Transcripts For CNBC Fast Money 20240712

Some places are reporting record single day increases lets kick things off with meg terre terrell. Were seeing a couple days worth of data with record cases. If you look at the United States in total, now the sevenday average of new cases is starting to tick higher again meaning trends to the south and west of increasing cases are starting to overcome the positive trends coming down in the northeast as of yesterday, 27,000 new cases were reported across the United States United States. If you look at individual case, weve been getting the new case counts for today for states like arizona now up to an additional 3200 cases today california reporting 4300 additional cases today but that could be due to Testing Backlog from l. A. County we saw in the numbers yesterday. Florida also reporting record high cases today 3800 South Carolina another one of those states reporting record highs. Now in terms of the hot spots in the country, the areas with the fastest case doubling times, it is close states, phoenix in a bad spot seeing cases double every 12 days. Were seeing similar trends in tampa, orlando, san an ttonio a austin you mentioned apple store reclosures in 11 different areas and i was interested to see where those were and how they mapped against the trends that we are seeing across the country. You can see the counties here. Arizona apple closed all six of its Stores Across that state but it was pretty discerning Closing Two Stores in florida not including Tampa Orlando seeing the fastest case growth. North carolina Closing Two Stores in charlotte but leaving the rest of the state open while all of those counties are seeing doublings and triples of cases, where apple closed stores is where there are more cases per population level they are being pretty discerning within the states. Thank you meg terrell, the other point is 11 stores out of what is the base here . Many, many Stores Across the u. S. 11 is a small sampling here. Here we ask this question because a rally has been built on the reopening trade and what if we take a look at this reclosing of america and will that sort of dash this rally that has been built on all of these hopes, guy, that things are going to open up without a hitch . Yeah, thats one of the pillars of this rally, no question this reopening portion, which, you know, ive been skeptical not because im not p ocoptimisc but trying to follow the science on what people say this virus doesnt care its getting nice out and it nice to go to the beach or want a couple beers with friends it doesnt seem to be going away in warm weather but seems to be getting worse. If youre building your hopes on a seamless reopen, thats the wrong thing. The other leg of this, obviously, is central bank intervention, the stronger of the two legs and that seems to be bolsters things again, im not trying to be dower here im just trying to be realistic and be honest. I dont think this reopening is going to go nearly as smoothly as the market seemed to suggest until recently. Dan yeah, so listen, mel, it was a pretty clear example of buying the rumor, selling the news a little bit the market is kind of caught a little resistance over the last week and a half or so. The apple news is really interesting because listen, i dont think there is much demand by the masses here in america to have mass lockdowns again and if you think back to march when we started having these lockdowns, it really started in the private sector we saw the nba shut down we saw a lot of businesses like apple close their stores and try to be a bit careful because remember, its not just their employees, their consumers they need an atmosphere where people want to go shop at the end of the day, you know, i think that the private sector is likely to lead. Well have spotty, spotty reopenings over the course of the summer and i think investors are going to have to get used to that a little bit. I think thats sort of the point here were trying to make and that is, you know, states and the United States as a whole may not want to do more lockdowns but its the private sector stores close and decide on their own to close, thats the Economic Impact and isnt that what we care about that is going to be the impact to earnings and the hit to the economy. If they do not reopen as planned. Tim . Regardless of what states are doing. But i think apple has a social responsibility, at least, they feel they have a social responsibility and deemed to be. Its interesting because when apple reopened stores in china, that was a Glass Half Full moment the fact they are closing on where they have already opened up but that ultimately we are look, as a country were moving to a reopening phase and its moving into head winds but the reality is its interesting to me its a glass half empty apple, when they started Closing Stores in china, when we started to understand the impact and what it meant for their china business, it was a very big deal for the market is this a very big deal today . Look, as it relates to the Health Related cycles here, im not sure that a lot of the places where were seeing, you know, strong case or case rebounds or cases places that we ultimately had ever really gotten the right measure on what the impact of the virus had been were now hearing that places that are a little either more remote or certain parts of the country are doing poorly and thats to me, i think, part of that still, that first wave. It depends how we want to measure this and i think the data is very inconsistent. This is not good news and i think sending the week out on this message for apple, which hit alltime highs this week is a very important thing for the market to reflect on this i can woo