covid stats have kind of replaced some of the macro indicators as the most important driver of stock valuations you know, i do think this is as bad as advertised, fundamentally. So i do think its, you know, fantastic that were kind of, you know, seeing a peak perhaps in, you know, in the virus but i think with, you know, the unemployment thats kind of left, the lack of investment that were seeing, every single one of my companies has cut capex by 20 this year thats an annual number. You dont just turn that off one quarter and turn it back on. And to the degree that things dont snap back here in may, these companies have yet to make structural changes in their Employee Base pb a, and thats, think, the real risk to making this significantly less of a v shape thats priced in so were approaching this in a very measured way. Were looking for divergences in our group, where maybe some stocks are getting a lot of credit for a serious vshaped recovery and some stocks that arent. And thats the best way we can play it. Because, quite frankly, i readily admit to not being able to figure out where this virus is going, and obviously, thats the most important thing right now. So, were really trying to play these record divergences in some of these names and thats how were thats kind of how were positioned Going Forward part of what all of us are doing are guessing on where we think things are going to be steven, i appreciate your time so much. Absolutely. Happy to help. Thats steve tusa from jpmorgan we mentioned top of the program that dr. Fauci made some comments today that were positive about Gileads Remdesivir lets take you back and let you listen to that now okay, so, a trial that the National Institute of allergy and infectious diseases, which is the institute i direct, sponsored called the adaptive covirus Disease Treatment trial, or aact i was started in february 21st of this year and it was a randomized placebo drug trial, comparing the drug remdesivir with a placebo. It was highly powered with about 1,090plus individuals, so it is the first truly hagighpowered randomized placebocontrolled trial. In various countries throughout the world, including germany, denmark, spain, greece, the uk, et cetera. The primary end point was the time to recovery, namely the ability to be discharged when you have a study like this, we have a data and safety monitoring board, which looks at the data and they are independent, so theres no prejudice on the part of the investigators, because theyre doing the trial or the drug is from a Certain Company the data and safety monitoring board on monday afternoon contacted me on april 27th first on friday, the week before, and then again on april 27th, and notified the study team, namely the multiple investigators who were doing the study throughout the world, that the data shows that remdesivir has a clearcut, significant, positive effect in diminishing the time to recovery this is really quite important for a number of reasons. And ill give you the data its highly significant. If you look at the time to recovery being shorter in the remdesivir arm, it was 11 days compared to 15 days. And thats a p value for the scientists who are listening of 0. 001. So thats something that, although a 31 improvement doesnt seem like a knockout, 100 , it is a very important proof of concept because what it has proven is that a drug can block this virus. And ill give you an example in a moment, of why we think, looking forward, this is very optimistic the mortality rate trended towards being better in the sense of less deaths in the remdesivir group 8 versus 11 in the Placebo Group. It has not yet reached statistical significance, but the data needs to be further analyzed the reason why were making the announcement now is something that i believe people dont fully appreciate wherever you have clearcut evidence that a drug works, you have an ethical obligation to immediately let the people who are in the Placebo Group know, so that they can have access and all of the other trials that are taking place now have a new standard of care so we would have normally waitet further, dot the i an cross the t but the data are not gone to change some numbers may change a little but the conclusion will not change so when i was looking that the data with our team the other night, it was reminiscent of 34 years ago in 1986 when we were struggling for drugs for hiv and we had nothing and it was a lot of anecdotal reports of things that maybe worked, maybe not, people tacking different kind of drugs and we did the first randomized placebocontrolled trial with azt with an effect that was modest but building on that every year after, we did better an better. We had better drugs of the same type and we had drugs against different targets. This drug happens to be blocking an enzyme that the virus uses an thats an rna prolimarase. This will be the standard of care and, in fact, when we look at the other trials we are doing, we were going to do trial with another antiviral. It is an antiinflammatory, were going to now compare the combination of remdesivir with this as drugs come in well see if we can add on that. So bottom line, youre going to be hearing more details about this it will be Peer Reviewed appropriate but we think its opening the door to the capability of treating an i can guarantee you as more people, more companies, more investigators get involved it is going to get better and better id be happy to answer any questions. Is that you go first and then you go. Changing the time line, the development of a volcano sy nation no. This has nothing to do with vaccines this is treatment for people already enfekted vac soons to prevent infection in those that are at risk. Do you have nothing more than i continue at the press conferences, keep you up to date that everything is on track with the phase one study. We are in the third part of it, nothing has changed that anything i have said when we had press conferences. Read a lot of oxford. Not one another one of candi that are moving along. Thats good thats great. Hows this news influence