Transcripts For CNBC Closing Bell 20240713

Saying it will reopen 100 stores in the u. S. This week and progress on the vaccine front with heavy hitters stepping in which well have much more on. We will and not just are we excited about the new package there, the music is exciting i had seen the graphic, but i add not heard this music they should just playing through the whole hour to keep people on their toes very dynamic and thanks to the team for making it work. 59 minutes left of the show and big guests to come a huge exclusive with the ceo of merck. Ken frazier. Hell join us as they lay out their strategy to battle the coronavirus. Plus, mt. Sinai teaming one a slew of companies to support front line workers well speak with the ceo and ceo of pinterest. Mike is drilling down on the action meg is tracking progress on the vaccine front and wilfred has new comments from jamie dimon, but mike, first to you on this Broader Market and take ussen inside what are you seeing . Yes, obviously have broken above these levels everybody was fixated on last week the slowing down was just a stutter step and not a stumble seems all the market needed was for it to pass without anything interrupting the idea of reopening the economy and theres really nothing of getting in the way that thats going to cause Business Activity for now, investors feel underexposed we got above these levels last october so thats the realm were now playing in a gentle range turg the day. Its been all about the opening pop and weve just sat there at least at the index level. Did want to point out the kind of interplay of momentum stocks against deep value stocks and obviously its been mostly about momentum the winners continuing to win much of this year. If you look now, since the low, march 23rd, value has now, its kind of nosed ahead of momentum now. Clearly a more cyclical bank to this current phase of the rally. Thats a positive. Sort of affirming the idea that this is the market trying to sniff out better times for beaten down areas but look at a long longer term look at this relationship and youll see how fast this gap is that deep value stocks measured by this etf would have to kind of close if thai going to kopt to tell that message that the economy is going to accelerate from here. Is that the message from the market can you really infer anything as far as what the economic prognosis is from the market with people saying that everythings being distorted by the Federal Reserve and pumping in so much liquidity that the market and economy are just going to go in different detections you can infer from the market is saying now versus what it was saying a couple of months ago because weve had two different markets in the span of this period when the economy was shut off and the fed was becoming active so its not just been p one mode since that began and i think we have to keep in mind, were grading on a curve here because those beaten down values like the travel stocks, financials, theyre so below where they were just a few months ago that were just kind of making up a little bit of the lost ground that has built up. So its not as if the market is say iing the economys going tob great. Weaver back to normal by the end of the summer. Its saying its moving in that direction more quickly than we had anticipated several weeks ago. All right well mike certainly helping out. Thank you. Progress on the vaccine front inject iing a dose of optimism today. Meg joins us with the latest developments meg. Hi, sara. Big news from merck today essentially laying out three different moves solidifying its strategy one was to inlicense an antiviral drug then the other two were two different deals on vaccines one, a a partnership with a nonprofit to develop a vaccine based on the same Technology Used for their ebola vaccine and the other acquiring a Company Called femis heres many merck lines up in term of the timeline for human trials theyre around the june, july time frame they say with the second vaccine that i just mentioned edmentio be in human trials within a few weeks. There are several companies that have started trials and novavax announced it was starting phase one trials in australia. And theres a different collection of companies here, some with proven vaccine experience like merck, johnson johnson, which is getting in in september and others which are newer companies. Merck points out over the last 25 year, there have been only been seven vaccines approved for new disease causing pathogens and four came from merck so they argue they have both the track record and technologies that have been proven to work before to put together sort of winning combination to getting a covid19 vaccine, guys all right, meg, one quick question another reason the market is val rallying is this idea that among the states that have reopened, broadly speaking, there hasnt been any major surge in the key metric, positivity rates hospital saixs there are hot spots, but can you tell what you say the data actually show and how optimistic we should be about this reopening from a Health Perspective . Sfwl i think from the experts ive been following, they are very cautious watching those metrics and theyre worried that there might be some upticks in certain spots. And they are watching those very closely. So we have to hope that we wont see a lot of new hot spots as the country opens up but most o the people im talking with do expect some kind of resurgence at some point. Whether its now or the fall and so it sounds like a long haul kind of no matter what. However, we have to hope for progress on all of these different fronts meg, thank you. And we look forward the an interview with ken frazier on this show in the next hour on the big coronavirus developments from that company. Two announcements on vaccines and one on a potential treatment. Thats coming up 4 00 p. M. Hour. Just want to switch focus about the talk about the banks and earlier today at the Deutsche Bank tenth annual Financial Services conference in new york, jpmorgan chairman and ceo, jamie dimon, addressed a number of factors and of course the banks performing well today. We also spoke specifically and dividends and buybacks i think its important a company try to sustain its dividend so the better course of action was to wait and see and if you go, if the recovery starts, like we said, i think well have a good idea when we report earnings, youll never need a dividend. If by any chance that is pretty clear that this is going to get worse dramatically, then of course the board will take up the issue and say what should we do, when should we do it, how . If board mature, theyll consider that. But you have to have a pretty bad economic environment i think for banks to justify it to show we should cut it down. I think youve got to see the white of the eyes of the recovery before you start buybacks, but i think the companies that are more opportunistic, if theyre retaining a lot of capital, their reserves are coming down, i think you may see people start them, but probably wont be the size that you saw before he also struck a relatively constructive tone that provisions for things like bad loans, dont know if we can roll along with that, but things like provisions for bad loans wouldnt need to continue to rise in the second half of the year we would have a substantial inkre increase in the Second Quarter but if the base case happen, you may not need any more in the second and Third Quarter or Going Forward. Cecil upfronted a lot more than it did before. My hope would be when you start to see the first people come off, is higher than people think. Not lower, which also gives me an increased chance to do a refie, which would be smart for them in the old days, there was danger that when you stopped paying the mortgage, you would never start again. But remember last time around, the thing were looking at, home prices are down 40 . Finally, he suggested that tradinging revenues in the Second Quarter will be just as strong as they were in q1, which was strong of course all of this pushed jpmorgans stock to a session high. Pretty much where it remaps, mains. Up about 8 . Banks in general benefitting from reopening rising yields and that market rotation that has been b the result of those factors. The bank index up about 9 today but still down 34 year to date and r sara, thats where id say the tone of jamie dimons presentation today was relatively constructive to Bank Share Prices being done about 40 year to date as opposed to being bullish. Tomorrow on closing bell, well speak to the president and coo at Goldman Sachs their stock only down about 15 year to date now with the bounce today. Was going to ask you about the tone because jamie dimon always sort of sets the tone not just for the banking industry, but very much for Corporate America and i couldnt really tell there how he was feeling. Constructive is the word you used, but i couldnt tell how optimistic for instance, the dimon bottom when he was buying shares as sort of a sentiment indicator almost of Corporate America. And he was asked about that, but wasnt drawn to it and i guess if he really felt as strongly as he did in 2016, he would have bought stock perhaps but wouldnt be drawn on calling a bottom per se. But as i said, he was constructive relative to the image you may have had for a share price that was down sort of 40 or so coming into that. I would say this as well he said even in a bear Case Scenario from here, if you had a bull, a base and a bear Case Scenario, the bank will still make money this year he said only if you have a repeat of a great depression, super, super bear Case Scenario, that would not be the same he said it would apply to most of the banks you could sum it up another way which is to say there will be more provisions for bad loans this quarter so its not like this quarters perfect. It just said in the second half of the year after another quarter of more provisions for bad loans then you probably wouldnt have to see that again and again, share prices having been down sharply coming into the day are able to rally given that bit of news today citigroup is up the most 10. 