Transcripts For CNBC Closing Bell 20240712

Sarah . Yeah, shows the power of the fed there. When that headline hit, boom we have a great lineup coming your way Jeremy Siegel and rick reider join us. Plus, well speak with larry kudlow about the latest debate over the future of enhanced Unemployment Benefits and what happens when they run out . Well also take a closer look at one winner amid the volatility, the video game sector. Well speak with Strauss Zelnick. That stock has been an outperform they are year lets focus in on the big stories with one hour left of trading. Mike santoli tracking the action and phil lebeau and joining us to discuss the outlook for the banks is brian foran start us with the big come back that weve seen in the market this afternoon theyre saying buy the dips were in a dip buying environment. They proved it this morning. Take a look improvement. We got that one weeks time. Things are looking stretched at the highs. One week ago today 3232 was the closing level then we got that shakeout. Thursday most pronounced and then continued this morning. And i was pointing last week to what people were saying might actually be a zone we kind of have gravity pull. There is an 8 to 10 pullback from the highs today value stocks were leading along with things like Cloud Software it was a broad buying interest that happened in the overall market now take a look at the context for this move compared to other bull markets early bull markets nobody is saying what this is right now that were in. But right now, this is a lot of years, but the key point is this is the path right here of the current rally off the march 23rd low. And what you see is places in the ranks of things like the 1982 and the 2009 bottom in terms of how much it gained in a short period of time what does that also tell you pretty much was due for Something Like this. Right . To start the chop around maybe consolidate a little bit take a breather. But you see here that months later the other significantly similar rallies did continue higher from there. Now wide range of outcomes as i said we dont knowwhat this thing i if its going to be this massive multiyear move but it is behaving this way which is mostly to say were still in routine pullback zone and we were this morning even with that 8 decline in a few days time. Didnt yet really compromise what was driving things in an underlying basis guys i mean do you not think that the buy the dip mentality which as you point out appears to be at work today . Has a loet t to do with the fedl reserve. It has to do with the Federal Reserve telling us repeatedly it will not permit a worst case scenario, a worsening of Capital Markets and conditions they keep characterizing what theyre doing in terms of Corporate Bond buying as helping market function. In other words, making sure that there is bid ask spreads are okay making sure will is liquidity. At this point, organizebarguablr yo beyond that things are functioning well they seem to want to accentuate the idea that they want to place a cushion under the market it is dollar for dollar. Somehow they have a Multiplier Effect in stock market the general message and the approach is absolutely giving confidence to investors to say i will buy when there is a down side break yeah, certainly led to an extra late half. The stocks already turned around from the negative opens. Mike, thank you. Airline stocks starting the day deep in the red. Staging their own sharp rally throughout the session phil lebeau has the latest on the sector for us. A volatile day for the Airline Stocks you look at the four Biggest Airlines as you mention, they started down 5 , 6 . Not all of them have come back substantially since then you still have a couple of carriers far better than they were earlier this morning this comes on the same day that we saw the best passenger levels in the u. S. Reported for this weekend that weve seen since mid march. A little hard to tell. At the end of that line there, its a slight uptick its the first time weve seen numbers above 500,000. Still down 79. 4 compared to a year ago because theyre so low in terms of passenger levels, the cash burn rates continue to be high the for june, the cash burn daily cash burn is between 25 and 40 million depending on the airline. And one specific note, today United Airlines out with a 8 k saying they borrowed 5 billion backed by the frequent flier Mileage Plus Program they expect to have 17 billion in liquidcy by september the other part, 4. 5 billion loan they expect to line up through the treasury department. Phil, i want to ask about that how rare is it to see an airline have to collateralize the frequent Flyer Program on one level you could say its great. Its a noncash item. And theyre getting a better rate because theyre backing it with that. But it also still strikes of the slight level of desperation that exists in terms of well grab what cash we can even among the strongest Biggest Airlines in the country. Well, it its never been done like this before in terms of taking the frequent Flyer Program, they have about 100 million members within mileage plus and monday tiesing etizing it we would rather set up this Loan Facility and have too much liquidity that makes it through early next year and then figure out okay, lets pay it back early as opposed to waiting too long and then saying oh, boy weve got a second wave. Weve got to find more money they are moving ahead of time as much as possible phil, as always, thank you. Lets have a look at the banks one of the worst performing sectors this year. Top of the pile with that intraday recover rich. Next guest is saying they do see some optimism in the space head of regional Banks Research joins us brian, great to see you. Thank you so much for joining us do you think its fair that banks over the last couple of weeks and months have kind of been tracking the likes of the airlines as just discussed with phil as if they are really very closely tied to the fortunes of the virus and the economy. Look, i leave you with three key points on that first, its an extremely tough time to be a bank. And rates are low. Credit costs are high. So to your point why are they tracking the ultra Cyclical Industries like the airlines its the same thing if we get a recovery and also the outlook for the fed potentially raising Interest Rates in 2022 or 2023 or at least some point in my lifetime starts to improve a little bit if we dont, if we dont get the recovery, then both of those things continue to work against them and thats the core fear with the banks bouncing around one times tangible book. The second point i make is within the books, the highest losses are in consumer looking forward and looking how things are tracking relative to what the banks expected, there is actually a little sign for optimism there two key places were seeing it, one is in credit card delinquents and they came out for the month of may this morning. And theyre actually down a little bit year over year. Much better than expected. No one was expecting them to be down clearly, there is a heavy dose of government stimulus, expanded Unemployment Insurance but still being down here year over year this far into the game is a surprising positive and the second place were seeing this housing. St weve seen both real estate dealings and mortgage purchase applications balance to a low double digit year over year increase so higher than a year ago. And its only beginning of april that both of the metrics were down on the order of 30 to 50 . The third point i make is where were still cautious in the commercial and in particular commercial real estate fund. Look, its a well worn theme we realize a lot of investors are worried about commercial real estate right now. It seems like an industry that is going to deal with challenges with Retail Sector and with the Office Sector for in time to come from the banks speshgtive, its the place they built by far the least reserves so far. So where credit card, they have written off 9 of the loan book. So brian, is your thesis tha bears have overdone it on the banks and ignoring the critical positives . Where do you see the best opportunities . Which stocks we lean into the consumer focus bank at the most part. And we still avoid the more commercial heavy franchises prosperity, coamerica are the top three in the coverage universe the within the sector, again, its more about rotation to the consumer heavy names and continuing to avoid the commercial heavy names at this point in the cycle brian, where do you stand on the likelihood of consolidation and in particular as it relates to pnc we had bill on the show a month or so ago. He has ammunition clearly. Will he have been willing Bank Share Prices in this last week to decline 5 more, 10 more or is the current level ready for him to pounce . Theres an old adage banks are sold, no the bought. No bank ceo wants to sell at the bottom of the cycle. One thing slowing consolidation at this point, the valuations are low. But the liquidity of the banks is at an all time high theyre sitting on 3. 3 trillion of cash. That number was 1. 