Look at the s p 500 at 2978, a 55point gain and there is the nasdaq the outperformer yet again, almost 2. 25 , 200 points, 9387 the nasdaq, not all that far away from last februarys highs, which our headliner says this hour is going to happen this year and not just the nasdaq so lets welcome in fund strats tom lee. He is joining us via skype tom, welcome back. Nice to see you again. Thanks for having me. Big call. How are we going to get there this year, tom you say 3450 is happening . Yes, and i think what really drives our view is that companies in the midst of the shutdown arent standing still you know, theyre reengineering their operations, learning how to be digital, run with fewer employees and less real estate so in 2021, as we exit this pandemic, theyre going to generate higher earnings on a lower level of sales and that means implied better pes. And thats why we get into july, stocks will start discounting that and were looking for new high hi highs. Youre looking for a vshape in the stock market, which has pretty much already happened but the more controversial side of the call is a v bounce in earnings, as well. And for earnings to have a v, you need the economy to have a v. And that seems a little unlikely, that people are going to be cautious no matter what is reopened and when. Weve heard that routinely from ceos Tilman Fertitta was on our network the other day, saying, its great to be reopened, but if nobody shows up, you have a problem, no matter hat yes, thats right if theres fear and consumers stay in, theyre only going to buy things that they need at home but we have a couple of data points to show that this may not be the case. You know, in china, auto sales are actually recovered to precrisis highs in the u. S. , i think some companies, especially for consumer products, have actually reported that in may, their year over year comps might even be positive i dont know if thats pentup demand, but i think were going to see a pretty strong recovery in the second half for a lot of the things that didnt happen in terms of spending. So i think well be surprised to the upside so youre making a very big call on a sector, as well. And i want to wait to get to that i want to open it up to the Investment Committee, because i really want to have the discussion and debate, whether they think that this is a realistic place that investors can expect the stock market to go joe terranova, the first crack at tom lee today, to his call of new highs this year. So tom, i guess the concern that i have with your assessment that the market can make these new highs would be that the contribution from fiscal and Monetary Policymakers has been so aggressive and so much more of a catalyst in this recovery that if we see the s p move higher, they step back and they say, were okay we dont need more fiscal support. We dont need more monetary liquidity. In that scenario, do you struggle, then, with the s p making that new high because i think you would agree, thats been so critical in the equation as weve seen the significant appreciation yeah. I mean, thats a great the problem is the s p index is distorting whats really happening with equities. You know, these sort of secular growth names like f. A. A. N. G. And the stayathome are bouncing against new highs. But a lot of the market, close to 20 , are still below a 50 retracement. So a lot of what were seeing and the reason we see new highs is that these leaders stay where they are, but then these beaten up stocks bounce back. Thats why i think policy makers can appreciate the fact that making new highs isnt really about stocks going past to prefebruary lows, its just a lot of beaten up stocks coming back from the basement joe, ill push back a little bit myself i mean, theres no indication whatsoever that the fed is going to all of a sudden pull back once the economy looks like its recovering jay powell himself, the fed chair the other day, used the words well after, when talking about how long policy measures like the ones theyve taken are going to be in place, even as the economy gets somewhat back on its feet. That these policies arent going away anytime soon. Theres no way theres no way that theyre going to risk that. And im talking about even after this economy gets going. I agree with that, absolutely no way they pull back. What im saying is we need more. We need more, scott. Right now, the fiscal support measures 13 of gdp. You probably have to take that up to 17 to 18 of gdp toms talking about a lot of components of the economy right now that i would characterize as laggards recovering. Well, for those laggards to continue recovering, youre going to need more fiscal support. Whether its for the travel industry, the airlines, entertainment, so be it and monetary liquidity, were going to need more in that regard the Municipal Bond market is still not trading in the capacity that it should. No, im not saying that theyre pulling back im saying theyre pulling back from giving us even more and the markets are going to need more, both fiscally and monetarily and i think that the fed isnt looking at the stock market and making that decision. Powells looking at the real economy. If he was looking at the stock market, he wouldnt have used the language that hes making that hes saying now scott, i agree with that. But what is rallying right now, the laggards, that i would call the covid contagion stocks, they need economic support. Whether its from fiscal or Monetary Policy makers, they need economic support. For them to continue moving higher carrie, firestone this big call from tom lee today. You think its likely . What would you tell your investors . Well, weve had the opportunity to talk to investors over the last few weeks and we have some new investors who have said, ive had cash on the sidelines, its not been the right place to be, admitting that, and we say, we understand that and perhaps well put a third of it to work now. Its