Transcripts For CNBC Closing Bell 20240713

Under an hour left in the session. Lots coming up on todays show a big exclusive interview with bank of americas ceo. Well get a read on the Small Business relief program. He joins us live in about ten minutes time plus as retail bankruptcy concerns swirl, well speak with the president of sax fifth avenue about whether customers h actually return to stores when doors do reopen but first, lets focus on the big stories of the day. Mike is tracking the market pullback on this first day of may. Josh is covering apple diedra is watching amazons move and phil has the shocking tweet from elon musk that sent teslas shares tumbling. Mike the s p 500 down almost 3 today. About 3. 5, 4 from its highs just two days ago. Look at a chart. Just to map where we are down about 4 we had broken on a shortterm basis the uptrend from march i dont think anyones going to get too concerned about this unless it goes deeper than at least 2550 week and a day or so ago, last tuesday, we were down around 2730 so were just skimming a bit off the top here but i think theres reason to believe with the big day tech stocks faltering, giving back april gains, the market might be suck in the shortterm. Did want to look at how the Global Markets split this is when bank of america and its two hypothetical portfolios. One is the lockdown one. One is those that benefit from the shutdown the other is the reopening not just stocks. Things like high yield bonds what it shows you is that the shutdown portfolio has flat lined. Its stalled and hasnt given back much but the reopening portfolio coming into today has picked up some of the slack and it probably shows you even though theres a good gap there so the over all markets arent pricing in a r near term start of the economy i think what it shows is that theyre increasingly depending on incremental day the or impressions that we are restarting because the other portfolio probably has to Start Performing to get markets much up from here, guys the interest thing that jumps out to me in terms of the week to date performance is theres kind of a mixture in fact of those sort of two groups of stocks that have done well youve got the typical understood performers like energy, financials, that are both higher so far this week and the typical outperformers like Communication Services and tech that are also higher for the week as whole. Which makes it harder to draw conclusions of what the driving force this week has been well the driving force has been almost fusion confusion or least rapid rotation people running from one side of the boat to the other. Coming into the week, there was a sense out there that the big Growth Stocks weve come to rely on had gotten overheated it was time for them to rest then it created this huge positioning shift. The equal weighted portfolio and in midweek, itt looked like tha would be the new theme and the last two days, thats backed away so thats why i think were in a confused after we had this sharp rally off the lows all right, mike, see you in a bit. Lets focus in on apple as wall street digests earnings from last night the stock is is lower, but holding up better than the rest of the market. Josh so apple did best expectations and did manage to grow albeit modestly despite the pandemic company did not issue guidance saying in the near term, theres too many uncertain theties to really give a forecast of what the next 60 days will look like. I did catch up with tim cook and asked him about the work from home trend, how is that going to affect business. Tim cook telling me its clearly helping the ipad and the mac we envision both of those to have improving year over year performances in this Current Quarter and what we see is that the usage of facetime has gone through the roof its not getting talked about as much, but the usage says otherwise. As for when apple is going to reopen some of the sfoers, cook says it will go country by country and in some places, county by county theyll be driven by the data. He says the first u. S. Store could reopen in midday back to you. Thanks for that shares of amazon are sharply lower today on the back of earnings and weighing on the broader tech sector. So theres a cost to amazon surging demand and thats partly whats weighing on shares today as well as that big year to date run up now bezos asking investors to take a seat because the company is planning to spend everything it makes on covid related expenses from testing to millions of masks and thermal cameras to beefing up it capacity cost aside, amazon did say most of its businesses are booming amid the pandemic. Online sales are up. Aws broke 10 billion in revenue and its fiphysical stores are final lie gaining traction the tech giant has successfully hired 175,000 new workers and says that capacity is beginning to be expanded now asked what sustainable b hab habits the company is see iing, they answered grocery. This is a market amazon has been trying to break into for more than a decade and could represent the next frontier. Guys thank you want to bring in mike with the move here on amazon, mike, with so many people betting on this stock. Its beloved by analysts, by Retail Investors its been a huge outperformer. Do you see this as a cross ro s roads . Im not sure. It was definitely a crowded position everything seemed to be moving in the direction of amazon and i think that the take away from what the company has said b about its plans, b about the heavy Spending Priorities are both in line with what people condition ed to expect but also this doesnt seem as if theyre investing for some grand multiyear opportunity. It really is to try and ramp up current capability and do some of the tough stuff not jux protect employees, but also the last mile of delivery and things like that, so i dont think it changes the overall story. The stock probably just got overextended i guess you have to ask the question, whats my next catalyst, my next incremental reason to get more or less comfort b wbl a stock like this and it has to do just with the kay deps of a restart of the economy rath ethan anything else its got to have a little reset. But mike, if we do see a quicker and more successful reopening of the economy than perhaps expected, does that hurt amazon stock could we now argue that all of their business lines will continue to grow and just improve what their bottom line profitability is if costs are able to decline a bit. I dont think it hurts in any fundamental way. I dont think it necessarily weakens the Overall Investment case for the company. What it does is just kind of captures, sort of diverts attention to other stocks that might not have run so much and could have high eer kind of beneficiary effects from the reopening of the economy thats all it is the its about the flows and about sentiment as that goes along with this reopening story. So on the flip side, mike, bezos was invited i think, summoned or invited, to testify on capitol hill about an antitrust issue with Third Party Sellers today reminding us that the government still has a company like this in its cross hairs and the other factor that you have to assume or if youre a bull, is that this huge amount of spending, the 4 billion in profits, is going to be temporary. How do you think about that . Are they going to be able to grow like this and have all this excess capacity and be able to make money i mean i think theyll think about the making money part down the road in terms of the regulatory st t scrutiny, been a wall of worry the stocks have been climbing. Not too threatening at any moment not sure thats going to be the decisive factor here the return on this heavy investment is going to be something that gets a lot of attention going through this year yeah. The question is how long it lasts. Amazon down almost 9 . Michael, see you soon. Surprising tweet from elon musk sending tesla share ts tumbling take a look at shares of tesla down just under 10 . You want to focus on 11 00 a. M. This morning, thats when they really fall off and why . Because of u this tweet sent by musk he tweeted out tesla stock is too high, imo, mean iing in my opinion. I am selling almost all physical possessions, will own no house remember, we have heard elon musk either tweet or comment, give interviews, make some kind of a reference to the companys stock being overvalued while musk and the sec, they settle d a case back in 2018. That was all the going public 420 and at the time, the agreement was that a tesla committee was supposed to oversee musks communications. Dow jones said they reached out to him and asked if it was preapproveded, a joke, got an answer saying no, we have reached out to tes asking if they have any comments by the way, we have reached out multiple times when this happened, number of people came out and said why would he do this is it possible that his twitter account got hacked we asked tesla heard nothing back so if this was a joke or the account was hacked, youd think we would hear by now but again, shares down just under 10 on the day so i know people are asking me all day as if i had some sort of information about whether his twitter account had been hackedment so phil in the past, musk has sort of gone rogue like this and tweeted some whacky things ultimately approved to be b a buying opportunity as teslas financials have improved we saw that in a president obos quarter. I wonder if this time might be different given the secs involvement or not no way of knowing in fact weve seen four different examples went back to 2013 we found four different examples and if you look at the stock performance, 30 days after he made comments about the stock being overvalued, two times the stock was down i dont know, 11 , 0 e 20 . Its all over the map in terms of what the stock following his comments about the price of the stock being overvalued or too high, whatever term you want to use. Phil lebeau, thanks so much. Tesla stock down 9. 5 . Coming up next, Brian Moynihan will join us well perhaps ask him if he thinks his stock is overvalued, unlikely that he does think that hell be with us live and exclusive next the Small Business administrations ppp program faced criticism as some claimeded certain Bigger Companies have been favored over smaller ones as of wednesday this week, bank of america has processed 250,000 ppp applications of those, they said 98 were for companies with fewer than 100 employees. 