7 trillion in january. If you think about what that does if im a bank ceo and my stock is out there against the book there is no gun to my head eventually i might be a seller id rather wait six or 12 months and absorb the losses and then sell for something north of tangible book and give me self a victory on the way out i think there will be deals. Pnc is one you highlighted prosperity is another thats been very vocal about being on the hunt right now but theyre going to be few and between. Theyll be the extension rather than the rule. Again, key difference this time versus 08 is the banks are flush with liquidity back in 08 there were a lot of sellers. Frankly, they ran out of monday. Do you think, therefore, zero bankruptcies among the banks provided, you know, were talking above 50 billion in assets or so yeah, i think thats a real possibility this cycle especially with the default cycle playing out a little bit more slowly than we all initially anticipated and obviously fear you know, that gives them time to earn their way through it and gives them a lot more options as well brian, thank you for joining us we have a new session high, by the way. The dow climbed to up 286 points were up 214 as we stand nearly 1 on the dow which, of course, was down 760 points right near the open, sara. And quite a turn around the banks are not the top of the pack in terms of the market leaders right now. They were right at the bottom this Morning Energy and financials, always either at the top or bottom when it comes to this reopening trade to your point. Up next, market volatility kicking in high gear following last weeks fed meeting. Are investors in for a summer of wild swings . Well ask Jeremy Siegel for his outlook after the break. Youre watching closing bell on cnbc. Stock slices. 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. Because when you want to create 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. Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. A rise in daily infections in florida and texas are weighing on Investor Confidence as much of the country continues to slowly reopen we have a look at some of the key hot spots to watch hi, meg. Hey, wolf, if you look at the country at a whole, were Holding Steady at 28,000 new infections every day across the united states. This could be due to testing this gives us a sense of how severe the outbreaks are take a look at texas and arizona. The blue line is the new cases you do see those increasing. The yellow line is the hospitalizations net change which includes discharges or deaths you can see for texas and arizona, they are adding, you know, between 0 and 50 new hospitalizations on a net basis per day. So those are ticking up quite a bit. In terms of hot spots around the country, the places seeing their cases double in the fastest time, phoenix, tampa, charlotte, north carolina, austin, texas, and Central Washington state enough guys that local leaders in these areas are talking about whether to pause their reopenings or even put some of those mid gas stati those mitigation measures back in place meg, thank you. It certainly been a volatile market over the past few days. Is todays turn around a bullish sign for stocks overall . Joining us now on the news line is Jeremy Siegel, university of pennsylvania warton professor of finance. Professor, good to talk to you again. Big turn around in the market today. Buy the dip crowd is alive and well what does it tell you . That tells me all the tons of liquidity that is out there. As we know in the last hour, the fed is providing even more liquidity. And, you know, ive been saying on your program for months that all this liquidity is positive for equities is going to feed into the economy in 2021 and i think thats what stock investors are looking forward to you know, i look at monetary statistics, the treasury has has an account at the fed with 1. 5 trillion in it that they have not yet dispersed mnuchin was on saying were going to get that into the economy. Thats on top of everything thats there so again, you know, we certainly have, you know, the fears, the limited openings, and all of the rest but this liquidity is going to feed a Strong Economy going into 2021 would it have been more healthy for your case on equities to have seen a slightly bigger pullback, a prolonged pullback in top level equity snashgts. Markets yeah, there was froth went up among the fastest we ever did see did it get frothy. Another 5 pullback, you know, would have washed some of that froth up i think again people looking ahead and saying, listen, you know, i didnt get in back in late march or early april, you know, im not going to make that mistake again. And wait for some sort of, you know, Double Bottom the way so many people talked about and thats why i see the buying going in and with the fed, you know, theyre there to support for the government to put money into the economy. This is necessary. Its going to have economic consequences next year and, you know, i think i think investors recognize that what also could have economic consequences, professor, is what meg just laid out which is the rising hot spots across this country. Especially in in busy metropolitan areas are you not concerned about that in the thesis here that hospitalizations are going up and some local authorities are talking about shutting down spots. You know, i think and we do see it. And i wish people would respect the social distancing and those rules in place but were not going to have a shutdown like before i mean, everyone is saying that was just devastating for so many people and the economy i think that if we, you know, respect the social distancing, if we wear masks outside when we should, we take a look at the asian countries, theyve been extremely successful with this you dont need the draconian measures like china. You look at korea, japan, taiwan this will control it and i think that i wouldnt even call it a second wave. I dont think were going to get the type of shutdown at all as we had before. I dont think anyone wants that. And so, again, its a matter of managing it. Professor siegel, not necessarily what i was arguing i mean, you could still have economic pain if consumers themselves decide that, you know, its scary out there and they dont want to go out anymore because of the rising infectionors business infections it doesnt have to be necessarily a xwlount or noth g necessarily need to be a shutdown or nothing. But again, we are making great progress on the vaccine. Three of them at least stage three trials you know, we dont get a headline on a breakthrough every day. You get a little discouraged you see that, you know, sort of a breakout but really if you talk to the epidemiologists, you talk to doctors, they say, wow it is progressing faster than we thought. Its not going to be withdrawn from the fed and government. It its going to be there and say, wow, i can do these things and guess what i have the money in the bank account to do these things i think thats what im talking about 2021 dont forget, stocks are among the most forward looking of all asset classes. There are forward earnings, not what is going to come this year wlachlt is going to come in 21, 22 and 23. We talked the last couple months about how hard it is to have a true pe multiple given the unpredictability i wonder what you thought about dividend yields, particularly in light of the Additional Information today that the fed is going to be buying individual Corporate Bonds. Clearly yield is not really on offer outside of equities. We see the yield on fixes income the fed is going to keep, as they said, the short rate really low. Bank accounts will be zero for years. If you want to go out long term, you have to present on the treasuries you get 1 , 1. 5 on Investment Grade corporate. And in my scenario, i say moderate inflation next year, yields will be rising. But it youre in the long term bonds, youll have capital losses so the only place to go really for the income is the equities because equities historically go back in those modern inflation times and have been the assets that have kept up with their income and thats where people will go. And thats what a lot of people are thinking of now. Thats where i want to go. The i think that scenario is going to become even more important as we head through the ye year. Big if there on inflation we leave it there, professor well have you back on to debate that one i would love. To. Always good to hear from you. Byebye we have 36 minutes left in the session. The dow is up 127 points just paired some of the gains. But certainly recovered much more of the losses down over 700 at the open. Still ahead, what happens when the governments extra Unemployment Benefits expire next month well ask larry kudlow if he thinks those payments should be extended or replaced with somethg elinse stay with us the were back in a couple minutes. 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. Second tip you can put googly eyes on your stuff to keep yourself company. Uh for example, thats heraldo. Hes my best friend. Oh, sorry nancy, i forgot you were there. Get the amazing iphone 11 for halfoff on at t, americas Fastest Network for iphones. 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. Still ahead, video game stocks have been major winners this yeefrmear benefitting from more people staying at home. Well discuss the outlook for the sector and the highly anticipated launch of play station 5 with Take Two Interactive Strauss Zelnick later on in the show and a quick check on bonds the ten year yield is back above that. 7 sort of jives with the better mood the market is in now. The dow is up 111 points a lot better than session lows this morning which was down 760. Closing bell will be right back when you walk into an amazon fulfillment center, its like walking into the Chocolate Factory and you won a golden ticket. All of these are face masks. This looks like a bottle of vodka. But when we first got these, we were like whoa [laughing] my threeyearold, when we get a box delivered, screams mommys work mommys work. With this pandemic, safety is even more important to make sure we go home safe every single day. Welcome back to closing bell. Weve got just about a halfhour left to go before the close. The picture looks a lot better than where we were this morning. Financials, communications services, consumer staples, those are the groo ups that aupe leading the charnls higher 10 out of 11 sectors are Green Health Care is negative. Energy going negative too. Were losing steam dow is up 57 points. The session high is above 200 points the session low just after the open was down more than 700. So its been another roller coaster session on wall street lets look at what is driving the action right now coronavirus cases continue to rise in parts of the u. S. And beijing reinstating some shutdown restrictions. The Federal Reserve this afternoon says they will buy individual Corporate Bonds in a shot at more stimulus for the market and tech is leading the rally. The nasdaq outperforming, up ov over 1. 