hard to say you put it all to work, because weve gone up 33 . I think its very important to acknowledge that the market has had a different timeline, a very different timeline than, for example, dr. Anthony fauci he was trying to save lives and stop the spread of the virus and not overwhelm the Health Care System to some extent, we can say were opening up, that was successful. But the market was looking at the stimulus, the bailout, and what would happen after we hit the surge. The market is saying, and i think theres some reason to believe, that people wont stay inside 9 11, the survey said was afraid to fly, were absolutely not going to fly after hurricane sandy, nobody wanted to own real estate in new york when facebook had its scandal, nobody was going to trust facebook or use facebook and we know what happened. People wait sometimes, often not very long, and then they go back to the habits that they derived some satisfaction from so the market is betting that people will go back. And the market, again, is not just one market. If you look at the companies that have been doing well, whether its amazon, facebook, payp paypal, thermo fisher, for example, a number of the health care companies, s p global we have a number of names that are at or near alltime highs. And thats because theyve been able to survive and exist well in a very distressed environment. And the market has rewarded them so i can imagine that the market is taking some comfort in seeing the earnings better than they would have expected, sales better, and theyre looking forward to whats going to come when people really begin to start to come out and spend some money, which the market seems to think that that will happen and it probably will happen. Farmer jim, we come to you, my friend. Where are you today on your levels of cash, and how are you thinking about the market here youve got a guy on the show today thats making a very big call youre sitting on a fair amount of cash, not a pile of it, but, you know, a fair amount, relatively speaking. I feel very comfortable with that cash. It was 13 last week, but right now were at 12 , because, remember, it was 13 last week, but the other 87 has appreciated. And it keeps appreciating. So i dont want to give the wrong impression im really enjoying this rally i also look through the valley, though, as tom lee is, and i like his provocative call, but i need to push back in this way. Their margins have collapse because of what theyre having to pay their employees and even in other sectors, youre going to see revenue thats going to be stunted for a while by social distancing whether thats travel and leisure, you know, restaurants commercial real estate rents are probably going to be under pressure, as more people work from home. So to tom, i would ask, hey, look, you know, this is anecdotal evidence, but theres a lot to the anecdotal evidence that would say, earnings are going to be under pressure for a little while here. Tom, how do you answer that fair points. Fair points. Hes not the only one who would say that yeah, s p is not the economy. It only employs 25 of the entire private labor force 20 of the s ps cost is labor and close to 15 is real estate related. So 35 of the cost of the s p today are costs that can be reengineered and of the great financial crisis, 5 of the 11 sectors when to alltime earnings in revenues with less revenues it was 13 , even tech was like 7 the s p has shown that in every recession crisis, they cut costs relentlessly they get back to peak earnings much faster. And right now, the s p is making no money i think s p earnings this year will be 50 at best, less than half of consensus. I know theyre going to be ugly we know that jon najarian, right, Jim Lebenthal is talking about this valley, right . Its all pant what you see on the other side of the valley, right . Tom lee sees a rainbow Jim Lebenthal is worried about nor storm clouds building. What do you see . Well, jim just being cautious hes not worried hes not saying theyre out there. Hes saying, what if that storm comes across the pond or across the lake, scott . Thank you, jon. Thank you. Youre very welcome, jim. I think what tom is saying is spoton, scott i was down in indiana this week. They opened it up monday a week ago. Most virtually all of the restaurants, bars, Shopping Centers had people in them most were keeping their respectful distances very few actually had the masks on, because theyre not required, like they are here in chicago. But i think, scott, when you have people that have been basically shut in for this many months, just like mike wilson said yesterday, the reason tom is going to be so right here is that people will get out and they will rage i think Ricky Sandler was exactly right that this is going to be the raging 20s coming out of this, because people want to be out and so instead of spending on travel, theyre going to be spend ing spending on services, on goods and so forth i think that is basically what were seeing everywhere, where people are coming outside, scott so will that drive markets you bet it will. Theres all of this pentup demand yes, weve been spending at target and walmart and of course amazon, but wait until people get out of their homes, scott, and start spending in these other spots. Unfortunately, we all know, theres a lot of Small Businesses and some very Large Business businesses like jcpenney that will be going out of business and not coming back. Now, jcpenney may get that bailout, not for the brand, but might have amazon stepping into that void. A lot of that will be happening right now and a lot of that is exactly what you would expect in this kind of a reemergence by the consumer if thats the case, you agree with tom lee, well hit new highs this year. Is that what youre saying yes, sir, that is what im saying and i said weeks ago that we would not get back down there and retest that bottom after we saw what we saw. When we saw