Transcripts For CNBC Closing Bell 20240712

I know youre loathe to lay into fiscal policy but given forecast for Unemployment Rates, do you think its important that congress extend the extra unemployment benefits. I think were trying to keep our comments on fiscal policy at a high level ill come to your specific question let me just say this, this is the biggest economic shock in the u. S. And in the world really in living memory we went from the lowest level of unemployment in 50 years to the highest level in close to 90 years and we did it in two months extraordinary. Appropriately the response there fiscal authorities has been large, forceful, and very quick by the standards of these things roughly 3 trillion congress has authorized, and thats benefiting households, laid off workers, small and medium businesses, hospitals, state and local governments, 14 of gdp, its in a class by itself in terms of both the size and the speed of it. Its also pretty innovative. Both the ppp and Unemployment Insurance are quite innovative in the american context. There were difficulties in implementing them but thats really a function of their novelty, i think this program by the way, the fed also, we both innovated and acted forcefully, progressively, proactively and aggressively as well you put those together, all of that is making a difference now. You look at the income data, expanded unemployment and stimulus checks have gone a long way to replacing lost income from job loss. Youre seeing it in the job data many given ppp credit on that front and keeping Small Businesses going its so far its a good response and having a good effect the question is, its big. Everyone can see that its big is it going to be big enough thais the question the question for the question that ive been concerned about really is this issue of longer run damage to the economy. Were doing a fair job of getting through these first few months more than a fair job the question is that group of people who wont be able to go back to work uickly, what abou them that could be many millions of people, in parts of the economy that will be slow ones to recover. We want those people back in the labor force, we want them getting jobs they are going to need possibly probably will need further support. I will say, this its possible well need to do more and its possible congress will need to do more. In terms of 600 Unemployment Insurance, i wouldnt try to give congress advice on the specifics of that. I know they are looking at i know from both talking to people and reading the papers that they are looking at a whole bunch of different possible approaches Going Forward and some of those seem kind of promising so were happy to give advice if people ask for it but probably not public ly. Thank you chair powell, im going to pick up on what scott asked you. You have been studious in threading the needle in interviews and speeches and colloquy thats followed not giving advice to congress but indicating theres likely to be a need for more fiscal stimulus for additional policy in the future, so im going to try a hypothetical here, and you can rebuff it if you want. If you were to find yourself in a Senators Office suite, he held up that unemployment report, which youve described as unexpectedly positive and a welcome surprise, and he or she said how this is an indication we can put on the brakes, i wonder what you would say. Your message, impressive as it is, how much urgency and dealing with this and weve seen that from the Federal Reserve, i wonder if you worry that sense of urgency isnt being matched panned what the consequences might be there is a fear the fed could be seen as we look through the unemployment and summer and more to wait and see what happens in subsequent reports a second question. Youve talked about your fear of a second wave of this disease. Theres a difficulty with definition youve talked about weathering this crisis and getting through this storm it seems to me as i listen to chatter from the white house, epidemiologists, there is an agreement on what getting through this means you have an administration inclined to if not direct be content this opening up states economies too early. How problematic is that not having an agreement on how to treat the virus. I will provide a little context. I want to be clear about the picture. One way to look at the picture if you look at the widest measure of unemployment, labor market slack, if you will, is the u 6 measure. The one we talk about all the time is u3 by economists the one that has a much broader measurement of slack in the economy is u 6 the u 6 level tripled from 27 thats 2 Million People who lost work in the economy, either going to part time thats in the low 20s. Thats post may unemployment report you can look at it a different way, look at the regular Unemployment Rate. Take the 21 people who list as unemployment now and add more on for the ones miscoded. Take those people who are suddenly out of the labor force. You put those together and that has gone up by about 24 million. Those are two different measures of what happened so the question is 22, 24 Million People got to get them back to work somehow weve got to get those people back to work. They didnt do anything wrong. This is a Natural Disaster i do think the responses so far have been great. Thats the way i would think about it i would just in terms of the may employment report, its so nice to see i think what people were thinking, youd start to get back to work kind of numbers in june, july, and august very few people saw them in may. Almost no one saw that happening as early as mid may but it did we dont know what that is, whether its a timing change well have to wait and see its clear evidence of how things are and how humble about our ability to have confident predictions as opposed to just predictions. Bottom line, i would just say the key thing people need to understand is theres a lot of work to do in the labor market were going to stick with this and support that until the work is done. That is something were going to do as well it may require congress to help but thats going to be their decision. You also asked about the second wave. We have major responsibilities and powerful tools, but the decision about when to reopen the economy is one for elected officials at the state and local and federal level. We dont have coronavirus experts, its kind of selfevident, i think, that if it happens, you know, the issue would be, first of all, Peoples Health but secondly, you could see a public loss of confidence in parts of the economy already slow to recover. It could hurt the recovery even if you dont have National Level pandemic, just a series of local on ones, in traveling, restaurants, entertainment. Anything that involves getting people together in small groups and feeding them and flying them around those things would be hurt it would not be a positive development and ill leave it at that thank you, edward lawrence. Thank you, chairman powell, for the question in may we saw at least 5 companies file for bankruptcy. Do you think its too late, first of all second of all, the future of these facilities, is this a oneyear impact to the economy to these facilities or multiple year if so, how many years. We have significant interest, we think also, remember, lots and lots of companies are getting financed, too. Banks are lending, markets are open you have a much better lending climate than certainly we had in february and march we dont think its too late, though we do expect it to be quite soon in terms of timing, well leave them open for new loans as long as we need to. That will be a decision we make, of course, with colleagues at the Treasury Department. At certain point there wont be a need for further loans and the assets will be there i dont know if thats part of your question, too i would say at that point the useful role of the Federal Reserve is close to an end at that point we dont have expertise managing pools of credit assets, loans, if you will, or bonds. We dont want to be made we dont want to be part of the decisions to manage such a portfolio. Wed be looking to have that done either someplace else or by a third party or the Treasury Department were working on ideas for that. Our real focus is on getting these facilities going and getting them to do the job they need to do thank you reuters. Thank you so i have two quick questions. One, if we have hit bottom the economy. The second is regarding the way that the pandemic has exacerbated racial inequality, i wanted to ask to what extent do you think you can factor in those disparities. I would say many forecasters have been expecting a bottom for the economy around the middle of the year with ahuge range of uncertain uncertainty. I think the labor market the evidence of one jobs report, the Labor Department may have hit bottom in may. We dont know that were going to see many forecasters widely expect a recovery over the second half of the year so it is possible. Were in the going to overreact. Were going to be very careful reaching any conclusions about good data or bad data. Were going to be here with tools supporting the economy as long as its needed. I think theres a possibility the bottom is coming to the Labor Department we dont know that well know more Going Forward. In terms of the effect of the pandemic on equality the pandemic, of course, hits everybody. But in economic accepts it hits those industries that involve groups of people in tight groups, either in places where its travel, leisure, restaurant, bars, those kinds of Service Economy jobs a lot of lost jobs are people in the service area, relative to other jobs, relatively low wages. If you just look at what that is, unemployment has gone up more for hispanics, more for africanamericans and women have born an extraordinary, notable share of the burden beyond their percentage in the workforce. Thats really, really unfortunate because if you go back two months where we were, we had effectively first tight labor market in a quarter centu century. For the last