76 had fewer ten employees. Joining us now is Brian Moynihan brian, a verygood afternoon to you. Thanks for joining us. Nice to be here thank you. Brian, lots to dig into on the ppp which well get to in a moment, but if i may, i wanted to start on the broad rer economy. Weve been debating all week what the hikely shape of recovery is. And i know at bank of america, you have sort of a clearer pulse check on exactly what spending is looking like for r corporates and consumers and i wondered what insights you could share with us on that front. Sure. Its a pleasure to share some of the insight we get from our 66 Million Consumers and our tens of thousands of companies. Before we do this, weve got to remind ourselves this is a human and medical crisis as that can resolve, youll see the Economic Situation get better what were seeing in spending today, we talk about Consumer Spending, consumers use of money, not only debit card spending, but also the broader ways consumers spend money year to date, its flat to year. It was growing on the upper Single Digits almost 10 then fell what were seeing recently is the last four weeks, the run rate of that is about 50 billion a week of total cash move iing through consume rers accounts to pay bills, to take out of the atm and spend, to use the debit and credit cards thats about what it was in the fall of 2017 and its kind of hit a flat there and is starting to grow a little bit so the good news is given all thats going on, it cadown about 30 its kind of at a flat space and youre seeing it grow, but the aggregate amount of activity is more consistent with the fall of 17. If you took the average of 50 billion and went back and found that when was the last time it ran at a 50 billion average. The economy was in reasonable shape back then. Are you suggesting, am i reading this collectly, that even though the rebound might be much, much slower than the fours that we have picked up, we have picked up a little bit in the trough as it were of Consumer Spending may be behind us . It all depends on what happens next but right now, yes, youre seeing some things start to go up youre seeing retail, which was about three or four weeks ago was all about provisions grabbing all they needed in a stay at home posture theyre seeing spending on clothing start to pick up. Spending at restaurants grow the last few weeks at both the Quick Service and regular restaurants off that low er base. And youre seeing frankly just the theme of the day, gas purchases at the pump both on our merchants side, when we process for the gasoline providers and also on the consumer side on the r cards they use youre see iing that grow a lite bit so what youre starting to see the frankly people are driving more now that were four, six, eight weeks into some of this activity and so if you look at it, youre starting to see those things spend obviously things like travel and movies and things are still and youve had lots of guests talk about that, are still in a different condition but youre seeing that. Even when you look at the communities that are opening, its still premature because its only happening now, but youre seeing the start of more spend iing in some areas and soe of states that have opened up a bit so well see where that leads us because its still early on lets touch on the ppp program. Those statistics you were kind enough to share with me a few hours ago. 89 of your ppp loans to companies fewer thaen 10 employees and ten employees. Do people oo need to take a step back, look at those figures and realize that in general, its sort of working . Its sort of fair . Yes, so let me just talk about where we are today because this has been a heck of a week to where we are here as we close the fourth week of the program. If you look at where bank of america is is now, the sba working posture this week start off a little tough but has improved dra mmatically. Theyve processed a lot of activity theyve done a good job of getting a system up. We now have 231,000 plus sba numbers today. Its 231,000 businesses. 98 less employees 75 or 6 less than ten employees have promissory notes going out to them. Well send out over the next 80 hours, 1,000 notes totalling 15 or 20 billi 20 billion. The program worked this week well the numbers were staggering. Thats 231,000 pieces of work that went on to get through oal the process and the notes are are out. Weve got about 50,000 notes already. The rest will go out over the next 48 hours. Those customers, all they have to do is execute the note and money goes into their account relatively quickly brian, i know you cant touch on individual clients, but clearly, there have been some cases where maybe the clients size, its strength of Balance Sheets or its access to other forms of cash where they tapped the ppp program but perhaps were less deserving of those funds that other small er businesses. Were there examples for you where people met the written down criteria but you guys thought this client really isnt as deserving as some might be but you have to fund them either way because the terms were the terms. I think through the question and guidance to treasury, youve seen people take action, cu customers take action. Its not our responsibility. Its the customers. So youre see iing that but you get swoot ins and outs of that. Youre missing the broad point that if 231,000 businesses for 24 billion, in another 37,000 we have ready to go through the sba theyre going through 1500, 1600 an hour for another couple of a billion dollars. Its a broadbased Program Going where congress wanted it the changes made to eliminate the types of things they were talking about, youve seen the stories out about it but the reality is this is going exactly where it was supposed to go to very Small Businesses in big numbers across the country do you think the dojs opened some proceedings to investigate whether there was fraud in the process. Do you think its inevitable there will have been some fraud . Id like to see how the investigations pan out and see what customers and clients are doing. Its premature the. The ppp program aimed at helping the small r eer clients and Big Companies with some of the fed anchors have been able to tap the bond markets. The feds main Street Lending Program Designed to address the sort of middle ground of that. Do you think that has been well designed such that all of the companies out there that need funding will ultimately be able to get that and does it give you confidence that the level of rigwrite downs you have to make q1 earnings will be the peak in q1 just go back and talk about the economy broadly at the start. What youre going to see now as it plays out in the next several weeks here is the impact of the stimulus plans all hitting at once. Youre having the ppp program, youve seen us talk about how much it goes out the door quickly. Unemployment benefits that are being distributed even though the horrible situation was at the level its at. You have the stimulus checks which 100 millions have gone out and we have a major part in distributing those so all that is hitting and at the same time, youve seen what the other thing the fed has done, our stand by, which is a role and theyve done a great job. Mortgagebacked securities, munis and theyve gone down and youve seen the spreads come in the regular way, activity go up, which has allowed for tremendous issue answer of Investment Grade debt the biggest month is april and the next was march that activity has put a lot of ly quiquidity in in the market c has helped move a will the of loan demand to the holders of that so you put that together, where havent they reached yet thats what main street is set up next. So the teams Smaller Company has been working with the fed and theyve got a turn sheet the good news is there frankly, the best news is its never used which is that economic recovery is such that we dont have to use it at all having it there is the right thing to do and they built the program and see it play out over the next few months as to what actually happens somewhere between 15 and 20 , yet the nasdaq is give or take flat year to date. Do you think theres a risk in the months ahead that this is going to be seen as a set of bailouts or aid programs really benefitted wall street, the haves and not main street, the have notes, such that there will be real implications for the shape of capitalism as we know it i think at the end of the day, companies have to run their business to meet all their stake holders and youve seen a group of us send a letter out from the World Economic forum that talked about in the covid crisis, how you think about stakeholder capitalism were all committed to large companies. What does that mean for us no layoffs this year theyre doing a great job of serving america every day. The branches staying open and our employees, theyll be a teledoc and Free Medical Services we have thousands of days of child care were paying for so the employees can be effective when they work at home when their kids are out of school and you just go through all the things weve done. Employees like ours otherwise are doing that so no layoffs. We went to 20 an hour in march and all the other programs i described thest a heck of a package to tout our teammates. This is a, we need them to be successful, we need to be successful, we need you to be success fful and the way were going to do it is keep you safe, number one and two, make sure you dont worry about things to help serve the clients and customers. Think about the amount of teammates working on ppp who have been working every weekend. 