5 . Its already been a pretty volatile day of trade. We watch some of the gains slip here and some of the sectors turn red it certainly has. Extraordinary intraday moves, particularly for certain sectors like the banks lets have a check on individual market movers. They were rallying even before the markets broader come back. Shares of irobot soaring after they raced tised their second qe sales. Up 11 and docusign hitting a record high after it announced the company will join the nasdaq 100 index replacing United Airlines on the 22nd of june. And thats worth a 7. 4 jump today. And such a sign of the times. An airline replaced for docusign spot spotify getting a boost today. What does this involve hey, sara, so its surging after announcing a partnership with wall march. Walmart plans to adds 1200 sp shopify sellers. They can sell goods on walmarts website and they get a percent a age of that sale comes after the partnership with facebook. They can buy, sell, ship, and manage inventory and taken off during the pandemic. Check out shares year to date. Those are almost doubled theyre up about 7 today. Piper sandler also upgrading the stock today xrciting the great digital awakening happen shopifys revenue is poised to quadruple in the next five years. Guys zblfr ka. Kate rooney, thank you. Time for a cnbc updaet here is your cnbc news update at this hour the oscar awards are being delayed by two months because of the pandemic the eligibility window for new movies is february 28th instead of the usual december 31st the ceremony will be held on april 25th joe biden and the Democratic National committee raised over 80 million in may it was their best month upon racing for this novembers election President Trump and the republican National Committee have not yet announced their may numbers. Can you go to cnbc for more on the election and in new jersey, all state and local Law Enforcement agencies must release the names of officers who have committed serious disciplinary violations by the end of this year. This follows a new order from the states attorney general and by july 15th, names will be publish of new jersey state troopers and that is our cnbc update at this hour. Ill send it back to you thank you so much for that. We got 27 minutes left of the session. Slipping a little bit from the highs. The dow has gone negative. We have given up all of those positive territory gains but still significant gains from the open we were down over 700 points after the break, the esg trade is a winner today. We will discuss the names that should be on your radar. That is coming up here next on closing bell. First up is this exquisite bowl of french onion dip. 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. While the future of work more than just trading remains a question mark, one thing is certain reopening will be a journey. Thats why salesforce created work. Com to help at every step of the process, with tools like manual Contact Tracing to help prevent one from becoming three and three from becoming more. While displaying Key Information in one place on a Customer Relationship platform you trust. Because heres one more thing were sure of. Relationships are the heart of business. So lets tackle this together. 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. The dow is off the best levels of the day. Dipping negative once again. One Group Offering investors relief, esg index funds. Since the march 23 close both vanguard and black rocks esg funds have outperformed the Broader Market theyre up 37 from the market bottom thank you for joining us, john my first question is on performance, actually. Would we expect esg funds to outper in volatile times or when markets are less volatile . Certainly they have outperformed during volatile times. Part of the reason for that is that they have management teams generally that are well able to deal with these issues they invested in companies with management teams that do well during periods of crisis. Were learning a lot about Company Management and ability to deal with crisis during this time period. Were getting real time evidence in terms of whether or not the policies and procedures that companies have in terms of how theyll deal with the employees, supply chains, and the communities in which they do business will actually play out during the real crisis as we get this information, were able to bake it into Investment Decisions that were making day to day. So its gone from something that is looking at policies and procedures to something that is looking at real time behavior as it plays out in front of us. Im wondering how pronl nent on the list of things you consider as an esg investor equality it is very much in focus of late does it get enough of a focus . Being only a subtopic i guess of the s and the g and not its own part of the acronym . Should it be promoted . The Way Companies are dealing with the covid19 crisis as well as the racism and inequality that is present in this country are having an impact on how consumers perceive their brands. Also having an impact on how employees perceive a company as an employer. So, no, it hasnt received enough focus in the past but it is front and center today. John, can you name names for us of who you see as best in class in this area especially in the covid19 age i think walmart is a very interesting example. It is a company that might not come top of mind to many esg investors because as a company, it has gone through significant change over the past five or six years. You know, esg investing is about positive change. Not just identifying companies that are doing well today, but engaging with companies to help drive them to do better. And walmart is a company that has gone through positive change talking to the company they will tell you that theyre experienced during Hurricane Katrina really taught the organization about the Important Role that they can play in responding to crisis they were a front line responder during Hurricane Katrina and getting essential goods to people who needed them they take steps to solving the issues and they really changed their brand and changed their reputation and the communities where they do business so thats a very good cam am of the company that has gone through change thats an interesting story. Of course, stock has done very well during this period of positive change. John, clearly all of these factors are very much on the agenda now i wonder what you think as to where we will be in five years or ten years time. Will all s p 500 companies by then be fully esg compliant if that is phrase to use . Esg is an asset class and will become a thing of the past so they will be in esg type companies. All the companies will have adapt independent a way that will be able to applaud in five or ten years time its a great question esg is really about companies innovating and adapting to change esg really to us measures how well a company can keep ahead of the changing desires and needs that society places on corporations so i do think that already most companies are addressing esg in some way, shape, or form but were at the very early stages so your question about where will we be in five or ten years, is an interesting one. Companies are going to continue to address this in different ways internally. Theyre adopting and innovating we even see companies begin to compete with each other, compete with each other in terms of burnishing the brand and dealing with operating costs by being better and better at managing their human capital, their Natural Capital as well as, of course, the financial capital. I dont think it has an end game john streur, thank you for joining us 17 minutes left in the session the dow just flat at the moment. Holding on to fractional gains having been up about 280 points at the start of the show after the break, a top retail analyst lays out the names he likes now. Plus, big moves for big media stocks in todays volatile markets. Those stories and much more when we come back and take you inside the market zone. I geh. Common bird. E. Ooh look over here something much better. There it is. Peacock, included with xfinity x1. Remarkable. Fascinating. Very. It streams tons of your favorite shows and movies, plus the latest in sports news and. 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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. Were now in the closing market zone. Commercial free action of all the action goingon into the close. Mike santoli here to break down the crucial momentses of the trading day as always. We have paul with us as well good afternoon to you, paul. Lets kick things offer with the Broader Markets. This is as we stand. The dow is flat. It was down 760 at the low at that point we mentioned the fed buying individual Corporate Bonds, did that account for all of todays intraday rally . No, the market was grinding higher from that opening low for most of the day. It is unclear by the way exactly how much is truly new about this program. We knew they had the dollar amount there allocated for corporate buying so i think you have to kind of market on close, sell orders on the imbalance that came out a little while ago and that seems to have taken a little bit of the steam out. I mean what is new is that theyre not you know, they had just been buying ets to your point, mike, they announced they were going to do that i think the question was how far would they go to do that and not just signal they were doing it i think the other question, is you know, can you extrapolate . Is the next move from here that theyre going to buy stocks . Yeah, i dont know why you would extrapolate that i think that it does show a certain amount of urgency. They want to get it in the market by the way, i think one of the issues with the etfs is some are trading at a premium from the asset value. People are front running the fed in there this may be a more efficient way to do it. Mike, quickly, are we in a moment again where bad news is good news for stocks . You cant say on friday the market was weak, thursday the market is weak because powell is down beat and now say the market wants down beat news so that the fed comes in were still going to pose those questions. The. They want one particular bright spot in todays session is tradition alameda stocktraditional media stocks why the move, julia . Well, really surprising here. Ing now theyre up about 8 . They are up about 150 from that stocks lows still down 40 year to date. That stock is likely benefitting from confidence about the return of live sports as is fox. The shares are up about 3 discovery shares of 2. 