couple of years before the pandemic hit you were seeing wages go up at the most at the lower end of the wage spectrum, and that was great we were meeting with people from low and moderate income communities all over the country and saying dont change this do whatever you can, keep this going. This is the best labor market weve seen we had every expectation, every reason to expect this would continue, then this comes. So its hard breaking. We want to get it back i think we learned a number of things over the course of the last few years one of them is you can have 3, 3 1 2 unemployment for a couple years and you see modest moves in wages and relatively almost invisible moves in inflation that was not anybodys understanding of the structure of the economy we can use our tools to support the labor market and support the economy. We can use them until we do fully recover and thats what were planning to do we dont target different groups were cognizant of the fact that late in the last cycle, late in the last expansion, the benefits really do go more to people at the lower end of the spectrum, for the first time in many years, when labor markets are tight, when unemployment is low, so we would really like to get back to that place victoria from politico. Hi. Victoria guido with politico i wanted to follow up with a couple of things that have already been asked first of all on fiscal policy, you all put our summary of Economic Projections im curious to what expenditure future fiscal policies is factored in or not factored into those projections and how more or less fiscal policies might affect those projections my other question is on main street, youve mentioned that the fed and treasurer are willing to expand the program further. My question is, whats the threshold for those types of changes. Is it just making sure borrowers who want to borrow through the program are able to do that. In terms of the way we do forecasts is we dont we dont tend to incorporate things were highly uncertain about i think the forecast would not have included substantial additional big fiscal support for the economy. Maybe a modest amount. Something that looks like a low end guess on what might come out of the current negotiations. Thats basically what would be in the baseline. Of course, if there were more fiscal support you would see it sooner thats a question for congress were spending a lot in terms of main street and our willingness to expand it further, i think one thing were looking at, very strongly looking at, is nonprofits and is there a way to incorporate them into that facility or a similar facility thats another dimension you know, if we had a great idea for changing main street we would have done it weve done things very positive here as we learned more, it could be in terms of size it could be in terms of lots of Different Things i think we have a good product to go to market with now i think it will get out there soon you know, well see, and well be willing to continue to adapt. Thank you the vast majority laid off are expected to be recalled by their employers. At this point, what is your expectation of how much of these job losses will be permanent a reliable estimate of that, clearly not everyone will go back i would say many will go back. But whats the remainder when we reach the new normal is uncertain. It could be a number of people in many estimates. Id say youre so early in the process, people are for example, people are going back and looking at other significant changes in the economy, and they have seep how many people go back when, for example, theres technological change you may have seen some of this research you come up with an estimate its just going to be very hard to say my assumption is that there will be a significant chunk, well into the millions. I dont want to give you a number because its going to be a guess, but well, well into the millions of people who dont get to go back to their old job, and, in fact, there may not be a job in that industry for them for some time. There will eventually be, but it could be some years before we get back to those people finding jobs if they lose a job, if they can find a be jo in their own industry, thats the fastest way. They know other people in the industry, different kinds of jobs thats the fastest if you have to go to a different industry and start over again, its much harder thats when you start to lose people who just fall out of the labor force. You know, its very tough on their lives. We all know people to whom that happened in the Global Financial crisis hence, our desire to do what we can to support this and support this recovery with the tools that we have i want to go back to the issue of inequality. Im wondering what more could the fed do for equality in the country. I know you said you dont target certain groups is there a way you could use black Unemployment Rate as some kind of a benchmark as something you want to meet or something to keep track of. We track unemployment by all kinds, as you know, all kinds of different demographics, particularly africanamerican Unemployment Rate, which reached an alltime low in the modern era. Its close to twice the Unemployment Rate, or it was its certainly much higher now you know, the best thing we can do with our Monetary Policy tools is to look at the evidence we saw with our own eyes recently the economy can have very low unemployment, very low unemployment it could have been lower than we were it could be lower than 3 1 2 , without seeing financial imbalances, without seeing inflation getting out of control. We frankly didnt get inflation back up to target. Without seeing wages getting out of touch with where they should be thats the biggest thing we can do inequality is thing thats been with us increasingly for more than four decades. Its not really related to Monetary Policy. More related to theories that cause it its something that more or less has been going up consistently for more than four decades theres a lot of theories. One is globalization Technology Call for rising levels of skills and aptitudes and education, and u. S. Educational attainment flattened out relative to our peers over that period that means if youre on the right side of those trends, then those things are good for you. If not, wages will stagnate. Wages at the bottom havent gone up for a long time wages at the top compensation any way you cut it, before taxes, after taxes, wages compensation has gone up a whole lot for people at the top and really happened gone up for people at the bottom if you look more in the middle, it has gone up for most other groups but at the bottom not so much in real terms we call it out as an important factor in the economy and we use our tools to support maximum employment and take that definition to heart. Obviously thats something that requires all of society, all of government response. Thank you for the last question well go to michael mckee, bloomberg television. Michael, bloomberg tv and radio. I came across a statistic, since your emergency announcement, every single stock in the s p 500 has delivered a positive return im wondering even the levels of the market right now, whether you or your colleagues feel there is a possible bubble that could pop and set back the recovery significantly or we might see capital misallocation that will leave us worse off when this is over. Second inequality is not just about wages but also about wealth a number of studies suggested keeping rates so long and targeting markets after the financial crisis that the fed did contribute to wealth inequality in the country. Im wondering if you think theres some tweak or some message you could give that would affect this. What weve targeted is broader financial conditions if you go back to the end of february and early march, you had basically the World Markets realized just about the same time i remember that monday, that there was going to be a Global Pandemic and the possibility it would be contained in one province in china, for all practical purposes, was not going to happen. It was iran, italy, korea, then it became clear in markets from that point forward investors all overthe world fo several weeks wanted to sell everything that wasnt cash or shortterm treasury instrument they didnt want any risk at all. What happened is markets stopped working. They stopped working companies couldnt borrow, couldnt roll over their debt, people couldnt borrow thats the kind of situation that can be financial turbulence and malfunction, a Financial System not working can greatly amplify the negative effects of what was clearly going to be a Major Economic shock. What our tools were put to work to do was to restore the markets to function. I think some of that has happened as i mentioned in my opening remarks, and thats a good things. Were not looking to achieve a particular level of any asset price. What we want is investors to be pricing in risk like markets are supposed to be borrowers are borrowing, lenders are lending. We want markets to be working. Again, were not limiting it to a particular level i think our principle focus, though, is on the state of the economy and on the labor market and inflation. Inflation, of course, is low we think it will remain low. Really its about getting the labor market back and getting it in shape thats been our major focus. I would say if we were to hold back we would never do this the idea, just the concept, that we would hold back because we think asset prices are too high, others may not think so, but we just decided that thats the case, what would happen to those people what would happen to the people were actually legally supposed to be serving. Maximum employment at stable prices thats what were pursuing were also pursuing Financial Stability. There you have a Banking System thats so much better capitalized, so much stronger, better aware of its risks, managing its risks, more highly liquid you have all of those things they have been lending, taking in deposits, a source of strength in this situation so i would saywere tightly focused