Local drycleaner. How that industry is trying to get back on its feet it is wednesday, june 24 this is Worldwide Exchange here on cnbc good morning and welcome wherever in the world you may be watching here is how the markets and stock futures are setting up they are downright now about 186 points remember, futures at this hour can move around rapidly. Well keep checking in the question of the morning or month, quarter or year is whether stocks can continue their remarkable run the nasdaq their eighth session low. The dow up 19 up 31 on the nasdaq 100 just this quarter continuing to focus on technology and the runup to increased investor concentration to fewer and fewer names stocks like amazon, microsoft, google, facebook counting for 22 of the s p 500 total market cap that is the biggest, smallest slice in the history of the markets. The fewest Companies Account for the greatest weight in the history of the modern American Market four of those names are trading once again at alltime record highs. Something to note. They are all leading stocks in the majority of the etfs one thing down is volatility the vix falling yesterday is now down 40 since april 1 as the world from market perspectives has calmed down. A mixed picture overnight in asia well get you more on those markets. Down about 1. 5 each coronavirus headlines top stories from travel bans to another warning from dr. Fauci kate rogers with the ratest on what is going on on a wednesday morning. Good morning good morning. The European Union could stop american travelers from entering its borders blaming u. S. Failures in containing the spread of covid putting u. S. , brazil and russia on the top of barred countries dr. Fauci says the u. S. Is experiencing what he called a, quote, disturbing surge of coronavirus cases. A couple of days ago, there were 30,000 new infections that is trouble some to me the way you address that is you have to have the man power, the system, the testing to identify, Contact Trace in an effective way when you see those increases, you can understand where they are coming from and do something about them. In other news, ben and jerrys is joining a boycott of facebook and instagram ads to ask them to stop racially and offensive posts joining the list of other companies. And value acts founder planning a new venture to start a social responsible business. Both the dow and s p are within 10 of their alltime highs. The nasdaq is at a new report. The world, not just the United States, the world is throwing trillions at the economic slow down joining us now david wadel is this really just all about the stimulus trade or do you believe like others have said there is maybe going to be a faster recovery than the market or many other people originally thought . I think it is both. I think the amount of stimulus that has been deployed is dramatic weve seen three times the amount during the great final crisis weve seen more of the kwa quantitative easing. Theyve thrown 15 trillion at it, so basically bought the gdp. Everybodys leap frog. Sort of like y 2 k they are natural events. Companies go through austerity programs, they right size Staffing Levels and improve things we may see a surge of productivity after this. I found it humerus we are seeing the shape of recovery. There are always vs. If we get a u, it is because the government has done a lot to suppress the animal instincts that drive us. We sort of underestimate the animal spirit not only here but abroad we have to remember, this is the fourth pandemic. We always focus on 1918, there was 1957 that was very deadly in 1960 when you look at the markets, especially in 57. Of course things are very different now. After recessions after 57, markets were far high than they are. Do you think there is any historical comparison to be made i do. I think your choice is appropriate. That was the asian flu we had 100,000 people die in the United States. The population was half the size that would be like 200, 250,000 today. We had a 10 draw down in gdp. Then it went on to ride at about 9 level markets rallied 58 quickly and 90 over four years post pandemic of the four, you mentioned, we had a bear market, a recession and pandemic activity. There was a vaccine but it was only 60 effective you ask people about the 57 and they dont remember it we had another one in 68, 69 the market went back up. We had woodstock people were congregating i think weve gone from being a quarantined economy to being a face masked economy. People really want to get out and spend the money. I hear your point i dont want to debate the pandemics. It is very dangerous to a lot of people right now i dont want to minimize the effect of covid. It has been deadly we understand that your point on 57, we have talked about this on this program. Ive tweeted stuff out forget 57 to your point, it was a very dangerous time as well when p it comes to the markets and the economy, are the markets related right now . Do stocks have anything to do with the economy right now i think they do i think 2020 is a throw away year, Everybody Knows that we are now all looking forward to 2021. Right now, the analysts could be right or wrong the expectations are that earnings will be back to 2019 levels typically coming out of the recession, analysts under estimate the power of earnings by call it 10 if you gross that up to 180, you look at the