5 amc networks up 7 still down double digits for the year Big Major League sports. Back over to you julia, thank you. Is this a good way to play the reopening trade specially if youre looking forward to sports coming back . There are better ways to play that reopening trade stocks are negatively impacted before the shutdowns some of the media stocks have just been dead money for years so just to think that the economy is going to get somewhat back to normal and coming weeks or months and that these were stocks should really do well i think there are other safer plays that you could be Comfortable Holding a longer time than the stocks are just hoping for a short term bounz pretty much. Theyve been so weak for so long lets talk about Retail Stocks outperforming the Broader Market today. Joining us now for more on retail, deutsche banks retail analyst. Paul, thank you so much for joining us i guess the key question to start things off is do you expect a huge wave of Consumer Spending to be unleashed in the next couple of months or not the consumer is already come out of the gates very strong in this reopening phase we think that stimulus money has been a big aid to drive consumption. We also know that there is a lot of pent up demand. And while there might somebody shifts in behavior in terms of more e commerce spin, ultimately, yes, we think the consumer will continue to spin meaningfully as manufacture the dollars that might have been previously allocated towards entertainment or towards travel will actually now find their way in retail boxes. The question, paul, is what has been priced in the stocks in if you look at a day like today where retail is having another good day, what sort of expectations now are there for return to Earnings Growth . Well, i think he weve had really difficult earnings season that is just passed and ultimately the expectation for this upcoming quarter is another challenge, period, with meaningful margin contraction. I think ultimately we do have some strong retailers like off price retail, for example, tj max, ross stores, burlington who will kind of lead the charge and driving a return of Earnings Growth in the fall weve also seen other real value plays like dollar stores, dollar tree and five below. We recommend and we believe theyll see Earnings Growth again come the fall and Holiday Season as well are there any of the traditional retailers, paul, that may well be beaten up at the moment that in fact could benefit medium term if some of their competitors suffer and go under, for example, but they dont quite do the same themselves yeah, when it comes to looking for more value, i think this is a bit of a debate across reail investors of, you know, who is really well positioned over time. There is not many in our per view that we really like to recommend. I will highlight one name, however, which is ulta beauty. This is a company that we do believe will take market share over time. We think its best in class within the category. And we do think that the consumer will very swiftly return to shopping beauty. In addition, we do think there is overall consolidation of trips. And so a walmart and target we also will be beneficials of that trip consolidation and the bigger baskets both in store as well as online. Zblfr what about Department Stores do they ever come back, paul macys has been trading on the life lines, on liquidity and that sort of thing but the question is, really demand here. Correct and we think that demand even precovid19 was negative in terms of the trend line. And so ultimately, we do think that this has been a real hit to the Department Store come back story. We do not recommend any of the names in that particular sector. And we do find Companies Like dillards and nordstrom and macys to be challenged potentially in a position where they are losing share. And ultimately, theyre going to have to maintain really strong liquidity to get through this next 12 months paul hickey, where do you stand on the consumer names . Staples versus discretionary in particular i think staples names, you know, ran a little bit the defensive characteristics. I think to what paul is saying earlier, just Consumers Want to spend. Given the opportunity, what were seeing across the country in states that are reopening i think is giving the ability they want to shop they want to go out to eat they want to travel. I think as you see things continue to open, if we dont see this surge incases or surg in more importantly surge in hospitalizations, i think people become increasingly more comfortable and the stocks are able to have a discretionary sector tied to experiences which were the most hard hit will continue to recover here mike, there is so much and just getting back to in terms of the Retail Stocks, mike, just want to bring up the fact that in consumer discretionary, you have the targets, walmarts, they dont trade like the Department Stores which trade differently than the brands right now i mean, what is your sense of how this group has been performing yeah, the market is definitely kind of absorbed this idea so still wayner take most market even more than it was before the ones i look at and theyre at the top or the bottom of the performance numbers and the s p 500 almost every day the gaps, the kohls, Urban Outfitters theyre still 40 or below the highs. The theyre up massively from the bottom when priced to go away and thats the interesting part is the market almost considers them to be the kind of binary Trading Instruments right now as opposed to bets on the future. Theyre going to shrink in one way or another wlchlt that is already priced in is an interesting question they trade cheap to anything you would have considered normal earnings before. But what is going to be the new normal paul, well leave it there on the retail front thank you so much for joining us now home builder lennar set to release earnings we have a preview. Yeah. Lennar had had a strong First Quarter which ended just as the economy was shutting down at the star of march. At the time the chairman said lennars liquidity is a stabilizing factor in enabling our company to help absorb the shock that is moving through the economy at this time were well positioned for stability today as well as for opportunity when markets set on them he added lennar is focused on reducing land spend to grow cash flow now sales of newly built homes in april did much better than expected builders had reported strong buyer interest in the last four weeks. So well see in a half hour. Back to you sara . The stock is doing pretty well going into that diana, thank you up about 6 . Paul hickey on the Home Builders this has been a bright spot for the economy and in terms of the market and the Consumer Sector do you stick with it yeah. So the purchase applications are up eight weeks in a row. The prior record is six weeks in a row. When you look back historically, when you see such consistent increases in mortgage purchase applications theyre good for the Home Builders over the next 36 to 12 months with better than average returns. Leonard by itself in the last 12 earnings reports the day after they reported it rose 12 times so investors have reacted positively to the reports over the last three years and i think besides low Interest Rates, do you want to live in new york city . The question is to a lot of people, people are leaving suburbs and big cities you know, the outbreak of the coronavirus and the unsettled conditions so i think its a very positive backdrop for the Home Builders going forward. Weve got just about two minutes left in the trading day. Mike, what are you seeing in the market internals theyre supporting the story from the headline you indices, sara of a strong buying impulse today. The advancing declining volumes on the New York Stock Exchange about, you know, three quarters positive or little less than that right now they started very deep in the hole so there was pretty much the other way. And that obviously has swung over the course of the day look at the bond etfs. The Corporate Bond etfs. This just todays trading. You see that vertical blip higher in it all of them we did get the details about the fed from the efforts to buy their own portfolio of Corporate Bonds. That was obviously a bump to the come back storey the volatility index has come down so we did see this spike on the chart from last week now back into the mid 30s. It is supporting the idea that we had had this shakeout, maybe it past and under way. It has to be held out a little bit more all right lets move back to the Broader Markets. 50 seconds left of the session were up by about 111 points on the dow. The high was 286 the low as we said, 762 points right near the open. Very strong intraday rally a little blip towards the end. Back into the green by. 5 as we approach the close nasdaq comp is up 1. 