on real economy goals and, again, were not focused on moving asset prices in a particular direction at all. Its just we want market to be working. Partly as a result of what weve done they are working. We hope that continues thank you very much. Fed chair jay powell continuing his crisis firefighting and making it clear hes in it for the long haul he will continue to support the economy through bond purchases he says will continue and not raise Interest Rates from rock bottom zero level through at least 2022 welcome, everyone, to closing bell im sara eisen with wilfred cross. Stocks have been all over the place. Looks like were around the flat line the general takeaway, fed chair powell is concerned about the outlook. He mentioned its uncertain a number of times, not to be too reassured by the jobs report he said welcome news but still 20 million americans unemployed and the fed is going to continue to support the economy in any way they possibly can. That was the message how stocks are interpreting it we were down, higher after the statement, down back around the flat line. To that point volatility in markets, you can see positive on the session at the start of his press conference up 83 points on the dow. We then declined over 300. Can see weve recovered back to being down 100 banks suffering lower rates, down 5 or so. Lets bring in our panel to discuss first. Mike santoli, chief Market Strategist at jeffries, bank of america global research. Courtney gibson, Capital Marks andour own Steve Liesman is with us, too first, quickly on this market reaction, clear commitment to keeping rates low for quite matt perhaps slightly less constructive tone on whether or not were going to see the economy continue to recover compared to the gist of market commentators over the last couple of years. Certainly chair 30u8 risk management, downside risk, long road back to a well functioning economy. I think that might have been a little bit of a reminder also, you have to mention that the market often kind of goes to sleep during the press conference, figures out what a proper response is even the next day sometimes a rethink. You dont want to necessarily say the verdict is in. Whats happening, bonds are rallying, yield doing down, Long Duration stocks are up the rest of the market value stocks are down. That was infect for two days i dont think the market saw too much in jay powells remarks to change what it was doing, sorting out whether the rally needs to be digested and reassessed in terms of likely growth rates. A few other headlines to mention, the Federal Reserve expects the economy to shrink 6 1 2 this year and for it then to rebound 5 next year, 3 1 2 after. Executive the Unemployment Rate at the end of the year to still be elevated at 3. 9 . David, what is the appropriate investor takeaway from chair powell sorry about that, sara. I think the appropriate takeaway is twofold. You have you guys sort of said this in the beginning you have a message, which is pretty bleak on the economy. Frankly sep, quite bleak, at the end of 22. The outlook. 5 1 2, which is well above their estimate this is a pretty unfriendly economic forecast. But then you have a fed chair thats telling you, hey, ive got you. Ive got your back im going to do more for you ill do whatever it takes. I think the market has to tussle with those two things. I came away from the press conference feeling pretty good even with the very down beat forecast, which may or may not be correct as jay said, we should all feel pretty humble when thinking about making these forecasts and also humble about the ability of the fed to create inflation, something they are concerned about and concerned about going into this. I think the overwhelming story is not the Economic Outlook, its that the fed is there with programs, with everything its put in this to make sure if we do have another second wave or bout of weakness for any reason were going to get the stimulus coming in. The last thing you said, sara, really when the market kind of took a little move back up, not huge, but definitely seemed to react to it on the last question, when someone tried to ask do you care about stocks being up since the lows, since that marine date, he said we dont really care. Were not here to sort of call a bubble or not a bubble were here to make sure maximum employment i thought a little defensive, actually. I agree with you. I thought that was a pretty strong comment for the stock market dont give us a whole bunch of flack for sort of doing our job, which is trying to get jobs back and get employment up, inflation back to target were not really going to get worried about some nebulous concept of Financial Stability as it relates to where the equity market is. Steve liesman, you were in the virtual room, as it were what was your main takeaway . So, im a little bit more strident than your suggestion there. You used the Great British phrase slightly less constructive on the economy. I feel like powell was kind of trying to take the market a little bit by the lapel and shake it and say what are you guys thinking. Theres this outlook here that everything is going to be fine and were going to get right back to where we were and get back quickly powell was given, i dont know what you want to call it, a half a dozen chances to provide a rosier outlook and he did not embrace it in fact, he went further than he had in the past and said, look, even when we bring people back, theres going to be many, many millions of people who dont have jobs, whom there wont be jobs for the essential dichotomy out there in the market right now is this, can you embrace the feds low rate forecast and yet not embrace the idea for at least two years for now there will be a large output gap in the economy, elevated unemployment and not back to where you were for 2, 2 1 2 years thats the fed thing together. I think thats been a profitable trade. I just dont know how long it remains profitable if the numbers start to undermine the idea, were going to come back quickly and everything will be hunkydory in a couple of months. Michelle meyer, how do you react to that, disconnect between economy and markets and the fact powell remained pretty down beat, as steve laid out, on the economy in a number of ways . Yes i think steve is spot on fed chair powell made it very clear there are a lot of challenges ahead for the economy and gave an outlook that was concerning we could have an initial but certainly there could be problems thereafter. Michelle, i wanted to ask what you thought the chances were that inflation could surprise to the upside clearly they have committed in their forecast at the moment to low rates for a long time. Look at the money supply growth over the last couple of months is it possible inflation could surprise to the upside you know, its really quite interesting. That was one of the Key Takeaways for me today, the fed is very convinced theres going to be a disinflationary environment. Look at the forecast, below 2 , through the forecast horizon the way chair powell talks about the inflation backdrop with slack in the labor market. Even when you get to full employment its not obvious that will be sufficient for higher wages and price pressures. Theres a lot of stimulus pumping in theres a lot to happen for that to become inflationary you need to have a phillips curve thats active, you need to have wages picking up. I think powell communicated very clearly they are not going to be convinced that there is an inflationary push, a trend high of inflation until they see it just an Unemployment Rate thats a low target is not sufficient condition to believe there will be fire inflation. They are clearly not looking at the athome inflation on the growth rate numbers which today showed a big, sharp rise courtney, investor playbook here, do you do anything different as a result of what youve heard from chair powell for me personally and many of our clients were very much focused on and im focused on the longterm. Candidly, i want to start with the fact i do everything chairman powell is doing an incredible job navigating through these unprecedented times. I think its worth noting hes being cautious as relates his comments and we need to appreciate that because ultimately were in a situation where you cant have people thinking that its going to be rosey down the road. Theres a reason Interest Rates will be kept low not only that, he said im not even thinking about thinking about raising rates. That should tell you something as investors i think right now you have to have it. This the stock market. You have to decide, am i willing to lose . If im not willing to use, should i be playing . Were seeing a lot of Retail Investors getting involved and seeing the spike in the etrades of the world, even cashout people can now invest. We have to be very, very careful as it relates to the messaging that were providing to regular Retail Investors, let alone our highend Institutional Investors that know what they are doing. We have to protect our people that are out there now that says, oh, the stock market does nothing but go up. We all know thats not true. I thought it was very prudent of fed chairman powell to outline the potential risks and potential problems we may see as we move forward here, possible resurgence, seeing 21 states with covid now spiking again you cannot ignore the reason why hes saying hes going to keep rates low. I think the bottom line is in a nutshell, if you have the philosophy,stick with it, remain diversified and understand your risk tolerance. Kourtney gibson, michelle meyer, Steve Liesman, thank you all for your take on powell. Joining us with more reaction by phone, mohamed elerian, economic adviser, former pimco ceo. I saw you tweeting, mohammed, and i said get him on the show you sound a little critical of fed chair powell whats your reaction a couple of things, sara. He didnt give Additional Information on the key issues that the mark is thinking about. You saw that in the reaction of the market while i agree with mike santoli that the verdict, final