6 . After the break, would you feel safe going back to the Shopping Mall a key question for retailers and operators alike. Well speak with the ceo of a company that runs 180 Shopping Centers in california, colorado and illinois and well ask where the customers are coming back. Stay with us closing bell back after this short break. These days, its anything but business as usual. Thats why working together is more important than ever. At t is committed to keeping you connected. So you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. Iits not acceptable oor nothing. And its definitely not close enough or nothing. Mercedesbenz suvs were engineered with only one mission in mind. To be the best. In the category, in the industry, in the world. Now, get 0 apr financing up to 36 months on most models and 90day firstpayment deferral on any model. Mercedesbenz. The best or nothing. Americans are slowly emerging from their homes. Data from apple maps for instance saw an increase in requests for maps and public transport seeing anuptick as some start to consider buses and subways. Hotel demand growing slightly as rates show some signs of life in may according to data from str and restaurants have been one of the hardest hit. But open table seeing a slight uptick in reservations year over year slight but we will take it. Moving in the right direction. Absolutely. Small steps but as you say in the right direction. Another area weve been watchinging is Shopping Malls even as businesses start to reopen, some major retailers are struggle iing to pay rent and asking to renegotiate on their hees leases or requesting to de payments joining us now, sandy colorado and illinois. Good afternoon to you. Thanks for joining us. Thanks for having us. So how tough has it been and maybe we can get to some of the green schuetchute, but how tougs it been . Its been what youd expect from a pandemic. Went from zero to 60 in no time and many, over 50 of our retailers had to close its been a tough go but weve been working hard to communicate and get ready to reopen so what is open right now and what is it looking like . Yeah, so you know, our process was this the you know, essential services which for us included grocery stores, dollar stores, pharmacies, you know all those targets and walmarts theyve been open all along. So we had to take tecare of tho customers who visited there and most of those retailers had an upsurge in sales then our smaller retailers take our restaurants and our smaller retailers, had the you know, had to go and Delivery Services and they really had to ramp up to make that possible whats been happening and were in three state, california, illinois and california. Is county by county, weve started to reopen. So this last weekend, we got a number of restaurants open for sit in dining, which has been great and a number of retailers where you could go not just for curb side, but into the store, so today, were about 70 reopened and have you seen football come back strongly or not . Yeah, heres whats interesting. I think this goes to the strength of the retail environment. Even with the same tenants being open just essential service, we were having double digit traffic increases to our Centers Going to the exact same tenants week over week since about late april. Since last week, our average traffic has been up about 25 so we are seeing more customers starting to come back. Now the length of the stadium is shorter. But i think the signs are pretty positive i think people are are starting to dip their toe in the water. Are all of your stores in e different Shopping Centers and malls open and are they paying rent so, two different questions first of all, not all of our stores, so for us, we have movie theaters, gyms, a lot of places where you know, three months ago, we would have been thrilled to have close, personal int interaction. Those are still closed in l. A. County, we have restrictions on people going inside stores and shopping that is still curb side. So that is a bit of a hopefully, l. A. County is going to open up u and even when they open, they have occupancy e restrictions its still restricted. On the rent side, rent has really been sort of a bifurcated kind of thing. For us, our biggest focus is making sure our Small Business people survive the heart of our communities and Shopping Centers are Small Business people. There were a number that were completely shut down we worked closely with them to help them with at least some rent but more importantly, working with sda and ppp loans so i would say our rent collection has been probably somewhere between the 60 to 70 range. With a lot of that oriented towards the tenants that either never closed because they were essential sf services or those partially opened what about the biggest tenants . Are they receiving any deals from you there are questions about Companies Like starbucks or chipoltle, which are doing relatively welcome paired to the smaller guy asking for rent concessions. I think thats a great question the way to approach this from the beginning was we understand this pandemic is affecting everybody but some tenants have different accessibility to Capital Markets than small we said we understand youre going through a will the of liquidity and this is a squacary situation, but you can access equity markets and public debt markets. We need you to pay rent so we have the resources to help our smaller tenants, so with limited exceptions, we have made very, a very small amount of deals that said, often if we make a deal, theyre shortterm deferrals with a fairly accelerated payback. So we do have the resources. We want b to be, we dont want to be tone deaf to the needs of all our tent ten napts what about going up the food chain . Have you asked for some kind of deferral through the banks for Interest Payments . Weve had to so a big part of this, and we jumped on this earl lly in the cycle as soon as we realized what this was becoming. We we want to our tenants, our lenders and we were very clear with them. We said hooer whheres what the stress in the system looks like to us. This is what this could look like and at this kind of stress level, we cant pay you and we dont want to go into default so how can we work best with you . Most lenders were fantastic. Thankfully, we had a long relationship with our lenders. A majority are Insurance Companies and they were incredible one in particular. We worked with them and were able to defer our payments and that gave us flexibility so thats generally been a good experience sandy, thanks for joining us. Thank you and thank for all you do 37 minutes left of trading. Check out the major averages theyre all going strong the s ps over 3000. Dows over 25,000. Every sector in the market is higher financials really leading the charts zooming higher compared to the other sectors. The tech heavy nasdaq is lagging only up about. 7 up next, well talk to the ceo of merck First Company to receive fda approval for an ebola vaccine on its attempts to tackle the coronavirus treatments yields are making a move higher today. Tenyear yielding around. 7 just below that, but theyre selling bonds going into stocks. Thats pushing yields up closing bell will be right back. Derek, seems like your team is operating just fine remotely. Yeah, everything is running smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. Heres a check in on the markets. Healthy rebound. Dow e leads the charge up about 3 677 points, pretty much near the session highs at 704 nasdaq still the outperformer comfortably but only up 0. 7 today. Lets check on individual Market Movers crocs. New data also showing that cro krrcs was one of the top 30 footwear brands to show a sales increase in march up 9. 5 today. Shares of spotify falling. This on a report say iing amazon may invest in localized podcasts adding that sports content the top of mind for amazon as it plans to buy out more tv rights and have additional Audio Content for users. Spotify was lower but ending the day positive up about 0. 4 still scratching my head over crocs. Time for a coronavirus upkate date with sue. Im doing the same thing. Thank you so much. Good afternoon, everyone we have new numbers for you. The u. S. Death toll now approachiapproach ing 100,000 according to data from Johns Hopkins mike pences press secretary has returned to work after testing positive for the coronavirus nearly three weeks ago in a tweet, miller said she has since tested negative three times. New york federal prosecutors have charged two men in separate schemes to inflate personal protective equipment prices. The first, a pharmacist, who called himself the masks man and has been accused of selling 200,000 worth of n95 masks at 50 mark up. The other, a used car sales man who purchased large quantities of equipment in february with the attempt to resell it a as high as 500 and brazil has the highest covid19 death rate in the world and a new study by the university of washington is warning the death toll there could spike five fold to 125,000 by early august. That nations president has resisted calls for a lockdown as many fear it has become the newest hot spot. For machine or that story, you can head to cnbc. Com wilf, back to you. Thanks for that after the break, well speak with the cochair of mt. Sinai and ceo of pin tres about a new effort to help front line workers d w thanhobo businesses have altered during the pandemic all 11 sectors higher. Technology and health care at the bottom, but still higher by about a third of a percent financials at the top, up 6 banks up 9 . Industrials and energy also gaining strongly today weve got what, 29 minutes left here are the key things drive ing the Action Equities crossing key thresholds s p back above 3,000 dow above 25,000 on a big rally today to start the week as we showed you continues reopenings and signs of economic recovery across the country with apple say iing it will reopen 100 more stores this week and progress on the vaccine front with merck announcing a number of treatment efforts. Well speak with the ceo after the close today. Ken frazier, big one to come dont want to miss that. Weve got breaking news now on the senate Insider Trading investigation. Kayla with the details the wall street journal is reporting according to its sources that the department of justice is is going to be closing the investigations of trading in the portfolios of senators inhoff, feinstein and leffler. All of those lawmakers had access to information about the coronavirus as that concern was ramping up and just before the market sell off. Notably, the department is not expect ed to close the investigation into trading by senator richard burr, who had more direct involvement in a near liquidation of his portfolio. Senator burr has said he was relying on Public Information reported by cnbc asia but acorying to the wall street journal, the investigation into burrs trading activity will continue while the investigations in those other lawmakers by their spouses or Investment Advisers are going to be close. Thats the latest. Back to you. Thank you drop and give me ten thats what mt. Sinai is hoping some americans will do as part of its new fit for the front line challenge which kicks off today. The goal is is to raise futo rae funds for front line health workers. Rich friedman is the ko chair and chairman of Goldman Sachs Banking Division along with the pin tres ceo, ben silverman. So, rich, what is is this challenge this challenge so this is is a