multiple today, yes, we are going to get that traction that stimulus is only going to be like 50 deployed if you look at the lending, it hasnt started yet case rates are rising. Every time that goes up, the stimulus goes up too one of the things we dont talk enough about is the fatality rates are coming down. That might be a lag and that would be bad news. If you are betting against the markets now, you are betting against the president , congress, the fed and scientists it is too big an op oesitionnal party. Take care best to you. When we come back, etsy, peloton, zoom. Traders are sticking with the stayathome stock trade plus baseball is coming back the latest on baseballs plan to get in a season. And later on, President Trump holding another rally. Your next guest says a packed house in arizona may not be enough to convince wall street of four more years straight ahead when Worldwide Exchange returns. For over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. 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 bbut what if you couldg do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. Well stay on the futures but right now, lets stay on Stayathome Stayathome stocks continue to surge names like peloton, docusign and zoom at or near alltime highs investors continue to cash in on this stay or workfromhome trade. What new names might we throw in there . Gene, im not going to call it stay at home lets call it find a new home trade. The last time you were on, you talked a lot about zillow. Weve seen markets on the east coast boom why do you think the findanewhome trade might be worth our viewers money i want to make it clear, i personally own zillow stock. The reason for the shift and moving from dense areas bigger cities to smaller. Urban to suburban and even rural areas. This has created a shock wave, a forecast of how people live their lives. Why zillow it started with something as simple as the zestimate and parlayed that to 200 million active users this is a platform that is formable look facebook with monthly active users that is good so when people look at and are curious about what their home is worth. What is more important is where companies are going longer term. Capturing the sales lead they want to disassemble and reassemble the real estate process. We know zillow is trying to make offers and take some of the friction out of selling a home that has worried some investors. Those companies, big companies, like zillow that can take on this risk. Ultimately, it is a big opportunity. Listen, people have tried to take on the real estate payment structure for a long time and pretty much failed at it sounds like you are convinced zillow might be able to break in a bit. You mentioned facebook as well do you think facebook shares have seen their highs . I do, brian i think these are fairly valued. I also predicted some of their engagement would slow. Theyve had quarterly new user growth theyve been rock solid Going Forward. Ultimately despite their reach, it is still an advertising company. There has been a fracture of the market to be in the have category to advance themes weve talked about on the real estate side. Facebook even with incredible reach are still an advertising business they would have incredible earning power and that impact would be muted there is better places to put your money you talked about areas of opportunity here Going Forward surprisingly one of the bigger opportunities is apple it sounds a little tone deaf ultimately, this has massive tail winds even despite its stock is underappreciated by investors. Wow underappreciated . And zillow could be the ultimate work from a new home stock always a pleasure my friend. Well chat again soon. Take care. Still on deck, the path forward for drycleaners and one company adapting to the new normal with technology announcer todays big number, 12. 8 billion. Thats how much teslas short sellers are down this year in coines acrdg to s 3 markers shares have more than doubled year to date derek, seems like your team is operating just fine remotely. Yeah, everything is running smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Welcome back and good morning. Lets get a check on the headlines outside of money and business with phillip mena in new york good morning. The pandemic is still proving to be a major hurdle in the race for 2020 six states held primary. All struggled with long lines because of coronavirus in louisville, kentucky. At the only polling location, people were locked out in new york city, congresswoman cortez said her surprise 2018 victory was no fluke and joe biden built on his lead for the democratic confirmation. The fbi is confident no crime was committed when a noose was found. They say that noose had been there at least six months. And wallace was only assigned that specific garage it was a garage door pull rope fashioned like a noose wallace disputed that. Weather tied in 2019. It was a noose wasnt directed at me but somebody tied a noose. Well talk more about that later this morning and baseball is back after months of negotiations, baseball will begin their season late in july with players reporting for training a week from today the league proposing 60game season and lessening travel and the teams have signed off on health and safety protocol soon youll be able to watch the angels have you heard about this