verdict is not in. You saw the market go up on the statement and go down during the press conference thats because the marketplace wished for more information. The second thing he sidestepped was a disconnect between the real economy and the financial markets. Thats important not if youre buying assets covered by the fed but buying assets not covered by the fed. Its important to the fed itself because it opens up criticism, fueled by how long its taken to get main Street Lending program there. Thats why i was more hesitant than others about the statement made during the press conference. I wonder what your take is on the u. S. Dollar at this stage. Clearly unbelievable low rates and negative rates in europe and japan for many, many years is this sort of changing tune from the fed more of a surprise and more of an impact on its currency if we do now see rates incredibly low for the next two or three years. I think two things will play to that. One, people realize the fed is dovish he is not ruling out negative rates, which is interesting. Neither is he ruling out control. Looks at this year, my get stuck in the low growth equilibrium longer thats happening and will have an impact on it. Third, people are looking at the investment all that is coming in. I think thats why youre seeing the dollar under pressure. Mohamed, thanks so much for joining us. Thank you. Up next, the airlines take a dive kbrub hub looks to europe and a multibillion dollar revenue hit. Those stories and more when we take you inside the zone we have 18 minutes left on the session and were currently flat on the s p 500 save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Hey lily from at t here. Im back and while most stores are open, im working from home and here to help. Heres a tip get halfoff the amazing iphone 11 on at t, americas Fastest Network for iphones. 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Stocks volatile after the Federal Reserve projected no Interest Rate increases through 2022 fed chair jay powell highlighting the level of uncertainty the fed has about Economic Outlook during his monthly News Conference today. Listen. Indicators of longerterm expectations have been fairly steady the extent of the downturn and pace of the recovery remain extraordinarily uncertain and will depend in large part on success in containing the virus. We all want to get back to normal but a full recovery is unlikely to occur until people are confident its safe to engage in activities the severity of the downturn will depend on policy taken by government to provide relief and support recovery when the Public Health crisis passes jay powell then telling Steve Liesman, were not even thinking about thinking about raising Interest Rates josh brown, as an investor, is that a signal to buy we know this market really likes low rates and qe and stimulus. As a trader it tells you to be long gold its no surprise gold is one of the better places to be, equities in metal. As an investor, i think its a more difficult question. One of the things coincided underperforming segments of the market either cyclical or value oriented if you look at fed forecast out a few years, which nobody believes in but just hypothetically, lets act like they matter, theres really no rate hike in sight even into 2022 if thats the mindset powell is a student of history, he knows things started to tighten up too quickly in the 30s. Nobody wants to repeat that when you also have a pandemic hanging around what youre saying to yourself is, okay, whats been working throughout low rate environment. Look at apple and microsoft today. These are massive upside breakouts in stocks that had already been going up. Absolutely massive part of me thinks its not about the fund memorials of these companies, this is about fund flows and massive reallocation into large crap growth. When growth is scares people pay for anything that has growth we know these names are exemplars of that. The last thing i want to point out, we seem to have had a reversal for lower price stock group, speculator, robin hood names, most beaten down sectors that had this huge comeback. Authorizes back out of favor at least today. I dont know how long that will last we did a scan. We looked at the 60 stocks down in the s p 500 yeartodate, only three are in the green today. I think its a little bit of a sentiment shift, people coming out of downtrodden long trade and going back to what they know has been tried and true and thats large cap texas, looks phenomenal in general. Mike, to what extent markets welcome the level of rates being low versus being surprised by the extent of dovishness from the central bank, which is going to be hard to price to the downside in years ahead unless you were to go negative. I think bond futures markets were already telling you it was going to be 0 out there. I dont think that was too much of a surprise powell was vociferous how its going to be hard, but by the way rates were at 0 for seven years the last cycle we didnt get to 6. 5 unemployment, which is the feds projection for four years after the peak my point is that stuff doesnt necessarily the stock market doesnt market to market how much of a struggle were getting in the improvement of Economic Conditions for every tick. If its improving, the market can find a way those bond stocks, microsoft and apple, Long Duration cash flows. Bonds are rallying, so they are rallying a spillback from laggard trade well see if it will last. Market over stretched, too many stocks going too fast, weve been reconciling that. Well see if this is a stealth correction or, in fact, its unstable underneath and has to have an index retreat. That recent rally in underperforming stocks is important, taking a leg low off jpmorgan top analyst jamie baker said the recent runup cant last longer, jetblue to underweight, United Airlines to neutral, Revenue Airlines for the second half of the year. Delta, meanwhile, expects Second Quarter revenue to decline 90 year over year with capacity down 85 tom highlighting in the note tsa passenger traffic numbers trending towards hitting precovid levels by august 3rd josh, i guess with the airlines, maybe they started no way. Theres no way. Let me make my point and get to my question, even though you already answered it. I guess they started to answer the shortterm question whether they will survive 2020 but theres till longterm questions about the impact of things like work from home on Business Class travel and the rest of it. I saw that yeah. I saw the same chart tom saw it was in the wall street journals sober look daily chartfest. What they basically did was took the bounce weve seen over the last two weeks and extrapolated it out, i dont know, 12 months. If we go in a Straight Line in the recent bounce, then, yes, youll get back to precovid levels by august i would say take that magical creation and throw it out. I dont like those type of extrapolatorycharts. Its very hard on the ground to imagine that being realistic not necessarily a call on the airlines i would point etf is where action is happening. We talked about robin hood traders who said ive heard of delta. I cant believe its down 80 , ill take a shot at it that trade worked. You can laugh if you want. I dont know there is enough leg to that trade to continue on the fact they are rolling over look, i didnt buy them at the bottom you know, its not like i was all over that bounce ive been skeptical of it and i remain so. Were getting some news here, guys, on a potential treatment option against covid19 from eli lilly. Meg with the story meg. Hi, sara. We know eli lilly started trials of two antibody drugs for covid19 this is an entirely new approach to treating the disease. The first drug is designed to do that they started Clinical Trials with two of those. Chief scientific officer telling reuters if all goes well these drugs could potentially get Regulatory Approval by the early fall well have to see how those studies go they say if they are seeing that by late august, for example, they are preventing hospitalizations and more severe disease. This could be enough to potentially get Regulatory Approval, which would be ahead of the time lines were talking about for vaccines we know that after talking with regenerons chief officer friday, they are also planning on starting human Clinical Trials of their drug this week an important class of medicines that could advance quickly if they do well in Clinical Trials, guys. A lot of people hoping these antibody therapies can bridge us to the vaccine meg, thank you want to hit starbucks under pressure after reporting it expects to lose more than 3 billion in revenue during its latest quarter kate rogers with the details kate. In that starbucks projecting the loss of 3 billion in q3, adjusted loss between 55 and 70 cents a share due to covid19. 