24 by seven. Volunteered from other lines of business several thousand moved into this effort to get it through in four weeks time from the first application until now. Thats tremendous. I think the companies that have run this way were trying to meet all the stake holders plus trying to dlifr for the shareholders at the same time. Could Mortgage Rates and should Mortgage Rates come down a bit more than they have . They havent tracked one for one. The feds moves in interest rates. Is that an area that should and could happen soon . Well you know were still doing about a billion and a half mortgage volume a week so its there. I think people have to be careful that just like spread the wides when base rates fall the idea of taking on a 30year obligation by investors is not why when its a mortgage that could extend all the way to 30 years. So it will settle in, but theres lots of volume going on every day and i think one of the interesting things that these guys talked about on one part of the show today or yesterday is the Housing Market is going to be interesting now as you start to see real estate practices open back up or be deemed essential and activity start to take place and well see how u that plays out but that will start driving the activity and mortgages right now, theyre the lowest in history and a good deal for the consume rer. I want to ask how youre thinking about buybacks in the longterm. Not so much whether you should be doing share hoholder capital returns or not but the balance between buybacks and dividend clearly a lot of stock has been bought back by a lot of Companies Including your own over the last couple of years. Were 2019s buybacks for bank of america for example a mistake given it was done at a much higher share price than were at today . Then the question where 2018 is a benefit at a much lower price, 17 thats always good to judge. Not trying to get return here. Youre taking capital. You dont need to serve your customers and clients and putting it back in the hands o the shareholders to do what they need to do our philosophy has been to keep the dividend ratio of 30 of earnings that served us well in the First Quarter and the ability to continue to do that shows you how much earnings we have in the company but more importantly, how conservatively weve managed and brought up the dividend even increasing it year after year the last five or six years well continue to buy it back because at the end of the day, thats capital were generating we dont need to support the business and this past quarter we grew 150 billion in deposits and 70 billion in loans and think about 70 billion going out to Corporate America and corporate world helping them we have all the capital we need to serve the customers still a very Firm Commitment to the current dividend. Yes wanted to touch on a broader question about u. S. Government debt theres been talk over the last couple of days that one potential way to punish china would be to cancel their holdings of u. S. Debt. Hypothetically speaking, if that were to happen, what would be the Market Reaction . Is. Well i think the u. S. Is the reserve currency in the best and most powerful economy in the world so i think it, it you know, at the end of the day, we got to handle ourselves well and show the world what they should do ill leave that to the politicians, but we have a great country and great prospect thats why everybody in the world is putting money here now. So it would be a mistake to take that tactic i think the subject negotiation with china is all political. Is a political matter and but i think on a fiscal matter, our day is part of our full faith and credit in the United States. Brian, i wanted to just quickly touch on the potential longterm implications of some of o the changes weve seen. You guys have a large portion working from home. Just daily, the ceo of barclay suggested having thousands of people in a single building might be a thing of the past do you think thats the case that your longterm prime commercial real estate needs as a company will reduce . Our needs as real estate were coming down just because the dinlgtization, the trend that has nothing to do with this virus, this tragic virus, but has to do with what was going on continuous so do more business with less human content and weve managed that well. That will continue so well have have less real estate demand you know i think like anything else, the view of what will happen because people are people and Consumer Behavior that we see is consumers are creatures of habit 20, 30 years ago they said there would be no branches ch we still have 4300 of them. A lot of peoples views of how behavior changes as well as whether people want to come in the office right now, they have a viewpoint and a year from now, another after 9 11, people were afraid of flying for a while then ts ara came in and the safety ashurdness thats what its going to get take to get people back. What are the safety measures, cape capeable of handling similar outbreaks like this. That will assure our teammates theyre safe and so i think theyll come back to work. I really dont think working from home even though were doing it flawlessly, even though we took 180,000 people and did deployed 100,000 laptops even though we had people working from home that we never thought would work from home, the reality is were more effective for the customer when were in those buildings so i think that will happen. How well do that and the method is also subject to determination. Floor by floor, function by function, person by person and it will take us a while to get there largely because we have to get past the point where theres this virus cannot hurt people through a vaccine to be actually the able ility to b ooempb decie were back to normal just quickly, was there a moment in march where some of your colleagues pushed the balance between getting people back for full effectiveness versus safety of workers a little bit too much . Im sure you heard scott wapners story based on a recording of your head of equitys was there a mismatch in march compared to what some of your deputies were telling theirs i think at the end of the day, weve handled this well for our teammates. Ive got 200,000 plus people im responsible for every day and my Management Team is responsible for and they have access to me to express any concern and we take care of that. And so the best thing we did is took about 9,000 high risk people out of the business you know put them, took them home immediately even though substantial part of those teammates had been home since then without an ability to work because say it was a Branch Manager and you cant manage a branch if youre not there type of thing we handled it well so if any employee has an issue, they can come forward and ask me about it and im happy to answer but the team has done a great job. Think about the repositioning of that many people, that fast and yet with the high market volumes ever are taking operations groups with the highest market volumes every and not having any issues of closing. It was unbelievable. The execution by the team. Brian moynihan, always a pleasure thank you for joining us sara thought that was really encouraging that he said hes starting to see a little bit of Consumer Spending at restaurants and on clothing. Take a look at the markets here. We are selling off off the lows of the session. S ps down two and tree quarters percent but its a pretty broad sell off energy is the hardest hit area down 6 . Consumer discretionary down 4. 5. Amazons share price reaction to earnings a big part of that story. Consumer staples and Communication Services holding up the best. Stocks now in the red for the week with this sell off. 29 out of 30 dow stocks are lore the only one bucking the trend is walmart still ahead on the show. Well ask Scott Gottlieb about the latest treatment and vaccine developments this week and what he makes of the surge of states planning to ease restrictions and as we head to break, a quick check on bonds for you yields actually have been going up the other way theyre higher today which might find somewhat surprising given the big sell off of wall street some selling of bonds pushing those up except for the 30year. Our special coverage will be right back this virus is testing all of us. And its testing the people on the front lines of this fight most of all. So abbott is getting new tests into their hands, delivering the critical results they need. And until this fight is over, we. Will. Never. Quit. Because they never quit. 23 minutes left of trade dows down 600 nielsen out with some fresh data about the price of groceries during the pandemic and consumers are starting to see sticker shock. Heres some top line finding fresh meat prices were up and prices up 31 cheese and cows milk prices up 10 never a good combination with rising unemployment and lower wages. Inflation at the Grocery Store for things that people so desperately need stocks are selling off today the nasdaq is the worst performer. Our next guest says he thinks this market volatility is far from over. Joining us now is dan niles. Dan, good to see you again thank you for joining us just trying to keep track of your public statements it sounds like you called the crash that we saw on stocks in march and were positioned for that, but maybe missed the big surge we saw in stocks in april because you were expecting more volatility walk us through your position. Yeah, no. We made money in april we made money in the month of march. We made money in q1 and so far, well see where the day ends, were making money today so for us with this volatility, we try to adjust our positions every day. Especially when you have days like today where youve got some stocks down 10 . Well be potentially covering some shorts, which we are, with other names that we feel like theyre not down as much they should be, well be add iing to those. What we try to do is try to have longterm view so there anames e core holdings. We saw with amazon this past week, up 2300 and thought there would be expenses because of covid19 and is we got out of the name we comely plan on buying it back its a similar situation with tele doc saw that last week it was 190 the stocks come in since then we plan on buying that back so a lot of this volatility, its actually great if you can work with it and have it help you in terms of reducing your risk. You can make money in the markets down like it was in march or make money in april when the market was up so you know, were going fine and i think the thing to focus on is with this kind of volatility, you need to adjust your positions based on the risk youre on and thats what were trying talk us through your thoughts on amazon specifically will the company, the share price, get hurt if the company reopens quicker than expected or will it benefit sort of by the way and the its just a value kags call . Yeah, its a great question well i think what youre going to see immediately is that and youve seen this in pral where as a lot of stocks in the hotel sector or cruise lines or gambling stocks et cetera, as those stocks went up, you would see some of you know, names