end. Yeah, guy, the virus doesnt care if you want to go outside the virus doesnt care if the weather is nice. That reminds me of mr. Market. Mr. Virus doesnt care its an entity in and of itself. It decides what it wants to do, right . So mr. Market, guy, is telling us, mr. Market does not care if there are these fits and starts. Mr. Market wants to go higher. Mr. Market do you like that term mr. Market i dont know. It reminds me of mr. Mets. Thats an aside. Mr. Market doesnt care that mr. Virus doesnt care because mr. Market wants to go higher and ro rice and hope. Markets always want to go higher, no question. I understand that for the majority of the people, if not everybody watching, they actually have a vested interest and want the markets to go higher, as well. I get all of those things. I left my pom poms at home 13 years ago. Im not suggesting youre saying that but our job, ive never viewed our job to be a cheerleader for this market, be dog mat tick ematic either way earnings will be affected absolutely the market is laooking past that the market is trading at a ridiculous multiple maybe justified because wehave a reckless Central Bank Federal reserve. With that said, again, this reopening is not going nearly as well as i think people had hoped or people expected and i think were seeing that now and, you know, hopefully im wrong but all thoel tthough administratios there is a magic vaccine coming, the science suggests however many years of people developing vaccines suggest it doesnt happen that quickly. Yeah, just so you know, if you were a cheerleader, it would have to be for a funeral parlor or morgue and i would be your teammate on that one were not the cheeriest people when it comes to this stuff here. What does that mean wow. He just said hes not a market cheerleader hey, here is the thing, right . You use the term science a lot and i think its really interesting when we think about it as were heading into the summer and people want to be out and you talked about what the rye vus is virus is going to do there are simple things as we wait for therapies and vaccines and hopeful for all of that to come sooner rather than later, there seems to be pretty clear science wearing a mask helps the spread of this disease you know, for some reason everything in this countriy, it rather political it interesting if you look at the red, blue map and see where this is spreading and you see what the prognosis is or just the inclination is for people to wear masks, you see that its spreading there. I think that thats a really interesting thing to keep an eye on because i think were headed into a very political season here and it seems that this is like really ground zero for that environment. I think that the a really good point and reminds me of the note from our friend marco of j. P. Morgan when he wrote in a note one of the biggest risks of the market is this poll litization of the reopening and part of that is his politica politicalization of mask and mask wearing and if mask is the root to limiting the spread, as we go into the political season, we could see the spread increase because of this, you know, seeing this as a red or blue kind of stance, tim. Well, yeah, i mean, and god bless dan. I think i know what color his pom poms are i think there is a dynamic here which unfortunately this disease has become a political football at times and i do think also on a week when we heard from mr. Powell, you know, the fed has been thrown into this political season, as well, even though we all would like to believe that thats not what happens. So i just think that the reality of the virus and what its meant for markets is its been all about assessing the length of time and the amount of time were going to have to push back on earnings and assessments and giving Companies One year or tw and a mulligan and i think thats really what it comes down to the disease is all about a vaccine to the extent but this country as dan pointed out, i dont think were going to get shut down again. I think the reality is that this is going to be a process where were going to see some rebound. There is no question that this has been seen by some parts of the country as, you know, a political dynamic more heavyhanded than it should be the reality is this is a health issue, folks and markets are responding most to the health issue. All right were just Getting Started here on the fast money five. Up next, well tackle a look into who is really in the dri r e stoojo seat on wall street and onfa fd int slimming down in a big way. 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You cut commissions to zero and allow the purchase of less than one share and get millions of accounts opened up, explosion of trading in the market and when you talk to them or read the boards, the word fed always comes up if you think the market is going to sell off soon, you have to find something that says its going to be so powerful to bring the market down, even the feds unlimited printing and the trader crowd buying like mad is not going to be able to stop it. Our next guest has new numbers on just how much impact the day traders are having on the market richard follows it rich, always great to speak with you. Good ervening, melissa. I feel this is a big question on the street. Do Retail Investors, are they big enough, size big enough to have an impact on where the market is going . What have you found . Certainly the volumes are at record levels. If you look at the trade reporting facility volumes, thats volumes that arent done on exchanges, mostly retail, those are at a record high as far as percentage of all volumes. If you look at the actual trade say, a mrme erk ameritrade, i mean shares because there is a lot of