91 of stores were open at the end of may Comp Store Sales have improved from being down 63 in april to down 43 in may. In q3 they expect comps to decline between 40 and 45 the company saying it will open new stores in fiscal 2020, down from the original projection of 600. The vision for each large city in the u. S. Is to have some mix of traditional cafes and pickup locations. The strategy here alliance with rapidly evolving consumer landscape and preferences weve seen emerge as a result of the pandemic they have sped up their plans to make these changes they originally projecting them to happen over three years, now shortened them to 18 months, guys over to you. Thanks for that touch on wells fargo, about 9 lower after forecasting higher Loan Loss Provisions in the quarter. Investor conference earlier today, cfo noted Net Interest Income will decline more than 11 . The point about general outlook in contrast with more optimistic tones from other Bank Executives at this conference including Morgan Stanley james gorman who joined us yesterday. All the banks took an extra leg lower, mike, during the fed meeting on the prospect of lower rates for the impact it will have on Net Interest Incomes wells fargo down 45 yeartodate compared to kbw index down 6 and 20 yeartodate, continues to suffer disproportionately and does sort of stand out talking today cfo or a different conference on a different tone from the rest of the banks that i do think have been striking a more constructive tone on the economy compared to what we heard from jay powell today. It seems wells has not been able to sidestepping the industry, a full helping of it without off sets and faster growing parts of the business. It seems like the market is punishing it on a day where the overall Regional Bank index is down 6 or more. It does seem as if people finding an extra reason not to like wells on a day it was already not looking great. But still for the month, josh brown, the banks, financials have a nice comeback, 8 , definitely taking a step back today and last several sessions. Where do you stand you havent been a fan i own jpmorgan. Im much more interested in the payment space and credit cards than i am in traditional banking. I think they can be okay by taking loan loss reserves and putting pressure on earnings in the near term, they are doing what they should be doing in an environment like this. We all know a lot of the extraordinary stimulus that the treasury and the fed were able to advance to the American Consumer is not forever, right so you have a lot of things coming up in july that just wont be the case anymore. When you see the spending dropoff that directly is a result of that, you say is Congress Going to come back and do more . These are households that spend every dollar they get. So when you give them stimulus, they go out and spend more it makes rebound for credit and debit card spending look better than it would normally be. What is the real level of consumer demand x they get programs unfortunately we might find out this summer. You have not seen a wave of personal bankruptcies, you havent. I hope we dont. I dont know that three months of direct deposits and stimulus and having that go away, i dont know that we really know what the real amount of spending is in the economy the banks, they are the first in line to get either the benefit or the hit its just the reality of their business so any bank that issues credit cards is going to have to face the same questions what happened i thought we were rebounding. We were just about two minutes left until the close dow is down 230 points mike santoli, what are you seeing in internals. A lot of softness all day before and after the fed, two days in a row, average stock down significantly, decidedly negative, five to one in the new york stock exchange. Similar story if you look at equal weighted index of russell 1,000 stocks thats pretty much all big cap stocks, equal weight over the last two days against the qqq, cap growth, back in growth the volatility index interestingly or maybe understandably after the fed meeting has gone lower that often does happen the fed is a known volatility keeping s p dead flat is a formula for Cboe Volatility Index to give up a little bit of that premium. We have just over one minute left of the session. We are selling off as we approach the close the dow is now down 250 points the low of the session there during the middle of jay Powells Press Conference was down about 334 rerallied briefly but selling off as i said into the close, down nearly a percent on the dow. S p down 0. 4 nasdaq composite holding onto significant games, 3 4 of 1 , above 10,000 level set for another record close s p 500 only one sector high, technology, up 1. 8 . Otherwise the other sectors, energy, industrials near the bottom banks down there, kbw index down some 6 . Not enjoying fed chair powells commitment to lower rates. Down 0. 4, dxy below 96 with 95 for the first time in a while. All is flat but golden joining a nice rally during press conference and since up 1. 5 for obvious reason at the close down a full percent on the dow, half a percent on s p, up 0. 7 . That will make another record closing high for the nasdaq. Welcome back, everyone if you are just joining us to closing bell im sara eisen with wilfred frost and mike santoli, senior markets commentator. Take a look how we finished up the day on wall street lower for major averages like dow and s p, dow closing down 282 points those squiggly lines going positive at one point. That was all around found federl reserve. First a pots tiff response to the statement, they promised to keep Interest Rates low through 2022, then lost momentum lost half a percent. Technology was the only sector that was higher on the day and that helped the nasdaq go to another record close the nasdaq its eighth positive day in the last nine it is now up 12 for the year. Thank you. Microsoft, amazon, some of these big cap tech cops, tesla helpingous down 2. 6 . Coming up well get reaction to fed chair jay powells News Conference joined by former federal. Lets talk about the market today. Josh brown still with us p Alicia Levine joins the conversation first to you, mike santoli, was this a reaction to the fed what drove the selling at the close. I dont think fed did much to change general sense of whats going on in the market it did reemphasize. If you thought we would race ahead and get back to normal, i dont think thats what the market was implying. There has been a rethink a pullback what happens when the market guess nervous, still wants a place for money, defense, tech stocks thats been kind of so far fortuitous rotation thats gone on its unclear again cool off more and maybe just kind of consolidate the gains in the last couple of years. Alicia, it was thin today one sector higher, tech, 10 sectors lower, some meaningfuly low. Does that give you concern the whole market will roll over. We think theres a consolidation coming over the summer but this is not the cause of the rollover. Really the statement was very dovis dovish the fed, a vshaped recovery its a soft v but is a v in 2 1 2 years, which is faster than some of the projections weve seen out there lately. With that you have a recovery in the labor market of more or less about 30 months. Thats average so it shouldnt be too surprising that in a recession we have a 30month recovery in the labor market i think that the softness in the cyclical sectors has a little to do with how far they had run in the hope we were going to bounce back quickly i would have some exposure there. In the end the direction of travel is upward josh brown, what are you buying and selling these days after the already incredible run weve had for the market so nothing specifically we have the sense that the market is back in a bull trend just purely on technicals, which is not a call on the economy but when you look at longer term moving averages, look at the s p and nasdaq, its undeniable uptrends just purely on math you can see an asterisk on this, coming off a low base, an asterisk for that. All they have done is regain a loss thats the stuff good for commentary, but its not really important. What is important is you look at sectors and the overall market in a bull market you say, all right, clearly people are no longer discounting theres going to be an ongoing emergency. Now the question is how much of the economic recovery has already been discounted . I know weve seen wild moves in the economically sensitive sectors but these are wild moves from almost bankruptcy level valuations in some cases i dont think weve really got the entire recovery priced in just yet by the way, big recovery in small caps, still not an uptrend technically speaking mid caps just barely getting there. Then you look at some areas that happen to have massive market caps semis are peppies away from alltime highs some of these are very big stocks nvid nvidia, it looks ridiculously good its an enormous company by market cap so much bigger than airlines and retailers and all the things we give equal time to its like do we have this marketwide recovery and does it have to continue every day not really the big stocks with the big market caps continue to soldier higher i think big picture thats whats important is being invested and recognizing that over the past week, hertz, petroleum, despite hertz declaring bankruptcy and rumors chesapeake is looking tofile bankruptcy as well mike, youve been taking a look at the rush into those low cost stocks since the Major Trading platforms went to 0 commissions. Low priced not cheap on a value basis. You look at the chart it shows back in october is when schwab went to zero commissions the first yellow bar is the performance of the prior year of these stocks the second bar is what they did since through october, a massive move clearly a relationship between zero cost trading, small, built into the side show, speculative names, bankruptcy or not they have come off the board i think its more of a side show than the story of whats happening in the market but related to this idea that so many stocks were pummeled down to the brink of survival in march and have come back i think in the course of sorting out which ones will live on from here, theres been a little bit of misunderstanding at times by the way, the very highest priced stocks continue to perform because thats basically fang and big cap growth with 1,000 and above. Its a fascinating chart and analysis there i guess another angle is the huge amount of account openings weve seen from both in relation to market volatility and zero dollar trading and longterm implications of that we dont know it seems so far to be playing out to help the big guys maybe they will see their margins in the shortterm but after period of consolidation, schwab, Morgan Stanley, whether that allows them to start to generate fees in other ways, across selling other products, maybe through wider spreads. Yeah. But probably will play into the bigger guys hands in the medium to longterm. Its getting client balances and earning interest off them and thats a mechanism to do that as well. We spoke with james gorman yesterday of etrade to ask him any implications for the Broader Market levels from some of this huge trend of trading and account opening. I think the amount of retail activity that, you know, at this level of speculation in dollar terms is pretty small. Accounts, individuals quite large. Maybe because everybody has been sitting at home with nothing to do, some people with nothing to do thats what stimulated it. These are very, very, very small accounts so no, the market is being moved by overall sentiment the worlds economy has bottomed. Josh, do you agree with that when you see a sudden runup in airlines or hertz or Chesapeake Energy does i make you concerned were near a market top or more relaxed like james gorman. I think james gorman has it exactly right. In dollar terms its not important. This not moving trillion dollar stocks that determine the direction of the s p and certainly not pushing valuations up thats another phenomenon. This is like this weird side show thats happening in parallel with the overall market recovering i think what gorman gets right, this is related to people looking for the only game in town you cant go to vegas now you can with a mask on theres no sports. I think a lot of the sports personalities have pivoted toward stock trading which is awesome. I say awesome, not that people wont lose money, they will. This is how you learn. You have to lose money one thing, my guys were on a podcast saying its weird to see bubblelike behavior in a recession. Its a podcast, i couldnt scream in their faces, no, its not weird. 