challenge that came to me about three weeks ago. And the idea here is to give a global and well deserved tribute to the front line workers who have carried us through this pandemic so you know, it came to me as i was literally working out in the morning and i came up with the idea that we could do this kind of fund raise sort of like a variant of the ice bucket challenge from years ago and i first talked to mt. Sinai about just doing it for mt. Sinai. I thought this would be more interesting if we could do it national and i scared them because they said how could we do this. Its been a while to put this together, but we have 26 ak d k Academic Medical Centers in the United States among the leading in h the world and these are the treasure to the United States. To have these Academic Medical Centers and employees in hospitals have been b treasures to us to take care of us during this period. The idea is for someone to be able to sort of pick an activity, run five miles, bike 25 miles im going to shoot baskets, then get people to sponsor you. The proceeds of which go to the hospital of your choice. So we have 26 that are in, but this is an invite to any hospital m is, any Academic Medical Center thats out there to join this challenge and raise money truly in honor of the front line and i have a a person ran for it because my son is a front line worker eer and was te in the middle o the surge. Hes now back. Finished his fourth year residency, but this has been a passion for me to take care of the front lines of the pandemic. You guys, Corporate Partners for this in supporting the push and you also yourself have developed an app thats here to help us through this crisis. Is that right . Yeah, when rich share d the idea, i was really excited about a chance to say thanks and also raise money for the folks that have been working so hard to keep us all safe moti both my r sister, both par are doctors. I feel personally connected to it and the platform is all about inspiration. We have a lot of creative folks that would love a way to contribute in some small way so we were excited to jump on board. As you mentioned like separate from pinterest, weve been building an app called how we feel it lets people share their symptoms as well as their emotional well being and we provide that data to researchers to help them better understand the spread of the virus and how we can support those in need rich, want to ask you about the mt. Sinai Health System and how the hospital is doing now that the case numbers and hospitalizations have gone down in new york, but its still a hot spot just give us an update on what the hospital looks like. How much normal activity has resumed and how much is is still dedicated to covid19. Thats a good question. The way i look at it is there are three phases to whats gone on the first is the surge and im happy to report that the surge is really over no more than 20 of our hospitals basically have Covid Patients and the other 80 have been cleaned and sanitized and essentially reopened for mandatory or required kind of surgeries. Were still waiting for the governor to allow elective surgeries but thats what comes next, for people to resume their normal health care, which is critical dauz bauz if people stop and dont go in for procedures, thats going to create a bigger issue and to me, phase three is what comes next and we dont know what comes next so i think the good news is were doung to less than 20 of what we had at the peak. The hospitals are are basically pretty quiet theres really very few people in the Emergency Rooms so you know, i would encourage anyone who is needs to go in for surgeries or procedures they do it soon because we dont know whats going to happen in the fall we dont know haas going to happen as we even go through the summer so and this is true of all the hospitals certainly in the new york and new jersey metropolitian region as we are passed the surge period which is a great timing for the tribute that were doing also for the front liners right now theyre getting a reprieve wanted to ask about the sort of levels and type of engagement youve seen on pinterest how have the levels held up and have you seen what people are engaging on as it relates to going out or staying in type topic sns sfwl yeah, weve seen record levels of engagement. More people are visiting every day and the number of people saving ideas is at a high. As the company we look at two things like first, we want to make sure that people have ak setaccess to really high qualit medical information from organizations that are trusted so thats been our First Priority but as you said, weve been able to also understand what people are looking for and its a lot of the stuff you might expect. People are trying to reset their sort of living and work habits so we see people searching for easy recipes ideas for helping their kids out. Ideas for staying fit. For reorganinuysing their home we also see some people just looking for entertainment. This is a tough time for a lot of people emotionally. They might have lost their job or be dealing with loss. We see people coming for ideas on how to recenter themselves and get a little escape and relief of pretty intense news over the last few months but ben, are you able to capitalize on that increase potentially record engagement and users if advertisers are pulling back and feeling the recessi recession . Yeah, we found as you mentioned then when it comes to advertisers, theres a mix theres some advertisers that are really showing signs of optimism and there are others, many of whom have all their Stores Closed that are in wait and see mode were really try to support them in this period we want to make sure that to the extent we can help them understand where consumers are going and what kind of things theyre thinkinging about planning for the future. We can provide that to help inform their strategies for reopening the businesses and finally, rich, talking about the future you mention ed the fall as the uncertain phase three i think in your words how are you as a Hospital System preparing for what most of the medical experts say is happening, which is that theres going to be a return of this dr. Fauci says its inevitable what are you doing well, the its a complicated question because the, what were doing is getting ready for you know what could be even a worse period than before but we have more therapies, more know how. And we think were going to be prepared from a ppe standpoint what will get kocomplicated in november and december is when people get colds, theyll start sneezing and coughing and wont know if i have the cold, a new or covid were preparing for the physical capabilities well need, manpower issues, but were working with companies to connect with them to help them manage through its going to be a very stressful period when your employees dont know what they have. Thats what were most worried about is that it will coincide with cold and flu season and no one knows how this is going to meld together. But mt. Sinai will be ready for this with our front line were going pay a big tribute to them now a lot of gratitude to do in clapping for them, but we want to put money into the programs for them and to really support them but were a little ners about the fall to be honest with you we just dont know whats going to come. Well certainly keep us posteded thank you very much for joining us today fit for the front line rich, ben, good to have you both weve got just about 18 minutes left before the closing bell check out where we and on the markets. Dow surging today. Up almost 600 points s p 500 up 1. 5 . Still ahead, a pharma titan enters the race for a vaccine. Ken frazier joins us to talk about his efforts. Thats coming up on closing bell you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. This moment right now. This is our commencement. No, well not get a diploma or a degree of any kind. But we are entering a new chapter in our lives. Our confidence is shaken; our hearts cracked. The kind of a crack that comes from the loss of a job; from life plans falling apart. We didnt ask for it. But we are rising to meet it. And how far weve come isnt even close to how far we can go. We just have to remember how patient we were. How strong we can be. how strong you can be. and remember this; theres a crack in everything for a reason. How else can the light get in . Tomorrow starts today. Just losing a little steam some headlines suggesting the u. S. Is now mulling some sanctions on certain chinese officials and companies relating to issues in hong kong but still up a healthy 2. 2 on the dow s p 1. 3, nasdaq a little behind the two. On the dow, four stocks negative including recent big outperformers. Microsoft, apple, walmart at the bottom banks like jpm and Goldman Sachs near the top of the pile today, up 7 or 9 or so after the break, the one airline that ubs just upgraded to a buy plus, are target and walmart gaining ground on amazon in the e commerce battle . Those stories and more coming up in the market zone and you can always watch or listen to us live on the go on the cnbc app well be right back. Where will you go first . Will it be familiar streets . Or perhaps unknown roads . Wherever you may go, lexus will welcome you back with exceptional offers. Find a lexus for every road at lexus. Com. No payments for up to 90 days on all 2020 lexus models. Experience amazing at your lexus dealer. Im going to start the bidding at 5. Thank you, sir. Looking for 6. 6 over there do i hear 7 . 7 in the front 7 going once. Going twice. Sold to the onion lover in the front row next up is lot number 17, a spinach and artichoke dip, beautifully set in a hollowedout loaf of sourdough bread. Dont get mad get e trade and get more than just trading investing. Banking. Guidance. 