activity in retail right now. So there is a lot of activity but back to the original question, are they having an impact on the overall market were trying to get at that. There are a lot of people who actually think there do and others say the retail guy, never going to be big enough to make any difference. I still think that they have a limited impact certainly with time, you know, well know but relatively small percentage of the market a lot of tyimes they are low priced stock. Rich, sorry to cut you off. The connection is really terrible were going to have to let you go we look forward to speaking to you again. This is the big question, tim, you had your doubts. Rich has his doubts and here we are saying its the robin hood rally. Well, look, im of the view that if you look where majority of those robin hood checks went in the economic bracket, income bracket and you look at the trading frequency on the week before stimulus checks came out and the week after, cnbc did a nice note about mid may. The reality is a lot of stimulus checks went into the market. Are they moving the market if you think about the masses and in terms of frequency and timing of liquidity, there are days we could have pushed this around we spent a lot of time this week and the last three weeks also though talking about these companies that had been of particular interest to this crowd. Weve been talking about Companies Either on the verge of bankrupt bankruptcy, stocks in a momentum vortex of shororts and there iso question when you look at the overall market and size of the market and the fact the nasdaq 100 is basically dominated by the four Biggest Companies in the world, i dont think retail is necessarily moving them overnight. I would also then look at retail trends this week and over the last couple weeks in terms of measuring bullish or bearish sentiment and its very interesting bearish sentiment within the Retail Community is significantly higher than it should be when you consider where the market has moved the Retail Investor is in. They are sup pesposed to be movg the market but not measuring terribly bullish here. Guy ill jump in here. Sorry. Oh i think that point is an interesting one, the last point tim made about the bearishness of the Retail Investor a lot of that has to do with the fact we got those cheecks, opene the market and having fun with it and making money but at the end of the day, a lot of people who are furloughed are getting worried about the fact they may not have a job when their bonus unemployment money running out in the end of july i think there is probably a level of bearishness about the economy and about their ability to earn wages that are higher than they were, lets say, in the prior six months in the back half of this year. So that could have something to do with the push and pull and i think the most important point is this. Weve been talking about this for a long time. All this cash thats sitting in money market funds, where is it going when it goes into the market ti tim just said it it goes into the top stocks and those are the ones just absolutely surging apple, microsoft, new alltime highs today and reverse lower but thats where passive money is going to directly. The rest of this stuff, planes, trains and automobiles the guys will keep playing around but it will act as an accelerator to the downside. These checks came after the low in march for many of these folks, last thursday not with standing, a lot of them never seen the market go down it goes up every day you get desensitized to the fact this is easy markets go higher. Number one number two, as a point tim made but we all agree upon its one thing to have 1200 and to go to zero its bad but its not potentially catastrophic its another thing to have, you know, 1200 being allowed to leverage or leverage that 1200 and not only lose that but lose some multiple of it. Thats what we saw with this poor individual that took his own life this is not an easy game despite the fact that people want to see try to make it out to be and remember, you know, for a lot of these folks, they only seen the things they own go higher the sun also sets, if you get my draft. Yeah, i mean, trading on your phone is so similar to just trading like a video game. I mean, it almost you almost dont feel like its real money because youre pressing a bunch of buttons and trades go through but the reality is there is a lot at stake dan makes a good point were talking about loans being in forbearanceforbearance. When those are up and ppp runs out, what do you do . You need that money in your robin hood account. We do we believe that those stimulus checks are going to keep coming. They are going to extend those benefits if we are at 20 million unemployedis 20 . But there is no question that its a very difficult time to gauge the health of the consumer and so taking the robin hood dynamic and impact on the market and then just also playing, how many of them are people not paying loans i dont know but i bet there is a descent correlation there, as well and at some level, as weve talked about, people that are not paying loans, if given an opportunity at forbearance or sleep three mon skip three months of payments, youre going to do. Three big stories down, three to go. The fed, fast fo a aodnd frauit company. The countdown will continue after this 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. 