randon guy i heard hes from houston. You and i will have to make a virtual lunch bet. I dont know how that works. But well figure it out on the season coming up im down. Im always done. Ill send you a grubhub or something. Good to see you. Hope to see you in person. Straight ahead, President Trump trying to reignite excitement around his much delayed Election Campaign and what investors say are his chances of winning first, not zoom. This stayathome stock has seen market value triple since the march 20 bottom. Thmyere sty chart of wednesday stick around businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. Can we make it nine in a row on the longest win streak of the year as the work from home rally keeps working. It is not healthy to have people buying stocks for fun what billionaire investor has to say about day traders turning some heads too little too late . President trump trying to reinvigorate the base . One industry on the return from the lockdown. Tht Worldwide Exchange here on cnbc good morning welcome. Im Brian Sullivan here is hour your money and investments look about half way through the 5 00 a. M. Hour futures are still down still time to turn it around but steep losses we could see anything happen but not the most positive morning the question is whether they can continue their remarkable run as of late. The longest win streak since december way before the pandemic lockdown the dow is up 19 this quarter that is nothing compared to the nasdaq 100 which gained 31 since april 1. Continuing to sit around technology and the role in the runup and increased investor concentration in fewer and fewer names. Stocks like apple, microsoft, google, facebook now account for nearly 23 of the market index think about that five stocks, maybe six that account for 23 over one fifth of the entire s p 500, which of course 500 stocks. Look at that they all lead these etfs for those stocks with the exception of google are trading at alltime record highs. We talked about the stayathome stock up nearly 200 since march 20 not amazon, not zoom, not apple, it is etsy the stock getting two upgrades from Rbc Capital Markets and pushing etsy to the new alltime high the reason the Lockdown People are flocking to etsy to buy homemade, hand made masks and Hand Sanitizer up 200 since the bottom a new analysis over the growing u. S. Deficit some of the more dire fiscal projections. Elon, good morning there you are. Hi i am here i made it just for you so there is a lot of pain fiscal pain as the u. S. Economy tries to fight the coronavirus the new report out this morning by the center for a responsible federal budget shows the u. S. Deficit is expected to average 2 trillion a year through 2030. Meanwhile, the National Debt would reach 20. 7 trillion slightly larger than our total output by 2030, it would swell by 170. 2 trillion. This makes some assumptions including that washington eventually comes together to pass one more Coronavirus Relief package. It bakes in a trillion dollar state stimulus bill. It assumes the tax cuts passed in 2017 get extended as well the report finds several funds are in danger. The Medicare Hospital Insurance fund would be depleted three years sooner and trust funds would have to start paying out reduced benefits a year earlier. The report does acknowledge this spending is necessary and the reason why they are getting cold feet or you could say 2 trillion reasons they are getting cold feet one does wonder about the idea of taxes. We know if you taxed all the super rich, it doesnt make a dent where does that go the current tax cuts and the reduction in the rates for individual households including highincome households that seems to continue. That seems to be a safe assumption including the state and local tax unit for extending as well. That is baked into the report. That is 300 billion in deficit a year this is a factor of fighting the coronavirus. Still a lingering impact from extending the tax cuts in 2017 well see what happens if there is a democratic demonstration and congress if those cuts do stay in place. Back to you. Middle class taxes, always a hot topic. Good to see you. You too, brian. From d. C. To the campaign trail, President Trump trying to brush off the disappointing show out in tulsa the president grapples with a stalled Election Campaign for now. Wall street considering the idea the president may not win out in november Prediction Markets have been way behind and polls the same way. Tina, good to chat with you. We forget, my goodness, we have an election coming up on november 3 right now, the polls not looking very good for President Trump. What is your expectation of what is going to happen in november there is everything to play for now. One of the remarkable things ive been tracking and talking to clients is how almost to a person, the expectation has been that President Trump will handily win a second term. Weve now gotten to the point whether the attendance at the tulsa rally and the lockdown, that is very much in question. Trump is the underdog. I think the markets have biden at 58 those things can change. What does that mean from a markets perspective lets say the polls are wrong in 2016 are right this time, biden wins what does that mean for the equity market . This is a favorite topic of investors. The Market Impact of a change in government in the United States is