like zoom or pick your favorite gilead at one point, we sold that as well youve seen the names related to covid, they would go down so the initial reaction might be to have amazon drop like youve seen in april during periods of time and we have the others in play but back to saras question because were adjusting our positions, we sort of got core positions we like. Will amazon get hurt sure, but theyre a longterm win we are people started using amazon or facebook or you know, you pick your favorite service. Those people wrrnt going away. Will they use it less when people go into the office . Obviously they will. But youre talk iing about companies that should do very well in the future because of the way we lif and work and do tv interviews, thats probably going to change for ever and thats a really good thing for a lot of these Companies People who were afraid to use the service before my mom is a great example. Like nervous about using things like this and putting our credit card information in, but this crisis has caused people to try things out they wouldnt have otherwise. What about apple, dan you usually have a strong opinion on this one. They reported yesterday, they showed they can still grow and theyre bouncing back in china they did scrap guidance and now theres this new concern about a trade confrontation between the u. S. And china over coronavirus. Where do you stand on apple . Its hard people get confused between great products and companies and stocks and part of that relate to what do you value at and ill challenge one of your assertions that its a Growth Company the march quarter are exactly where they were in march quarter because apple a lot of season l seasonality. In the march quarter of 2015 so in five years, theres no growth obviously theyre dealing with covid, but so is google. Their revenue is five years ago and google had problems with covid in the quarter in five years, marng quarter up 15 apples to apples comparison. Did about 14 billion in revenue. This most recent quarter, they did 34 facebook, 3. 5 billion in march amazon made it 22. 8 billion five years ago a76 billion its not going to grow this year five out of the last six quarters, apple did not grow their smart phone revenue. And multiple is very high and id much rather own one of those. By the way, we did own apple earlier. In april because we were like well, it will probably go up because we expect the market to bounce the way we think about apple is that will it probably run into what people think will be another 5g cycle coming in the back half of this year probably because thats whats happened the last two years. Then will it probablycollapse just like its done many the last two years as you get into the beginning of the next year because people go, well, just another jeep what is what mike said back on the program in january talking about this no at the valuation its at, which is 23, 24 times earnings, which is higher than the market, not really growing its not a name im that interested in. Theres a lot of Semiconductor Named like quaul clcomm we own theyre gaining apple as a Chip Customer theyre going to benefit as their selling prices go up thats a name you want to buy. Momentum going to be putting chips into apple. Thats how were sort of playing apple through other names that were long and not apple dan nice, got to go for breaking news. Always appreciate you joining us just specifically talking names. We have breaking news here on this potential treatment for the coronavirus fda approving remdesivir for emergency use kayla has more details kayla. Sara, President Trump just making that announcement in the oval office where he is meeting with the ceo of gilead and just told the reporting pool he has approved the use of remdesivir for emergency use. A release that is just out from the food and Drug Administration says that remdesivir will receive this emergency use authorization for the duration of the covid19 pandemic, however long that lasts. Of course earlier this week, we learned that remdesivir accelerated recovery of patients who were take iing it during a trial run by the National Institutes of health certainly that was a president obamative development. This is an even more positive development to allow this drug to be used in emergency situations and get iting that f approval for this specific use case r sara not seeing much of a share price reaction in gilead, but i would say that this was widely anticipated. Especially after the positive results that kayla referenced this week and after dr. Fauci you know the foremost Infectious Disease specialist in the countryat the nih said it is a positive first step and will become a standard of care. Now the question is can they produce enough of it clearly the keon squawk box this morning says that they can i think 100,000 or so doses but are we going to need more of that come fall and how can they really get this up and running so the only thing i bring back for all of the good news weve had on gilead this week in particular, the stock is essentially flat up maybe a percent week to date and clearly, it did run u up year to date, but just goes to speak to the point that all the good news were having and optimism we could have about what that means the treating people with the the ceo said theyre unclear how much profit gilead will make in the shortterm given they announced theyll be giving so many doses away for free. Yeah i think thats the take away from earnings its going to be costly for gilead to get this up and running and as public service, you know theyre not looking to profit off of that and that sort of hits the stock but look to the market and the hit we got in the month of april on these treatment headlines. The university of o chicago encouraging note on the gilead study then confirmation from the stud y at a national level. Scott gottlieb will be joining us later in the show take a quick break 12 minutes left in the session down 3 . Well be back in a couple of minutes. And. Lets get started. music fades in hey hi you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Cnbcs Senior Market commentator mike is here to break down the trading day welcome, keith lets start with the Broader Market fueled in part by worry that the white house could impose new r tariffs on china larry kudlow stressing that china should be held account bable for not doing enough to contain coronavirus and the pandemic and discuss whether additional tariff are in fact on the b table. It was really just a few months ago we signed a good phase one trade deal with china. Usdrs put out a report e recently which indicates that the chinese are cooperating and implementing so thats a very important piece. With respect to future tariff decisions and other measures, thats going to be up to the president. I dont know theres any rush u. Our efforts here are first of all to kopt to get this virus down he didnt say yes or no, keith. How much do you think thats playing into the move lower today . Quite a lot when you take a look at it and i think Market Participants are also exploring or trying to game out or put into their calculus what else could happen from a political standpoint and a financial standpoint i know theres been a lot of talk about the u. S. Just not paying on their obligations for chinas holdings but the other piece he said in that segment was the full faith and credit of o the United States is so i think we should take that off the table. I think the bigger concern is not just tariffs, ramping that up and squeezing the vice on china, but what are going to be the political ramifications. I think almost everybody that i talk to believes china should be held accountable on some level and whether that is simply we just trade ideas and variables we can put in place or political, thats the great unknown so i think thats scaring the market, too. Mike, clearly a big sell off day today. That said, we have got yields the ticking up tenyear is back up to 0. 63 and for the week as a whole, the dollar clearly weaker. Its flat today which has been more of a risk on yet equity is going the opposite direction i think for equities, theyre kind of contending with their own condition and issue issues mean iing a very big month i think wednesday we said it at the time, the market kind of overindulged on the good news headlines. Whether it was gilead, the fed, and also got stretched to the upside so i think this is a little bit of a pullback on that not really sure to be honest i hear what keith is saying, but i dont know that the china news aside from being an excuse was necessarily the key driver when you have amazon selling off on results and the regional banks are not down 5 because of u the possibility of action on china put it that way. I would add to that, the cruise lines, airlines, those are the double digit decliners today. Not necessarily a china story. Just spilling back. Those are the weak qulae, and the weak seumanutapots in t pandemic want to hit oil. Chevron beating expectations today but the oil giant announcing a 2 billion cut to capital spend iing and expectin operating costs to decrease by 1 billion the ceo, michael worth, joined cnbc this morning saying we could see a bottom in demand listen First Quarter you know we were on a bit of a downward trajectory through the quarter certainly accelerating as we went through the month of march. I think in april and may, were finding a bottom in demand demand for aviation use is off 75 to 80 everywhere you look. Some places even deeper than that gasoline demand, plus or minus 50 off. And diesel, about 25 off. Those numbers are relatively consistent in most regions around the world keith, big headline when chevron says were seeing a bottom in demand do you agree with that and if so, what do do from a market perspective . Buy a stock like chevron by an emp company . You buy oil . The emergency patch has been one of the things that i tended to stay away from for the last couple of years because its not shown any kind of improvement in many of the fundamentals we look at or the ability to rally along with the rest of the market. I would take what the chairman is saying about demand he would have access to more amounts of data than i would however knowing whats going on, i would be surprised if were going to see any kind of stoppage of a great more stoppage in supply what he had now. It costs a lot to shut in wells