2009, the biggest trade of that year, if anyone remembers that was faz, tna, tza. These were tripled long and short etfs that did banks, small caps, triple short the nasdaq. These were the trades. This is what everyone was doing and having fun w they may not have been doing it for free but thats what the speculators were doing in 2009 when the stock market had been cut in half. So its not weird to this this in a moment like this. If anything you can go back to every period like this and find these little mini bubbles of speculative activity because what draws speculators out is not necessarily stocks doing well, what draws them out is volatility and things that move boy, do we have 5, 10 stocks to mikes point that arent moving. Alicia, what does history tell us about where this goes . Look, history is telling us were going upward i want to remind everybody what the fed said today about equity prices and asset prices. Were not worried about that so essentially the fed is going to support prices and more concerned about dual mandate thats really a green light. We always thought core allocations needed to be to your Growth Stocks because in the end when we do recover from this a low growth and low rate environment and that ultimately supports the kinds of assets that have performed over the last decade, which are secular Growth Companies today was an example of that having said that, you have to have some exposure to the cyclicals here, because when we recover and we will its not a matter of going in the other direction, the small caps and cyclicals really give you some juice here, which we saw over the last week even though we saw some reverse in the last couple of days, Going Forward you have to have some exposure. I know josh talked about this but gold is great hedge for central bank and liquidity and Asset Classes so we like gold as a hedge here. Not going for bankrupt stocks, though, sounds like. Not going for bankrupt stocks in bankruptcies, equity gets wiped out. This is pure speculation, but small and an example of people not wanting to miss the writeup but too small to matter to the overall market right now. Sounds like everybody is in agreement on that. Josh brown, Alicia Levine, thank you for joining us. Case closed. Good to have you. Fed focus up next we will ask former fed governor Sarah Bloom Raskin and Paul Mcculley how much more stimulus is actually needed, they think, to fuel an economic recovery d air jay powell says hes prepared to act if needed. Were back in 90 seconds for as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Try natures bounty sleep3, professional or consultant a unique trilayer supplement that calms you, helps you fall asleep faster and stay asleep longer great sleep comes naturally with sleep3. Only from natures bounty. Jay powell, no plans to raise Interest Rates through 2022 lets bring in sara bloom raskin and mcculley, chief economist, good to have you on a fed day. Want to spin this forward a little bit, sara he said they arent planning to adjust Interest Rates, raise them, said keep qe going he talked about two other tools the fed is looking at in its toolkit, use of Forward Guidance and yield cap controls whats the significance of that . What would that do thats exactly right. Hes showing his hand theres going to be more, there could be more one would be something that would be quite new for the fed, which is this idea of yield control. That is something the fed has not tried before he was quite up front, describing its something the fed is looking at and that the fed has started to analyze that is a pretty good indicator that the fed is going to start rolling that one out as soon as it feels its ready Forward Guidance is something that the fed has played with a long time. Of course we saw the use of Forward Guidance in the recovery to the financial crisis. Thats essentially figuring out what youre going to signal to markets how long youre going to keep your fed funds rate at 0 lower bound. It signals to markets, hey, were going to keep it this low until we get to a certain level of employment or, perhaps, for a certain period of time so those are the two tools he has previewed. I think that was intentional well see exactly when he actually decides to use them. Paul, another one of his lines was well put these emergency tools back in the toolbox when the crisis is over. Just how hard is that going to be i think its going to be difficult. I think he needed to say that institutionally but they arent thinking whatsoever putting them back in the toolbox now. In fact, if i had to summarize what he had to say in one word, is he committed to being nurturing of the recovery, nurturing in every respect i think that was his key message. It was for main street more than wall street. He wants main street and congress to recognize hes going to be nurturing not in the weeks an months but years ahead. We also got the forecast from the Federal Reserve, sara. They are clearly expecting this to have a big impact, down 6 1 2 for gdp this year rebounding next year the potential growth rate, how the economy can potentially get back to trend is pretty much where it was, i think 1. 8 or 1. 9 before this crisis. Is that realistic to think theres not going to be temporary damage to growth well, i think hes conceding there is going to be temporary damage the question is how long is tempora temporary. He would like to think longer term the temporary damage will be get addressed he would like to see it through combination of targeted fiscal and extraordinary measures the fed is taking and willing to take i think there is a sense there is going to be some longterm damage here. He wants to signal that. He wants to signal that so he rationalizes why the fed is going to stay engaged for quite some time. Paul, did you think he was saying that to be on the safe side or he really believes it. What was your own take on the jobs number we got last week and whether or not that positive surprise within the number can continue i like how chair powell addressed the whole issue of jobs data. We knew there was going to be a huge bounce off the bottom by reopening. We didnt know which wont it would come and recede through the second half of the year. I think hes welcoming that. He wants to nurture that on the question of longerterm damage, he has a huge amount of concern on that. Thats not really a second half of the year question its a longer term question and its really a question for congress because, again, he reiterated hes in the lending business not the spending business to the extent you need grants and programs that involve fiscal spending, he was openly Encouraging Congress to do it, stressing that he will be super accommodating for as long as necessary. Sounds like, paul, this is one of those News Conferences if you were sitting with us in normal times you would have been applauding you sound happy. Absolutely. I think chair powell is doing a fantastic job particularly with overall government weve collapsed that church and state separation between fiscal and Monetary Policy and jay has been fantastic in articulating th that. Paul mcculley, Sarah Bloom Raskin, thank you for your reaction. Up next tesla hitting a new high could newcomer nikola take some juice out of the stock well discuss the emerging rivalry right after the break. With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Tafind a stock basedtech. Pron your interestssultant or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. We will set external goals for 2025 for africanamericans and hispanic americans at accenture and in our leadership. Makes business sense. Makes more sense to have inclusion. The problem with not saying anything is you are implicitly allowing the current state of the worl 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. Were back wall street is buzzing about a group of stocks that have seen wild moves in the month of june including bankrupt names like alerts and jcpenney. Perhaps no stock as buzzy as electric Truck Company nikola. The name has drawn significant attention since it first hit the Public Market last week and now its drawing the Public Company that took its name from the same inventor, tesla. Both named after nikola tesla. Before we get to that story, here is a quick comparison nikola founded by trevor and its stock nearly doubled. Its market cap even eclipsed fords earlier this week tesla began trading in 2010, up 6,000 since then and today surpassed 1,000 shares for the first time he seems to be taking notice of his competition, the brewing electric battle. Not much of a battle yet. A product they have shown to people and say, look, were