pretty short term and limited. We do get a rally if there is a republican president historically certain sectors will benefit there is one important consideration now where last year, Equity Investors were concerned about a warren or sanders presidency they will be a bit more relaxed about a biden presidency they dont seem to have priced in a clean sweep that is a chilling prospect, i think. Yes we focus on the president becauses that the ceo, if you will most of the political strategy notes i read, which is not many. I try to stay out of politics. But really good ones they are starting to whispering that there is a chance, not a great one, a chance that it becomes a clean sweep. That the democrats retake the senate as well what is the market risk there or benefit there . It really depends on the investors. U. S. Investors are more concerned about the Market Impact investors have been asking me for several years is america going to be a normal country again. The discussion of the u. S. Stance on global trade and the response on germany. These are factors the International Audience really matters. In that case, theyll be more comfortable with a biden presidency the main case for those is tax you cant escape that is the number one issue. We just had elon talking about the deficit. Im going to Say Something that may get people to turn off their tv now middle class federal effective tax rates are near alltime lows thats not me. Once you factor in deductions. What you actually pay when you get your return and refund back. Middle class taxes on the federal level are near alltime lows do middle class taxes have to go up i think under any scenario, given the extraordinary government response to the virus on the fiscal and the fact that u. S. Taxpayers, you are right, they dont like to hear it have paid so little taxes is why we have such a hallowed out response this goes back to the reagan era. The scariest words to hear are, i am from the government and im here to help you need to carry out the testing and response i do think taxes have to rise. How that happens is a question for whoever is next in the white house. Middle class tax hike normally doesnt sell but at some point, there is not enough rich people to pay it all. I have a feeling we have not seen the last of each other. Thank you very much. Great stuff. Take care. On deck, as you all of you, out there think about returning to work means hanging up shorts and slippers for shirts and dresses well talk to a drycleaner about his path forward dell is examining a spinoff of the roughly 50 billion stake of firm war the industry looks to recover from the pandemic lockdown tyson foods says it has signed a certification that says its meat shipments is free of coronavirus that follows an unusual request from china stay tuned you are watching Worldwide Exchange here on cnbc 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. We are heading back to the office out with the web cams and shorts and back with the work shirts. Now comes an impacted business that is drycleaners now to our guest with 25 locations in new york and new jersey yesterday, not even knowing you were on, i went to mylocal drycleaner for the First Time Since midmarch what is the status of your business and industry . Good morning, brian the status of our business and industry as you probably know most, if not all drycleaners had to shut down our business was not as much affected because not only do we have 25 locations but the most widely downloaded and used consumer app we encourage our customers to use our app for a lower touch delivery and services for laundry and drycleaning the other thing was that we pivoted quickly and supported the 10,000 medical workers that came new york city and gave them a steep discount and while they were here, we serviced them. Overall, the industry was hit very hard drycleaning went down by 90 in the industry basically people who were using drycleaning were people like yourself in the media and some professional offices. And that can be drop off and pick up. I went because i wanted to have something mended and hemmed. How is your industry done . Is it down 100 . There is not that many tv anchors in the world were you able to maintain some kind of business sure. The drycleaning went down overall by 90 our business because of the on line channel was effective no more than 40 . We have many Different Services that we offer. Drycleaning was hit the hardest. You are interesting, kam because you have new york city and new jersey we talked about this exodus out of the city. Many of those people will come back to the city people use words like forever, which im skeptical about. What are you seeing early from the change in the location dynamic, new york versus new jersey i think new jersey is actually completely shut down was completely shut down most people have laundry machines at home because they are not going to work there was no drycleaning need Laundry Services was strong but drycleaning was hit hard. As they come back, you know theyll slowly come back summer is coming up and schools will likely not reopen most likely will not come back or will come back very slowly. Many people are waiting for Unemployment Benefits to run out before they go back to work. We think the industry will slowly come back we have seen signs of recovery many drycleaners are still shut down we think theyll continue to be shut down. You lose 20 of the business you cant afford to stay on. Kam, thank you. We are wishing you and your team all the best come back and tell us how you are doing as we kind of start to reopen here. Thank you very much. Coming up, as big tech continues its big run. Are the biggest names over valued we did a little work on this and well give you historys surprising answer next so im gonna hold on promoting you this quarter. 