and if you look at some of the Oil Producers where they are on the depletion cur f in some of their reserves, it doesnt make sense to shut in also when you factor in weve still got 40 tankers sitting out in various oceans waiting to dump their product from saudi arabia on to the u. S. Market, thats going to be a bit of a problem in and im so convinced the demand picture is going to come back as fast as the Big Oil Majors want it to. We have to see how everything pays out with the economy reopening in the next few months Brian Moynihan echoed a similar tone to steve wirth there in terms of michael wirth, scexcuse me, the slight pick up. The worse has been Royal Dutch Shell because of they cut their difr dend in a way that some others didnt. Shells down about 12 for the week and for the First Time Since 1945 right i know they are one of the long standing dividend payers huge part of the footsie 100 accounted for almost a tenth i believe for dividends with bp. So big story there wow Airline Stocks sharply low today. Phil has the details this is all about investors now assessing how much u liquidity each of the airlines have in terms of how long will it last them theyll get through the second and third quarter. What happens in the fourth and beyond and thats why all of the Airline Stocks down anywhere between 6 and 11 today. Three specific Airline Stocks we want to mention. First of all, southwest joining the other Major Airlines in requiring face masks for passengers and crew members. That will be start ng the next week, week and a half. Theyll also change their boarding procedures. United, earnings came out yesterday. The call was today and when you listen to that call, it was very clear listening to the executives that they are going to be focusing on cost cuts. Thats going to be the key to whether or not they can avoid job cuts this year and finally, theres american corps out with a note today as they analyze the american Balance Sheet, theyve cut the cost down to 1. Back to you. Yeah, that was a shocking number phil, thank you. Mike, less than two minutes left of trade what are you u see ng the market internals today . Certainly weak. Look at the volumes on the new york stock exchange. Its been more than 90 downside all diaw its a good rinse the markets getting after a strong month then look at a week to date basis. The nasdaq 100 against the small cap russell 2000 theyre up around the same place but u just look at the huge bulge in small caps. Had a huge mean reversion run and it was almost unwound in a relative basis so clearly the kind of positioninging factors are moving quickly hard to avoid whip saw in that sense then the volatility picking up today as you would expect with the market down hasnt been able to get out of u this mid 30s area at least on a sustained basis. Weve got seconds left just off the lows but still the 660 points on the dow. We touched on 700 moments ago. That equated to 2. 7. Nasdaq down 3. 2 russell, the biggest decliner, down 3. 9 but Still Holding on to week to date lead as mike said although that lead has been erased somewhat. Week to date, the russell is higher by 2. 11 where as the other are just in the red now. For the week as a whole. As the bell rings, the s p 500 is down 2. 8 for the day all 11 sectors are lower levelled by energy, Consumer Discretionary and financials unwinding some of the catch up theyve played in the first half of the week. Down 2. 5 on the dow the close, sara that will take us lower on the week welcome, everyone. Take a look at how we closed up the session on wall street. Lower. Here are session lows. Down 617 points. Just off the down mark we were at 29 out of u 30 stocks closer lower. Walmart the only exception and we were lower on the week on the dow. Heres the s p 500 energy getting hit the hardest every group in the s p lost more than 1 . Consumer staples held up best. Nasdaq got hit harder than the rest 3. 2 amazon, a big story there. Big drop post earnings on the spending the small caps have been strong making a real catch up it tumbled today coming up this hour, well ask the president of sax fifth avenue about the retailers plans to reopen stores whether the coronavirus will change Consumer Habits over the longterm. Joining us to talk about the market today, keith still with us ceo of iq capital. First though to you, mike, on what we saw today and for the week and whether were starting to see a change in the dynamic of the market after april saw its best month for stocks since 1987 yeah certainly the strength in april it was pretty much in one direction and not surprising youd have a little give back right here whats significant is as weve rushed up to the post crash highs on wednesday, it was enough to just focus on any incremental bit o newof news tht said maybe stocks got overdone on the downside. Maybe we could have a sooner versus later opening that worked when you got yourself higher then those big tech stocks were pretty much bulletproof the whole way and theres a rethink of that. And at 2950 with the market stret stretched, i think thats what youre seeing. Especially with the sell the news a amazon reaction today down about 4 off the high not terribly significant just yet. After the 2018 low in december, you ran up similarly in a v fashion and then gave back about 4 so this isnt the size of a pullback, but i think you have to be on guard for the the idea that we could be in for a sloppy period of a shortterm Jeremy Siegel is able to join us now as well professor siegel, where do you stand on the key market leving and whether were going to be range bound or retest some of the recent highs and lows. Weve had a tremendous rebound to say the least and i, its certainly not usual to expect some retracement of that. I dont think the tariff talk helped probably a couple of hundred of those points off the dow is a little worry about those tariffs again. But i do not think were to get close to those march 23rd lows i just think im looking at the monetary data. I find it overwhelming we have increased ed the money supply in the last five weeks. More than we did during the entire year that followed the lehman bankruptcy in 2008. Such fast liquidity creation and i think that once this repressed demand, we cant do the things we want to do, but the liquidity comes back in, were going to have a very Strong Economy coming 2021 and inflation for the first time in decades. So the question is, has that already been factored in were coming off a huge month for stocks the best month since 1987 and now down only about 12 for the year so is all that good news in terms of liquidity and stimulus and hopely a return from demand from states reopening already in the market yeah, i think a lot of it is but a lot of people think just sort of wildly overvalued now and given the worst recession tins the gths great depression, how can we only be off 12 from highs. And i would say because of all that liquidity and i think that some of its going to be, once people go back to work, repressed demand comes back, and by the way, lets face it. This slowdown for good or bad favors the Big Companies over the little companies. Theyre gaining market share i think the market is not overvalued from longterm basis. And i think that bull market in bonds, 40 years, 1981, is going to be over this year half a percent is what we see at the ten year i dont think well certainly im not going to be living to see rate lower may eat my words there yes but how many times have you and everybody else said that this is first time that ive said that this is over and its because of the tremendous push not just of the Federal Reserve on its quantitative easing but actually putting money into the bank account. 17 more transaction out in five weeks. Go back in the data and tell me when we ever had that again. Keith, where do you stand i think thats extraordinary. Keith, where do you stand on that and does it increase the argument towards there is no alternative in the medium term once if we can get through the next couple of months of volatility excuse me, professor, keith, to you. Yeah, thanks, wilf. Yeah, i think that is part of what everybody factors in. Is that you heard me say it a long time in a world of secular down rates and now were anchored to zero, and listen, if you go back and draw a chart on the tenyear, its been declining since the late 80s and now were at that zero point. In a world where Capital Needs to go or it gets rewarded, ive said it before, u. S. Equities is going to be there and youve got the fed and other monetary authorities pulling out their big bazooka and firing it every day and increasing the amount of am measuri a ammo theyre firing. Take a look at what boeing did with their bond offering 25 billion. That was up substantially from a 10 10 billion offering because investors need to have a yield theyre not going to get that in most b bond markets so therefore, theyre going to run to the equities market and hope for the appreciation thats supporting dr. Siegels argument is that money will continue to flow into equities and youll probably see that price appreciation continue on not completely, but in fits and starts and certainly the market is a forward looking instrument. They try to get ahead of it for what they see, but so some of what people think is priced into the market but i do think once we clear out a lot of the noise that were dealing with, with china, with covid19, some of the other political issues that we have in our own country, eck wiities will kopt to rally now this week, saw earnings from the majority of the faang names. Alphabet, facebook and apple finishing the week in green, but amazon, the notable decliner, down a little bit for the week as a whole got that number for you in just a moment down 5 . Hard to read from here Ariel Investments ceo john rogers weighed in on this earlier today on cnbc. When ever you see a handful of names dominate the s p the way the faang stocks have, its usually a sign that the markets are going to change dra m dramatically and what works in this coming out of this environment we think will be entirely different than what worked in the last environment. Professor, wanted to come to you on this. Can you weigh on the valuation of these types of stocks versus the rest of the market at the moment or are we still in a position where pe multiples arent really the driving factor compared to technicals well i think this years pe ratios really dont mean anything honestly you know given the check i think youve got to look towards 2021 technology, how much more do we all have been relying on technology technology, health care. You know weve seen development in therapeutics. This is whats going to really bring that confidence back those sectors are going to do very well. However at the same time and i think the fed is just going to keep that zero rate and were our people get income, i think theres going to be a play from those dividend bonds were going to take a dividend hit. 15, 10, 15, 20 but were going to come roaring back in 2021, 2022 and its going to be about the only place youre going to get reasonable income. I think the Technology Stocks and those income producing stocks may do very, very well into the next year or two. You said youre expecting inflation. I reported that in stores, were starting to see Food Products xwo up in prices like eggs and meat supply and demand there and maybe an asset prices, but you know with 30 Million People and counting unemployed, wages falling off a cliff, i think more economists are predicting deflati deflation. Instead of inflation at the moment absolutely. This year, im saying next year. Next year, with we get Effective Therapeutics and or a vaccine and come back and all this repressed demand and theres money in those bank accounts, thats when i see it i see it towards the second part of 2021. 