the second wave of funding, both by the fed, as well as congress, scott. I think those, as well as us being trapped in our homes and now finally being released, that is going to be what really drives us. So, tom lee, i mentioned this big sector call you have, bear with me one second i want to get to tom on this sector call. You think theres something really significant going on in energy, tom. Which has obviously come a long way off the bottom but where does it go from here and why . I know it sounds strange, but weve been mystified Energy Stocks bottomed five days before the s p bottomed, so march 18 pth, and since then ha led the s p. So theyve become a new stealth leader it comes at a time when it looks like oil made a really significant low from negative 48, plus 80 move in less than a month and it looks like a 12year for stocks is ending and if thats right, energy will become a new leader in this bul demand may be explaining it. Airplane and passenger traffic is starting to pick up as states unloc unlock i hear you, but some of me feels like were cherry picking any bit of information that seems positive and taking this tremendous leap that just because things are reopened, means that theyll be using docs words, raging. Just because restaurants are reopening, that theyre all of a sudden going to be packed. I dont know how you make such a tremendous leap. There are 30 Million People unemployed in this country 30 Million People unemployed in this country so how is the economy going to snap back and were going to find this rainbow, tom lee, at the end of this valley yeah, its a scott, this is a its a global tragedy. I cant believe that this is how many people are out of work. If someone said, this is a recession and we put this Many Americans out of rocker, its really its horrifying. But what we have to keep in mind is the income effect is a lot smaller than the employment effect right now, taken the april labor report, the cumulative effect on labor income is less than 5 so unemployment is distorting the income hit to the economy. I think Energy Stocks arent going to go back to the 2008 highs anytime soon, but if they retrace 50 of that loss, youre talking about a sector that could double in price. Thats even triple. Its big opportunities in a beaten down sector and there is a lot of firepower, by the way i know you guys all talk about firepower, but keep in mind, money market funds is public capital. Its 5 trillion right now thats 25 of gdp. And private equity is sitting on 2 trillion its 7 trillion of private capital. Thats bigger than what the white house and the fed are putting to work. Theres a lot of private money that when theyre confident can be put to work as well, within gdp and financial markets. Thats why there isnt, you know, there isnt a lot of firepower lost theres just tons sitting there. So, joe, this call about energy, okay, tom says that the bottom of energy on march 18th of this year, marks the end of the 12year bear market for Energy Stocks, which started in june of 2008 do you want to take that on . I dont have confidence that that is the scenario and the reason for that is follows. As marc lasry would tell you, the last experience of oil below 35 was in 2016. And with that experience, private equity and to a lesser extent the Banking Community stepped in and they offered rescue financing, which has a fiveyear cliff. So in the second half of 2021, you are going to have an avalanche of Debt Maturity for the Energy Sector that is going to have to be dealt with in a refinancing capacity and until we get past that point, i cannot suggest to anyone to assume the risk in believing that the bottom is in place for energy equities. Does someone want to take toms side in this and back him up yeah, i carrie, you go first. You go first the reason that i would take his side is because as tom well knows, the s p weighting for energy is under 3 or maybe its now back to 3 it used to be 12 . So Energy Stocks have lost so much value that the bounce from here can be dramatic and its still a very small sector to the s p. So it really doesnt take a lot to move the needle its not as if were talking about an Industry GroupLike Health Care and say, oh, its underperformed to get it going, it takes massive amounts of buying this does not take massive amounts of buying. And thats why i think that it can happen not just simply on the technicals so then tell me, carrie, the best energy stock right now that has a chance of a real liftoff to match what you just said and to back up your prediction on what tom lee had to say, as well the best stock right now for our viewers is what . Well we only own phillips 66. You just made a big case. Now you dont have a stock to recommend . Im giving you one, phillips 66 psx is an energy stock we own. I think its a good one. Its a refiner it really suffered its had a big bounce back and i think it will continue to go up. But ge is an energy stock. Now youre getting too cute with that. Ill give chevron a boost i think there are many less names than they used to be that are viable for exactly the reasons that joe pointed out because of the massive debt. Particularly the offshore drillers and a lot of the oil service companies. Schlumberger is still a Great Company. That stock has been abysmal for years, slb halliburton just cut its dividend yeah, well, i dont like halliburton. All right, jim, go ahead. Im going to im just going to jump in here, because, look, its possible that everyones right here, but what you have to do in this sector more than any how can everybody be right . No, no, no just let me finish you just said how can everybody be right . we have different opinions because you have to be selective. Because, you can express those opinions in different ways, scott. Tom, its very easy to express toms opinion by going long chevron, exxon, the refiners and pipelines like Kinder MorganKinder Morgan being the best of the pick, by the way