going to build this. When you saw tesla mostly fair above 1,000, people took note of the fact elon musk sent an internal memo. Weve seen the memo. He said in the memo to staff, it is time to build the semi. One quote, production of the battery and power train for the semi would take place at gig, a nevada, gigafactory outside reno with work occurring in other states they have already made it clear they are looking at a potential new manufacturing site potentially in the midwest, maybe oklahoma, maybe texas. Thats where it could be built why does this matter nikola had a heck of a run the ceo saying, look, were targeting semi, electric vehicles, hydrogen cell. The electric semi will be built. Some giddy euphoria about electric semis look at market gap lets start with tesla well above gm and ford and then you have nikola, which is nipping at the heels of ford, a lot of money piling into nikola this week, guys this is what people will be focused on whether or not we see a battle when it comes to electric semis. One of the bullish arguments for tesla, not an automaker but tech company and that justifies the multiple it has. I guess you cant apply the same to nikola, to the same extent. If its truck, not the same level of importance talking about future of Autonomous Vehicles and kented networks to that extent. True. They are also planning on doing pickup trucks as well. Look, could this be the beginning, tesla has a whole portfolio . Thats a possibility as well keep one thing in mind here. We do not know yet where nikola plans to build its pickup, what longterm plans of production. When you look at tesla, this is a real company you can argue whether its overvalued people will say its not a real company, blah, blah, blah. It has a portfolio of vehicles it manufactures vehicles, likely will sell close to a half million this year. So it is a company that has the goods. Will nikola at some point . Well have to see. At least a plan, not a bankrupt company phil, thank you. You bet. Coming up, ceo of a company trying to compete with quest and lab corp. Through athome testing for diseases and the her struggle to get fda approval for covid19 test. Thats next. 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. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Tafind a stock basedtech. Pron your interestssultant or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Welcome back as america reopens its economy theres been an uptick in cases in some places, 25 more rise in states like nevada, florida, North Carolina, and South Carolina texas seeing its Third Straight day of record breaking coronavirus hospitalizations as the company sought to rapidly scale up testing, Health Company providing test kits where they use a swab and send it to a lab in 48 hours. Joining us founder and ceo of everly well. Good afternoon, thanks for joining us take us through why your test is different. Its fully at home and selfapplied. Absolutely. Thanks so much for having me we did receive the first fda emergency use of its kind fully athome covid19 test Sample Collection kit that can be used with multiple authorized labs. Its very easy for an individual at home to go through eligibility screener online, have a kit shipped to you overpass a simple nasal swab, collect it and send it to the lab its really quite easy for consumers to use at home especially as we see the second wave of cases start to spike the fda has said even today that the prioritization of athome Testing Solutions is even more important than ever before so you can actually do the nasal swab yourself, julia im asking because there are still some questions about whether some of these tests maybe not showing us accurate result because of user error as professionals administer it. Its really hard to get up there and get that swab. Right this is a really important point. So this is a nasal swab that has been confirmed to be accurate only collecting in the base of your nostril, interior naris different from the pharyngeal swab, the deep swab Many Health Care providers are still using its something the fda even before our emergency use authorization they had been using data from United Health groups recent study to be able to show that selfsampling with a shorter nasal swab was just as accurate as the deeper swab collected by health care professionals. So that has been shown now, of course, there can be inadequate sampling with any of these tests. And there can be a point in the viruss life cycle where you could get a false negative that is still the case but overall the accuracy of sampling has shown to be as accurate with selfcollection versus Health Care Provider setting. What do you see the likely demand of being . In particular, are we past the pointern need to be tested before they go back out in the open again were kind of reopening almost regardless thais going to put a limit on the demand youre likely to see . I think testing actually has now become more important because when we were going through the kind of National Shelter in place state by state, people were not moving about as freely they werent coming into contact with whats almost guaranteed coronavirus in some form or fashion in your daily life of course Protection Measures are key, masks, handwashing, et cetera even more important is access to a testesly, quickly and get results quickly so as people are reentering and going back to work and going back to their daily lives, they have that to be able to get them information about their exposure as quickly as possible. Its also interesting, julia, youre not part of lab corp. Or abbott or major Public Company what was the approval process like from the fda . Was that challenging because you run a smaller, independent company. Everlywell has 100 employees based in austin, texas weve been teaching people how to selfcollect lab samples the last five years, offer over 30 athome tests. The difference here is we were wading into what is not typically our path in a Global Pandemic to work in partnership with the fda in getting authorization. So it was actually a really exciting process we knew we were working in partnership to lead the way for creating a template for athome tests. Thats what the fda has published. Its really not about everlywell, its our ability to be innovative, be quick, partner with these regulatory agencies that are moving as fast as they can and create a mission that i think is bigger than just us and really allows athome testing to be a big part of the covid19 response and not just a small piece for one company. Julia, thank you for joining us from efverlywell. Thank you. Practice what you preach of thats what many are telling employers now calling for racial diversity. The companies at the center of at criticism and how they are responding later on closing bell. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. You say that customers maklets talk data. S. 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. Welcome back time for cnbc update with leslie picker. Im leslie picker here is cnbc update. Wows says people need to stop vilifying police officers. Mcenany says they are putting finishing touches on proposals and reducing cops is a nonstarter Warning Police departments across the nation that personal information of some officers is being leaked online and could lead to attacks by extremists. Vogue publisher anna wintower says they have failed to have enough black workers she takes full responsibility and says this is a time for action and commitments, which will be announced, quote, as soon as possible tonights Nascar Bubba Wallace will have a black lives matter paint scheme hes the only black driver in nascar cup series. Earlier in the week he called for confederate flags to be removed from all nascar events back over to you guys. Leslie picker lesl leslie, thank you. Up next, raising a red flag. Companies from s. N. A. P. To adidas calling to do more for racism and lack of diversity in the workplace. How others can do better for their companies. Closing bell will be right back 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. Find a stock basedtech. On your interests tomorrow or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Makes it beautiful. State of the Art Technology makes it brilliant. The lexus nx experience the crossover in its most visionary form. Experience amazing at your lexus dealer. Snap facing backlash from former employees after speaking out against racism following the killing of george floyd last month. According to mashable, exemployees said snap didnt always fight for racial justice, calling past practices racially biased snap responding saying, quote, we are investigating these allegations and will take necessary actions to make things right. This follows a wall street journal story where some black adidas and estock exchange laudehr. Wall street journal Jacob Gallagher and brenda darden wilkerson, a nonprofit that connects diverse female talent with leading technology companies. Thank you both for joining us. Jacob, first tell us about the story, what you found when talking bo employees of Certain Companies and their criticism. What we were seeing in the weeks and days since the killing of george floyd, a lot of companies throughout a variety of industries have spoken out and put out public declarations against racism, speaking for equality but what we had heard from employees at adidas was that these public declarations really did not align with their experiences internally that included, you know, really intense instances of scr discrimination one calling the n word, design material that came down from headquarters in germany that included an image with confederate battle flag. Employees i spoke with also said the little acts of discrimination, the fact they were the only black employee on a team or the fact a lot of employees felt like the Company Really appealed to people of color and black people and their products are really bought by those consumers that they were being tapped for their creativity, expertise, as people of color and not dulally