3 financials top the performance today. The banks index is up around 1. 3 weve got a weak dollar down 0. 6 strong oil price up 2 gold sort of unchanged today the ten year treasury note improving up to 0. 71 . In terms of the apg market, s p 500 up 0. 8 . And the nasdaq up a healthy 1. 5 at the close not bad considering where we were after the open this morning. Welcome everyone back to closing bell if youre just joining us, im sara eisen take a look at how we finished up the day on wall street. Quite a reversal in the session. We were negative all day long. The dow got as low as 762 points earlier this morning it was a steady come back throughout the afternoon then we went positive on word that the Federal Reserve is going to step into the market and buy Corporate Bonds. Its just been buying etf. That took us over into positive territory. Lost some steam there in the last hour. Went negative again. And then climbed back in the last moments of trade. Up 157 points on the dow s p 500 finishing higher. 8 we got every sector positive at the close. The health care was looking dicey there at the end of the day. It was the worst performer did it end date positive financials and industrials did particularly well. The nasdaq closed up 1. 4 . Technology had a pretty good day. And the russell 2000 index up 2. 3 the so a bit of a comeback for the market coming off last week which is the worst for stocks since march. We have a trio of big interviews coming your way this hour. Will were going ask National Economic Council Director larry kudlow about whether coronavirus hot spots threaten the economic recovery were seeing. Plus, well ask rick reider about the rebound and where he Sees Opportunities amid the volatility and video game stocks are hot with people staying at home. Well speak exclusively with Take Two Interactive about the outlook for the industry but first, lets talk about the Market Action today. Paul hickey is us with first you to, mike on what turned out to be a pretty positive day and it was broad with all sectors closing green. It was. What it told me was that an 8 pullback and the s p 500 over a weeks time is plenty enough to bring out determined dip buying. Thats what the market is down since last mondays high at the open today it was basically right around these areas that people thought maybe might be the first stop for a pullback so i think thats definitely to the good interestingly, the first part of the come back was the typical lets buy the old growth stocks. The software, the cloud plays and the defensive areas. Then over the course of the rest of the day, it was those kind of beat up value secretators that discarded. I think, you know, it is certainly a show of resilience were still in this mode where youre a few percent down from the high its not clear we have quite the clear sweet spot that was there before, free of complicating reopening and infection news and all the rest of it but i think you have to say it was a fairly impressive reversal from this morning. When you see the action particularly today intraday and on friday after thursdays big gut check, does that encourage you that its up from here for the most part . We have to expect volatility on the way up to wards i dont think this is going to be a smooth climb. And with what the last few days showed us is there is some bumpiness. This is an unprecedented biological event and still, we havent had that scene, that means there will be a complete reopening of the economy. Well see that Economic News feedback in the markets narrative that this will be a quick short rebound. We think the rebound and recovery will take a bit longer and so the markets are going to reflect that with these occasional pu occasional pullbacks but overall, an upward trend paul, the bears say the virus hot spots, the hospitalizations, the economys come back, the fact that millions of americans could be unemployed even with the reopening. And the bulls say dont fight the fed. Today was a lesson that when the fed comes in with an announcement, i mean, its not necessarily all priced in. And there is this element of the liquidity to sort of wash ago way the bad news what do you do about all that . Well, exactly so last week there was a worsening of the virus and he was sounding down beat about the outlook for the economy. So with the fed, i mean, the fed sounding negative about the outlook. That should be positive for the market its going to keep them more accommodative going forward. Powell is a smart person but nobody knows what where the economy is going to be six months from now. But what he did tell us is that the fed is not the fed is going to be there at the ready to provide as much liquidity as possible regarding the covid19 headlines, they got worse towards the end of last week, but eastbound if you strven if t hospital rates, theyre on the decline nationwide i think you may have certain areas where some Hospital Capacity hospital rsz sayis reaching capacity. But the overall trend, were seeing an increase in cases. The hospitalizations arent going up as much that tells us that were finding better ways to treat the virus and testing more people and were going to find more cases but i think overall, those two reasons were not the greatest reasons to sell off on thursday. I think what you could you cant fault investors for is after rising 40 , taking some profits. So that is common even in bull markets or, you know, any time as mike was saying earlier when you look back at prior bull markets, he was talking about the path weve seen. Within the First Six Months of every bull market since 1974 and lasted more a year, we have seen at least two 5 pullbacks in the First Six Months think arent to be that unexpected just quickly, what would be your top sector pick for the rest of this year and your worse sector to avoid . You cant deny the outperformance of tech year to date its up a handful of mega tech firms up 18 year to date. Tech has led this rally, we expect the firms with strong Balance Sheets that can stand up to their dividend over time. Theyll hold up. Worst performing sector is still energy its still going to be Global Demand which we think will be sluggish near term and energy has a supply going into it. And that moderated a bit but it hasnt changed the overall outlook. Thank you for joining us. Thank you lets bring in now National Economic Council Director larry kudlow very good afternoon you to thank you so much for joining us. Thank you, will appreciate it. I want to kick off in terms of what weve seen a little pickup in the number of hospitalizations do you stand here today and echo the same sentiment that we had from the secretary last week that it is almost impossible to envision a full economic shutdown again even though the numbers are ticking up is. Well, look, yeah. Im not the health expert. But i will tell you the numbers are ticking up in spots. The nationwide numbers, we just got the cdc numbers. And fatality rates are. 7 thats over seven day period they have not moved. Theyre almost flat. And that trendcontinues. Thats to be expected. Remember, were testing. I mean this is what one of the Health People reminded me. Were testing 1 th,000 times mo than we did back in march when this terrible story got started. So youre bound to have some upticks in some places by and large, in the hospitalization rate, the prior guest is right nationwide, hospitalization rate is down. Dont forget on the hospitals, lektive surgeries are now back st so that may show a slightly higher issue i think this is not worrisome at this point we acknowledge that there is some quick spots we know how to deal with it. The Health People will tell you, we have much more experience we have far better equipment, ppe and so forth and it is essential. It is essential that we do abide by best practices. You know, face coverings where the local guides social distancing. I dont think there is any chance at this point what we know that will will be a second increase, a second wave. And no shutdown in the economy secretary is right there is no intention of even thinking about shutting down the economy. Still, larry, there is some discussion of local authorities talking about slowing down the reopening. Businesses can make their own decisions. The question is really an economic one does this get in the way of the v shape recovery that you and many in the markets are hoping for . Look, the employment figures, weekly claims down ten straight weeks. We had the three million job increase that was unexpected basically, because i think of the ppp program, the paycheck protection program, essentially temporary layoffs and furloughs, those folks are now starting to go back to work. 80 reopened much more to come. We have the apple mobility index for traveling. Weve seen tremendous Housing Demand all the stores, merchandise Department Stores, grocery stores, general merchandise and food stores. Theyre booming. Well get a retail sales report coming tomorrow. I think wall street expects. 