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. Yeah yyeah yeah hey, hey welcome back to the special edition of fast money. Two down, three to go. Major League Sports have been shut down due to the coronavirus. Who is the first to return i know nothing about sports. Im out of this. Guy, what do you say come on. Thank god, by the way she doesnt know anything. She doesnt, tim first of all, sports are back. I mean, British Premiere League thrown at me, nascar, i watched days of thunder last night and got my cold trickle fix. Somehow watching four guys play golf to an empty gallery is interesting. I dont. Out of the four major ones, it the National Hockey league to me, hockey is the sport of sacrifice. I love it. And i cant wait baseball should call up and say you know what, folks we cant get our act together. See you next spring. Who knows what happens to football and basketball seems to be playing at disneyworld. Good luck with that. Well, if you think about football and for all we know, we could be getting, you know, replacements again and guy could be shane falco and coming in out of his retirement from that sugar bowl disaster. Anyway bad movie reference. The bottom line, if i look at the four major sports out there, hockey is the one that has to come back. If you rank them according to the following, the nba i think has the most to lose in terms of momentum but i think the nba is one that probably also in the context of what is going on with some of the social movement in the country right now, i think the nba wants to stick to a solidarity line thats very, very interesting and important i think if you think about major league baseball, its actually kind of sad. There is a guy that would count the National Past time as baseball i think baseball is the one that probably comes in last but hockey needs to come back for the money. So timmy, i hate to break it to you, buddy. Baseball will continue to come in last. That other spring sport lacrosse is about to over take it the premiere Lacrosse League is back in business july 25th for a twoweek championship series its going to be on nbc sports, all 20 games for two weeks youll get a yard sale, my boy thats the one lacrosse july 25th. Sentlating conversation. Dont mess with paul. The countdown continues the peanuts, the teacher talks, womp, womp, that was that conversation for me. Thgs cld inou get moody for jay powell well explain why when we return 300 miles an hour, thats where i feel normal. Having an annuity tells me my retirement is protected. Protected Lifetime Income from an annuity can help your Retirement Plan ride out turbulent times. Learn more at protectedincome. Org. Yeah yyeah yeah hey, hey cool . Drop the taco. Get in the car. Does this sentra feel like a compromise to you . Wait, what. . The handling is good, right . No compromise there. Nope watch this. Umm. Bbrie. Brie brie rear automatic braking. So if this Nissan Sentra isnt gonna compromise, why should you . Youre right atta girl. The allnew Nissan Sentra. With more standard safety features than any other car in its class. With more standard safety features that could mean an increase byin energy bills. You can save by using a fan to cool off. Unplugging and turning off devices when not in use. Or closing your shades during the day. Stay well and keep it golden. Welcome back to the fast fi five. Risky business for the fed jay powell and company doing something they never did before. They started buying Corporate Bonds this week as the fed continues to signal it will do whatever it takes. Tim, you actually said the fed deserves to downgrade. It deserves to be downgraded. If a company was out there georging themselves on debt and increasing their Balance Sheet like a drunken sailor, they would be downgraded. The testimony this week where it almost seemed as if the corporate buying conversation was just kind of thrown in there willy nilly, thats the problem. I dont think there is anything in the feds mandate, which is growth and inflation is about buying Corporate Bonds we know they are nationalizing the high yield junk market and essentially nationalized government debt. That should be nationalized. The bottom line is it a very disturbing trend for a fed i think if im a ratings agency, im downgrading the fed right now. Its interesting. Jay powell was talking about this said effectively that they are going to proceed with this because of credibility issues. They said they would do this from the get go so they are going to do this if you take a look at the amount, the dollar amount, its not very much and yet, here we are. Credibility went out the window with paul vulker. Im already enouold enough to rr if theyre worried about their credibility, they should worry about Something Else number two, free market capitalism i love larry cud lokudlow i consider him a friend. I hope hes watching this is not what its all about. You have to allow corporate darwin ism to take over. What winds up happening is you carry companies that are not viable and hurts everybody else. Its i know it sounds awful but i got to tell you something, the other side of this is far worse in my opinion hold on a lot of people will say hey, this applies to ppp and all sorts of programs put in place to build what were hoping to be a bridge to the other side of this pandemic to keep some of the economy going so there is a real argument here to be made to say support some of these companies and the economy, yeah . I understand that look at the numbers, look at the difference in the numbers between whats going on. Look at, you know, when Steve Mnuchin pulled the 6 trillion out of his pocket, where is that coming from . Its coming from me and you and dwindle away our buying power and by the way, this started long before anybody heard of covid and started in earnest in september, september 17th to be exact. What the fed is doing, they could hide behind the window or the vail or the carpet of covid but there is much more going on and my opinion, it a lot worse. All right old man screams at sky we got you, buddy. You dont