being recognized for those efforts and given a chance in the company. Where you sit on this are you fearful Companies Wont see actions match rhetoric or are you encouraged things are changing for the better . So we just need to admit this is a wakeup call now is the time all of us, our companies, our leaders, every person step back, take a look at themselves in order to address their part in this current state. None of us has far to look for feedback thats meaningful we can take to improve. Were in a moment to listen to the feedback of the world, not just to shareholders but also to customers, employees and partners and the community at large. So brenda, as a result of jacobs story, adidas did respond. It did take some concrete action investing 20 million in black communities, enforcing in University Scholarships for black employees and committing to hire 30 new hires in the u. S. Filled with black and latino folks. Is this the kind of action you want to see . Can you give us some specific examples and slagss of what these companies should be doing, since they havent been doing it already . Absolutely. Absolutely i think that these are great examples of Actions Companies should take but theres lots of different action toss take first of all we know companies have an obligation to support the communities in which they thrive and help them thrive. So right now companies have this incredible time sensitive opportunity to respond to the calls of antiracism, Community Safety and economic justice. And i believe that the examples thank you gave are just a few of the ways that organizations can do that. I can share five things i think can help Companies Get started right now. First of all, acknowledge past missteps weve all been a part of whats gone on in the past it doesnt make sense to pretend we havent. Acknowledge those mistakes we did that last week. Part of our mission is to make sure women technologists are lifted up, given that air time and light for their contributions. We had to admit in the past we had disappointed and let down the black community for not doing the best job for them. Number two, ask tough questions. Be willing to ask those questions and to listen. Its time for leaders to show the humility that says, yes, im willing to come to the table im willing to ask those questions. Im then going to spend five times as much time listening number three, be willing to weather the pushback i think the pushback is something we all deal with having that background and being willing to stand up to the pushback and respond to it is part of the conversation that will help us move towards healing. Number four, set metrics when you make a decision to do something, set up those metrics, so you can on the regular find out how well youre doing with those strategies and be willing to pivot and make sure you continue towards the expected outcomes that you have number five, an easy way to address economic inequality, which is a big piece of this equation, is to make sure that equal pay is a reality right now companies can take a step to take a look at what they are paying across the board. If they find inequity, fix it. Brenda and jacob, thank you both for joining us. Thank you. Thank you for having us. Up next, the governor of colorado talks to us about businesses reopening in his state from gyms to restaurants and what tt anhames for jobs and state revenues when closing bell comes right back an entirely new feeling, the difference between excellence and mastery is all the difference in the world. The lexus es. A product of mastery. Experience amazing at your lexus dealer. But inside every etf. There are untold hours of careful construction. Infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. For a prospectus containing this information. The xfinity voice remote will find exactly that. For, happy stuff. If the groups happy, im happy. 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Of course were worried about some of our neighboring states going in the wrong direction how is your reopening going of business and daily life its going great. You know, we ended the stayathome order in april. Weve had stores open for a couple months, restaurants in the last few weeks people are doing things smart, theyre doing things safer we want as much normal Economic Activity and life to resume as possible that means we need to be smart about it my 6yearold daughter is in art camp this week were very excited to have her there. Whats your outlook as to what it would take to go into a severe lockdown again . Do you accept that the bar is much, much higher this time to want to shut the economy down in full well, our goal from the very start, weve been very consistent from our actions in march until now, is we dont want to overwhelm our health caresystems and hospitals. If you get sick with covid or noncovid we want to make sure theres a bed and treatment for you. Weve expanded our Hospital Capacity about 20 temergency beds we have extra stepdown beds. We want to make sure if you get sick in colorado, you have a fighting chance of Getting Better what have you learned about the responsible ways of reopening things like business that might help guide you toward potentially reopening schools and that you could tell states here in the northeast like new york and new jersey which are preparing their phased reopenings about how to do this successfully what have you learned about masks and other best practices its not Rocket Science its common sense. Its about staying six feet from others where you can our stores have decals on the floor. All people who work in stores wear masks several municipalities also require customers to wear masks. I encourage them as governor if youre in public, wear a mask protect yourself, protect others salons came back in april. Both parties wear masks, both the client and the person administering the haircut. Weve had a good experience with it we have to have as normal a life as possible. That means socially, psychologically, economically but in a safer way. I want to ask your thoughts on the recent protests all across america and colorado as well whats your advice to people who still want to protest in light of clearly the risks given coronavirus and can you understand when sometimes protests boil over a little bit from being purely peaceful well, look, like most americans, of course, i sympathize with the cause. We need to end Racial Discrimination in criminal justice and so many other areas. From the Public Health perspective, of course im worried. In fact, thats been my biggest concern last week that were going to start seeing an increase in cases. Weve made so much progress against this virus in colorado are things safe . No are they reasonably safe yes. Im really worry about additional cases from all those out there exercising their rights and to their credit most are Wearing Masks and theyre trying to do social distancing but its hard with so many thousands of people. Thonanks for joining us. Thank you. Dow and s p falling for a second straight day. Up next, were back to look at whether Investor Sentiment on wall street is still surging need better sleep . Try natures bounty sleep3, a unique trilayer supplement that calms you, helps you fall asleep faster and stay asleep longer great sleep comes naturally with sleep3. Only from natures bounty. Our Retirement Plan with voya gives us confidence. Yeah, they help us with achievable steps along the way. So we can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Oooh, well. Im good at my condo. Oh. I love her condo. Nana throws the best parties. Well planned, well invested, well protected. Voya. 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The dow and s p closed lower on the day the nasdaq notched a new record high mike the reason we keep coming back to different Investor Sentiment readings is on the way off the bottom of the market in march the continued skepticism and caution of investors was a big tail wind for stocks the market rally burned up that skepticism a weekly poll has shown a big jump in the bulls, up to 50 in bullish. The bears really at the low end of recent range. This spread is getting relatively wide. People are coming around to the bull case. Thats not necessarily a positive for the market. On the nasdaq 100 daily sentiment index, this got up to about 93 bulls. These dots show previous times from macro charts when it was at or above that threshold. You definitely saw pullbacks from mid single digit percentages down to much more than that before too long, not instantly but it seems like it proceeded a little bit of a consolidation or a pullback. Just a couple of readings that say maybe the market got a little stretched, running a little bit hot, guys just two minutes left in the show sharing some final thoughts, i also wanted to point out something that we didnt cover we covered a lot about the fed and Monetary Policy. Fed chair powell did give a nod to what was happening in the world. In the stop of his statement he said theres no place at the fed reserve for racism and there should be no place for it in our society, clearly stating the obvious but showing hes not tone deaf. Very much sort of lending the feds credibility to the economic fight for equality. Thats consistent to a large degree how jay powell has approached his articulation of the feds mission, focused on the average person, people at the lower end of the wage scale. Even before the recent unrest and before this big downturn in the economy, he was basically saying its great to run the economy hot because it helped those whose least advantaged in this economy when talking about economy versus market, he was clear to point to what his mandate was in that he almost wasnt concerned if the Broader Market continues to run hot compared to the underlying economy by the way, the nasdaq composite up 0. 7 . S p 500 down off a percent, dow down 1 . That does it for closing bell. Fast money starts right now. Elon musk has a new rival. Well dive into teslas big move to quiet down a startup. Plus, a major mall deal goes bust