7 increase or Something Like that. I think the v shape economy is right there. And we reference the congressional budget office. Theyre looking for plus 20 third quarter. Our view is youre going to get plus 20 in the second half of the year and with good policies, youre going to get a big bang economy in 2021. Larry, the stock market experienced the v. We hope the economy follows. Given where the stock market is as we stand today, are you in any way fearful that the government and Central Banks response to this crisis will materialize kind of like it did after 08 and 09 and benefit the haves more than the have nots the stock market rallied and they have more exposure to that and a lot of those unemployed dont have the exposure. Dont forget by the way, i know the upper end has the bulk of the valuation but over 50 of americans own shares that gets you right into the middle class ill say this also with these reopenings. You know, temporary layoffs, furloughs, going back to work, particularly if we see the samestore sales go up i think the middle and lower end of the wage scale which has been hurt very badly, i agree a lot of hardship there. A lot of hard felt difficulties there. I understand that. The Trump Administration policies, lower taxes and deregulation and better trade deals, it was precisely the middle and lower income wage earners who had the fastest increases. I believe it is possible. Well continue our growth policies and growth incentive policies so much of this look, the pandemic created a terrible contraction in the economy okay no question about that a Natural Disaster passes. And this will pass and coming in with a strong fundamental sound economy, i see no reason why we cant snap back you have folks acknowledging we may not get back to where we were right away. But give us a couple quarters. Give us a year or so i think youll see a splendid recovery i get your point in terms of the ownership of the stock market it is far higher here in the u. S. Than the uk and europe. More like 20 to 30 not 50 as you rightly say it is here nonetheless, that still leaves a big portion of society that perhaps dont have exposure to the stock market and i wonder as well when we consider the rising debts and deficits of the back of this crisis whether increasing a Capital Gains tax to make some of the people that are having enjoyed this stock market bounce back pay a little more wlchlt that should be included as we approach the election in the plans for nextyear so, no, i think higher tax rates would be a disincentive to invest and form new capital look, President Trump has talked about much different policies. He would like to see payroll tax holiday for the workforce the president s talked about lower Capital Gains tax maybe to rejuvenate asset purchases, excludeing from Capital Gains for a while. But some juice into it hes talked about tax relief for businesses and restaurants and sporting events, entertainment and so forth we would like to see covid19 liability restrictions so we dont get hurt and stop the process of reopening i think all of these things are going to be positive the we started with the fda during the pandemic and now its going to cover every Single Agency and department in the federal government less remove obstacles to businesses, to employment, and to Economic Growth thats been his policies i think those policies will be continued. And thats why im optimistic were going to get the v and then were going to get continued rapid growth after that i think 2021 coulding a big bang year you are said i dont believe there is systemic racism in the u. S. I found that surprising given the moment that were in, larry. Given the Economic Data which has only exacerbated the inequality weve seen. I think this is the best system ever devised for history the we are liberty we are equality. We are fairness. We have come a long way in this country. I will grant you there are some people who may be racist i will also grant you in the police there are some bad apples folks have good hearts in this country and they do not work for discrimination and they understand the need for equality and opportunity. Heres a thought president obama first black president who was elected twice. He got 79 million white votes. I find it hard to understand something called systemic racism now can changes bemade absolutely the executives of Police Departments should have more latitude to fire cops who are rogue cops or commit misconduct after misconduct but on the whole, with he have come so far in this country because of our open system because we are a democracy, because we believe in freedom and we believe in equality you know, im old enough to remember all the legislation, all the Supreme Court cases in the 50s and 60s, brown versus the board of education and education. Fair housing laws. Voting laws. There is a pbs you have to watch this pbs documentary his name i forgot. Im sorry i forgot him ive been running off so much here at the tongue but his work was phenomenal. Thurgood marshall. Please excuse me he changed so many things. So my point is this. We can learn from our history we can learn from our mistakes. Our whole history shows that and right now well once again learn from certain mistakes. Is this a systemic problem no i dont believe that america is bad. I never will believe that and i never will i dont think it means that america is bad i think you have to look at the explanations for why, you know, the net worth of a white family is ten times more than a net worth for a black family or a black family lead by a household with an advanced degree doesnt make as much as a white family who is led by a household with a High School Degree the st statistics are endless half of black men dont have jobs i think thats what people are referring to when they talk about systemic racism in society. Number one, im not sure what the systemic term really means but youre describing very important economic problems. Family breakup problems. This is a complicated matter we wont settle i doubt on this broadcast or this interview. But, look, before the pandemic hit, we had the lowest africanamerican Unemployment Rate in history. Okay 5. 8 in february of 2020 and before that, in 2019, i believe it got as low 5. 4 in fact, all of the minority Unemployment Rates in the trump boom hit historic lows people with or without High School Degrees it is remarkable before they struck and got in the way. This will go this Natural Disaster will leave us and well get back to where we were. All im saying here is we have seen tremendous social and economic progress. I believe more is about to come. And thats why i do not believe in whatever it may mean systemic racism were progress americans learn from history and progress from that i believe this crisis right now, whether its policing and other matters related to policing, we can change this and we can improve this and indeed we will. Larry kudlow. Thank you for joining us. Thank you. We appreciate the time. Video game stocks keep rallying amid the coronavirus pandemic up next, well ask Take Two Interactive Strauss Zelnick about the surge in people playing video games at home during the pandemic and whether that trend could reverse when americans head back to the office and out of eithr homes. Were back in just 90 seconds. Stock slices. 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. Because when you want to create 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. 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. 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. Welcome back stocks are negative for the year if you played the game, stocks if you play the video game stocks, excuse me, youd be wayner blizzard, electronic arts, take two all outperforming the Broader Market the country reopens and more people return to work, will the sector continue to soar . Join us is Strauss Zelnick welcome to the show. Thank you for joining us thanks for having me. I pose the question in the introduction its been a red hot period for you in terms of getting gamer as people have stayed home. What happens when they go out . Well, first of all, we have to acknowledge that no one would have wished for this time and its a time of great depravation tragedy for many, many people. So its only with that backdrop that i can acknowledge and in fact our company has been performing very well we actually entered our fourth fiscal quarter last year with a head of staem. And that obviously was enhanced by people sheltering at home so we reported great numbers for fiscal 2020 and were, of course, now in our First Quarter of fiscal 21 and given out our initial guidance which looks strong indeed. What caused it is you know, more demand for the entertainment business that is growing more rapidly than any other part in the Entertainment Industry for some time now there is no doubt that we greatly benefitted from people being at home with some time on their hands. How much, strauss, do you think that that increased engagement sticks with you and do you have an idea of the ba balance between new gamers or tracting new gamers altogether id rather use some facts to answer the question. Media consultants did some home work they said that during this period, interest in Interactive Entertainment is up 39 . And their expectations based on research is the post crisis when we get back to normal. Of course, at some point well get back to normal that interest will still be up Something Like 14 versus the period prior to the sheltering at home which is more than double the growth rate we were already enjoying take two has done better than in the Fourth Quarter of last year. And our expectations continue to be optimistic. But thats just distinguishing between expected growth in the sector and expectations about what our company can do given that its our goal and strategy and typical result to offer the highest quality entertainment in the business zbl. Strauss, who are the new gamers coming into the fold . Anything about the demographics or engagement habits look, we definitely have seen people that did play before become reengaged. We definitely have seen new players. I think the demographic, however, remains broad i think a little known fact is the average age of a gamer is 47 45 are female 55 are male its americas pastime this is already a very broad kbas based business i think people entering business are across all ages, all types of interests, every dem graphic is represented and i think the question is what makes this such an exciting time versus linear entertainment . I think the answer is we offer great stories, great graphics, great characters and great game play we also offer you the opportunity to connect with families and Family Friends and communities