your thought process of states reopening their governments . Do you think people should be more comfortable knowing that there is a drug that is proven effective . I think its a beginning. Its a beginning it means you build on it i love that as a building block. I love that. Certainly it is a positive it is a very positive event. From that standpoint and were going to be very careful as we open a lot of people, a lot of governors are opening. I know youre very advanced, will be advanced in getting it going but were doing it very carefully. We have learned a lot over the last couple of months and if theres a fire were going to put it out if theres a little ember burning, well put it out, put it out quickly and i think we have learned how to do that. There have been some areas that have really started up and we put it out very quickly. Well take you out of the oval office now. The president speaking there of what dr. Fauci was talking about, giving us all an update on the positive news regarding Gileads Remdesivir saying its a clearcut positive effect on the Recovery Time from the coronavirus. Also Proof Positive in his mind that a drug, any drug, will eventually be able to block the virus. Its significant news on Gileads Remdesivir and the way this trial and data at least tells scientists and those in the Health Care Industry that ultimately a drug will be able to block the coronavirus that in terms of what dr. Fauci was saying there as you can see the president meeting there with the economic adviser, one of thome, alongside the governor of louisiana whose state for that matter is hit hard by the coronavirus. You saw perhaps the market was rallying a bit more during the commentary of dr. Fauci. S p is good for 85 we are working on the best month for the s p since 1974 its been that kind of bounce for the stock market over the past several weeks theres the dow. Higher by some 617 points. Rob, so, you know, thats the word from dr. Fauci and it is undoubtedly good news. Whether you ore simply talking about remdesivir or the optimism of a drug to block the virus and that comes down the pipeline 100 . The progression and diagnostics, they are puttings and ultimately a vaccine creates levels of optimism you know the effectiveness of policy but its the impact of the lockdown that will allow us to see whether the vshaped recovery in the market is mirrored by a vshaped recovery in the economy and at this point we still have were probably 12 weeks out from knowing if thats the case. So i think we have to watch all of these things and react accordingly and like i said right now i think from a markets perspective were a little ahead of ourselves. Jenny, do you want to comment again . We have positive news of gilead and had a Significant Impact on the stock market. When we talk about the market, theres a big bifurcation. Saying the stock markets ahead of itself, parts of it are, yes. Parts that are still more rational with respect to the Overall Economic data. With the economic damage thats been done. So to me it doesnt feel terribly frothy. Im still at the popt in the have notes right . We are catching up i dont have that sense of being overextended right now but markets havent appreciated it. Is this a fed day do you feel as though we have that the fed and now to some respects fauci himself with his own commentary on what hes seen on remdesivir puts somewhat of a floor under the market here . Thats not saying that we could nt decline from here, obviously, but at least a floor of how low we may go if we see a pullback yeah. Both the fiscal and monetary canyons that cannons shot roughly 40 of gdp clearly putting a floor under the market but investors also have to consider what multiple do you put on the s p in a zero Interest Rate environment because next year investors open up the statements, look to reinvest the fixed income and find theyre earning zero on the cash and look to the market basically achieve returns. So while we have volatility, the market is overpriced it could go down 200, 300, 400 points but 2400 is probably the floor. Rich, good having you back. Great to get your voice on jon najarian, getting a final, you know, point from you, unusual todays interesting. Capital one calls and Royal Caribbean calls. People there people actually calls on cruise ships . Yeah. Absolutely, scott. In fact, i sold my ccl calls today when mark lazari was on your show and talked me into buying the debt. I was very happy with that then we saw unusual activity in ccl carnival and now again today were seeing it in Royal Caribbean and buying the may 55 was the stock at 47 to your point about capital one, cof, i was also surprised but this one is further out. September calls. Buying the september 80s with the stock at 71 in cof. Like them both im in them both now i wasnt at the start of the show but i am in both of these trades now, scott and like i say, took profits in ccl and watch those casino stocks. Do you have a final trade for us, doc . Sure. I will go with lvs as a final trade them las vegas sands. Appreciate that thank you. Rob, you have a final trade . Thank you, sir. I would just say dont get seduced by the fear of missing out. I think there will be another opportunity to richs point. Probably in the 2500 area. I think we have seen the lows of the year. Joe, football night in america yeah. Market access, a high yield electronic debt platform weiss akamai, unquestionably buy it. Which you did Jenny HarringtonEnterprise Products holding up nicely. Mr. Hightower, give us a final trade. Striker, sam yellow ken for the recovery in elective surgeries. All right we appreciate everybody today. See you back here tomorrow check the dow once again see you tonight on the special kelly picks it up right now. Thank you, scott, hi, everybody. Dr. Fauci makes bullish comments of the trial results of gileads covid19 treatment drug. Lets get straight to this optimistic dru news with meg tirrell with the latest, the stock move and the implications. Meg . Hi, kelly to share this is an unorthodox way to share results is an understatement we got the