12 minutes left in the trading day. Now in the closing bell market zone commercial free action mike here to break down the crucial moments of the day and today, weve got tooef weiss here welcome, steve well kick it off with the Broader Market stocks surging today boosted by hopes of a vaccine from merck which announced plans to work alongside a nonprofit to develop a potential vaccine and novavax which officially started human trials of its drug that along with just hopes of reopening. S p 3000 though it looks like were trading just below it now. What also stapd stands out are are some of the companies, the stocks leveraged to the economy, to the potential vaccine, those are doing better than the stay at home stocks which had been doing so well. What do you see . No doubt thats been the main feature of this day. Its a rotation into the cyclical and value of the small and big. But it does tell you it leads the Overall Index in a tough spot at the largest megacaps that have done so well start to back off doesnt really change the experience or the message of the market really in terms of what its say iing about the but what it says is that the Overall Index may be at the tail end, who knows how much more of this rally phase we have might be a little stuck if we get a violent ation also the upside came in the preopen pop and at the open. The markets been rallying for like 40 hours by the market opened today because the s p futures did open higher sunday night so i think you can look at today and say okay, is there really any oomp behind this. I guess thats what happened last week then we were flat for the rest of the week steve, clearly, the market is giving the economy the benefit of the doubt about the idea the economy will rebound how long can that work how long can we see bad days in the economy and the market shrug it off a few weeks, months, a whole year it depends. I think you know going back to kicking the can down the road in saw in so many different areas of the market. We saw it with the chinese trad deal that tnt get pased until a year after we fist started talking. Then weve got the conclusion and the it was a different outcome. So this is is a momentum market the stocks, momentum stocks, so as long as the momentum of good news continues and the expectation, the reality of what the economy is going to look like when this is all said and done and were back to work, is not going to matter because companies are not giving guidance for the second half so theyre basically saying we got a preview of valuation of metrics p its all of that guess what it pays to be an optimist in any market because they go up 85 of the time and at 15 , you want to be a pessimist is what we saw in february and march and its very short lasting. So yeah, i think continues for a while. Airline stocks surging today after an increase in bookings over the Holiday Weekend phil lebeau has the details for us what a day for the airlines all up between 12 and 15 along with the momentum in the market ft there was some good news. A modest increase in the number of people who were flying over the Holiday Weekend. That said, when you compare where the industry passenger levels are now to where they were in april or march, theyre still a long ways away the levels this weekend down 87 compared to where the industry was back in march. About 2. 4, 2. 5 million and over the weekend, you saw levels between 260 and 240,000 and the airlines are still restricting capacity this summer thats going to be the story line people are going to be watching how much capacity will they bring back as they see more people flying in too early to know at this point, guys just wanted to point out one call to you that weve been discussing southwest got a big upgrade from ubs. What can you tell us about that . It does theyre saying who has the strongest Balance Sheet right now so when they raised southwest right now to a buy rating from neutral, they said youve got a number of factors here one, theyre going to set the price target at 41 it was at 37 and they believe that the Balance Sheet when you analyze southwest compared with others in the industry, they have the least amount of leverage and they have the clearest path to recovery as the industry goes through u this rough patch however long this is six months, nine months, a year, year and a half. They have the clearest path to recovery by the way, southwest has outperformed the Airline Index and you can see it clearly there. Its been a nice outperformer and largely a reflection on the Balance Sheet. Thanks for that steve weiss, when we consider these airline stocks, american for example, its still down 61 year to date despite a huge rally today of 14 similar kind of thing applies to the banks which are rallying today. I mean again, its all relative to where they got to does that still allow you to buy them even up 14 today i wouldnt buy the airlines still fools gold. Even when traffic returns, theres three years after 9 11 that it took the traffic to get back, youre going to see a lot fewer Business Travelers and thats where the Airlines Make the margin they dont make it off the people that are arriving from vacation, buying 100 fares to go from l. A. To new york. Its about the Business Traveler were going to see that continue to decline from where the historic levels are. In terms of financials, look, theyre different because theyre healthy Balance Sheets but i dont see where theyre going to make money with the yield curve. But still, its very low levels. The margins are very low and if you look, the lows are theyll get back to where they were sooner, but fundamentally, the its not where i want to be. For you dont like the airlines, what do you like theres nothing wrong with owning the banks or airlines why not. Its speculative money i like technology. To me, youve got kind of a quagmire because youve got microsoft, one of the best companies in the world, trading lower today and i like biotech the xpi is getting hit because moderna is the biggest component and thats being sold off today, which it shouldnt be, because theres so much room for vaccines across the board. I like some of the industrials or transportation stocks if you want to call specifically about Xpo Logistics and uri. United rental. Those are recent positions i put onme on theyll come back with the market and wont be insolvent. Theyve got good cash flow xpo is a little levered. I get that but at least i dont have to worry about if theyre going to be in Business Delivery Companies Like fedex and ups could be facing heightened competition as amazon may be looking to expand amazon air. Bank of america notes that the press aircraft prices in light of covid19 may be opportune time to inkrecrease the size ofs fleet. The firm also points to reports that amazon is beginning to insource data systems with airport hubs in dallas, los angeles, chicago and kentucky with evidence amazon is planning to ramp up its Airline Investment citis website tracker found that target and walmart are seeing more website traffic growth than amazon this year steve weiss, i mean kind of link to your previous point apple, facebook, amazon, microsoft, netflix, walmart, all down today its not because their prospects are worse. Clearly, we understand whey theywhy theyve benefitted its just a rotation from stocks that have been at all time highs at the moment. On one hand, the its healthy to see the market broaden out somewhat on the other hand, you generally see this kind of action in market lows where theyve taken the real laggards and move iing them higher. These arent Junk Companies so im okay with it but in terms of amazon, i aulgs, always, my biggest position, the stock keeps going up i like what theyre doing with air freight and im staying away from fedex sure theyre cheap now but amazon, why should they pay externally for freight when theres such a big target for any company . Do it themselves and they can and air play is isa lot cheaper and i like that note quite a bit. Swrus over two minutes left of trading mike, what are you seeing in market internals sf its been broad if you look at New York Stock Exchange volume, been about 85 to the upside. It was 90 earlier. We had a little flutter to the downside, but till very much a broad day. Probably going to take care of some of these concerns about a narrowing aspect of the rally from late last week. Then if you take a look at gold, quietly, 4 off its highs from a few weeks ago, had an amazing run into that period when people thought we were going to have massive economic dislocations and the fed was obviously doing more than anybody expected its backed off pretty well. Then the volatility index continues to normalize lower in this steady fashion but pretty much at the post crash lows as we speak today still not really just falling out of bed all together and getting back below the longterm average below 20 just over a minute left of the session. Higher by 1. 2 on the s p 500. Still more than 2 on the dow. The high of the session for the dow was over 700 points. Up 500 points or so still a healthy gain nasdaq, the laggard today, is up only 0. 1 as we stand. Nine of the 11 sectors on the s p are higher it was all 11 an hour ago, but health care and technology have slipped into the red also these names like apple, facebook, amazon, netflix, walmart, are in the red today which you wouldnt expect when you see the dow up more than 2 . Banks, the best performing sector financials are up 5 , but banks up 8. 5 . Industrials and energy also doing well today interesting to see those classic other risk on trades taking place today. The dollar is weaker by 0. 9 oil is higher by 2. 5 and gold is lower by 1. 8 all of which youd expect on this day were up 520 points or 2 on the dow. A little bit off the session highs, but a healthy start to the week losing a little steam into the close but absolutely a strong way to start the week welcome back to closing bell, everyone if youre just joining us, im sara along with wilfred and mike take a look at how we finished up the day on wall street. It was an up day straight from the get go and the dow closed higher by 529 points more than 2 higher. The s p 500 good for a gain of about 1. 23 . We were up 2 earlier but then lost some steam into the close most sectors were higher banks were the allstar performers today as wilfred highlighteded a eand we got technology dipping into the red. Also had health care in the red, but industrials, real estate energy, all had strong days. Nasdaq almost flat as the tech trade faded throughout the session. The russell 200, the winner, big comeback ear, up 2. 