like the fed mel makes a good point about the bridge to the other side of this thing. The only issue i have with this action this week about the Corporate Bonds, its entirely unnecessary. Mel, like we still have this the stimulus coming. We have the ppp stuff in place we dont know what it looks like, right, when we come out of this Health Crisis hopefully by the fall you know, i guess the real risk that i see is that theyre just inflating risk assets right now because every day i see new job cuts that are coming that were going to be coming one way or another because of efficiencies being realized for a host of reasons. I want to make one last point because weve been talking about what do you think the bank stocks are telling you the bank stocks and price action are telling you were going to have negative Interest Rates here i know that doesnt seem like something a lot of people want to hear or agree with, i know a lot of people much smarter than me on the credit markets think the next move is higher in rates but the banks are not telling you that right now so put it all together the fed should take their pedal off the medal a little bit and we should let the risk assets kind of settle in a little bit because at least the crash is over now we have to see about the economic recovery and i suspect they will continue to have to reload on multiple levels as we get to the back half of the year unemployment will stay high, probably double digits for the next six months. Tim, you dont connect those dots, what the fed is doing to the performance of the banks no, i dont and i also want to be clear that theres a very different dynamic going on between what the treasury is doing and fed is doing. The fed is there to be fixing the plumbing of market and going after, trying to maintain health and money markets, trying to maintain health and asset backed securities, which are liquid and seeing some major draw downs i think that the banks are naturally going to be until the center of the storm when youve had yield curves really Interest Rates move lower and the curves steepened a bit. The fear is if you look at banks from the moment they announced red reservers, in kpexcess of wt anybody thought. Im not ready to jump out of the window on banks here we have a case where weve seen big bank rallies banks at times have showed major dislocation from this market and looked like if you believe the stock market is supposed to be 3100 and you believe bank stocks should be 10 higher at least. You cant say it any other way than that. Coming up, well reveal the finatwbistyiel o g s of the week stay with us a special edition of fast money is back after this. 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. 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 okay, give it a try. Between wisdom and curiosity, theres a bridge. Between ideas and inspiration, trauma and treatment. Gained a couple of more pounds. Thats good for the babies. Between the moments that make us who we are, and keeping them safe, private and secure, theres webex. Beautiful. Welcome back to the fast five. Were counting down the bi stories. Apples app store under fire the debate catching fire in the tech world listen to what microsoft president brad smith said this week. I do believe the time has come whether were talking about washington d. C. Or brussels for a much more focused conversation about the nature of app stores, the rules that are being put in place, the prices and the tolls that are being extracted and whether there is really a justification and Anti Trust Law for everything created. So as a regulatory crackdown a big threat to apple, especially as, dan, the stock sits just about at alltime highs. Yeah, i dont think it is this year. Weve been talking about this story a little bit it been floating around. We know the e. U. Has really set their sights on mega cap techs, competitive practices. Over there there with big fines and i suspect there will still be big fines i dont think any breakups are coming in 2020 is there a risk to it . No doubt about it. Cara swisher had a great op ed in the New York Times discussing practices and for you to think they will not come under scrutiny is a big, big mistake. These companies are exercising more and more dominance but that also means that they have more and more sway especially here in the u. S. Dealing with politicians on both sides. I dont think thats an imminent risk right now. Not imminent but could it be a risk the bull case is the Services Revenue. If this part of Services Revenue comes squarely under attack and they cannot charge between 15 to 30 of subscriptions to the developers including microsoft, then what happens to that bullish leg of the story, tim . Its all been about according services i dont care what you want to say because dan has been pointing out two years which is going on with iphone shipments and net profitability with apple where its rated its all about that services multiple, which is anywhere from 24 to 28 times, if you ask the street on a blended multiple with the rest of the name. Interesting story. Apple has been a year ago almost to this day we had apple and google and facebook under the doj kind of siren and this week the doj was certainly back in full force, as well. Listening to their competitors like microsoft and talking about the ranker, thats very real and there is no question the mega Cap Tech Companies would love to see the position be thrown here. Getting back to a stock that closed near ties because this week apple talked a little bit about or part of the rewriting to alltime highs was last weaks news about chips versus x 86 and where apple may be putting chips inside of laptops and macs and becoming a competitor a lot going