ill get back to that in a second but what you said and joe said is absolutely right and its why you want to stay away from the shale producers. Its why you want to stay away from the offshore oil drillers because at 33 a barrel of oil, theres no way they can make money. They cant charge the day rates they need to service their debt. So the problem here is wherever we talk about energy, people say, the oil Energy Sector is good, or the whole Energy Sector is bad its the wrong way to look at it you have to be selective, and you can express all of these opinions in different ways you can even short the offshore drillers right now those things are likely not going to survive so tom, lets take this a step further then. So if you think that you need to, you know, play shome of thee deep value stocks like energy, what do we do with the high Growth Stocks that have gotten us to this part of the distance in the first place do we stay with them i mean, the nasdaqs done the best of everything its 5 or even maybe now a touch less away from recapturing a high do we stay with those stocks i think in the historical sense, balance was always people owning defensive stocks. Defensive stocks make a lot less sense to us. I would take the f. A. A. N. G. And the secular growth in the nasdaq and treat that more as your uncertainty trade. You know, youre cash trade, which is essentially a defensive trade. Trim your staples. And then i would be adding the epicenter groups, which we now would add energy you know, we were thinking this was more discretionary financials, but i think a lot of energy makes sense. And i know even joe has bought a name like eqt, but there are a lot of other names out there that look good on our model that make sense to buy within energy, if, again, its 12year bottom so you have a lot of room. I just wonder, you know, tom, if its going to get hard be hard to get our viewers to buy into part of this story. Its like, okay, ive seen these high Growth Stocks, megacap tech do so well by the way, growth is outperforming value by the widest margin in decades the journal had a piece on this today if the year were to end today, the growth index would have outperformed the value index by the most since 99 wow and i have a hard time believing that thats about to change anytime soon. Yes i would agree. I think theres a lot of great Growth Stocks that deserve their prices, because theyve proven to be really smart businesses. So i dont i wouldnt want to sell my Growth Stocks. I would want to replace that with the deeper epicenter stocks thats where i would do trimming jon najarian . Scott, you know, a lot of us thought that mohammad bin salman was an absolutely idiot when he elected to overproduce like crazy. Yet, when he did that, they switched from, of course, they wanted diversification, they got it in spades, scott. Look at what they bought on the dips they bought stocks like citi, stocks like facebook, stocks like bank of america this is in the press im not just imagining this. This is what they did. They took cash and they took out of their sovereign wealth bought in as the market was just getting hammered and theyre reaping the rewards right now. As far as those same Energy Producers going forward, i would stay away from any of the really small ones, scott, and just be in the way that carrie and joe and tom were talking about, and jim. I would be in the chevrons and exxonmobils, some of these refiners and so forth, but i wouldnt be touching any of the small ones unless youve seen some reason for them to be acquired, because thats likely what has to happen okay. Joe, i think that was you who wanted in. Growth value, thats where i want to go i want to move off of energy now. So if you dont mind, i wanted to ask a question to tom. Just overall on the fact that he believes the s p can make a new high and i guess the question is, tom, can the s p make that new high without the introduction forget a vaccine lets just say a therapeutic or without further support from fiscal and Monetary Policy makers can it make that high without those conditions yes, but really conditionally. I think the market has to really deal with its uncertainty. You know, today, no one can be certain. I cant be that certain, but you kind of sound certain maybe relative to the market, because 12 to 18 months is what people think a vaccine is going to take. But if we have 118 vaccines in a pipeline and it comes six to eight months from now, the market can deal with that uncertainty. And i think thats what the message of the market is today and thats why were more certain. Were saying the market is signaling to us, theres a pretty vigorous recovery taking place, both on the economy and on the health side and thats whats encouraging us to sort of stay in the halffull camp what upsets this, tom lee is it a second wave . Is it openings that dont go well and we have to shut back down what are you looking at on the other side as the risk factor to your thesis, right yeah, well, as states open up, there is going to be a little bit more chaos now, because compliance and as john was saying, some places dont require masks. We know that masks really do slow the reproduction rate so im very nervous about a second wave. Were tracking the data county by county, so we are watching opened counties, but so far the news is good so we think were actually seeing progress, even though states are opening but youre right, thats a huge risk for sure. Carrie, you have names for me from the growth side yeah, i think that as we mentioned before, there are Many Companies that have done well, the companies and the stocks so the ones we own, amazon, paypal, apple, twilio, alibaba, facebook, s p global, i put together a chart and i think vin has it and it shows to the point that people make, they seem to think that tech and communication stocks represent a huge percent of the market valuation right now, relative to their earnings. So these