around the world people you know already or people you meet while playing. And can you talk to them while youre playing with them or playing against them its a very different experience than the lean back experience of watching linear entertainment which is also benefitting from shelter at home. Strauss, when we talk about the media stocks, we always talking about how much the likes of disney, for example, can get out of franchises that it owns from star wars to other things we just floated a graphic of your key gaming franchises are the franchises in gaming worth even more . How long can they go on for as we talk about the latest installment of grand theft auto . Will they go on foreever do you worry about overmilk them our goal is to create permanent franchises we have the best collection of property in the business we have 11 franchise thats have sold five Million Units within initial release. One way we believe we can create permanent intellectual property is by treating our property with incredible respect and only putting out a release whether its as close to perfection as anything can be. The last release at a 97 score of course, red redemption which came from rock star games had a 97 score and its our goal also not to bring releases to market unless and until the title is ready interest is a property of any type of all time strauss, i assume that most of your workers are working from home right now how is that impacting the business and is this one where you need to have offices to have come in and collaborate on ideas for new games . Does it disrupt your pipeline . Im proud of our company. We plan ahead. We had had actually planned a test work home day on march 12th completely without this regard and a week later, 5,000 of our colleagues were working from home weve seen no down turn in productivity we had one product delayed we delayed curbal Space Program two. Other than that, everything is on target. Since most of us do our work on computers or on the phone or zoom calls, we can be very effective working from home. But lets distinguish between highly motivated, highly committed, highly talented group of people who work at taketwo and all of our affiliates stepping up in it a tough time lets distinguish between that and saying therefore everyone should work from home. I dont think thats a great idea i think we have proven well do whatever is necessary to continue to be successful. Yet, i really believe that people in a physical location together collaborating, having coffee with each other, talking, this is the best way for creative enterprise to thrive. Finally, strauss, just had a bit of a back and forth with larry kudlow from the white house about this issue of systemic racism. He pushed back against the idea. I know Business Leaders like you have really been speaking out in a way we have not seen denouncing racism, denouncing the killing of george floyd. But also talking about solutions and best practices that you can do to change your company. I wonder if you would weigh in on this issue and what youre doing. This is a heartbreaking issue. Do i believe that we have racism in this country and that it insights violence . Absolutely how can i believe otherwise . Am i sick over the recent tragedy of George Floyds murder naturally i am all people are but what is more sickening is this is hardly a singular experience this has been going on for a very long time shame on us for just waking up now. We stand in solidarity with people around the world. Who of color, people around the world, all people around the world who know that we can and must do better woe were donating to charities that fight racism thats the very least we can do. And our culture at our company is one of inclusion and common decency and Mutual Respect what we learned in this time, what we need to learn in this time is just how much more progress must be made if were going to be the kind of society that we say we are and who we say we are thank you for your time. Thank you. A big come back train day to day. Well ask rick rdeeir how investors should be putting money to work in the face of the new coronavirus fears. Were back in a couple minutes o. O. Hm. Im thinking. Will i have enough . Should i change something . Well, youre asking the right questions. I just want to know, am i gonna be okay . I know people who specialize in am i going to be okay. I like that. You may need glasses though. Yeah. Guidance to help you stay on track, no matter what comes next. I geh. Common bird. E. Ooh look over here something much better. There it is. Peacock, included with xfinity x1. Remarkable. Fascinating. Very. It streams tons of your favorite shows and movies, plus the latest in sports news and. Huh run the newest streaming app has landed on xfinity x1. Now thats. Simple. Easy. Awesome. Xfinity x1 just got even better with peacock premium included at no additional cost. No strings attached. Just say peacock into your voice remote to start watching today. We have news on the casinos. Ka tessa brewer has details. El dorado filed an 8 k required Financial Disclosures what we got coming out of the document are stunning numbers on the way the regional casinos are performing this is one of the first looks at how theyre doing post opening. He wiel dorado, you have revenun 21 year over year 1200 basis point margin improvement. In caesars regional, revenue flat to up 2 year over year ebitda, the earnings are up 35 to 40 those margins have improved by 1,000 basis points Las Vegas Strip is not performing so well but they have just raised the limits in the Hotel Occupancy to 80 . And theyre seeing bookings now pacing 30 above the same period last year for conventions for 2021 but these regional numbers are really sending these are cost thats came out of this business and may not return like buffet, low limit tables, the entertainment really incredible margin improvement that is leading to such stunning earnings numbers there, guys st. Contessa brewer, thank you. Weve got lennar earnings out. Diana olick has the numbers out. Really nice beat for lennar 517. 4 million that is 1. 65 a share. Revenue of 5. 3 billion. Now chairman Stewart Miller said that business rebounded significantly in may new orders were down 10 year over year. But deliveries ended the year flat ended the quarter flat year over year we resumed starts and land spend to match the improving Market Conditions and this rebound has continued into the first two weeks of june. Theyre seeing strength across all markets and all regions. Theyre saying that theyre seeing a lot of people move from rentals and densely Populated Areas to purchase homes taking advantage of record low Mortgage Rates and theyre also reinstituting guidance saying that for 2020, they expect us to see between 50,500 and 51,000 new homes for all of 2020. A really nice beat for miami based lennar back to you. Not moving much after hours i guess a lot is factored in there is a lot of optimism going n. Absolutely. They were expected just because we heard so much in the market about the builders doing so well in may and june, that this was probably priced in diana, thank you. Lets go to mike santoli now for a look at walmart coming off in news today of a collaboration with shopify. Exactly the stock is at the center of the big debate do you stick with the big winners of the period or look at the others look at the street setup three quarters of everybody says buy it right now much stronger analyst sentiment than you had a year ago. This is a big spread between the stock price and target price 14 . Basically, the street is pretty bold up on this. Look at the valuation. Its stretched the upper limits of the multiyear range. Mid 20s in a forward pe basis. Relative to the s p 500, its relative valuations collapsing why . The s p 500 is going up so much. Other arnings, other companies are going falling apart this year so this is something that is happening with all of consumer staples. They look relatively cheap even though theyre absolutely kind of expensive and, in fact, j. P. Morgan said buy the staples today. They look relatively well valued compared to the overall market you have to be careful knowing what youre denominator is on some of the things same thing goes for p g. I would say fully valued, well loved, but could still keep working, well see st. Mike, thank you fed fueled turn around up next well ask black rocks rick reider weather the decisions to buy individual Corporate Bonds would spark the next leg of the markets rally certainly saw some enthusiasm afrnn. Ts t announcementhi teoo well be right back. 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. Talk to your financial professional or consultant 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. 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. Yeah yyeah yeah hey, hey were back partly after the fed announced they would begin buying individual Corporate Bonds for more lets bring in blackblocks Global Investment officer, rick reider thank you for joining us i guess starting point is your level of surprise at that announcement from the fed. The were we already expecting this perhaps to come if not today . We were expecting the fed to do what theyve done with etfs and the decision to go to individual Corporate Bonds, there was tweaking, i wont get too technical of the certification of companies in terms of being able to do this but it was significant. But it just follows on this continued persistence of the fed to provide accommodation and provide balance to see when they need it back to full employment. It was impressive. On a quiet monday, equity market was down 3 . I think 3. 