on with apple, almost priced to perfection but very differenefensive and this s probably the best one of mega cap tech if you ask me. I cant wait for the s 86 chip myself. I wait for the amazon truck every day to come by. The and 8 g phone youre waiting for, guy and you cant wait until the app store reopens. All of that. Seems to be coming. I cant wait for the application store. Katty huberty broke it down if shes not that worried about it, why should i be . Ill say is this, something ive learned over the last 37 years doing fast money. If you say anything negative about apple remotely, the apps you get on twitter is astonishing and i understand the argument you just own the stock and live to fight another day, but bear in mind over the last two years, you had a stock that went from 225 at the time was an alltime high to 140 and bounced and recently you had a stock that went from 320, which at the time was an alltime high and went to 240 and bounced. This stock gives you opportunities on the downside. Thats fact. That the not me riffing. Thats the way it is and my sense is youll get another one. Guy, youre saying trade it and own it, which i think makes a lot of sense i want to make one point about the Services Business people talk about what a high Growth Business and in the last quarter, it grew 17 year over year i get it its a massive number. It was 13 billion in the quarter about 20 of the overall and like tim just mentioned, its a much higher margin than the hardware here is one really important point people gloss over. They get about 12 billion a year that drops right into their Services Category from google for traffic accusation using that Search Engine for their mobile browser to me, thats a huge, huge thing that might go away dont forget android owned by google has more than 80 smart phone market share around the globe. To me, i dont find the Services Revenue growing that quickly 1. 5 billion installed base for ios users and have 125 million active users i dont see it and i only see margins going lower for their hardware so to me, yes, i think the stock is fully valued here but i would have said that at 300, too. Coming up, moments away from revealing the final hot story of the week need a hint . One household name just spotted the ultimate golden opportunity. Met e tas ene wh w co back right. 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What companies are doing to mark this day and the big challenges minorities still face. We go to deirdre. Gig companies are commemorating the days in different ways but uber and lyft are making juneteenth an official holiday a number of gig workers are raising awareness about the inequality that still exists its circulating a petition calling for sick leave, health insurance, workers comp and quote meaningful representation for black gig workers because the divide is on display today ride share and corporate employees have the day off drivers are classified as independent contractors and dont get the day off unless they choose to take it off look at some of these numbers. Ride sharing numbers at uber, excuse me, there are a number far more black drivers or contractors than there are black employees, particularly at a company like uber. According to the most recent diversity and inclusion report, the proportion of black leadership sits at just 3. 3 among fulltime employees, it at about 9 meanwhile, black uber drivers make up about 18 of total drivers s according to another survey the petition circumstanlating r the issue of a heated issue already and calls on companies to not just pay service to the black lives Matter Movement but if youre committed to black and brown lives, they say prove it. Thank you dan, this is an important issue. States like california tried to deal with this issue. Varies eef success. There was already momentum on these gig workers side i know there is obviously huge lobbying efforts because it really does change their Business Models in a lot of way but i think the new climate or the most recent climate in this country is going to lean in the favor of these gig workers and i think the pandemic really hay lig highlighted a lot of inequities and who was hit hardest. When you think of gigability to assistance, weve also rely the on a lot of delivery services. Uber is answer l uber, door dash, these guys are raising cash at massive numbers. The optics of treating the workers that you built these businesses on this poorly at this time during a Health Crisis and he can no, ma and economic crisis arent great. Coming up, we reveal the final hot story tofhe week and its sizzling. Stay with us t that calms you, t helps you fall asleep faster and stay asleep longer great sleep comes naturally with sleep3. Only from natures bounty. The covid19 pandemic is creating Food Insecurity on a scale not seen in decades. An estimated 54 million americans will struggle with hunger. With 200 food banks and 60,000 meal programs, feeding america is the largest hungerrelief organization in the country. Join Morgan Stanley in supporting feeding america and your local Community Food bank. 