are estimates of the s p earnings thats about 42 , if you see the two pie charts, 42 of all earnings for this quarter, the quarter were in, should come from tech and communication. Then you look at the market valuation. Its 38 so it isnt even equal the valuation of the companies arent even equal to their contribution and i think these businesses are growing, theyre showing that they have staying power, that they have Growth Opportunities and most of the stocks, the big names we talked about are selling between 20 and 30 times earnings Procter Gamble and clorox sell for higher multiples than most of the big tech names. And i guarantee that no disrespect to clorox, but apple has more opportunities in innovation than clorox, or i hope so. So this just suggests that while these stocks have moved higher, and we know they are a big component of the s p, its not disproportionate to the amount of earnings they contribute to the s p. So tom lee, i want you to stay with me i want to jump away for a minute and talk to steve liesman, because something is going to happen in the market today that hasnt happened since the 1980s. Steve, youll tell us what this historic bond auction is going to be today. Its set to take place in less than an hour i know a lot of people have their eyes on it, including you. First time since 1986 it came out. Its going to be a 20 billion issue of 20year bonds, something that has not happened since the 80s you can see where its trading it was in the low 120s the last i checked, 122 was the price i got. I dont know where it is right now. And secretary mnuchin talked about this yesterday and, talked about how theyre financing the debt he said, its my intention to borrow a lot of money in the shortterm, to have the funding, but then expand our financing in 10, 20, and 30year bonds. What i would like to do is lock in a significant amount at very low interest rates, so the money were borrowing can be paid back and dealt with over a long period of time scott, the technicals on this, ill give you some highlevel math here. 30 minus 10 is 20, okay. What does that tell you . It tells you that ten years ago, the 30year bonds from ten years ago are now the 20year bonds. The fed happens to own an awful lot of those through its qe program. Theres not a lot of supply right in this area and the hope of the treasury is they hit a sweet spot of demand from Pension Funds and Institutional Investors who are trying to match liability. So you can have this conversation about the market and whats happening and you were talking about it earlier, because this debt thing seems to be doing pretty well were adding 2 trillion to the deficit and it seems like investors are taking down this debt and no one cares. Well, its not no one cares, its happening and i think theres a big belief out there that the fed is out there. Its a buyer of the amount of debt thats coming and Global Investors also seem to want this debt, because of the security that american debt instruments offer. So its happening, and i guess it happens until it doesnt, and it really creates a positive outlook for stocks and equities, especially with the fed buying Corporate Bonds as well down the roa road while i have you, steve, i want to weigh in on our debate tom lee is suggesting that well hit new highs this year, which is a very aggressive call relative to others joe is making the case that maybe we can get there, but you still need a lot of support from the fed and or congress. And its interesting cull off of yesterday, with mnuchin and powell on the hill, i think it was was that yesterday or the day before of powell making the case for more support and the treasury secretary saying, maybe, but lets see where this all groez that has a long way to go to determine if tom lee is right. Its great to be back but the story is that the fed is much more in line than the pessimistic outlook. I really get the opinion talking to fed officials that they dont feel like the kind of testing is there to bring back the consumer the way the consumer might want to come back and when you think about that, i think you have to maybe press tom lee, who i have huge respect for. You can press him yourself, hes still with us okay, so the question is, what kind of recovery are we talking about . We can get some of it back and we need to get the vast majority of it back, but what kind of economy is it if people arent going to the movies, if theyre not going to concerts, if theyre to the going to restaurants and not doing, i think, some huge percentages like 40 of the economy is involved in things that are not the kind of thing you want to do if were doing social distancing i understand you have some faith in the ability to get the testing out there. Im just saying, the fed has a lot of concerns right now that thats not the case. You can get a good chunk of it back geographically, and by industry, but theres some stuff that unless certain things or conditions are met, youll have an economy that has a serge percentage missing for a while to come. Tom yeah, we published a study a couple of weeks ago, looking at every category of social distance from restaurants to sports to travel and its about 17 billion out of the 7 trillion consumer wallet so its about 5 or 6 . If only half of it comes back, its 300 billion thats a huge hit, but thats a hit that can be made up with other parts of the economy so one thing were kind of conscience of is we oversample in our own experiences what not going to restaurants, et cetera, means. But its a very small share of peoples wallets how can eating at home and health care gobble up close to 75 of our activity . And another piece is really is operating leverage is the hallmark of every Company Coming out of a crisis. And companies are massively engineering their costs now, because they understand how to operate a business with nobody actually being able to be in the office tom, i appreciate you being with me. Steve