5 or so we ended up over 1 . Pretty incredible stuff. What the fed did is it [ inaudible it is a persistence move on its part to provide accommodation. Well, i think, rick, it shows the power of the fed and even fit wasnt somewhat expected move, just shows that theyre fully in the game and, you know, the market likes this credit backstop. So if youre an individual investor sitting at home, you know, worried about some of the headlines around the virus or the economy or the fact that, you know, economists like jay powell predict millions of people will be out of work even when the economy does return st wh what do you do when its such a fed fueled market . Sara, yeah, what you said is exactly right. You have to keep in mind what the economy does and what the markets do can be different. It will recover faster not only that, were talking about a liquidity dynamic, what the fed is putting in. If theyre taking the Balance Sheet over 7 trillion, theyll put that in there. The aggregate inzechl dex we fon a 20 fixed income by the end of this year. Look at what they did today. So as an investor, you have to think, gosh, they made Interest Rates unattractive from an invefrtment point of view. The whole five year and treasury market is functionally 0 . So what i do do with my money . Ive got to provide some up side return in the equity market. Well continue to get that boost. The way you look at equity ritz being premium, that is on where Interest Rates have to be. You by this today. Companies are going to be able to borrow increasingly attractive rates that is a fantastic arbitrage if youre a company can you borrow attractive rates. Buy back the stock if you want you can make acquisitions. It provides, as you say, further balance to the equity market but thats how investors have to think about it you know, Interest Rates sti low. What jay powell said, Interest Rates stay low for two to three years. Thats a pretty big deal when investing in the markets. Rick, compare for us the scale of what the fed is doing to other major Central Banks dollar is down 0. 6 today. Do you expect further weakness there . So simon, i think the dollar is a hard call there is money coming into the u. S. You know, i do think that there are places like europe i think what europe has done with the european eurozone recovery fund, what theyve done in terms of german fiscal stimulus is good i think the euro is going to appreciate relative to the dollar versus the other crosses around the world its a hard call i think the dollar will be relatively contained what the fed is doing versus any other gap in employment, weve never seen anything like this electric madery to fiscal stimulus which weve never seen before i cant describe how big this is when you talk about not only the amount of liquidity theyre putting in the system, the commitment to low rates for a long period of time. And then the targetted nature of it which we saw in full force again today. Rick reider, we leave it there. Thank you for joining us. Still to come, a group of former ebay employees have been charged with harassing a journalist in a bizarre stalking campaign that included live insects and a bloody pig facemask that story coming up on closing bell. Yeah yyeah yeah hey, hey were back time for a news update hi, here is your cnbc update at this hour President Trump is trump says we will live with it and calls the landmark ruling, quote, powerful. Trump also said that he will lower the u. S. Troop count in germany to 25,000 unless the country increases its defense spendsing. He also bawarned john bolton if book he has written is published. He said any conversations with him are classified. Overseas the french government is backing away from a ban on choke holds that was announced last week. That claims that the ban would deprive them of a key tool to subdue unruly suspects and that is our cnbc news update for this hour. Sara, ill send it back to you. Thank you up next, a bloody pig mask, funeral wreath and fake craigslist ads these are some of the tools that six former ebay employees are being accused of using in a cyber stalking case. Well break down the details right after the break. Right now is a time for action. Thats why usaa is giving Payment Relief options to eligible members so they can pay for things like groceries before they worry about their insurance or credit card bills. Discover all the ways were helping members today. Or credit card bills. But a resilient business you cacan be ready for it. Re. A Digital Foundation from vmware helps you redefine whats possible. Now. From the hospital shifting to remote patient care in just 48 hours. To the university moving hundreds of apps quickly to the cloud. Or the City Government Going Digital to keep Critical Services running. You are creating the future on the fly. And we are helping you do it. Vmware. Realize whats possible. Welcome back federal prosecutors charging former ebay employees with cyber stalking deirdre bosa here with the details. This is a bizarre story. Yeah, it certainly is, sara just wait until we get into it prosecutors say that those six former employees used a strategy called a white knight strategy to essentially intimidate a couple that run an online emers news letter that was critical of ebay it began by sending some pretty disturbing to their neighbor its house with their names on it they even sent a box of live cau cockroaches. Those same employees notified the couple of the harassment and offered to help them today ebay said it was notified of these actions by Law Enforcement back in august of 2019 and responded by firing the employees and launching its own internal investigation now, the company also says that it found no evidence that then ceo devon wenig knew of the cyber stalking but they said that his communications were inappropriate and there were a number of considerations in his departure, so its still unclear what his role was or wasnt in this very, very, as you called it, sara, bizarre story. Yeah, absolutely. Thank you. Deirdre bosa. After the break, jpmorgan ik office well have those details when closing bell comes right back. 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. And their financial wellbeing. Since our beginning, ourltant business has been people. Its evident in good times, with decisions focused on the longterm. And crucial when circumstances become difficult. That continued emphasis on people our advisors, associates, clients and communities gives us purpose, strength and a way forward. Today. And always. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will you can rely on the people and the network of at t. To help keep your business connected. I see all the Amazing Things you have been doing. You are transforming business models, and virtualizing workforces overnight. Because so much of that relies on financing, we have committed two billion dollars to relieve the pressure on your business. As you adapt and transform, were here with the people, financing, and technology, ready to help. Some news out of jpmorgan this afternoon the company will gradually bring sales people and traders back to the Office Starting next week, june 22nd. They expect around about 50 of sales and Training Staff could be back in the office by midjuly they say on background that people that come back will be doing so voluntarily also the fact that jamie dimon made an appearance on the Trading Floor last week as i understand it. Id say 50 back by midjuly might put them a little ahead of some of their peers but all of the big investment banks starting to move in that direction. Well see when they will get back to 100 if they do get back to 100 , if there are longterm implications. Wilfred, has it affected anything, the fact that most of the traders have been working from home . I think its made some small effects but the remarkable thing is how much if you take step away from jpmorgan and take Goldman Sachs and Morgan Stanley which are much more geared to investment banks, they were operating 90 , 95 from home at the peak the very idea that thats even plausible was amazing. Clearly it makes some effect i think they have all adapted pretty well. I think the sentiment from all of these banks is were going to go back to trading and keep our offices. The question is whether support staff still need to be in prime new york locations and things like that. So there will be an impact on commercial real estate but its not a binary zero to 100 type debate. Certainly the density of these Trading Floors is a lot less than it was, say, 20 years ago, so 50 of what it had been before this crisis is not going to be terribly kind of thick on the ground but there is a reason they had these Trading Floors i think youre able to see a little bit of people squinting and saying there had been some liquidity effects in the market or things like that. But obviously mostly automated as it is. Well, speaking of the markets, guys, it was actually, mike, a pretty strong, decent close considering where we were at the open down more than 700, up more than 100 retail sales, its going to be interesting tomorrow looking for a sharp rebound there. See what the consumer has been doing. What else you watching the economic index has very, very surprising. That means that the economic numbers coming in better than expected cant ignore the resilience of the market today from those lows a lot of times a big down open on a monday would have had people piling on it was exactly the reverse today. Asia will be interesting. The nikkei was down and not enjoying the intraday turnaround the u. S. Enjoyed well see if the positive u. S. End to the day carries overnight but big turnaround today. S p up by 0. 8 were out of time here on the closing bell. Fast money starts right. Fast money starts right now. Guy adami, tim seymour, dan nathan pull up a bar stool because dave fortnoy joins us to talk about the big boom in trading. And nikola shares, well talk to Trevor Milton ahead. Plus an earnings alert an lennar well break down the numbers straight ahead but we start off tonight with a massive reversal on wall street today. The dow falling more than 700 points at its lows after clong