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 to the fast five counting big the big stories of the week the final story. Want fries with that depends what you order as mcdonalds will keep dozens of items off the menu for the foreseeable feature. The company seeing opportunity in simplying the menu. You know, guy, its interesting for a chain that started with a single offering, the humble hamburger to go to all these different variations on top of other items like the ones that are discontinued, salads, bagels, yogurt parfaits, this is quite a change. Yogurt parfaits i know im boomering all night long and its getting late for me and i got to go to bed soon, number one number two, i yearn for the days when you walk into the mcelderry dan no d mcelderry dn nocdonalds, h cheese burger, for me i get four cheeseburgers, quarter pounder, large fry, coke and im set. Fantastic. Simplify like bruce springsteen, dwindle, dwindle, dwindle, dwindle. That the dead. You have a major topic 219 that nathan is looking at from august of 2019 and february of this year. Buyer beware. Guy got frozen. The mcdonalds gods froze him for saying that. That the a huge order for a single man, tim. I dont know what you order but that sounds ginormous. Look, im not afraid of a big mack im afraid of a mcdonalds salad. Who goes to mcdonalds for a salad . Frankly, im not a boomer like guy but maybe i am im not. But im not going there for a parfait, either. Im going for an egg mcmuffin. Getting that back on the menu is critical bottom line, this is a fiveyear rerating story. This is a story that obviously coming out of covid, brands that are trusted and iconic will be the ones that do better and take market shares. If you look at u. S. Sales comps for may, they are coming back but still down 12 from down 19. 3 for april and international significantly worse. If you want to look at out to 2021, this is a 23, 24 times earnings, which for mcdonalds is not expensive and i think will be defensive here. You know, its interesting. This story kind of goes back to a little bit of what we started the show talking about is this rolling reopening or the rolling lockdowns and i think it a really smart manager decision to probably play well with their franchis franchises, simplying their business at a time there is a whole heck of a lot of uncertainty. That being said, this is a company doing a lot of takeout and deemed essential during the lockdowns but i think that they probably have a better shot of succeeding in an uncertain kind of consumer environment but simplying that menu. That stock got rerated by expanding that menu by expanding breakfast all day. Those sorts of things. I think the value menus, that stuff. They need to keep some sense of variety but simplification will work for them. Guy, youre raising your hand. Horse hockey to variety i dont need variety i go to white castle, i know what im getting number two, dan said old men yell at clouds im looking at my twitter machine and apparently, its something from the simpsons, which by the way, ive never seen, either hes clearly coming at me in a major way on a friday night and, you know, im hurt just want you to know. Thats all you have to say . If theyre looking for a new name for the show tim tv. Because tim is still a little undecided about his boomer stature. I think hes well entrenched with guy i will be frank with you. Again, this goes back to this could be us on a commercial break where i talk about your hemp ties and shirts and what not. Dan thinks hes amillennial. Im happy to wear 54 years old that t thats my age. Thats what i do mcdonalds is an important part of my life i thought we were talking about mcdonalds. You both are wearing pretty much, youre ragging on him for hemp ties from the same store. Your clothes are from the same store. Back to machicdonalds, they wil probably do away with the specialty things like Shamrock Shakes, that will be gone. The mcrib that would be a tragedy in my view to never have a mcrib again, things like that. Those are reasons to go to mcdonalds what, guy . Quickly, because i know with have to go to break. We sent a young man out to get mcdonalds for the desk. You figure hell come back with 40 hamburgers, 40 cheeseburgers and fries. Simple he came back with filleto fish sandwiches fired him on the spot. Dwindle it down. Guy, just so you know, back in two bubbles ago 1999 we had an interncnuggets in an hour. He scored. That was a big one. The Shamrock Shake certainly is one of the great things ever created by mcdonalds. If they lose the Shamrock Shake, they wont only lose the irish but me, keep it. Dans point about the coronavirus, certain changes businesses are making and using this excuse to keep them in toie trend. I dont know why anybody would go to mcelderry docdonalds anda bagel. That makes no sense. To really say these are ways to save money and well keep them youre going to see this way past the pandemic. It going to stay, guy. You got to wonder about the restaurants and other stores that offer so many Different Things to be everything to everybody saying enough of that. Yeah. And on a serious note, whats the effect to that that is something dan has been talking about for weeks. Behind closed doors, something nobody wants to admit, im scared that the hiring trajectory isnt going to be what the market wants and obviously what citizens in the United States want i think these companies have learned to do more with less and that does not argue particularly well for the employment picture. It extraordinary well for the technology picture thats the most deflation. Companies like mcdonalds and starbucks have done a great job of rising the standard, the working conditions and pay scale for minority workers and essentially, those folks who work from whatever demographic they are from and i think that is part of the allegiance you see. It reflects in the multiple for these companies that have rerated over the last five years. Good for them. It will continue. Thanks, guy tim and dan, good to im Tyler Mathisen on day 173 of the coronavirus crisis. Tonight cases are spiking in several states, forcing businesses to close their doors once again some of these states are truly in epidemics right now. Cases spike several states hitting new infection records today. Plus businesses forced to shut down a second time. Well hear from one owner tonight. Ne