liesman, i appreciate you pop on too im going to start calling it the Tilman Fertitta indicator. He was on our network yesterday and i thought it was so poignant what he was saying he employs thousands of people he has so many different establishments middle end to higher end across a spectrum, whether its casinos or restaurants and made the point it doesnt matter. You can do social distancing or whatever and your place can be scaled down to meet the new normal, but if nobody shows up it, it doesnt matter. So when Tilman Fertitta comes back on the network and says, ive seen a turn, thats going to be the moment to take stock in right there lets go to seema mody now we have breaking news on stock that are taking a big drop chinese tech names whats happening, seema . Thats exactly right, scott the senate has passed a law that allows Chinese Companies to abide by u. S. Securities law and the disclosure of a specified information regarding whether they are owned by a federal government theyre also requiring an actual audit. It follows ongoing concerns regarding huawei and you are seeing chineserelated names come off the highs of the day trading actually at session lows names like alibaba, jd. Com and baidu. Good and timely seema, thanks so much. Carrie, what about this . You own baba, right . So, i hadnt really heard that, i heard a rumor, butvil i have to look into it these types of news stories happen with any chinese company. And baba has been able to sustain, i would say, a reasonable business through the worst of the coronavirus in chi china. Things are starting to open there. Its a growing middle class that took a hit but we think that it will come back in terms of this specifically, well just have to take a better look at it later today well take a quick break. We still have to trade target, gang we have lows still in front of us, too. And i want to get to both of those. We also today have bullish calls out on moderna and baxter international. Well debate those when were back across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. A green day across the board right now. Nonetheless, were still positive and we have the other headlines regarding the virus. I do, indeed. Thank you, scott in new york, new infections and hospitalizations fell since yesterday, but the daily death toll rose slightly to 112. Governor cuomo says the coronavirus has spread further in poorer areas. Focus on lowincome communities, do the testing, and do the outreach. Do the testing and do the outreach thats where the cases are coming from. Thats where the new hospitalizations are coming from thats whats going into the hospital system. Thats where youre going to see the highest number of deaths child vaccinations in new york city are down 63 from the same time last year. Mayor bill de blasio says its even worse for children over 2 years old. Their vaccination is down more than 90 for more on the pandemics impact on General Health care, go to cnbc. Com and in russia, the government is reporting 135 new deaths from covid19, the highest daily death toll yet nearly 8,800 new cases were confirmed, taking that countrys total above 300,000. You are up to date, scott. Back to you. Sue, i appreciate it very much hey, jon najarian, i want to get one more comment before we move on to these retail earnings on that story that seema was telling us about the potential delisting of chinese stocks whats your take here . I know youve invested in these in the past. You may own some now i do, in fact, scott. I own baidu calls, and i think i own alibaba stock with the calls written against that clearly, that would hit these stocks and im going to have to reassess, based on what we just heard from seema, scott. I may have to exit both of those positions. Take a look at kwig thats sweg right thats the etf that tracks all of those commerce stocks in china, scott, so youre right. Anything in the focus of this particular legislation is something that i dont think you want to be holding much longer well, thats an interesting call joe, is this a oneday phenomenon, a reaction to a headline, or is this something that you need to be concerned about if youve gotten into these stocks and watch our show. I think its been simmering for many days, from both the United States and the chinese. I would potentially categorize it as the first strike in what potentially could be a financial asset skirmish between the United States and the chinese, as we move forward so, yeah, i think theres rightful concern, as it relates to these headlines and i wouldnt dismiss them too quickly. Lows of the day so well keep our eyes on that how about target and lowes . Carrie, do you want to take either one of those . You own home depot so you probably have more of a take on lowes than maybe target, but feel free. The stable is yours. Yeah, well, its interesting. So home depot and lowes are two of the kind of companies, as is target, thats been open, thats been able to operate in a socially distant, essential environment. And i actually was at a home depot on saturday morning at 7 30, and it was really crowded. So i can imagine the same is true at lowes people who are at home are doing more themselves. With gardening season, theres just tons of people who are spending lots of money and time on their garden. Scotts miraclegro, i think, is having its best season ever. And i would imagine that lowes would continue to participate and benefit from this environment, just the way home depot has. I like what they reported, home depot. I know the stock was down a little bit, but its been very strong if i was a buyer of lowes instead, i think that the same is true, that, you know, theyre both good companies, they run their properties well, and i would be a fan i mean, i am a fan of one of them im not going to own two, but i think lowes is good, also maybe the lowes ceo can convince you otherwise hes on with cramer tonight, Marvin Ellison is. Thats an exclusive