77 on the day. Up even higher as you can see. Merck making major moves in the race for a Coronavirus Vaccine one of the big stories of the day driving the market, were going to ask the chairman and ceo about the deals the company swrus made and when a vaccine could be rolled out. Joining us to talk about the market today first though st citigroup strategist, tobias marala Morgan Stanleys mike wilson joins us by phone and steve weiss, managing partner at short tills capital. First to you mike on what drove the action higher and what took a little wind out of the sails toward the close yeah, i think the traction in the theme that the economy right or wrong, good or bad, is going to reopen. Theres momentum in that direction and the bull case that it goes smoothly and creates a strong initial recovery of the economy cant be refuted soon so i think that was your strong open s p down half a percent from open to close to there was fading of especially the large cap names. You have to be on alert of what this means if the stocks that got you hear, microsofts and apples and nvi a nvidi nvidias, if they have to take a break, maybe going to leave the index stuck. Were at this round number we jumped above it closed below it. These late day fades havent really had legs in recent weeks but i think you have to be on alert for the idea that this rally is on the mature side at least in the shortterm. Mike wilson, if we do see much better news on the economy or much better news on a vaccine, will we only see one of two buckets in the kind of structural growth, the recent understo underperformers, outperformers we saw a bit of rotation today is that the best we can hope for . I dont think it has to be one or the other i think they both can work our strategy has been to own a barbell of high quality growth plus the more cyclical parts of the market i think the loser in this sna scenario you laid out is the ultra defensive area of the market and that will require tenyear yields moving up a bit more but you know if you think about last year, what really outperformed was defensive securities and it wasnt the growth stocks. It did well, but defense was really the best performer because the market was sniffing out late cycles. Quality growth works the problem is its gotten expensive so now that stuff has the to peel back and some of that money can flow into the cheapest parts of the market which tends to be in the value area got to hand it to you, mike you made a pretty good call. One of the first and few saying the market had bottomed. That you were bullish. You saw this as an historic buying opportunity so r far, its proven to be so its been a tremendous more than 35 run off of the bottom. Do you expect it to continue here zwl we do and thanks i think whats going on is classic recessionary playbook. Once everybody realized were going to recession, typically this is what happens in april, these value stocks, cyclical stocks, had some bad weeks, too, and masmall caps we think thats what a bull market looks holike at the beginning. You get a big, powerful move off the lows need consolidation got that towards april may get another period of consolidation at months end thats my guess. Nobodys good enough to trade it daytoday were bullish. We think corrections and consolidations will be healthy what youve been talking about the last 20 minutes is exactly our feeling. It has to broaden out. So the prbroadening out were seeing is quite healthy. Tobias, to you expect more rotation like we saw today i think its likely the bigger issue is is i think you brought up earlier, the things that have brought us here, those secular growth companies, high quality, bulletproof Balance Sheets, they really dont have a lot more upside youre talking about secular growth probably about 56 of the market cap today. Deeper cyclical. Energy, materials, industrial, about 15 . We kind of need them to join in. Financials need to come in as well but the problem now is industrials are not bearish. That was march 20th, 23rd. So what does that tell us i think we could look at a 10 pullback easily. Look, this is not your typical recession. For example, 2009, march time frame, you see commercial industrial standards start to improve. The data we just got two weeks ago showed those same lending standards becoming much more severe may lead the economy by nine months so were not talking a bullish booming economy. Even by the Fourth Quarter yet, people are trading this i think march, april of next years type of economic environment. Steve weiss, where do you mike, it sounds like sorry, i was just going to say mike it sounds like hes trying to pick a fight with you i dont think hes picking a fight. We all have our own views. Theres going to be signs daytoday that confirm each of our views and signs that b probably throw cold water on our views. As far as lending standards go, i think thats an excellent point but look, the fed is stepping in and directly lending now to companies the government is stepping into that hole. Weve seen over a trillion dollars issued credit is available. Its available and its presentful and available to just about anybody. Steve, i was just going to ask how important do you think a vaccine is or streemt for where the market sits . Clearly, theres been lots of bits of good news, but the time frame continues to point to only next year having the vaccine will the market have wobble at some point in the second half of the year now the market could wobble if some of the data from some of the companies have said were working on it. Starts to falter so weve seen this before. I mean the markets turned into one big biotech investor its overshouting the issues with china, which are severe ive done a lot of work on them. So i would be the tie break with tobias and mike and this is nothing weve ever seen. This is not a traditional recession. Weve never seen the country shut down. Thats never, ever happened. And were not going to see a lot of those businesses, the Growth Engine for jobs in this country, come back to business anytime soon a lot of them are going to stay out of work completely so i think that the market again going to the optimism and when that starts to hit, what percentage of workers are actually coming back are we going to see 10 unemployment Going Forward and the stimulus is going to put food in the table and pay rent barely its not going to drive spending like we saw in 2008. So youve got to be careful of that however, right now, it doesnt matter and going back to your question, as long as every day or every three days a new Company Comes out and talks about their vaccine, the markets going to move higher. The first day of the week in the markets this tuesday, bob pisani has a check on all of the biggest movers of the day. Bob. And wilf, a great day just want to remind people, we had headlines late in the day that moved the markets down. There was talk of u. S. Mulling sanctions on chinese officials it reminds everyone china is also a part of this overall equation and that can move things, but today, the value stocks for once value outperformed. Banks, industrials, energy all of the regional banks has double digit gains comerica here. Youll notice theres not really breakout all the banks looked like this off the lows but no real breakout jpmorgan was up about 7 same story, double digit gains in the airlines but look at this this is not really a breakout. The its a good day, but were not really breaking out of any patterns, but if more people might be traveling, that would help industrials and make airplanes and parts. We saw General Electric have a good day overall its struggling to try to praek out but still not there. Tech tron, another company, in the small aircraft area. They had a very good day and finally Energy Stocks hike apache have held their own the last month theyre trying to break out. Thats the upward slope but its not quite there. Some of the others are there the rally today had all three things the reopening, vaccine and stimulus talk about as senator mcconnell talked about a fifth relief package out there something for everybody. Back to you. Thanks so much for that earlier today as well, jpmorgans Ceo Jamie Dimon spoke for the first time in a while in fact he weighed in on whether the consumer is looking reason bable or not at the Deutsche Bank Financial Services conference. The consumer is in good shape relative to we expect unemployment to go to 20 but the way you think about that, ss n its not effectively because those consumers, 50 to 70 are earning more than theyve earned before theyve gotten benefits from the government theyve quarantined themselves but a lot of them expect to go back to work its a healthier consumer and you see that in actual underlying roll rates housing prices were down in the last recession 40 from peak to trough theyre still up here so its completely different from the consumer standpoint and if the recovery begins, you know, maybe having a good healthier consumer will be a obviously would be a good thing mike wilson and i discussed this with sara framed it as constructive relative to where banks share prices were so certainly not bullish. Where do you stand on bank hair prices banks have been really a laggard. I attribute most of that to the fact that the ten year yield is is stuck here at 70 basis points cant get going. Thats tip kl cal giving the fed. And with their quantitative easing purchasing, but im still a, were overweight banks because we think its a classic early cycle group. Its tricky at this time of the cycle. We think theyre in much better shape than they were in the financial crisis we think housing a big part of that we think housing is much healthier and the banks should weather is storm i think what they want to see is that a, rates go up and brk, theres not going to be a big e default cycle on the other side of this. So bapgs anks are reserved prop. Its a good place to be putting money to work. Steve weiss, tobias and mike wilson, thanks so much for joining us thank you optimism about mercks jump into the vaccine race has helped drive stocks higher today. Up next, an exclusive interview with the ceo b about that move and prospects for a vaccine this year, next year, when are relooking at back in 90 seconds tempurpedics mission is to give you truly transformative sleep. 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Get 0 apr financing up to 36 months on most models, and 90day firstpayment deferral on any model. Merck makingbuster moves toy announcing plans to develop two separate covid19 accines. Its acquiring working on a modified measles virus and expegted to start human trials in weeks its also collaborating with the research nonprofit iavi which is developing a vaccine using the same technology as mercks ebola vaccine with human trials starting this year also partnering with ridgeback developing an oral antiviral the news helped boost the market and merck itself shares closed up by about 1. 