2022 2023, 3, 4 inflation. We havent seen that for decades. Not this year. Definitely depolice station this year as long as demand is going to be restricted as it will with even the social distancing, but im talking about into the medium future towards next year, year after and in 2023. And see for the first time inflation that im not seeing for decades. Keith, your goal. Well, if you really, if you follow dr. Siegels view, that were going to have great inflation in 2021, 22 and 23 then of course you would buy gold thats the old adage if you expect more than 15 inflation, then you buy gold not sure if i agree. While it is true u that we will b probably get everybody back to work, at least thats what we hope, im not quinconvinced that from the recent events, people are going to go out and wildly spend money like they did before this pandemic. What this has shown is that you have to have some dry powder in your bank account. Im not convinced its going to come back like a lot of people are hoping including myself i dare say that once people get back to work and start getting a check again, theyre going to start saving money which is going to tamp down the actual demand bev seweve seen thank you both for joining us thank you my pleasure still to come, well ask dr. Scott gottlieb about whether states are putting citizens at risk by oping eireenthr economies before more coronavirus testing becomes available. Were back in 90 seconds hybrid clouds things can get a bit cloudy for you. But now, theres the Dell Technologies cloud, powered by vmware. A single hub for a consistent operating experience across all your clouds. That should clear things up. A new study is break iing dn a new and the health consequencens that could come with it. Well that study comes from the ben wharton budget model and trying to justify the trade off. The National Numbers are pretty dramatic if we stay on lockdown and stay socially distant, the economy would lose 18. 6 million jobs in may and june alone however if the economy reopens, then we could actually see a creation of jobs over those same two months by the tune of 4 million. Now u that number however would come with a dramatic increase in the number of of deaths. Under the restriction, the death toll is projected to hit 117,000 through the end of june, however if we go back to normal tomorrow, that number would climb dramatically to 950,000. Now this calculus is going to look very different by state so in places where you have seen the virus start to flatten, the number of cases start to flatten out like l. Ouisiana, louisiana would see an estimated 78 increase in the number deaths if it were to completely reopen but a place like delaware where cases are just starting to increase, death toll would increase by 370 according to this model so some very tough math for officials across the country. Back to you. Yeah, stark numbers depressing thank you. President trump saying just moments ago that the fda has approved gileads drug, remdesivir, for emergency use for coronavirus. Joining us now is former fda commissioner, Scott Gottlieb, a cnbc contributor, on the boards of pfizer and alumina. Explain the significance of this fda move today and what it does and does not allow us to do here in the fight against covid19. Its a very positive development. The drug is active against the disease and its going to help patients its probably indicated if you use it early in the course of disea disease, its probably more effective. Particularly for patients who are at higher risk of an adverse outcome. One of the interesting things about the emergency use authorization that was granted today is that the fdas allowing the drug to be dosed for five days instead of ten so as studied in the trial in ten days burt theyre allowing it to be used for five days so thats going to allow them to double the supply the only place the eua requires a full tenday course is for intubated patients so patients who have already been put on a ventilator right now, they specify the drugs indicated for patients who have symptoms of covid that causes them to have low oxygen or requires sup mental oxygen so it can be used in moderate patients as well as severe so i think this is a pretty broad indication a pretty broad authorization and gives max mall flexible thety to physicians so its a very good development. It is a good development. And there have been a number of them lately when it comes to other treatments potentially and some Clinical Trials weve been keeping an eye on. Vaccine momentum testing momentum and the numbers continue to improve in this country for hospitalizations deaths icu visits whats your level of optimism would you say heading out at the end of this week versus where you were a few weeks ago well i think we need to be cautious what were seeing nationally if you look at the National Trends without the new york data, so qulou exclude new york, what were seeing is cases growing and were seeing hospitalizations increase. I just put out on twitter the data on hospitalizations hospitalizations are going up. So i think were seeing an expanding epidemic around many parts of the country at best, were seeing it plateau and its going to be some time before f we see sustained declines in new cases. Theres 25 states in the country that were seeing new cases each day so the case counts are growing each day so i think ths a real challenge and an indication that the mitigation probably isnt working as well as we opened it would. Were not seeing the kinds of sharp declines we would have hoped. Once you exclude california, th Pacific Northwest and the tristate region, the its a micked bag clearly god news on treatments in gilead and remdesivir in particular i wanted to ask your latest thoughts on possible vaccines. And in particular, the news out of the university of oxford this week under professor bell where he spoke of potentially having a vaccine that could be ready for a large portion of the u. K. Population by september. Which seems a lot faster than a lot of the conversation weve had here what do you make of that i think the Technology Story is very encouraging and theres a risk that even with the mitigation steps that we took, we get persistent infection, never get below 20, 30,000 cases a day all through the sum rer and never really get rid f of this, but coming back in the fall, i think were going to have a much better tool box. Very robust screening in place so well be able to detect virus easier well have remdesivir b available. Hopefully one more antibody based drug and i think were going to have vaccines in sufficient doses that we can deploy them in the setting of outbreaks still exper mentally so theyll be under protocols but well be able to use them in cities where theres outbreaks to kind of fence it in and use them both for therapeutic purposes as well as continuing to study them. The oxford vaccine looks promising. Theyve partnered with astrazeneca, but theres now a number of large Bio Pharmaceutical Companies in the vaccine race with promising looking products pfizer, the company that i work with, merck is in this j j j. Sanofi as well as a handful of Smaller Companies like moderna which partnered with lanza which has the capps aty to produce a vaccine at scale so we could be coming back a in the fall and have rack seens from multiple manufactures in the millions of doses and maybe the tens of millions of doses. Dr. Gottlieb, clearly good news on remdesivir just back to the treatment side of things. Its an iv drug though and its used on people that are hospitalized where are we on getting a pill that every day people can use, really early on to prevent even having to go to a hospital right i think were a long away from that this is a first generation antiviral. I think its going to take a second or third antiviral before we can form late something into a pill like tamiflu. Even the antibody baseded drugs are going to be an infusion. The good news about the antibody based trugs and i think one or more can be successful and will be available by the fall is that you can use it as a bridge to a vaccine. So it would most likely be a monthly injek. So you would deploy it in Front Line Health Care workers maybe people in Nursing Homes immuno compromised if we get all these technologies on the market. Even if we dont gedry o the virus, i think theres a real risk were going to have persistent infection and the mitigation is going to slow the rate of spread but not get rid of the infection all together, but even with persistent infection, if we have the right technology, we can reduce the risk of covid. Support our hospitals. Get our Health Care System in a proper place to deal with this and use these technologies, these drugs, to actually reduce death and mitt igate the diseas and make it a less severe disease in a greater number of patients thats the hope. Thats the hope of what this will deliver dr. Gottlieb, weve seen clashes, the tone of confrontation