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. This crisis is going to be over know exactly when with more standard safety features and we dont know exactly when the stock market will reach its bottom, weve got to be prepared for this to last a long time. If you assume that youre out of work for nine months but you end up only being out of work for three, well thats great. But if you think youre going to be furloughed for three months and it lasts for nine, well thatll be emotionally devastating. So, weve got to prepare ourselves. Tangibly and practically, as well as psychologically and emotionally. It combines powerful vacuum suction and spray mopping. To lock away debris and absorb wet messes. All in one disposable pad. For a complete clean, vacuum, spray mop, and toss, in one click. The shark vacmop, a complete clean all in one pad. drum beats tuesday was another day and another record nasdaq coming in with its eighth session in a row the big of the big are getting bigger and buyers keep coming in look at these threemonth returns. Facebook apple, microsoft up and amazon up 42. Those stocks have gone up, so too have the valuations leaving some to wonder if these stocks are also overvalued. We can check on one metric on the pe, price to earnings ratio. The current pe for apple, microsoft, amazon and facebook are low. Look at amazon, 893. Pe has never mattered. Apple, facebook and microsoft while up are still below their peak based on one ratio measure, apple pe is one to look at on a price to sales basis apple and amazon are above their historical peaks not everything but something to watch on these very widely owned names. Lets talk more about the levels of the nasdaq with jenny. Good morning it was a basic exercise but, hey, it is 5 50 in the morning, jenny. These stocks have had a major run. Do you think the faang names are maybe not worth our worry right now . I struggle with the term overvalued theyve had way more than their share of performance with valuation, you can argue Different Things you could argue it should be valued on that Cash Dividend im confident theyve had more of their share of performance. A chart that stuck in my head. What it shows is that the top five stocks in the s p 500 we keep talking about over and over they are at a point that exceeds where the top five stocks were in 2000 at the very peak something about this chart stuck in my head my presumption was if you look back at 2001, you would see the top five at that point in fact, they werent. They where are in many ways equivalent to the top five today. Microsoft, ge, walmart, cisco, intel. In 2000, 1999, you couldnt make a negative argument against these companies. The same that we cant really call facebook, amazon, microsoft overvalued today back then, they had outperformed and jenny, listen it was different i think i was the first person to report from the nasdaq live talking about Companies Like cmgi, companies that dont exist anymore. Ive been critical of my fear. Cant complain you are the donkey pulling the cart exactly what i find is that the conversation i had repeatedly is have i missed out . The reality is that, yeah, you probably missed out on the top five, maybe top 10 but not on the market more broadly. I think what is dangerous about those top five getting so much weight is if any of them stumble, it pulls the whole market back. You dont need to suffer with the whole market if you dont own those top five i think there is a lot of value. I dont mean vesting value i mean reward. Value in the real world. There is a lot of value in the other 495 companies out there. Looking at the russell 2000 and other companies. There are great companies. They get ignored because you just buy index funds leave us with one of your best ideas right now outside of faang is what . Okay. My recent purchase, National Retail properties. I just bought it last week as the economy returns and people starts to get out, i think the business will really thrive they own things like convenience stores, gas stations a little conservative but i think it should benefit. Gas stations, dont knock them we might need them again some day. Always a pleasure. Thank you. Have a great day goes like that dow implied open down 280 points well see you tomorrow on Worldwide Exchange. Squawk box and the dagang up next businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. Good morning, tech stocks. Nasdaq hitting new highs now on the longest winning streak futures pointing to a pull back this morning covid cases are surging. Maybe the reason for the weakness today some states are rolling back reopening plans and adding new restrictions plus americans not welcome a new report says eu is planning to reopen with tourism but perhaps without travelers from the United States. Wednesday, june 24, 2020 squawk box begins right now. Good morning, everybody. Welcome to squawk box. Im becky quick with joe ker