2 here now in an exclusive interview is ken frazier, chairman and ceo, along with meg. Meg, take it away. Thanks so much and ken, its great to have you with us today. I want to ask you about timelines. Merck has tremendous credibility in this area having just brought an ebola vaccine, the only one, across the finish line the timeline for that, in november 2014, in july 205, you show nd a trial in guinea that was 100 effective in preventing ebola infection but it wasnt until 2019 that it got licensed here tell us a about the ti little a timelines. Thanks for having me. You just recited our experience with the ebola vaccine this vaccine situation is very different because of the incredible pressure that i think everyone feels to get a vaccine that is safe and effective given the Global Pandemic that were facing so what i would say is is ththat were going to approach this in a very responsible but also aggressive fashion so im not in a position today to say exactly what the timeline will be b. As you know, Clinical Trials take a long time if youre going to immunize a lot of people, millions if not billions of people, youre going to have to make sure that you know exactly what that vaccine will do in people and you can essentially ensure the safety of people absolutely. You told me this morning youre planning into moving into phase one trials for one of those vaccine within just a few weeks. Tell us what the path look like in terms of Clinical Trials and whether if all goes well, merck will be participating in that major u. S. Clinical trial being coordinated by the nih that we heard about last week in a reuters report were going to be working on two different vaccines the iv thats got the platform we used in ebola as well as the platform used in the measles virus. Were also very confident about that the femis platform is a little l ahead and as i said this morning to you, meg, we expegt to go into phase one studies of that vaccine in a matter of weeks if those go well, then later this year, well be going into phase two studies. We also expect to get into clinical studies this year with with the iavi vaccine. You also announced a potential pill to treat this disease would be incredible helpful. Thats a drug from Ridgeback Bio and was highlighted in the whistleblower lawsuit recently where he highlighted safety concerns with similar drugs in the class potentially causing reproductive toxicitietoxicities how do you ensure for that as you proceed with human trials . Well, were very pleased to be in a partnership with ridgeback r fif for this antivi and what we did was to look at the phase one data, which showed if you use this at the kinds of dosages that should be useful in blocking the replication of the virus and in a way well tolerated in patients, the issue you raised is important, however. Normally, you wouldnt be Going Forward with a drug unless you had done the kinds of studies to ensure you wouldnt cause problems but again, this pandemic is different. And were studying this. Its important to remember that were studying this first in people who are already sick. This drug like remdesivir, the gilead drug, we think will block replication. The benefit of this as you said is its a pill its an oral drug which can be used earlier and by the way, can be used easier and scaled up to make billions of todoses, but were going to have to carefully proceed. Were not study iing it in a fis instance as prophylactic to prevent people from getting sick i wonder if you can give us a a sense, youre undertaking three different projects you laid out here today. What kind of investment merck is prepared to make in all of these different programs for covid19 . Weve heard from pfizer. Theyre potentially laying out a billion hdollars, gilead investing up to a boll dollars j j, a Million Dollars whats merck willing to spend on this were going to spend what it takes. We have the capacity, the financial capacity, the Human Resources capacity to prosecute these three programs in parallel were very excited by both vaccine programs the fact of the matter is we have an opportunity to take a step pack and say which programs do we think are the most promise ing and we wanted to find the kinds that will allow us to develop vaccines that can be deployed broadly we wanted to make sure we had things that could work with a single dose. Thats incredibly important that you have the kinds things that would be confident with a single dose and we wanted to use proven platforms. The measles virus as well as the vsv platforms are things b that have been approved for use in people so we know that theyre safe we know that theyre effective for example, the vsv platform about our ebola vaccine, the World Health Organization has estimated its effective in 97. 5 of f people after just one dose so we wanted those kinds of live, attenuated or weakened virus flvi platforms that we think will stimulate the strong immunity we need to have the kind of protection with a single shot. Its sara as you know, as the expert on vaccines, some viruses cant have a vaccine like hiv. How confident are you that this virus, covid19, can be eradicated via vaccine from everything i hear from our scientists, we have a reasonable degree of confidence. You know this is a new virus so theres a lot thats not known about the virus and its reaction in terms of the immune system, but theres strong confidence on the part of our scientists that we can get a vaccine and i think the other thing thats really important is that across the industry, not, no one company can solve this problem. All our industry colleagues are bringing dichbt approaches if you look at all that together, i have a great deal of confidence and optimism that we will have vaccines against this pandemic want to ask about some of your industry peers or competitors. So moderna says its b possible to have a vaccine by the end of the year even dr. Fauci, whos pretty cautious, said its realistic to expect by the end of the year. Why are you giving a longer time frame for yours . This is a company, moderna, thats nevada even put out a vaccine. Youve got plenty of experience in doing that. Each of these platforms has a very different set of characteristics and speed may very well be an advantage to the platform that moderna is using again, i would stress. Were racing against the virus here and were rooting for efb to succeed we have a lot of hands on experience as you just alluded to with respect to the ebola vaccine. We have hands on experience with these live, weakened viruses and we feel that theyre the best approach for us to take because of the things that i said including significantly that we can have reasonable confidence that a single dose will confer the kind of protection that we need so each one of these has a different platform, different characteristics, so it maybes sense that the timelines might be different but realistically, ken, when do you think its realistic that the whole nation indeed many other nations, too, will have been successfully vaccinated is that 2020 event well, i have to say we dont have confidence that we can come forward in that short time period with a vaccine that can be used and i think your question actually raises a second issue theres a scientific challenge around getting a safe and effective vaccine but the next issue is how quickly can you scale up and one of the reasons why we chose the two platforms that we have is we have deep eck appearance with both platforms we know how to make them we know how to scale up. Those particular platforms and were investing a lot at risk to be able to make hundreds of millions of doses by the end of this year if were successful l. Regardless of the timeline, ken, it was good the see you say youre optimistic that you or your industry will eventually find a treatment or a vaccine that successfully off sets this virus. Clearly, the Health Care Industry has been very much in the cross hairs whether its from politicians or the media, but particularly in recent careers. In a couple years time when we look back on this, do you think the way the Health Care Industry has responded will allow the pressure to ease in terms of what the industrys faced in recent years or do you think the opposite that if theres even 1 of profit made by Health Care Companies that it will reinvigorate criticism the Health Care Industry faces i certainly hope people will look at the industry differe differently. As you see, almost every company that has the where with all to try to respond to this situation is throwing in lot of resources. I think it reminds people that we need a healthy, strong industry for the next pandemic you know, this is not necessarily the last situation that were going to face where we have a viral pandemic or a bacterial pandemic we want to make sure that we have the kind of resources in place. Ill just give an example. Weve been committed to antibiotic research for years. Its not very profitable feed, but we want to make sure these viruses, that we have the right kind of antibiotics to product human kind from it i know that already as you said the whole industry is kind of spothi insupporting each othi time to get a vaccine going. I guess in normal times, ken, you compete with err other big Health Care Companies and you want to get your drug out there first and show why yours is the best is there anything more that the industry could be doing in terms of teaming up with typical rivals that could see one vaccine come together perhaps quicker than while everyones sort of still competing eve b b if theyre competing with a more positive perspective than normal well, again, i dont think were competing against other companies and a lot of information is being shared. For example, if were going to scale up and make billions of doses, theres no question were going to have to get behind what are the best vaccine candidates for the world so i think theres been a lot of sharing. If you go back to the early days of hiv aids research, the a similar thing happened we tried to bring the people together to share the right kind of information so we could all be advanced the deal with this pandemic and i think this industry is doing that obviously, we are individual companies. We are pursuing different avenues. But i think its good for society that were doing different kinds of avenues and approaches i think thats why im optimist k that a lot of smart people in a lot of different places employing different strategies and platforms are trying to solve the same issueed to follon the antiviral youve partnered with you mentioned to meg you werent looking at using it prof laktically what kinds of patients are you looking at using it . Can you take it at the first signs of a fever and what kind of evidence do you have that it works . There was a lot of hope around fuji film in japan and it didnt who that it worked in a study and it was a huge disappointment to clarify what i was saying is is that the first studies will be in people who are infected not in healthy people. So we but what we saw in phase one is that this was a drug that blocked the replication of the virus much as remdesivir did and we know remdesivir has led to improved outcomes for patients in studies already and what we want to do is make sure that as we move on to phase two, that we try to insure that we can show the level of effectiveness, but right now, the data weve seen tells us that at the levels that are necessary to block the replication of the virus, that gives us real optimism this could be an important agent either standing alone or in combination with another drug like remdesivir. Ken, its meg again you know i want to ask you about the geo political influences that are at work here that were observing in the vaccine race. As part of your deal, you received 38 million from funding from barta from the u. S. Government does that come with any strings, any guarantees