with china elevate again over the last couple of days do you think its pretty much now decided that manufacturing of drugs for u. S. Citizens longterm will shift meaningfully back to the u. S. Away from china . I think were going to look at Public Health irns much differently in the future and theyre going to be Strategic Issues were going to look at Public Health through the lens of Strategic Security and were going to want to make sure we have manufacturing capacity here in the u. S. Things that are critical certainly the vaccines that are being developed and antibody based drugs were looking to have domestic capacity for those drugs recognizing if were depending upon foreign pfacile theties, they may not let go in 2009 with h1n1, we had vaccine that was being manufacture ued in a foreign country for the United States. It was under contract by the United States and that country didnt allow the supply to be shipped back to the United States until they satisfied their local needs so in pandemic situation when countries are taking a Public Health crisis, theyre going to take care of their citizens so we have to depend upon domestic manufacturing for these products and also the point as to why we need to win the vaccine race. I was looking at the deaths per capita because i think this gets right to the heart of the reopening debate with states all going in Different Directions if you look at states like ohio and california, which you know by all accounts accordi indocto did i right. They closed down early call your attention. Those numbers, nine in ohio. Five in california versus states like texas and florida, which waited late, kept places open like the beaches, actually have lower death rates at three for texas and six for florida so how do you explain that theres variability in the death rates from different part of the country its hard to explain there probably is some undetected deaths going on probably not capturing all the deaths and it is the case in places you had real significant hot spots you saw the death rate start to go up and that probably was a sign that the Health Care Systems were getting pressed you look at states like ohio they see a sustained reduchovny in new cases louisiana seeing that. South dakota seeing that idaho seeing it. So there are parts of the country. About seven states where you see sustained reductions in new cases. So there are part of the country that certainly look good the Pacific Northwest like i said in the tristate area, but when you look outside those regions and states, its a really mixed bag and overall, the trends are in the direction of expanding cases and expanding hospitalizations once you take out new york city from those totals something well keep an eye on thank you for joining us thanks a lot. Appreciate it till ahead, we will ask the president of sax fifth avenue about the measures hes planning to keep shoppers safe when stores do reopen and you can always watch or listen to us live on the go on the cnbc app welbeig bk. L rhtac save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 12 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Welcome back stocks finishing the day and week lower mike, what do you think . Massive issue wans of corporate debt if you look at the Investment Grade, march and april, pretty much after the charts 300 billion in march alone that that means is that the credit market is open. Credit companies are taking advantage. Thats good. About half the debt thats not necessarily longterm bullish because that money is going to get as opposed to invested or buying back stock. Another rinkwrinkle is in the hh yield market its from deutsche bank. Its at multiyear high why . So many are essentially, they lose and come down into the junk bond universe, the net rating is higher what that means is that the spreads of high yield debt, the conditions of high yield debt might look better than they would, but that doesnt mean the companies are doing bet erat the its a different mix of issuers in there theres a will the of wrinkles going on i think were bracing for a default coming along the way in some sfri stris, but right now, at least the market remains open to bridge a lot of companies through this space thank you for that. Mike, lets ask about another strategy fr some of the other folks in the Corporate Bond market theyre see iing a big disconnet between how some Company Bonds are performing versus their stoc stocks i think one area is the airlines st some stock trading 40 cents on the dollar where the eck quitie have seen strong rebounds and theyre trading at Million Dollar market caps whether that offers some opportunity either for the bond market or the stocks to sort of adjust somewhere in between. Have you heard about that . Sure, it can observe things like that. Often what happens is if you have a highly leveraged company where the bonds are under some pressure and disstretres, it tr on an option. Even a bailout so there are a lot of pieces that you have to keep track the other thing just mentioning compared to europe and the u. S. Apart from the Biggest Companies in europe, you still have a much less developed bond market chblt it was one of the issues after the last crisis that dollar for dollar qe didnt lead to the same level of blod money supply expansion because of a less developed bond market and the same applies again this time well have to see if the more specific bank lending measures the ecbs embracing shake out and work in the same way this monday issuance is happening in the u. S. Breaking news on a cannabis stock. That stock is Canopy Growth a Canadian Based Company up about 5 in the aftermarket session on 175,000 shares of volume this after consolation brands which owns a 5 stake in canopy has now exercised in essence options to take its ownership stake in canopy up to close to 39 . They have options in their bank that would get them up to 55 if they chose to exercise those options. Still though, this investment there in Canopy Growth is is helping to drive those shares higher in the aftermarket session. Well continue to watch this, but thats the big news and well send things back to you. Still ahead, retailers may be planning to reopen their stores but up u next, well ask the president of sax fifth avenue if the shoppers wont show up because of lingering coronavirus fears. Back in a few minutes. Our members understand social distancing. Being prepared and overcoming challenges. Usaa has been standing with them for nearly a hundred years. And well be here to serve you for a hundred more. As states reopen, stom retailers are opening their Stores Including sax fifth avenue a the luxury retailer opening their houston and San Antonio Stores today and the experience may be a little different than what customers are used to nojoining us now is mark metric, the president of sax fifth avenue welcome, mark. So what is it like to shop in one of your stores during this pandemic well, its going to be some of the same and a lot different and i think what were doing right now, when you go back to march 17th when we closed our new york city flag ship, the team and i immediately broke this into three chapters which is is first to know and the present and then reentry, which is where we are today then the next normal. We dont know when the new normal is going to settle and im just really excited to be talk iing about Opening Stores again as we did today in tex how did you make that decision as to whether even with changes and safety precaution us taken to reopen . What guided you as to whether that should be a decision you take and whether its safe we put sbit a rubrik. It starts with the government and the guidelines were getting from them. Safety is always a concern both our internal and eck ternl customers. We have to be ready. You know were a luxury retailer we werent buying things like Hand Sanitizer and facial coverings back in the day so we have to make sure we have those and were ready to go then the community. How do they feel and are they ready. Its a mix eed bag of thoughts t they go in and thats how we make our decisions did people come through the stores today yes, they did we saw some great energy and you know people were excited we actually opened curb side a few days ago an it was an amazing response amazing what people were buy in and gave us a lot of excitement about whats to come and thats what we need right now. We need some excitement and positivity what were people buying i know its only one day so far, but did you expect there to be significant shifts in how you lay out the store and not just the immediate term but the year ahead if consumers have been feeling the pinch of the economic downturn . Look i think we have to be you know, we have to do what we have to do the customers our boss. Theyre going to vote with their dollar we have to ebb and flow. Thats why we call it the next normal, not the new normal but right now, we were very happy with the response we saw around luxury. Weve been selling online. That was more focused on beauty and more casual, but as we opened up, it was fashion and luxury so thats good and promising mark, as you know, the narrative around Department Stores in this country has gone from bad the to worse as this pandemic has hit how do you think u about what your industry is going to look like after that and how many will be left to survive . I would tell you its been a problem for me for a while i think theres too broad a brubb painted. Theres a lot of us that do things differently there are several players that came into this crisis. Candidly distressed. Whether the it was a flawed strategy or the Balance Sheet. What im focused on is sax and what i believe is our strategy is right on. We were headed into the destruction of personalization ease okay, working with the customer in whole ecosystem of sax. All channel. Then from a Balance Sheet perspective. We think about sax as an operating business but we currently are zero debt. When you think about it, were were owned by i like to say it like this. Unlike our peers who are retailers, were owned by Hudsons Bay Company which is in my opinion, a real estate company, that owns some retail they own about 8 billion in real estate. I would peg the equity around 5 billion just in the real estate portfolio. So i feel good between row debt and just our adl with that backstop behind us, sax is positioned welcoming in and will