interview. Make sure that you watch that. I hope marvins watching you have someone to convince, you have an investor out there, potentially, to convince Jim Lebenthal, how do you see these . Target lowes . I see great topline sales growth and just in retail in general, if you can combine the brick and mortar with a great online presence, youre going to win. But the problem,mentioned at the top of the show is, costs are going up, up, up particularly for target, you have food prices going up. That doesnt mean inflation is going up theyre taking care of their workers. Theyre making sure they get tested, theyre giving them more benefits, shorter hours. But its just, the margins are going to go down and stay down for a while. So you put that altogether, its a neutral. Theyre fine right now, but i dont get excited by the top line growth when i see the margins going down jon najarian, i know you would take the other side. I know that youre positive on target, at least im taking the leap, because you have been in the past yeah, i am positive about it, scott. The digital being up 140 , samestore sales up strong jim is exactly right they are spending on the employees and we all love to see that and some of the spending is a onetime spend, scott. Not in terms of the pay, but in terms of making all of those checkout counters safer for both the consumer and the employee by putting up the plexiglas that weve all seen anybody who has been in a store lately has seen that so some of those costs are a onetime cost. Others will be carried over for hopefully a significant period of time. But, yeah, i thought these numbers were great i really would focus in on that lowes, that samestore sales there were up 11 , scott but in late april and zbigoing o may, they say 20 samestore sales growth so thats that releasing of us that have been trapped for months in our homes, out there again. Thats what youre seeing there, rather than just, you know, little dinky purchases here and there. Thats the kind of wave i think youre going to be looking for brian cornell, hes the ceo and hes going to be on with jim cramer tomorrow night. So, all of you, Pay Attention to that one, too. Jims got a couple hes had so many great guests on lately and that continues tonight and tomorrow all right, carrie, ill come to you next for this story. Because Morgan Stanley has raised its price target on moderna, thats the stock of the week in many respects, working on the vaccine, caused the market to rip and then caused the market to dip lateday yesterday. So you put your old biotech and Health Care Fund hat on for me thats what you used to do, right . For a couple of decades at fidelity you used to run a fund so tell our viewers, you dont have to speak specifically about moderna, per se. But you are used to having stocks like this in your portfolio, right some are pinned on a dream, because theyre smaller biotechnology stocks or Health Care Stocks or what have you so now you have the floor to give advice to our viewers on what to do with Something Like this and a stock thats been so volatile this week and will likely remain that way moving forward. What do you do so, if i were to tell a friend, who said i would like to participate somehow in the vaccine breakthrough, i would say that moderna is one case i mean, there are others, johnson johnson. I would pick a few and say, put some money in that you can afford to lose, because on the one hand, its the holy grail. If we have a vaccine, we go back to the way we were its just a godsend. It would be the best thing that anyone can wish for, but if it doesnt work, the stocks going to go down by 50 , 60 , you know, who knows where well go, and if it works, it will go up a ton. So i dont have a problem with people taking some money, some, im saying, not a lot of their money, and investing in a few names, a basket of vaccine names, because of the upside but recognizing that, honestly, the likelihood of a phase i trial that shows some promise in eight patients with neutralizing antibodies does not make a success of the company or the stock. I hope it works. I really hope it works, but weve got a long way to go and there are hurdles along the way. So you have to be really careful when youre thinking, how much can you afford to potentially lose right we all right we all hope it works, obviously, right . But, you know, you speak to something that, you know, our viewers you have to face every now and then with stocks like this, and it is the word speculative. Thats the epitome its totally speculative. Of speculative names, many of which are these Smaller Companies that some people have never heard of before the coronavirus. Now youre making a bet, but you have to understand your risk as well carrie, appreciate it. Im so glad youre on today to deal with that question. Speaking of, well answer your questions right now. Joe, im coming to you first today. You first, joe joe in bayonne, new jersey, for joe. How much consideration should an investor place on place on a cos ceo when evaluating a company to invest in . This is a great question. Great question. You cant say jpmorgan without jamie dimon. And on and on and on how much weight or stock should you put in that . Tremendous question and you should put a significant amount of thought into who the ceo and the Management Team is and because you want to make sure you have a ceo that when theres a troubled time, hes able to understand risk and manage it well you also want that ceo that understands to make an omelet you have to break a few eggs and he is not unwilling to take risk like nadella did with microsoft and jeff bezos with acquiring whole foods for amazon look at the realization that theyre seeing now. Jimmy, judd in utah with a question for you i was hearing a lot of recommendations to buy Cleveland Cliffs in the past is it time to buy while its low . Hey, yes, yes sorry i havent meant to be silent on it i own it i continue to hold