that you need to supply the United States first and what kinds of pressures are are you feeling from around the world . Well the initial funding, we appreciate it did not come with a contractual obligation to provide doses to one country versus another youre right there is no geo political pressure there are other countries that are asking for us to make sure that theyre include d in the first doses. We think the right thing to do is to look at population risk groups so for example, Front Line Health Care workers for example, eililderly people. People who have comorbid conditions we want to make sure this vaccine gets to the people who are at highest risk. Of course we want to make sure its available to people in the United States and other countries and europe but murk merck has a long track record also of working with nonprofit organizations, governments around the world, to insure these important life saving vaccines get to people in low Income Countries i think its important for us to remember that this vaccine shows that it doesnt respect borders. So in a way, you could actually say that until all of us are safe, none of us are safe. Absolutely. A lesson we learned during ebola as well. My final question, i want to ask you b about something dr. Peter piet wrote in science. He did a lot of work in ebola and hiv. He got the coronavirus and spent a week recovering in the hospital and afterwards, he wrote quote without a Coronavirus Vaccine, well never be able to live normally fwagai. Do you agree with that well im not a scientist or a physician and i wont contradict hill the reason why were pursuing these two vaccine programs is because we believe that its critical for the world to have a protected agent against this disease. Were in the pandemic phase. But if were lucky enough to get past that, there will be an indemic phase. So for example, weve been vaccinating the birth cohort against measles for 40 years weve able to suppress it, almost eradicate it, but it didnt gone. Tuberculosis can come back its really important from our perspective, a single dose vaccine is the right way to try to immunize the world. Ken frazier, thanks so much for being with us today and well stay tuned on your progress always a pleasure and were rooting for everybody in this industry to be successful. So is the world back over to you yeah. As are we all. Meg, thank you very much and our thanks to ken frazier. We have breaking news from the white house. Kayla has more at the white house, theres an event underway at the rose garden where the p president is announcing an agreement between the federal government, administrators of Health Care Plans and manufactures of insulin to cap monthly cost for seniors for insulin at 35 a month. Earlier today, Kellyanne Conway and the chief admin traistratori this should result in an average annual cost savings for seniors who are taking part in Medicare Part d of about 450 a year. Thats a drop of 66 now this price cut will take place in january 2021 and government Officials Say that it could be a model to be followed for future drugs the white house said that it has akoccomplished this change by removing a provision in obama care that allows these Health Care Plans to negotiate a better price from these manufacturers, so its likely from those manufacturers that youll see some of the cost side of this being born we are tuning in to the president as he is making this announcement but certainly a very significant cost cut for the 3 million americans who are taking part in Medicare Part d to receive insulin and well tune in to the president and see if theres more news to bring you. Thank you up next, mike is putting todays Consumer Confidence number in perspective then ww, the company known as Weight Watchers is restructuring. Cutting 100 million of costs and announcing closures. Well talk to the ceo about the tough choices businesses like hers are having to make now and you can always listen to us live on the go on the cnbc app. Well be right back. You say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. Break iing news on disney hi, julia. Disney announcing it will be presenting a proposal tomorrow to the Orange County task force with a plan to do a phased reopening of its orlando theme park we dont know the details yet of the date, which we expect them to put forward tomorrow. We do expect to get a proposal from disney as well as sea world to reopen their parks. This is for a meeting scheduled for 10 00 a. M. Tomorrow. Guys, back to you. Julia, thank you. Just getting word from the cboe, the options in chicago, they are planning to reopen june 8th. Back to mike now for a look at Consumer Confidence, which actually rose in last months reading. Yes it rose over the prior month but still not really terrible considering the conditions out there i do think though if you look inside the Consumer Confidence survey, jim paulson has this way of look iing at it when you subtract the two components of Consumer Confidence. One is the present situation just how are things now in terms of your outlook on the economy or your situation then the expectations for the future. If you look at the dif rents between these expectations, minus the present situation, you see its gone from a negative to a positive so in order, the future looks brighter than the past now late last year, i was highlight iing the fact that th present situation looks so much better as a late cycle indicator b and thats the way it goes when this pops from a negative to a positive. This difference, it shows pretty much close to a major market low. Its basically a Business Cycle indicator. It says youre transitioning from recession nair to recovery and according to paulson, it should suggest that in fact the economic recovery is at least going to gain some traction at least the market is now handicapping Something Like that theres obviously no guarantees in this, but it is consistent with the way prior cycles have been have behaved even if the circumstances of this one are quite unique mike, thanks for that after the break, the ceo of Weight Watchers, ww as its known now, on its models changed during the lockdown. Partnership with oprah and what business will look le ikin the future so Mindy Grossman will join us next thats why Td Ameritrade designed a firstofitskind, personalized education center. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. So its like my streaming service. Well except now, youre binge learning. For a limited time, get up to 800 when you open and fund an account. Call 8663009417 or visit tdameritrade. Com learn. And wells fargo employees are assisting millions of customers never before across america through fee waivers and payment deferrals, helping people stay in their homes through mortgage Payment Relief efforts and donating 175 Million Dollars to help hundreds of local organizations provide food and other critical needs. When you need us, wells fargo is here to help. 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. Welcome back time for a coronavirus news update with sue herera hi, sue. Heres what we know in california, barbershops and salons will be allowed to reopen in areas where local officials can show that it is safe it signals the beginning of phase three reopening in some counties you can go to cnbc. Com to see how some other states are easing restrictions the governors of georgia and florida are offering to host the Republican National convention this after President Trump threatened to move the convention out of North Carolina unless that states governor guaranteed the event would be allowed to happen at full capacity state Health Officials are calling on Convention Organizers provoid a covid19 safety plan and in italy, some american tours r were among the first to see the ruins of pompei when they reopened. It was supposed to be the highlight of a trip celebrating his 75th birthday and their 30th wedding anniversary. They plan to spend a couple of days in rome before returning home with quite a tale to tell lots of memories wild. Thanks Ww International facing some backlash over its handling of employee layoffs recently. According to the new york times, the company known as Weight Watchers, fired employees in a series of threeminute zoom sessions it plans to slash 100 million in costs due to the coronavirus pandemic one bright spot though, for the Wellness Company its app only subscribers increased by nearly 16 in the First Quarter. Joining us now the Mindy Grossman, the president and ceo. Mindy, nice to see you so whats actually happening in the underlying business . How bad is it that youve had the to make such severe adjustments on layoffs and costs . Im going give it good context. Its great to be here with both of you when covid19 hit, we had to make, to insure that health and safety and security of our members and our employees, we had to close our physical studios around the world and although we did a significant shift to virtual studios, it also accelerated our Digital Strategy so as part of that, we have made the decision to downsize our real estate footprint to accelerate our efforts particularly in digital and virtual and unfortunately, that had us make a very difficult decision that affected a number of employees around the world who have been specific to those physical environments. And weve been paying the Organization Even when they werent working since the day we had to shutdown march 16th b but today, were not going to need the same size of footpri footprintmefootprin footprintmefootprint. We believe we did it as respectfully as possible in small groups, not video and each person had the ability to have a oneonone post up, which many took advantage of and Going Forward, we are reopening a number of our studios tastarting june 1 but we are going b to be very cautious and we were able to keep our communities together through our virtual studio, which was very important to during this time. The expense measures we took were knowing that even though w had an acceleration of our digital member sign ups that it was going to take time to have the studio business even in its new footprint back on track. We end ed the First Quarter wit over 5 million subscribe ers the highest in our history, as well as the highest retention. Weve seen Retention Trends continue due to the fact we did provide virtual studios. So again, these are hard, thoughtful, respectful decisions, but we have to envision where our business is going to be for our employees and members Going Forward. Do you feel like the sort of stay at home factor has made people be more indulgent or more Health Conscious have you members found it harder or easier to stick to their plans . Weve been able to see Consumer Behavior in realtime. In a few weeks, well be coming out with a wellness meter. We have 5 million