be positioned welcoming out. Some are not positioned like that Niemann Marcus is expected to file for bankruptcy. Your parent company, huddens bay, is often mentioneded as a potential buyer. Could you see that kind of future where niemann and bergdrk orf and sax are all under one company . I think for 2 years, people have been say iing that, there so much around that concept. Sure, of course, but right now, i have to tell you, i am focused on the customers, our associates and giving them the best experience we can and the safest experience we can. Good luck with the reopening. The ceo of sax fifth avenue. Thank you. Thank you so much still ahead, dating during the coronavirus. Well ask the founder and ceo of bumble about the spike in messages and video chatting in her companys platform right now. Time for a coronavirus news update good afternoon, everyone. Lets start in Southern California where more than 1 thourk protestors are demand in state officials reopen the beaches ch organizers say they want the governor to reopen the state completely police have brought in mounted officers to control the dense crowd and as we can see, many are not wearing face masks according to thu u research from the university of minnesota, the pandemic could last up to two years the study says that he should prepare for a spike in infeks later this career that could be more severe than the current one and in new york, the standing ovation for the last covid patient to leave the temporary hospital at the jav it its Center Nearly 1100 patients were treated there. Happy to see him go home for more kovrnl, head to our website, cnbc. Com. Sara, over to you. Love those celebrations of the discharges thank you. Up next, whos profiting right now amid the Global Crisis there are a handful of billionaires still winning in a biwa g y. Former investment banker, bl cohen, joins us to discuss after the break. Some wall street heavy weights seeing big wins. William cohen highlighting those winners and losers in the latest oped for the New York Times titles whos profiting from the Coronavirus Crisis among the big winners, bill ackm ackman bill, thanks for joining us, so whats the main take away in terms of the winners and losers more broadly is it just the people who manage to call the market direction right or is it more complicated than that . I think it all has to do with the fed and the feds unbelievable action that it took on march 23rd then again on april 9th. Bill ackman who made 2. 6 billion in three weeks, he basically, he was playing the fed. He was essentially bet iting th the fed would do Something Like it did obviously he didnt know what it would do, but he felt that Something Like what the did fed did which was flood the zone, much more quickly than they did in 2008 you know, and so he was one big winner people who bet correctly we had a huge number of Overleveraged Companies in this country, they bet those companies would have trouble. They bet correctly unfortunately, the fed took action and they got their positions swamped. So those people who played the fed were bet the big winners those who bet the economy and overr overleveraged have lost so far bill, you know youre a big thinker and you start your column with the invisible killer is testing global capitalism as never before what ultimately do you think is going to be the product of all of this . These examples that youre describing . The way the relief packages were crafted . The way the market rs behaving where does this leave us all obviously sara, if i knew that i probably wouldnt be talk ing to you at quarter of 5 00 on a friday afternoon id be on an island somewhere. What are you saying what the fed did in 2008 and what the fed did again 12 years later really begins require us to think about what kind of have we become. Weve become an economy that cant survive a serious downdraft except for the fed stepping in and rescuing ill use this hardly free market capitalism this is some sorlt of sort of rescue capitalism that the fed is near twice now. Lets stipulate that the fed was created in 1913 to be a lend er of last resort a role that used to be played by jpmorgan, the man. That man did not live forever and the fed replaced that man. So the fed is doing what its supposed to do as the lender of last resort but between 2008 and what happened now clear without the fed playing this hugely important role, there would be carnage beyond anything were already experiencing, which by the way, is is bad enough. So do you think the fed is going to end up taking blame for the inequality were going to face i think the fed deserved its share of blame for keeping quantitative easing going too long create iing what i call the soro morphine drip where everybody is giddy and taking all kind of risk that werent appropriate. One of my favorite charts is the high yield bond index chart. From mid february, high yield bonds were yielding 5 because you know investors were just taking all these kinds of crazy risks think iing that everythin was priced for perfection. Then this begins to happen the high yield bond index shoots up to 11. 5 . Beginning to reflect the kind of risks and rewards that investors should receive risks theyre taking and now its sempb and change reflecting the flooding of the market this the feds created. So the fed has created this hazard its doing what it has to do, but you know you have to ask yourself what have we become the fed has created this hazard, doing what it has to do, you have to ask yourself what have we become. What is capitalism in the early 21st century become because twice now weve had to be rescued by the fed, and thats not the same as free market capitalism dont anybody think that it is its very very different, and were not quite sure what the ramifications of that are. Well, this segment needs many more hours weve got to leave it there for times sake. Bill cohan, thanks for joining us, quarter to five on a friday. We appreciate it. Dating while distancing, the social landscape completely changed by the coronavirus were going to discuss with the ceo of bumble after the break. 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Go to flexshares. Com for a prospectus containing this information. Read it carefully. For a prospectus containing this information. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Welcome back, people stuck at home might be feeling cooped up and some are turning to dating apps, which have seen a bump in downloads. Heres what dr. Fauci said on the snapchat show good luck america, whether its healthy to meet up with a potential match you know, everybody has their own tolerance for risk. It depends on the level of interaction, if youre looking for a friend in a room, put a mask on and chat a bit if you want to go a little bit more intimate. Thats your choice regarding the risk joining us now, is bumble founder and ceo, whitney willford, very good afternoon to you, whitney, thank you for joining us. Thanks for having me. You have made some changes to your app for this kind of lock down era what changes are there, and what has the engagement been like yes, so we are the only major player that offers video in apps, so we have introduced a badge that insinuates you want to connect virtually, and have a first date or a second date, right from the comfort of your home through the app, and weve actually seen really incredible conversion to this we have seen a spike of 60 right when covid19 began and we have seen that remain very steady. I mean, virtual dating sounds really cool and innovative, whitney, how do you expect this whole world, your industry, and our dating apps to change when the social distancing measures are relaxed or at least when the economy starts to reopen what is it going to be like . Its important to remember that we have been in the virtual dating space precovid19. This is what our industry is about, this is what our company facilitates. We nmake virtual introductions theres going to be an opportunity that comes from virtual dating youll get to know each other virtually before you hop into a coffee shop or a bar together. Spend a little bit more time getting to know each other this adds an extra level of safety and security and so leaning into these virtual features and understanding who youre about to meet in real life, this time frame gives you that opportunity and, you know, i think its very critical to stay in this space because we are very alienated and isolated in this time, and being able to keep the globe a little bit more connected while they have to remain physically distance is everything were thankful for roi right now. Whitney, we debate every day what the likely bounce back will be for places like restaurants and bars, do you think it might be weaker than some expect based on more dating virtually you know, its interesting. I have always said that our biggest competitor is the restaurants and the bars, and its fascinating to see people flock to Digital Opportunities i certainly hope for the sake of the Worlds Health and the well being that we can get back to business as soon as possible, but we fundamentally believe that digital dating is not going anywhere this serves a real, you know, valuable place in peoples lives, whether its love or friendship or business, we offer business connections, we offer friendship and so i really encourage everybody right now to lean into these digital connections while we all remain safe at home. Whitney, thank you so much for joining us much appreciated. Thank you so much we have some breaking news in auto sales. Phil with the numbers. Auto data has crunched the numbers. The sales rate for the month of april 8. 6 million vehicles, thats down 48 compared to april of last year, when it was 16. 5 million guys, i dont think during the great recession, financial crisis, back in 08, i dont think it got below 9 million were checking to see the last time it was as low as it was in april. Were out of time on closing bell have a great weekend melissa lee over to you. Fast money starts now, coming up on fast, the big battle over the banks, the chart master says its time to sell. Thats not what you heard on this very show, just 24 hours ago. Who is getting is right. Well detectitake that. What elon musk tweeted that sent shares skidding. And big coin is about to break out. How he is positioning himself for the crypto comeback. We start with todays market