it, i have added in the last couple of months they bought ak steel at the beginning of the year giving them exclosure to the Auto Industry and thats bad in the face of the pandemic but autos are starting to pick up and owning a brand new plant this summer and positive things going for cliffs and why ive added to it. Jon najarian from reuben in california, locking to add a highrisk highreward position got any suggestions . Bunch of them, scott. Most of them would be in the casino space why . Because these guys, their business was totally shut down, totally shut down. Now you look at some for instance penn gaming and you look, they reopened ten casinos today. So the metric that you mentioned are people going do go there i think they are, scott. So you want high risk, high reward i think you get it in the casino stocks if i had to pick another area i would probably go with the cruise lines but ive already done that. In fact, im in Carnival Cruise line on the debt side. Interesting okay thank you for that kerry in pennsylvania, salesforce, is it a good investment right now i think it is we have owned salesforce and undermore formed this year and i think the reason is because salesforce needs people to be adding to the work force not leaving the workforce so to the extent that we get to the other side of this shutdown and we start to bring people back to work even if theyre working at home we add seats, salesforce is a Great Company with a subscription model it is about serving clients, customers and managing that inventory and i would buy it right now. Ill give you a bonus one im seeing it right now on twitter and gotten it before your Investment Committee frequently mentions half position or one position what are they referring to a certain percentage of their portfolios how do you answer that question for our viewer okay. Very good question so with our portfolio, we own about 33 names and make it easy. Thats 3. 3 position for each one of them. If going to establish a half position, meaning 1. 5 to 2 of the portfolio, sometimes when we think the stock is rich and hope to buy more of it coming down so that would mean establishing a name at half a position. Good stuff. Good job, carrie thanks. Well come back and jon has unusual activity today want to get that in, as well you can listen to us le ivon the go on the cnbc app were back right after this. At mercedesbenz, nothing less than worldclass service will do. Thats why were expanding your range of choices. Many dealers now offer optional pickup delivery and athome maintenance, as well as Online Shopping with Home Delivery and special finance arrangements. So, whether you visit your local dealer or prefer the comfort of home you can count on the very highest level of service. Get 0 apr financing up to 36 months on most models, and 90day firstpayment deferral on any model. Breaking News Coverage continues tonight on cnbc. I o ill see you at 7 00 jon has unusual activity today jon, tell us what it is. All right, scott. Ill start with newtanics. We see its clouds based you know how i love many cloud based names because of how they get into us, even in this sort of shutdown period, scott. So ntnx, the next week exwe ration, paid a buck for the calls. Ill be in them for that next week second one i mentioned cruise lines . I bought a cruise line today not the whole company, scott, of course, but i dont know. You can get them on the cheap i hear, doc. Yeah. You can. You can. You know, if i went in with kari and jim, i could and joe i could probably afford it. You might get the industry with all four. Yeah. With all four i could. So funny. Nclh norwegian cruise line, scott, next week expiration, buying the 13. 50 calls aggressively i bought those today and just to give you a quick update, that facebook trade from yesterday, it doesnt always happen this way, but just ten minutes after the show ended facebook announced that deal with shopify and the calls from 1 to 8 now today bang thats why you trade stocks and options. Oh, by the way, doc, up 12 in a week. Okay new high today for facebook. Its been that kind of run for Comp Services and tech and those big name that s that we follow closely. I want to get calls in quickly joe, jpmorgan up to a buy. You upgraded it to a buy the other day. I did 89 i think it was right . Yeah. I like that support from dick because i think dick overall has a very cautious view on the Money Center Banks so im staying with jpmorgan. I think i told you the other day it goes to 100 before 80 i believe that and i also believe its the right place to be. Kari, Charles Schwab downgraded today target cut to 35 you still own it we do and its a tough stock. Interest rates going down and hurting but eventually things will stabilize and the business will improve and at this multiple it is cheap. Got a lot of new accounts, right . I hope, i hope. Kari, nice to see you give me a final trade while youre at it. Zts it is a veterinarian company they have done well through the pandemic and business will start to really pick up when people can walk into the vets again. Okay. Farmer jim yeah. Kinder morgan. Its got a 6. 8 dividend yield and and increased recently i would nt be surprised if it increased another 25 and had over a 9 yield on this. A pete favorite for sometime. Jon, what do you got for me . Kw webb unusual activity hitting. Occidental petroleum. Joe verizon. Thank you for watching. Kelly evans picks up the coverage now. Thank you, scott hi, everybody. We have a nice rally on wall street as the major averages recover almost all of yesterdays losses the dow on pace to close at the highest level since march 10th the s p crossing above the 100day moving average for the First Time Since february. Its up 48 points, across the board gains of 1. 5 . And oil is getting a nice boost on signs of improving demand and surprise draw down in inventories. The Energy Sector is the top performer in the market right now. Crudup