members in our app that we see their behavior ef day from tracking food to what exercise. We also have been having 13,000 virtual workshops a week and weve also been launching the event, the Virtual Events with oprah. Ww presents. And so were really seeing both quantitative and qualitatively whats happening and its evolved. Its went from everybody hunkering down they were baking, they were eating and what were seeing now, especially with new members joining, everybody is doing a complete reassessment of their health of how they want to live you know, wellness is going to go from being a luxury to a necessity. Theres a complete reappraisal of people and having work, play, spend. And live and this realization that covid has brought to everyone, especially with obesity being one of the number one factors in the covid deaths, that they need to take care of themselves now not just for themselves, but for others and so we are really monitoring this we launched sleep tracking in our app. We launched hydration. We changed every unit of content that we have in every market around the world to respond to what were seeing in real types. Thats everything from menu choices to content for activitay so everything we can do to surround our members and then connect, which is our Community Platform has really been critical to everyone. Right now, community, inspiration and support is a major factor, which is why we made the decision that these virtual workshops that are launched with oprah were available to everyone for free globally around the world and weve had a million views of the live content and weve had very high engagement and we want to really help people right now as much as we can really get through this crisis coming out wanting to live a better life. Mindy grossman, thank you for joining us with an update on the business thank you good to see you up next, combatting coronavirus concerns many major corporations are urging employees to not take Public Transit is how can the mta of new york keep ridersas fe and make them feel safe . Well talk to the woman who runs the system, next for business as usual. Or is it . What if business as usual means putting people first. And understanding their needs . If thats your business. 365 days of every year, then business as usual is precisely what these times require. Which is why your lexus dealer will do what weve always done. Put you first. Find out how we can service your individual needs at lexus. Com peoplefirst. Finits only human to finde yinspiration in nature. And also find answers. Our search to transform. Farm waste into renewable natural gas led chevron to partner with california bioenergy. Working to provide an alternative source of power. For a cleaner way forward. Ever somethings gone mogotten into the office. M, i hear you. Feels like theres no barriers between departments now. Servicenow. The smarter way to workflow. Amazon putting out its own news story on its Fulfillment Centers. Courtney reagan has the story. Courtney hi, sara we know that amazon has obviously been many important for americans trying toget essential and important merchandise during this crisis and we know theres controversy about the Safety Measures that its taken for the Fulfillment Centers and the highprofile strikes and firing so amazon has sent out its packages and videos for scripps for local news outlets to read with the video that you see here with what it wants viewers to see rather than what we would be reporting on ourselves as news organizations and this is in response to requests for access to various Fulfillment Centers throughout the country which as far as we know amazon has not yet allowed for various news outlets. Weve reached out for comment if were able to do the mta reporting an uptick in ridership, but not everyone is onboard and the New York Stock Exchange reopened on a limited basis, banning those with transit great to see you. Tell us about that that data that we mentioned how much of an uptick have you seen its still very small upticks, but, look, theyre significant as they grow generally seeing 10 to 20,000 more riders each day, each weekday. So were at about 11. 5 of ridership now. We were at a low of 9 so its ticking up slowly, but surely it just shows that theres a sense out there that things are starting to open up a little bit here and there of course, were reminding folks that we need them to remain vigilant and you should be carrying essential workers still at this point. In the reopening today of the New York Stock Exchange, sarre a one of the rules for traders that were to come in was that they cant take Public Transportation like the mta subway what is your expectation about other businesses making similar rules and what would that do to your ridership numbers and to your revenues . If businesses and large Companies Want to be smart about this, large employers want to be smart about this, what i recommend is that they stagger the hours that their employers are arriving and stagger the days that theyll have workers in the workplace so that we can continue to try to social di distance on the Transit System the bus system in new york is still the safest wi ay to get to work and itser ticker symb ter environment and the reality is its not as safe do you fear quite a slow buildup in terms of passenger numbers just given the fact that space is at a premium on the subway . Oh, sure. Look weve been thinking about this, strategizing about it and planning for it for many weeks and months at this point we want to make sure that we are really transparent with the ridership about what they can expect as they return. Were making sure that were doing everything we possibly can to keep the system clean and safe for them and for our workforce, but obviously, were keeping a close watch on numbers. We want to make sure that as people come back were ready i think it is important for people to understand and set expectations look, in any Transit System in the country, not just new york, but anywhere once riders start to come back its going to be really, almost impossible to get that sixfeet of social distance, so mask usage is going to be incredibly important and just being strategic about putting as much space between you and the next person as possible so what happens if a person comes on without a mask . Do the mta workers have to kick them off well, im not eager to put new jobs on my workforce theyve already got a lot on their plate. Their job is to operate the train and the bus safely and to get people safely from one point to the other, but look, we have weve got station attendants and folks at stations and mta police and we have nypd throughout the system. The reality is is that masks are a requirement and you will be need to wear one, and so if you come into the system and youre not wearing one you should expect to either be told to put one on or told to leave the system and come back when you have one specifically what you felt about that do you think its fair for a company like that to explicitly be banning public transport . Should it be the other way around which is that they should be tested on arrivals and up to the individual to how they get there or not and how they keep themselves safe and healthy. Its not an issue of fairness so much as its an issue about keeping your workforce safe. If the New York Stock Exchange is worried about its employees, what they need to say is youre not to attend any events or, you know, social gatherings where people arent able to social distance you should be vigilant about selfisolating or quarantining yourself you should take your temperature and check your symptoms before you come to work, but you know, telling people that they shouldnt ride the safest system and the safest way that they can possibly use to get to work just doesnt make a lot of sense. Sara, last time you were on we talked a lot about the financial hole, obviously, that the mta has placed i think youve got more money from the federal government. What is the picture right now looking like and tell us what you found when you tried to go to the debt markets to raise capital. Well, so to be clear, weve had to go to the federal government multiple times now at this point and ask for different tranches of assistance the first frank what youre referring to has come to a couple of different pieces and second piece is 500 million and the second piece is and we still have 3 million to go on that and i think people understand that this is something that comes to us in pieces the reality is is i dont think anyone could have predicted the kind of unprecedented low that this has been to our system and to our revenues and our financial situation, but really, to all Transit Systems this is one of those consequences to the pandemic that were going to be feeling for a long time. Sara, thanks so much for joining us great to be with you. Thank you. Looking a head to tomorrow on the earnings front we will hear from toll brothers, box and hp and those are expected after the bell also tomorrow afternoon nasa and spacex, two astronauts will become the first humans to travel to orbit from u. S. Soil and the first to do it in a commercial spacecraft. We look forward to that. Dont miss tomorrow our exclusive interview with Goldman Sachs chief operating officer john waldron and sara and mike, particularly looking forward to that, goldman, the best performing of the six banks and it is only down 16 and trading revenues look pretty good in q2. We know how open Capital Markets will be and interesting to get an update from john waldron about what Goldman Sachs is seeing at the moment my also big takeaway guys from dimon, actually and the statement that you played, wilfred, what he said about the consumer and thaw dont think about necessarily as other recessions because in this case the consumer is getting stimulus checks and aid and anticipates that theyll get their job back and that paints an optimistic take on what we can expect. It has not really altered the outlook at least right now for the consumer and also the consumer Balance Sheet was in decent shape unlike many times going into a recession you did not see excess leverage and by the way, the Housing Market is sturdy at this point. We are out of time on closing bell, thanks so much for watching and well hand it over to fast money. Fast money starts right now im melissa lee. Tonights trader lineup, guy adami, tim seymour, dan nathan and Karen Finerman something exceedingly rare just happened in the market carter worth will tell us what it is and how to trade it. Plus one of our traders just went short this ultimate stay at home stock why netflix is no longer chill later, pop the bubbly because the Dow Jones Industrial average just turned 124 years old today, but is the index in serious need of a makeover . We are breaking down